<PAGE>
As Filed with the Securities and Exchange Commission on January 20, 2000
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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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)
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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 $9,587.53
</TABLE>
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(1) Estimated solely for purposes of calculation of the registration fee.
(2) Computed pursuant to Rule 457(c) based upon the average high and low sales
prices reported on the Nasdaq National Market for January 14, 2000. The
registration fee was previously paid with this Registration Statement.
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The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the securities act of 1933 or until the registration statement shall become
effective on such date as the commission, acting pursuant to said section 8(a),
may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY +
+NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN +
+OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE +
+SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Preliminary, Subject to Completion, Dated January 20, 2000
PROSPECTUS
387,892 Shares
MERCURY INTERACTIVE CORPORATION
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Common Stock
($.002 par value)
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The 387,892 shares of common stock of Mercury Interactive Corporation, a
Delaware corporation, offered by this prospectus were issued in connection with
the acquisition of Conduct Ltd., an Israeli corporation, which was consummated
on November 24, 1999. The shares may be sold from time to time by or on behalf
of certain former shareholders of Conduct who are described in this prospectus
under "Selling Shareholders." As part of the Conduct acquisition, Mercury has
agreed to register the shares under the Securities Act of 1933, as amended.
Mercury has also agreed to use its best efforts to cause the registration
statement covering the shares to remain effective until January 19, 2001,
provided Mercury is then making available "current public information" within
the meaning of Rule 144(c) under the Securities Act of 1933 (and if such
information is not then being made available by Mercury, then until the first
date thereafter that Mercury is making such information available). Mercury
will not receive any of the proceeds from the sale of the shares by the selling
shareholders.
Mercury has been advised by the selling shareholders that they intend to sell
all or a portion of the shares from time to time in the Nasdaq National Market,
in negotiated transactions or otherwise, and on terms and at prices then
obtainable. The selling shareholders and any broker-dealers, agents or
underwriters that participate with the selling shareholders in the distribution
of any of the shares may be deemed to be "underwriters" within the meaning of
the Securities Act, and any commission received by them and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933. Mercury has agreed
to indemnify in certain circumstances the selling shareholders against certain
liabilities, including liabilities under the Securities Act of 1933. The
selling shareholders have agreed to indemnify in certain circumstances Mercury
against certain liabilities, including liabilities under the Securities Act of
1933. See "Plan of Distribution."
Mercury will bear all out-of-pocket expenses incurred in connection with the
registration of the shares, including, without limitation, all registration and
filing fees imposed by the Securities and Exchange Commission (or SEC), the
National Association of Securities Dealers and blue sky laws, printing
expenses, transfer agents' and registrars' fees, and the reasonable fees and
disbursements of Mercury's outside counsel and independent accountants and a
single counsel for all of the selling shareholders, but excluding underwriting
discounts and commissions and transfer or other taxes and other costs and
expenses incident to the offering and sale of the shares to the public which
shall be borne by the selling shareholders.
THE SHARES HAVE NOT BEEN REGISTERED FOR SALE UNDER THE SECURITIES LAWS OF ANY
STATE OR JURISDICTION AS OF THE DATE OF THIS PROSPECTUS. BROKERS OR DEALERS
EFFECTING TRANSACTIONS IN THE SHARES SHOULD CONFIRM THE REGISTRATION OF THE
SHARES UNDER THE SECURITIES LAWS OF THE STATES IN WHICH SUCH TRANSACTIONS
OCCUR, OR THE EXISTENCE OF ANY EXEMPTIONS FROM SUCH REGISTRATION.
The common stock of Mercury is traded in the over-the-counter market on the
Nasdaq National Market. On January 14, 2000, the closing price of Mercury's
common stock was $94 5/8 (Nasdaq Symbol: MERQ).
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY.
The selling shareholders and any broker executing selling orders on behalf of
the selling shareholders may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933. Commissions received by any such broker
may be deemed to be underwriting commissions under the Securities Act of 1933.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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The date of this prospectus is January [ ], 2000.
