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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 2, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SYMIX SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
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OHIO
(State or other jurisdiction
of incorporation or organization)
7372
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)
31-1083175
(I.R.S. employer
identification number)
2800 CORPORATE EXCHANGE DRIVE, SUITE 400, COLUMBUS, OHIO 43231 (614) 523-7000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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IVERY D. FOREMAN
VORYS, SATER, SEYMOUR AND PEASE LLP
52 EAST GAY STREET
COLUMBUS, OHIO 43215
(614) 464-6322
With a copy to:
RICK SHAPIRO
CORPORATE COUNSEL
SYMIX SYSTEMS, INC.
2800 CORPORATE EXCHANGE DRIVE
SUITE 400
COLUMBUS, OHIO 43231
(614) 523-7218
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the 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 in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED PER SHARE (1) PRICE REGISTRATION FEE (2)
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<S> <C> <C> <C> <C>
Common Shares, no par value............ 1,587,412 $7.6875 $12,203,229.75 $3,221.66
</TABLE>
<TABLE>
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<S> <C> <C> <C> <C>
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(1) Estimated solely for the purpose of calculating the registration fee.
(2) Computed in accordance with Rule 457(c) on the basis of the average of the
high and low sales prices per share for the Common Shares on July 28, 2000
as reported on the NASDAQ National Market System.
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, AS AMENDED, 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> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THE SELLING SHAREHOLDERS 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 OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED AUGUST 2, 2000
SYMIX SYSTEMS, INC.
2800 CORPORATE EXCHANGE DRIVE
SUITE 400
COLUMBUS, OHIO 43231
PROSPECTUS
1,587,412 COMMON SHARES
------------------
In May, 2000, we issued our Series A Convertible Participating Preferred
Shares and Warrants to purchase our common shares in a private placement. This
prospectus relates to the public offering of up to 1,587,412 of our common
shares by our shareholders listed below which will be received by them upon
conversion of the Series A Preferred Shares and upon exercise of the Warrants.
The selling shareholders identified in this prospectus, or their pledgees,
donees, transferees or other successors-in-interests, may offer the shares from
time to time through public or private transactions at prevailing market prices,
at prices related to prevailing market prices or at privately negotiated prices.
We will not receive any of the proceeds from the sale of the common shares.
However, we will receive $15.00 per share, subject to adjustment, for each
common share issued to a holder of a Warrant upon exercise of the Warrant,
unless the holder of the Warrant elects a "net share" settlement.
Our common shares are listed on the NASDAQ National Market System under the
symbol "SYMX". On July 28, 2000, the closing sales price of our common shares on
NASDAQ was $7.125 per share. FOR RISKS IN CONNECTION WITH AN INVESTMENT IN OUR
COMMON SHARES, SEE "RISK FACTORS" BEGINNING ON PAGE 3.
------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------
THE DATE OF THIS PROSPECTUS IS , 2000.
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TABLE OF CONTENTS
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PAGE
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Risk Factors................................................ 3
Forward-Looking Statements.................................. 6
Information About Symix..................................... 7
Selling Shareholders........................................ 9
Plan of Distribution........................................ 10
Use of Proceeds............................................. 13
Description of Securities................................... 14
Where You Can Find More Information......................... 20
Legal Matters............................................... 21
Experts..................................................... 21
</TABLE>
We have not authorized anyone to provide you with information different
from that contained or incorporated by reference in this prospectus. The selling
shareholders are offering to sell, and seeking offers to buy, our common shares
only in jurisdictions where offers and sales of our common shares by them are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of common shares.
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RISK FACTORS
You should carefully consider the following factors in evaluating whether
to invest in our common shares. These factors should be considered in
conjunction with the other information included or incorporated by reference in
this prospectus.
CHANGES IN DEMAND FOR PRODUCTS AND SERVICES COULD CAUSE FLUCTUATIONS IN OUR
QUARTERLY OPERATING RESULTS.
Our operating results may vary significantly from quarter to quarter. Our
quarterly operating results are affected by a number of factors that could
materially and adversely affect revenues and profitability. These factors also
make estimation of operating results prior to the end of a quarter extremely
uncertain. These factors include:
- demand for our products and services;
- competitive conditions in the software industry;
- the timing of the introduction or market acceptance of new or enhanced
products which we offer or which are offered by our competitors;
- the potential for delay or deferral of customer purchases of our products
in anticipation of product enhancements or new product offerings by us or
our competitors;
- the timing of any acquisitions by us and related write-offs;
- the mix of our product and service net revenues;
- the mix of our North American and international net revenues; and
- general economic conditions and other factors affecting capital
expenditures by our customers.
The purchase of our products and services may involve a significant
commitment of capital and other resources by our customers. As a result, the
sales cycles for our products and services, from initial evaluation to delivery
or performance, vary from customer to customer. The timing of individual sales
is difficult to predict, and sales can occur in quarters subsequent to those
anticipated by us.
Our revenues in any quarter are substantially dependent on orders signed
and shipped in that quarter. Typically, we realize higher revenues in our second
and fourth fiscal quarters. Generally, we record a majority of our quarterly
revenues in the third month of each quarter, primarily in the latter half of the
third month. We believe that the fluctuations in our operating results is caused
primarily by the budgeting cycles of our customers and the structure of our
sales commission and bonus programs. As a result, our quarterly operating
results are difficult to predict. In addition, delays in product delivery or in
closings of sales near the end of a quarter could cause our quarterly operating
results to fall substantially short of anticipated levels.
TERMINATION OF AGREEMENT WITH PROGRESS WOULD REQUIRE US TO MIGRATE OUR PRODUCT
TO A DIFFERENT PROGRAMMING LANGUAGE AND COULD RESULT IN A LOSS OF BUSINESS.
Our core product, SyteLine, is written in PROGRESS, a proprietary
programming language which we license from Progress Software Corporation. We
depend upon the license of PROGRESS to our customers and the acceptance of
PROGRESS by our customers. We market and distribute PROGRESS in connection with
the sale of our products under a non-exclusive agreement with Progress. The
agreement may be terminated by either party upon 90 days' written notice to the
other party. In addition, the agreement may be terminated immediately by either
party if a material breach of the agreement by the other party continues
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after 30 days' written notice. Our relationship with Progress involves other
risks which could have a material adverse effect on our business, operating
results or financial condition, including the following:
(1) the failure of Progress to continue its relationship with us;
(2) the failure of Progress to develop, support or enhance PROGRESS in a
manner which is competitive with enhancements of other programming
languages;
(3) the loss of market acceptance of PROGRESS and its relational database
management system; and
(4) our inability to migrate our software products to other programming
languages on a timely basis if PROGRESS is no longer available.
WE DERIVE A SIGNIFICANT PORTION OF OUR BUSINESS FROM OPERATIONS WHICH ARE
SUBJECT TO FOREIGN ECONOMIC CONDITIONS AND CURRENCY FLUCTUATIONS.
We derive a significant portion of our business from international sales.
We expect to continue to expand our international operations, which will require
significant management attention and financial resources. Our international
operations are subject to various risks, including the following:
(1) the impact of a recession in foreign countries, particularly in Europe
and the Asia/Pacific regions;
(2) cultural and language difficulties associated with serving customers,
localizing and translating products;
(3) staffing and management problems related to foreign operations;
(4) exchange controls and reduced protection for intellectual property;
(5) political instability; and
(6) fluctuations in foreign exchange rates.
ADVERSE ECONOMIC CONDITIONS IN THE MANUFACTURING INDUSTRY COULD RESULT IN
REDUCED PURCHASES OF OUR PRODUCTS.
Our customers are primarily manufacturers. Our business depends
substantially upon the capital expenditures of our customers. Capital
expenditures by our customers depend upon the demand for manufactured products.
A recession or other adverse economic event affecting manufacturers could cause
them to curtail or delay capital expenditures for computer software products.
Any significant changes in the timing or amount of capital expenditures by
manufacturers could have a material adverse effect on our business, operating
results or financial condition.
PRODUCT DEFECTS COULD RESULT IN A LOSS OF MARKET SHARE OR MATERIAL DELAYS IN THE
RELEASE OF NEW OR ENHANCED PRODUCTS.