<PAGE>
TABLE OF CONTENTS
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PAGE
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Where You Can Find More Information........................................ 1
The Company................................................................ 2
Risk Factors............................................................... 3
Use of Proceeds............................................................ 10
Selling Shareholders....................................................... 10
Plan of Distribution....................................................... 13
Information Incorporation by Reference..................................... 14
Indemnification of Officers and Directors.................................. 14
Legal Matters.............................................................. 15
Experts.................................................................... 15
</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.
Mercury hereby undertakes to provide without charge to each person to whom a
copy of this prospectus is delivered, upon written or oral request of any such
person, a copy of any and all of the information that has been or may be
incorporated by reference in this prospectus, other than exhibits to such
documents. Requests for such copies should be directed to Mercury Interactive
Corporation, 1325 Borregas Avenue, Sunnyvale, CA 94089, Attn: Director of
Investor Relations, (telephone (408) 822-5200).
WHERE YOU CAN FIND MORE INFORMATION
Mercury is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports,
proxy statements and other information with the Securities and Exchange
Commission. Such reports, proxy statements and other information filed by
Mercury can be inspected and copied at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the Regional Offices
of the SEC located at Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60611 and 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of such material can also be obtained by mail from
the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549, upon payment of the fees prescribed by the SEC. Mercury's common
stock is traded on The Nasdaq National Market. Reports and other information
concerning Mercury can also be inspected at the offices of the National
Association of Securities Dealers, Inc., Market Listing Section, 1735 K Street,
N.W., Washington, D.C. 20006. Such reports and other information may also be
inspected without charge at a Web site maintained by the SEC. The address of
the site is http:\\www.sec.gov.
Mercury has also filed with the SEC a Registration Statement on Form S-3
(together with all amendments and exhibits thereto) under the Securities Act of
1933. This prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the SEC. For further information, reference is
made to the Registration Statement, copies of which may be obtained from the
Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of the fees prescribed by the SEC.
<PAGE>
THE COMPANY
Mercury Interactive Corporation was incorporated in Delaware in July 1989.
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. The common stock of Mercury is traded on the Nasdaq National Market
and is quoted under the symbol MERQ.
Mercury develops, markets and supports a comprehensive suite of automated
software testing and application performance management solutions. Mercury's
products automate testing of complex software applications throughout
enterprise by helping to ensure that software works as required by anticipating
problems and identifying issues. This helps companies build better
applications, from e-business/Internet transaction systems to enterprise
resource planning and other client/server applications.
Mercury's automated tools address the full range of enterprise software
testing challenges facing corporate IS departments, systems integrators and
consultants. Mercury's products provide:
. Functional testing, solutions that help ensure enterprise applications
and their interfaces work as planned.
. Load testing, software tools that test and stress enterprise
applications under real world conditions to predict systems behavior and
performance and to identify and isolate problems.
. Test process management, integrated tools that organize and manage the
testing process to determine application readiness.
. Application performance management that monitor an applications'
performance from an end user's perspective.
Mercury's solutions enhance and accelerate the application deployment
process because they are designed to support business and functional needs as
well as IS needs. Mercury's products can be applied by non-technical users who
are helping determine IS priorities and requirements. The products are also
highly integrated, so they work together in combination to test applications
across the enterprise. Most of Mercury's automated testing products are
available in specialized versions: for example, customized products for SAP R/3
applications, or Web applications. Mercury has established relationships with
several major software industry leaders to ensure that its testing solutions
reflect both their unique products and the unique needs of their customers.
Mercury is committed to continuing research and development in order to
achieve its strategy of offering advanced and innovative testing solutions for
evolving business needs. Mercury is also committed to strong strategic
alliances, both technology alliances with other industry-leading companies and
with channel partners, such as the major systems integrators.
2
<PAGE>
RISK FACTORS
In addition to reviewing Mercury's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 and the Current Report on Form 8-K filed on
January 19, 2000, the other documents incorporated herein by reference and the
other information in this prospectus, the following risk factors should be
considered carefully in evaluating Mercury and its business before purchasing
the common stock offered hereby. This prospectus contains forward-looking
statements within the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995 with respect to Mercury's financial conditions,
results of operations and businesses. Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates" and similar expressions
indicate forward-looking statements. In addition, Mercury has identified
certain forward looking statements below with a footnote symbol /1/. These
forward-looking statements are not guarantees of future performance and are
subject to risks and uncertainties that could cause actual results to differ
materially from the results contemplated by the forward-looking statements.
Mercury's business will suffer if it does not successfully respond rapidly
to technological changes. The market for software products is characterized by:
. rapidly changing technology;
. frequent introduction of new products; and
. changes in customer requirements which can render existing products
obsolete or unmarketable.
To maintain its competitive position, Mercury must continue to develop and
introduce in a timely and cost-effective manner enhancements to our existing
and new products that keep pace with technological developments and achieve
market acceptance. We cannot assure you that:
. Mercury will be able to successfully identify, develop, manufacture,
market or support new products or enhancements, including the
application performance management class of products;
. any such new products or enhancements will gain market acceptance;
. Mercury will be able to respond effectively to technological changes; or
. Mercury will not encounter technical or other difficulties that could
delay or inhibit introduction of new products in the future.
If Mercury is unable to introduce new products or enhancements and respond
to industry changes on a timely basis, our business could be materially
adversely affected.
Mercury is dependent on a limited number of products concentrated in
relatively new markets. Mercury's current products and products under
development are limited in number and concentrated in the automated software
testing and application performance management markets. These markets have
experienced rapid worldwide growth, and they remain relatively new and not well
penetrated. Although Mercury believes that the current trend toward increased
use of automated software testing and application performance management will
continue, we cannot assure you that the automated software testing and
application performance management markets will continue to expand or that
Mercury's products will be accepted in any expanded market./1/ Price reductions
or declines in demand for Mercury's software testing or application performance
management products, whether as a result of competition, technological change
or other factors, would have a material adverse effect on Mercury's results of
operations or financial position.
Operating results may fluctuate significantly and may be difficult to
predict. 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, including, but
not limited to:
. the demand for its products;
. its success in developing new products;
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/1/ Forward looking statement
3
<PAGE>
. delays in introduction of new products or product enhancements by
Mercury;
. the size and timing of individual orders;
. software bugs or other product quality problems;
. competition and pricing;
. customer order deferrals in anticipation of new products or product
enhancements;
. reduction in demand for automated software testing products;
. changes in operating expenses;
. mix of products sold; and
. general United States or international economic conditions.
In addition, Mercury's operating results are subject to a number of
additional factors which could cause a revenue shortfall in any given quarter:
. a significant portion of Mercury's operating expenses is relatively
fixed, and planned expenditures are based on sales forecasts;
. products are generally shipped as orders are received, and,
consequently, quarterly sales and operating results depend significantly
on the volume and timing of orders received during the quarter, which
are difficult to forecast;
. Mercury has historically received a substantial portion of its orders at
the end of a quarter, up to the last few days of a quarter; and
. product orders are affected by the buying patterns of customers.
If an unanticipated order shortfall occurs at the end of a quarter,
Mercury's operating results for the quarter could be materially adversely
affected. 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.
The computer software market is intensely competitive and Mercury continues
to face direct competition mainly from well established, publicly-held
companies. There could be a material adverse effect on Mercury's results of
operations or financial position if any of the major software manufacturers,
which have significantly greater financial and technical resources than
Mercury, decided to devote substantial resources to entering the software
testing or application performance management markets or if there is an
increase in developing testing or application performance management utilities
internally by Mercury's customers or potential customers. A variety of external
and internal factors could materially adversely affect Mercury's ability to
compete:
. the relative functionality, price, performance and reliability of the
products offered by Mercury and its competitors;
. the timing and success of new product development or enhancement efforts
of Mercury and its competitors; and
. the effectiveness of the marketing and sales efforts of Mercury and its
competitors.
Mercury expects to face increasing competition in the automated software
testing and application performance management markets. /1/ We cannot assure
you that Mercury will be able to compete successfully in the future or that
competitive pressures will not materially adversely affect Mercury's business.
Mercury is substantially dependent on its alternate distribution
channels. Mercury has derived a substantial portion of its revenues from sales
of its products through alternate distribution channels such as referral
partners, system integrators, and value-added resellers. Mercury expects that
sales of its products
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/1/ Forward looking statement
4
<PAGE>
through its alternate distribution channels will continue to account for a
substantial portion of its revenues for the foreseeable future/1/. Mercury's
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 have a material adverse effect on
our business, results of operations and financial condition.