Software programs are complex. Upon release, our products may contain
undetected errors or bugs which are usually resolved through the regular
maintenance and updating process. However, our products also may contain more
serious errors, failures or bugs which may not be detected until the product has
been delivered to customers. As a result of serious errors, failures or bugs:
(1) our customers could suffer major business interruptions or other
problems which could lead to claims for damages against us;
(2) our customers may delay their purchase of our products until they are
satisfied that the problems have been resolved;
(3) we may experience delays in the scheduled release of new or enhanced
products;
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(4) our customers may decide not to purchase the defective products or our
other products;
(5) we may have to devote significant financial and product development
resources to fix defective products; and
(6) market acceptance of our products may be reduced.
If our products contain serious defects, failures or errors, our business,
results of operations or financial condition may be materially adversely
affected.
CONVERSION OF OUR SERIES A PREFERRED SHARES AND EXERCISE OF THE WARRANTS COULD
RESULT IN SUBSTANTIAL DILUTION OF YOUR INVESTMENT, A DETRIMENTAL EFFECT ON OUR
LIQUIDITY AND ABILITY TO RAISE ADDITIONAL CAPITAL, AND A SIGNIFICANT DECLINE IN
THE MARKET VALUE OF OUR COMMON SHARES.
As of August 2, 2000, we had approximately 7,503,657 common shares issued
and outstanding and we had approximately 3,517,734 additional common shares
reserved for issuance upon conversion of our outstanding Series A Preferred
Shares and upon exercise of the Warrants and outstanding stock options. Our
Series A Preferred Shares, the Warrants and our outstanding stock options also
contain or are subject to various anti-dilution and similar provisions which may
require us to issue additional common shares. If these securities are converted
or exercised, other holders of our common shares may experience significant
dilution in the market value of our common shares held by them. If the selling
shareholders were to convert all of the Series A Preferred Shares and exercise
all of the Warrants held by them as of August 2, 2000, they would acquire
approximately 1,587,412 or our common shares. If the selling shareholders were
to sell all or a substantial amount of these common shares into the open market,
the sales could have a negative effect on the market price of our common shares.
The sales also might make it more difficult for us to sell equity or
equity-related securities in the future at a price we deem appropriate.
WE HAVE NO INTENTION OF PAYING CASH DIVIDENDS
We have never paid any cash dividends on our common shares. We currently
intend to retain all future earnings, if any, for use in our business and we do
not expect to pay any cash dividends in the foreseeable future. In addition,
dividend payments to holders of our common shares are subject to the rights of
holders of our preferred shares, including the Series A Preferred Shares. As
long as our Series A Preferred Shares are outstanding, no dividends may be
declared or paid on our securities which rank junior to our Series A Preferred
Shares, including our common shares.
TURNOVER IN SENIOR MANAGEMENT OR OTHER KEY EMPLOYEES COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS, OPERATING RESULTS OR FINANCIAL CONDITION.
Our success depends to a significant extent upon senior management and
other key employees. The loss of one or more key employees could have a material
adverse effect on our business. We do not have employment agreements with our
executive officers, except Stephen A. Sasser, President and Chief Executive
Officer, and we do not maintain key man life insurance on our executive
officers. We believe that our future success will depend in part on our ability
to attract and retain highly skilled technical, managerial, sales, marketing,
service and support personnel. Competition for personnel in the computer
software industry is intense. There can be no assurance that we will be
successful in attracting and retaining key personnel, and the failure to do so
could have a material adverse effect on our business, operating results or
financial condition.
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FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS OR INCORPORATES FORWARD-LOOKING STATEMENTS. YOU
CAN IDENTIFY THESE FORWARD-LOOKING STATEMENTS BY OUR USE OF THE WORDS
"BELIEVES", "ANTICIPATES", "EXPECTS", "MAY", "WILL", "INTENDS", "ESTIMATES", AND
SIMILAR EXPRESSIONS, WHETHER IN THE NEGATIVE OR AFFIRMATIVE. ALTHOUGH WE BELIEVE
THAT THESE FORWARD-LOOKING STATEMENTS REFLECT OUR PLANS, INTENTIONS, AND
EXPECTATIONS REASONABLY, WE CAN GIVE NO ASSURANCE THAT WE ACTUALLY WILL ACHIEVE
THESE PLANS, INTENTIONS OR EXPECTATIONS. OUR ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THE PLANS, INTENTIONS OR EXPECTATIONS DISCLOSED IN THE
FORWARD-LOOKING STATEMENTS WE MAKE. WE UNDERTAKE NO OBLIGATION TO UPDATE OR
REVISE ANY FORWARD-LOOKING STATEMENT OR ANY INFORMATION CONTAINED IN ANY
FORWARD-LOOKING STATEMENT. YOU ARE CAUTIONED NOT TO PLACE ANY UNDUE RELIANCE ON
THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THEIR DATES.
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INFORMATION ABOUT SYMIX
We design, develop, market and support integrated manufacturing, supply
chain management, financial and e-commerce software solutions. Our products
address the enterprise requirements of mid size manufacturing and distribution
companies and business units of larger companies. Our products are designed to
improve:
- customer service;
- electronic commerce;
- planning and scheduling of manufacturing resources;
- production and inventory management;
- supply chain management; and
- financial management.
In addition to generating revenue from licensing and supporting our
software, we provide implementation and training services to our customers. Our
principal customers are manufacturers with annual revenues up to $500 million
and individual manufacturing sites or divisions of larger manufacturers.
In February of 2000, we formed a subsidiary, Frontstep, Inc. Frontstep is
focused on developing and marketing our complete e-business suite, eStep. eStep
delivers e-business functionality for manufacturers, distributors and other
supply chain oriented companies. eStep capabilities include:
- web sales & service;
- channel support and customer relationship management;
- e-procurement;
- supply chain management and planning; and
- business intelligence.
Also in February, 2000, we acquired Profit Solutions, Inc. and its
web-based customer relationship management software product. The product now is
called eStep CRM and is being marketed by us through our Frontstep subsidiary to
midsize companies in the manufacturing, distribution and e-business markets. We
also are offering eStep CRM with our other e-business products. eStep CRM helps
companies incorporate customer service, marketing and sales functions into their
overall e-business strategy and is designed to improve:
- marketing automation
- sales management
- service management
- business intelligence
In addition to our eStep product line, we also develop and support two
other product families, SyteLine and SyteCenter. SyteLine is an enterprise
business solution for make-to-order manufacturers of highly configured
industrial products. The targeted vertical markets of SyteLine are:
- industrial equipment;
- fabricated metals;
- industrial electronic equipment;
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- specialty vehicles
- furniture and fixtures; and
- containers and packaging.
SyteCentre is an enterprise business solution designed for repetitive and
make-to-stock light manufacturers of discrete products. The targeted vertical
markets of SyteCentre are:
- consumer electronics;
- consumer durable and packaged goods; and
- computer and related peripherals.
We also market and support complementary products provided by third party
software vendors that are integrated with eStep, SyteLine and SyteCentre. These
products provide additional functionality, including:
- business intelligence;
- sales order configuration and pricing;
- electronic and web commerce;
- field service management;
- work flow
- advance planning and scheduling; and
- business analysis and reporting tools.
Approximately 80% of our license fee revenue is generated from our
world-wide direct sales organization. We also have approximately 40 business
partners throughout the world that sell and service our products. We have 26
sales and support offices in North America, Europe and Asia with about 20% of
our revenue being generated from outside of North America.
We were incorporated in 1984 in Ohio. Our principal executive offices are
located at 2800 Corporate Exchange Drive, Columbus, Ohio 43231, and our
telephone number is (614) 523-7000. Our web site address is symix.com.
RECENT DEVELOPMENTS
On May 10, 2000, we sold 566,933 Series A Convertible Participating
Preferred Shares, each without par value, in a private placement to a group of
institutional investors for $24.00 per share or an aggregate of approximately
$13.6 million in cash. Each Series A Preferred Share is convertible by the
holder, in whole or in part, at any time into two (2) common shares, subject to
adjustments, based on a conversion price of $12.00 per share, subject to
adjustments.
We also issued to the institutional investors Warrants to purchase common
shares at an exercise price of $15.00 per share, subject to adjustments. The
Warrants expire on May 10, 2005 and are exercisable at any time prior to their
expiration.
In May, 2000, our loan agreement with Bank One, NA was amended to give the
bank a first lien on our accounts receivable, limited to 75% of eligible
accounts receivable as defined in the amendment.