Mercury is dependent on its 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. /1/Mercury's international activities expose it to
additional risks. As Mercury continues to expand internationally, it is
increasingly subject to risks of doing business internationally, including:
. 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;
. 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;
. fluctuations in currency exchange rates may make Mercury products more
expensive to international customers; and
. future international activity may result in foreign currency denominated
sales, causing gains and losses on the conversion to U.S. dollars of
accounts receivable and accounts payable arising from international
operations.
Any of these risks could harm our international operations. 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.
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/1/ Forward looking statement
5
<PAGE>
Mercury's 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 its financial results are reported in U.S. Dollars,
fluctuations in the rates of exchange between the U.S. Dollar and other
currencies may have a material adverse effect on 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./1/
Mercury attempts 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. These efforts depend upon
estimates of transaction activity in various currencies. We cannot assure you
that Mercury will be successful in making these estimates. To the extent these
estimates are overstated or understated during periods of currency volatility,
Mercury could experience material currency gains or losses.
Mercury Must Effectively Manage 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. We
cannot assure you that the implementation of such systems, procedures and
controls can be completed successfully, or without disruption of Mercury's
operations. If Mercury's growth continues, we will be required to hire and
integrate 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. Mercury's failure to manage growth
effectively could have a material adverse effect on Mercury's business,
operating results and financial condition.
Mercury's success depends to a significant extent on the performance of its
senior management and certain key employees. Competition for highly skilled
employees, including sales, technical and management personnel, is intense in
the computer software industry. Mercury's continued success depends in
significant part on its ability to attract additional qualified employees and
to retain the services of current key employees. In particular, the loss of the
services of one or more of Mercury's executive officers could have a material
adverse effect on Mercury's business and results of operations.
Mercury stock will likely be subject to substantial price and volume
fluctuations due to a number of factors, some of which are beyond Mercury's
control. The trading price of Mercury's common stock has been and is likely to
continue to be highly volatile. Mercury's stock price has increased
substantially in the last two years. Mercury's stock price is subject to wide
fluctuations in response to a variety of factors 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
. other events beyond our control.
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/1/Forward looking statement
6
<PAGE>
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.
Mercury's failure to adequately protect its proprietary rights may harm its
competitive position. 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. There can be no assurance that Mercury's patent
applications will result in issued patents or that, if issued, the patents
would be upheld if challenged.
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, it generally enters into confidentiality or
license agreements with its employees and consultants and with its customers
and corporations with whom Mercury has strategic relationships, and Mercury
attempts to maintain control over access to and distribution of its software
documentation and other proprietary information. However, the steps Mercury has
taken to protect its technology or intellectual property may be inadequate.
Mercury's competitors may independently develop technologies that are
substantially equivalent or superior to Mercury's. Moreover, in other countries
where Mercury does business, there may not be effective legal protection of
patents and other proprietary rights that Mercury believes are important to
Mercury's business.
7
<PAGE>
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. In addition to the risk factors affecting
international sales and operations generally, 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 would have a material adverse effect on Mercury.
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./1/ Mercury believes these
grants are no longer needed to subsidize Mercury's research and development
projects./1/ 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.
Anti-Takeover Effects of Certain Charter Provisions, Unissued Preferred
Stock and Delaware Law. Mercury's Board of Directors has the authority to
issue up to 5,000,000 shares of Preferred stock and to determine the price,
rights, preferences and privileges of those shares without any further vote or
action by the stockholders. The rights of the holders of common stock will be
subject to, and may be adversely affected by, the rights of the holders of any
Preferred Stock that may be issued in the future. The issuance of Preferred
Stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire a majority of the
- --------
/1/Forward looking statement
8
<PAGE>
outstanding voting stock of Mercury. Mercury has no present plans to issue
shares of Preferred Stock. In addition, Mercury is subject to the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law. In general,
the statute prohibits a publicly-held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an
interested stockholder, unless the business combination is approved in a
prescribed manner. For purposes of Section 203, a "business combination"
includes a merger, asset sale or other transaction resulting in a financial
benefit to the interested stockholder, and an "interested stockholder" is a
person who, together with affiliates and associates, owns (or within three
years prior, did own) 15% or more of the corporation's voting stock.