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SELLING SHAREHOLDERS
The common shares offered by this prospectus are the common shares issuable
upon conversion of the Series A Preferred Shares and upon exercise of the
Warrants issued in the May 10, 2000 private placement. The following table sets
forth information, as of July 31, 2000, with respect to the selling shareholders
and the number of common shares issuable as of that date upon conversion of the
Series A Preferred Shares and upon exercise of the Warrants held by each of
them. No estimate can be given as to the amount of shares that will be held by
the selling shareholders after completion of this offering. The selling
shareholders may offer all or some or none of the shares. The selling
shareholders will determine from time to time the number of shares they will
sell. There currently are no agreements, arrangements or understandings
regarding the sale of any of the shares offered by the selling shareholders by
this prospectus. The shares offered by this prospectus may be offered from time
to time by the selling shareholders. Information about the beneficial ownership
of our shares by the selling shareholders prior to this offering has been given
to us by the selling shareholder.
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PERCENTAGE OF
COMMON SHARES
SHARES ISSUABLE SHARES UNDERLYING OUTSTANDING NUMBER OF
UPON CONVERSION WARRANTS BENEFICIALLY SHARES
SELLING OF SERIES A BENEFICIALLY OWNED OWNED PRIOR REGISTERED
SHAREHOLDER PREFERRED SHARES PRIOR TO OFFERING TO OFFERING FOR SALE
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Morgan Stanley Dean................... 543,300 217,320 760,620
Witter Venture Partners IV, L.P.
1221 Avenue of the Americas
New York, New York 10020
Morgan Stanley Dean................... 63,032 25,212 88,244
Witter Venture Investors IV, L.P.
1221 Avenue of the Americas
New York, New York 10020
Morgan Stanley Dean................... 21,196 8,478 29,674
Witter Venture Offshore Investors
IV, L.P.
1221 Avenue of the Americas
New York, New York 10020
Morgan Stanley Dean................... 173,004 69,202 242,206
Witter Equity Funding, Inc.
1221 Avenue of the Americas
New York, New York 10020
Fallen Angel Equity Fund, L.P......... 333,334 133,334 466,668
960 Holmdel Road
Holmdel, New Jersey 07733
</TABLE>
Each Series A Preferred Share is convertible by the holder at any time into
two (2) common shares, subject to adjustments as provided in our amended
articles of incorporation, as amended, based upon an initial conversion price of
$12.00 per share. The Warrants are exercisable at a price of $15.00 per share,
subject to adjustments as provided in the form of Warrant.
In lieu of the payment of the exercise price, the holders of the Warrants
may elect a "net share" settlement or exchanges of the Warrants by surrendering
the Warrants and converting them into common shares according to the following
formula:
X = (A-B) x C, where:
A
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X = the number of common shares issuable upon exchange of the
Warrant;
A = the last reported sale price per share for common shares on the
day immediately preceding the date on which the holder delivers
written notice of exercise of the Warrant to us;
B = the exercise price per share under the Warrant, as adjusted under
the terms of the form of Warrant; and
C = the number of common shares as to which the Warrant being
exchanged would be exercisable under the terms of the Warrant.
In connection with the sale of the Series A Preferred Shares and the
issuance of the Warrants to the selling shareholders named in this prospectus,
the number of directors on our board of directors was increased from 6 to 9 and
three new directors were elected to our board of directors, including:
- Guy de Chazal, Managing Director of Morgan Stanley Dean Witter
Venture Capital IV, Inc., a member of Morgan Stanley Dean Witter
Venture Partners IV, L.L.C. Morgan Stanley Dean Witter Venture
Partners IV, L.L.C. is the general partner of each of Morgan Stanley
Dean Witter Venture Partners IV, L. P., Morgan Stanley Dean Witter
Venture Investors IV., L.P. and Morgan Stanley Dean Witter Venture
Offshore Investors IV, L.P., each a selling shareholder named in
this prospectus. Mr. de Chazal indirectly controls each of these
limited partnerships and may be deemed to share beneficial ownership
of Series A Preferred Shares, Warrants and our common shares
beneficially-owned by each of these partnerships by reason of shared
power to vote and to dispose of those shares and Warrants. He
disclaims beneficial ownership of those shares and Warrants held by
the partnerships.