Furthermore, certain provisions of Mercury's Certificate of Incorporation may
have the effect of delaying or preventing changes in control or management of
Mercury, which could adversely affect the market price of Mercury's common
stock.
Year 2000 computer complications could disrupt our operations and harm our
business. Some computers, software, and other equipment include programming
code in which calendar year data is abbreviated to only two digits. As a result
of this design decision, some of these systems could fail to operate or fail to
produce correct results if "00" is interpreted to mean 1900, rather than 2000.
These problems are commonly referred to as the "Year 2000 Problem."
The Year 2000 Problem could affect computers, software, and other equipment
used, operated or maintained by us. We have not experienced any significant
problems on January 1, 2000 or since then and believe that our computer systems
are Year 2000 compliant.
Mercury believes that it has substantially identified and resolved all
potential Year 2000 Problems with any of the software products that we develop
and market. However, Mercury also believes that it is not possible to determine
with complete certainty that all Year 2000 Problems affecting its software
products have been identified or corrected due to the complexity of these
products and the fact that these products interact with other third-party
vendor products and operate on computer systems which are not under Mercury's
control.
Since January 1, 2000, to its knowledge, Mercury has no interruptions with
third-party software and no complaints from any customers. Mercury has
developed a contingency plan to respond to any of the foregoing consequences of
internal and external failures to be Year 2000 compliant. Mercury does not
believe that the Year 2000 Problem will have a material adverse effect on its
business or results of operations. /1/
- --------
/1/ Forward looking statement
9
<PAGE>
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares offered
pursuant to this prospectus. All of such proceeds will be received by the
selling shareholders.
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
Tida Shamir, Adv. (FBO
Sharon Azulai)............ 13,140 13,140 0
3A Jabotinsky Street
Diamond Tower, 25th Floor
Ramat-Gan 52520
Israel
Tida Shamir, Adv. (FBO
David Barzilai)........... 13,140 13,140 0
3A Jabotinsky Street
Diamond Tower, 25th Floor
Ramat-Gan 52520
Israel
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.
12
<PAGE>
PLAN OF DISTRIBUTION
Mercury has been advised by the selling shareholders that they intend to
sell all or a portion of the shares offered hereby from time to time in the
over-the-counter market and that sales will be made at prices prevailing at the
times of such sales. The selling shareholders may also make private sales
directly or through a broker or brokers, who may act as agent or as principal.
In connection with any sales, the selling shareholders and any brokers
participating in such sales may be deemed to be underwriters within the meaning
of the Securities Act of 1933. Mercury will receive no part of the proceeds of
sales made hereunder.
This prospectus may be supplemented or amended from time to time to describe
a specific plan of distribution.
In connection with the distribution of the shares or otherwise, the selling
shareholders may:
. enter into hedging transactions with broker-dealers or other financial
institutions; in connection with such transactions, broker-dealers or
other financial institutions may engage in short sales of common stock in
the course of hedging the positions they assume with a selling
shareholder;
. sell common stock short and redeliver the shares to close out short
positions; and/or
. enter into option or other transactions with broker-dealers or other
financial institutions that require the delivery to such broker-dealer or
other financial institution of the shares. Those broker-dealers or other
financial institutions may resell the shares pursuant to this prospectus,
as supplemented or amended to reflect such transaction.
The selling shareholders may from time to time transfer to a donee,
successor or other person other than for value, and such transfers will not be
made pursuant to this prospectus. To the extent permitted by applicable law,
this prospectus covers sales by such transferee. We may in our discretion
supplement or amend this prospectus to include such transferee as an additional
named selling stockholder.
Any broker-dealer participating in such transactions as agent may receive
commissions from the selling shareholders (and, if they act as agent for the
purchaser of such shares, from such purchaser). Usual and customary brokerage
fees will be paid by the selling shareholders. Broker-dealers may agree with
the selling shareholders to sell a specified number of shares at a stipulated
price per share, and, to the extent such a broker-dealer is unable to do so
acting as agent for the selling shareholders, to purchase as principal any
unsold shares at the price required to fulfill the broker-dealer commitment to
the selling shareholders. Broker-dealers who acquire shares as principal may
thereafter resell such shares from time to time in transactions (which may
involve crosses and block transactions and which may involve sales to and
through other broker-dealers, including transactions of the nature described
above) in the over-the-counter market, in negotiated transactions or otherwise
at market prices prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive from the purchasers of such
shares commissions computed as described above.