- Barry Goldsmith, who is a member of Fallen Angel Capital, L.L.C.,
the general partner of Fallen Angel Equity Fund, L. P., a selling
shareholder named in this prospectus. Mr. Goldsmith indirectly
controls Fallen Angel Equity Fund, L.P. and may be deemed to share
beneficial ownership of Series A Preferred Shares, Warrants and our
common shares beneficially-owned by Fallen Angel Equity Fund, L.P.
by reason of shared power to vote and to dispose of those shares and
Warrants. He disclaims beneficial ownership of those shares and
Warrants. Mr. Goldsmith also is a partner of Updata Capital, Inc.
PLAN OF DISTRIBUTION
We are registering all of the common shares offered by this prospectus on
behalf of the selling shareholders. The shares will be issued by us upon
conversion of the Series A Preferred Shares and upon exercise of the Warrants.
We will not receive any of the proceeds from the sale of the shares by the
selling shareholders.
The term "selling shareholders" includes donees, pledgees, transferees or
other successors-in-interest selling common shares issued upon conversion of the
Series A Preferred Shares or exercise of the Warrants and received by them after
the date of this prospectus from a selling shareholder as a gift, pledge,
partnership distribution or other non-sale related transfer. The selling
shareholders will act independently of us in making decisions with respect to
the time, manner and size of each sale. The sales may be made, from time to
time, by one or more, or a combination, of the following methods:
- on the NASDAQ National Market;
- in the over-the-counter market;
- in transactions other than on the NASDAQ National Market or in the
over-the counter market;
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- through brokers or dealers or in direct transactions with purchasers;
- in privately negotiated transactions;
- in connection with short sales;
- by pledge to secure debts and other obligations;
- in connection with the writing of options, in hedge transactions, and in
settlement of other transactions in standardized or over-the-counter
options; or
- in a combination of any of the above transactions.
The selling shareholders may sell their shares at prevailing market prices,
at prices related to prevailing market prices, at negotiated prices, or at fixed
prices. There is no assurance that the selling shareholders will sell any or all
of their common shares.
The selling shareholders may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
these 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 the 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 the 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 also may 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 of 1933 in connection with sales of the
shares. Accordingly, any 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 of 1933. Because
selling shareholders may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933, the selling shareholders will be
subject to the prospectus delivery requirements of the Securities Act of 1933.
The selling shareholders have advised us that, as of the date of this
prospectus, they have not entered into any agreements, understandings or
arrangements with any underwriters or broker-dealers regarding the sale of the
securities covered by this prospectus.
In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144 or Rule 144A of the Securities Act of 1933 may be sold
under Rule 144 or Rule 144A rather than pursuant to this prospectus. There is no
assurance that any selling shareholder will sell any or all of the shares
described in this prospectus, and any selling shareholder may transfer, devise
or gift such securities by other means not described in this prospectus.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in some
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.
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Under applicable rules and regulations under the Securities Exchange Act of
1934, any person engaged in the distribution of the shares may not
simultaneously engage in market making activities with respect to our common
shares for a period of two business days prior to the commencement of the
distribution. In addition, each selling shareholder will be subject to
applicable provisions of the Securities Exchange Act of 1934 and the associated
rules and regulations, including Regulation M, which may limit the timing of
purchases and sales of the shares by the selling shareholders. We will make
copies of this prospectus available to the selling shareholders and we have
informed them of the need for delivery of copies of this prospectus to
purchasers at or prior to the time of any sale of the shares.
We will file a supplement to this prospectus, if required, pursuant to Rule
424(b) under the Securities Act of 1933 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 or
underwritten offering, exchange distribution or secondary distribution or a
purchase by a broker or dealer. The supplement will disclose:
- the name of the selling shareholder and of the participating
broker-dealer(s);
- the number of shares involved;
- the price at which the shares were sold;
- the commissions paid or discounts or concessions allowed to the
broker-dealer(s), where applicable;
- that the 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.
In connection with the private placement of the Series A Preferred Shares
and the Warrants, we entered into an Investor Rights Agreement with the selling
shareholders named in this prospectus. The Investor Rights Agreement requires us
to file a registration statement within 90 days after the date of the agreement
to register the common shares issuable upon conversion of the Series A Preferred
Shares and upon exercise of the Warrants for resale by the selling shareholders
under applicable federal and state securities laws. We also agreed to use our
reasonable best efforts to cause the registration statement to become and remain
effective until each selling shareholder can sell all of its Registrable Shares,
as defined in the agreement, under Rule 144 under the Securities Act of 1933
without volume restrictions under Rule 144(k). The Investor Rights Agreement
further provides that any selling shareholder named in this prospectus may
transfer its respective registration rights to any person who acquires at least
51% of the then outstanding common share equivalents held by that selling
shareholder at the time of the transfer.
If necessary, the specific common shares to be sold by this prospectus, the
names of the selling shareholders, the respective purchase prices and public
offering prices, the names of any agent, dealer or underwriter, and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement of which this prospectus
is a part. The Investor Rights Agreement provides for cross-indemnification of
the selling shareholders named in this prospectus and us and the parties'
respective directors, officers, employees, partners, members and affiliates,
including any controlling persons, against specific liabilities in connection
with the offer and sale of the shares covered by this prospectus, including
liabilities under the Securities Act of 1933.
We will pay all of the expenses incurred by the selling shareholders and us
incident to the offering and sale of the shares underlying the Series A
Preferred Shares and the Warrants by the selling shareholders, excluding any
underwriting discounts or commissions.
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USE OF PROCEEDS
We will not receive any of the proceeds from the sale of our common shares
by the selling shareholders.
We have reserved up to 1,587,412 common shares for issuance upon conversion
of the Series A Preferred Shares and/or upon exercise of the Warrants, without
giving effect to additional shares that may be issued pursuant to anti-dilution
or other provisions in our amended articles of incorporation, as amended, the
Investor Rights Agreement or the Warrants. We will not receive any proceeds from
the conversion of the Series A Preferred Shares.
The Warrants are exercisable at an exercise price of $15.00 per share,
subject to adjustments. We cannot be sure that Warrant holders will exercise any
of the Warrants that are currently outstanding and thus, we may not receive any
proceeds from exercise of the Warrants. However, if all of the Warrants are
exercised for cash for the full number of shares offered for resale pursuant to
this prospectus upon the exercise of the Warrants, we will receive proceeds of
approximately $6,803,190 based on the exercise price of $15.00 per share.
If we do receive proceeds from the exercise of the Warrants, we plan to use
the net proceeds for general corporate purposes, including:
- working capital;
- acquisitions of other businesses and/or technologies; and
- our Frontstep initiative.
Pending use of the net proceeds for any of these purposes, we may invest the net
proceeds in short-term investment grade instruments, interest-bearing bank
accounts, certificates of deposit, money market securities, U.S. government
securities, or mortgage-backed securities guaranteed by federal agencies.
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DESCRIPTION OF SECURITIES
The following description of our securities does not purport to be complete
and is qualified in all respects by reference to the detailed provisions of our
amended articles of incorporation, as amended, a copy of which was filed with
the Securities Exchange Commission on May 15, 2000 (File No. 0-19024) as Exhibit
3(a)(4) to our Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2000. We have incorporated that Quarterly Report on Form 10-Q into this
registration statement by reference.
Our authorized capital stock consists of 21,000,000 shares, of which
20,000,000 shares are common shares, each without par value, and 1,000,000
shares are preferred shares, each without par value. As of August 2, 2000, there
were 7,503,657 common shares and 566,933 preferred shares designated Series A
Convertible Participating Preferred Shares issued and outstanding. As of the
date of this prospectus, there were 208 record holders of our common shares and
five record holders of our Series A Preferred Shares.
COMMON SHARES
Our common shareholders are entitled to one vote for each common share held
of record on each matter submitted to a vote of shareholders. Our shareholders
have no cumulative voting rights, which means that the holders of shares
entitled to exercise more than fifty percent of the voting power are able to
elect all of the directors.
Our common shareholders on the applicable record date are entitled to
receive dividends on a pro rata basis when and if declared by our board of
directors out of funds legally available for dividends on our common shares.
Dividend payments to holders of common shares are subject to the rights of any
preferred shareholders, including the holders of the Series A Preferred Shares,
and to any contractual restrictions.