Mercury has advised the selling shareholders that the anti-manipulative
Rules 10b-2, 10b-6 and 10b-7 under the Securities Exchange Act of 1934, as
amended, may apply to their sales in the market, has furnished each selling
shareholder with a copy of these Rules and has informed them of the need for
delivery of copies of this prospectus. The selling shareholders may indemnify
any broker-dealer that participates in transactions involving the sale of the
shares against certain liabilities, including liabilities arising under the
Securities Act of 1933. Any commissions paid or any discounts or concessions
allowed to any such broker-dealers, and any profits received on the resale of
such shares, may be deemed to be underwriting discounts and commissions under
the Securities Act of 1933 if any such broker-dealers purchase shares as
principal.
Upon notification by the selling shareholders to Mercury that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a cross or block trade, a supplemental prospectus will be filed under
Rule 424(c) under the Securities Act of 1933 setting forth the name of the
participating broker-dealer(s), the number of shares involved, the price at
which such shares were sold by the selling shareholder,
13
<PAGE>
the commissions paid or discounts or concessions allowed by the selling
shareholder to such broker-dealer(s), and where applicable, that such broker-
dealer(s) did not conduct any investigation to verify the information set out
in this prospectus.
Any securities covered by this prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act of 1933 may be sold under that Rule rather
than pursuant to this prospectus.
There can be no assurance that the selling shareholders will sell any or all
of the shares of common stock offered by them hereunder.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows Mercury to incorporate by reference the information it files
with the SEC, which means that Mercury can disclose important information to
you by referring you to those documents. The information incorporated by
reference is considered as part of this prospectus and information that Mercury
files later with the SEC will automatically update and supercede this
information. The documents that Mercury incorporates by reference are as
follows:
(1) Mercury's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, filed pursuant to Section 13 of the Securities Exchange
Act of 1934, as amended.
(2) Mercury's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1999, filed pursuant to Section 13 of the Securities Exchange Act
of 1934, as amended.
(3) Mercury's Current Report on Form 8-K filed with the Securities and
Exchange Commission on or about January 19, 2000 filed pursuant to Section
13 of the Securities Exchange Act of 1934, as amended.
(4) The description of Mercury's common stock to be offered hereby
contained in Mercury's Registration Statement on Form 8-A dated September
9, 1993, as amended by Amendment No. 1 to Form 8-A filed on October 28,
1993 filed pursuant to Section 12(g) of the Securities Exchange Act of
1934, as amended and Mercury's Registration Statement on Form 8-A filed on
July 8, 1996, as amended by Amendment No. 1 to Form 8-A filed on April 2,
1999, including any amendment or report filed for the purpose of updating
such description.
(5) Mercury's definitive Proxy Materials for the Annual Meeting of
Stockholders held on May 26, 1999 as filed with the SEC on April 19, 1999.
(6) All documents subsequently filed by Mercury pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, after the date of this prospectus and prior to the filing of a
post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this prospectus and to be part
hereof from the date of filing such documents.
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 those
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
14
<PAGE>
provisions contained in the Delaware General Corporation Law. The
indemnification agreements may require Mercury, 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 (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 retain 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
laws.
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.
15
<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.
See "Indemnification of Directors and Officers."
Item 16 Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
4.1 Certificate of Amendment of Restated Certificate of Incorporation of
Registrant
5.1 Opinion of General Counsel Associates LLP
23.1 Consent of Independent Accountants
23.2 Consent of General Counsel Associates LLP (Included in Exhibit 5.1)
24.1 Power of Attorney (contained on Page II-3)
</TABLE>
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.
II-1
<PAGE>
(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 Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Sunnyvale, State of
California, on January 17, 2000.