Under Ohio law and our amended articles of incorporation, as amended, the
affirmative vote of the shareholders entitled to exercise at least two-thirds of
the voting power of our shareholders is required for major corporate actions,
including merger or consolidation with another corporation, a combination or
majority share acquisition, sale or other disposition of all or substantially
all of our property and assets, our voluntary dissolution or amendment of our
articles of incorporation.
Upon dissolution, liquidation or sale of all or substantially all of our
assets, after required payments to our creditors and preferred shareholders, our
common shareholders are entitled to receive pro rata our remaining assets
available for distribution.
Our common shareholders do not have preemptive, subscription, redemption or
conversion rights and are not subject to further calls or assessments. Our
common shares outstanding are duly authorized, validly issued, fully paid and
non assessable.
SERIES A PREFERRED SHARES
Our amended articles of incorporation, as amended, authorize our board of
directors to issue preferred shares from time to time in one or more series. Our
articles of incorporation limit the voting rights of preferred shareholders to
one vote for each preferred share held on each matter submitted to a vote of
preferred shareholders. Our board of directors is authorized to fix and
determine the relative rights and preferences of the shares of any series of
preferred shares with respect to:
- dividend or distribution rights;
- the dates from which they are cumulative;
- liquidation rights and price;
- repurchase or redemption rights and price;
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- sinking fund requirements;
- conversion rights and restrictions; and
- restrictions on the issuance of shares of any class or series.
The terms of the Series A Preferred Shares referred to in this registration
statement, of which this prospectus is a part, are complex and are only briefly
summarized in this prospectus. To obtain further information concerning the
rights, preferences and terms of the Series A Preferred Shares, please refer to
the full description contained in our amended articles of incorporation, as
amended, included as Exhibit 3(a)(4) to our Quarterly Report on Form 10-Q filed
with the Securities and Exchange Commission on May 15, 2000 (File No. 0-19024),
which has been incorporated into this registration statement by reference.
Pursuant to the terms of the Securities Purchase Agreement dated May 10,
2000, by and among us and the selling shareholders named in this prospectus, we
issued 566,933 Series A Preferred Shares for an aggregate principal amount of
$13,606,392 in cash.
VOTING RIGHTS
The holders of Series A Preferred Shares are entitled to vote with the
common shareholders as a single class on all matters submitted for a vote of
common shareholders. Each holder of Series A Preferred Shares is entitled to one
vote per share held, provided that, upon amendment of our amended articles of
incorporation, as amended, to permit holders of our authorized preferred shares
to have more than one vote per share, each holder of Series A Preferred Shares
will have that number of votes per share equal to the number of votes to which a
holder of the common shares issuable upon conversion of a Series A Preferred
Share would have been entitled if the common shares had been outstanding at the
time of the applicable vote and related record date. We agreed with the selling
shareholders named in this prospectus in the Securities Purchase Agreement to
use our reasonable best efforts to cause our amended articles of incorporation,
as amended, to be amended further by our shareholders at our next annual meeting
of shareholders to permit holders of our authorized preferred shares, including
the Series A Preferred Shares, to have the right to more than one vote per
share.
As long as any Series A Preferred Shares are outstanding, without the
approval of the holders of at least 75% of the Series A Preferred Shares then
outstanding, we may not:
- create or authorize the creation of any additional class or series of
shares other than shares which rank junior to the Series A Preferred
Shares;
- increase the authorized amount of Series A Preferred Shares or any other
class or series of shares except shares which rank junior to the Series A
Preferred Shares;
- create or authorize any obligation or security convertible into Series A
Preferred Shares or shares of any other class or series except shares
which rank junior to the Series A Preferred Shares;
- amend, alter, restate or repeal our amended articles of incorporation, as
amended, or our amended code of regulations, as amended, to the extent
the amendment would adversely affect the rights of the holders of the
Series A Preferred Shares, except solely to authorize or create any
additional class or series of shares which rank junior to the Series A
Preferred Shares; or
- redeem or acquire any shares which rank junior to the Series A Preferred
Shares except our common shares pursuant to stock restriction agreements
as defined in our amended articles of incorporation, as amended.
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LIQUIDATION PREFERENCE
The