Mercury Interactive Corporation
/s/ Sharlene Abrams
By: _________________________________
Sharlene Abrams,
Vice President of Finance and
Administration,
Chief Financial Officer and
Secretary
POWER OF ATTORNEY
NOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Amnon Landan, Sharlene Abrams and Susan J.
Skaer, jointly and severally, his or her attorneys-in-fact, each with the power
of substitution, for him or her in any and all capacities, to sign any
amendments to this Registration Statement on Form S-3, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his or her substitute or substitutes, may do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed 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>
/s/ Amnon Landan President, Chief Executive Officer January 17, 2000
____________________________________ and Chairman of the Board of
(Amnon landan) Directors (Principal Executive
Officer)
/s/ Sharlene Abrams Vice President of Finance and January 17, 2000
____________________________________ Administration and Chief Financial
(Sharlene Abrams) Officer (Principal Financial and
Accounting Officer) and Secretary
/s/ Igal Kohavi Director January 17, 2000
____________________________________
(Igal Kohavi)
/s/ Yair Shamir Director January 17, 2000
____________________________________
(Yair Shamir)
/s/ Giora Yaron Director January 17, 2000
____________________________________
(Giora Yaron)
</TABLE>
II-3
<PAGE>
MERCURY INTERACTIVE CORPORATION
REGISTRATION STATEMENT ON FORM S-3
January 20, 2000
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
4.1 Certificate of Amendment of Restated Certificate of Incorporation of
Registrant
5.1 Opinion of Counsel as to Legality of Securities Being Registered
23.1 Consent of Independent Accountants
23.2 Consent of Counsel (contained in Exhibit 5.1 hereto)
24.1 Power of Attorney (see page II-3)
</TABLE>
<PAGE>
Exhibit 4.1
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
Mercury Interactive Corporation, a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Mercury Interactive
Corporation, resolutions were duly adopted setting forth a proposed amendment
of the Certificate of Incorporation of said corporation, declaring said
amendment to be advisable and calling a meeting of the stockholders of said
corporation for consideration thereof. The resolution setting forth the
proposed amendment is as follows:
RESOLVED: that the Restated Certificate of Incorporation of this corporation
by amended by changing the first paragraph of the Article thereof numbered III
so that, as amended said first paragraph of said Article shall be and read as
follows:
"This corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock". The total
number of shares which the corporation is authorized to issue is One Hundred
and Twenty-five Million (125,000,000) shares. One Hundred and Twenty Million
(120,000,000) shares shall be Common Stock and Five Million (5,000,000) shares
shall be Preferred Stock, each with a par value of $.002 per share."
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
meeting of the stockholders of said corporation was duly called and held, upon
notice in accordance with Section 222 of the General Corporation Law of the
state of Delaware at which meeting the necessary number of share as required by
statue were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, Mercury Interactive Corporation has caused this
certificate to be signed by Amnon Landan, its Chief Executive Officer, and
Sharlene Abrams, its Secretary, this 26th day of May, 1999.
/s/ Amnon Landan
By: _________________________________
Chief Executive Officer
/s/ Sharlene Abrams
Attest: _____________________________
Secretary
<PAGE>
Exhibit 5.1
Opinion of Counsel
January 20, 2000
Mercury Interactive Corporation
1325 Borregas Avenue
Sunnyvale, California 94089
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by you
with the Securities and Exchange Commission on or about January 20, 2000 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of a total of 387,892 shares of your common
stock (the "Shares"), all of which are issued and outstanding and to be offered
for sale for the benefit of certain selling shareholders. The Shares are to be
sold from time to time in the over-the counter-market at prevailing prices or
as otherwise described in the Registration Statement. As legal counsel for
Mercury Interactive Corporation, we have examined the proceedings taken and are
familiar with the proceedings proposed to be taken by you in connection with
the sale of the Shares.
It is our opinion that the Shares are legally and validly issued, fully paid
and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, including the prospectus constituting a part thereof, and further
consent to the use of our name wherever it appears in the Registration
Statement and any amendments thereto.
Very truly yours,
General Counsel Associates LLP
/s/ General Counsel Associates LLP
<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 hereby
consent to the reference to PricewaterhouseCoopers LLP under the heading
Experts in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
San Jose, California
January 20, 2000
1
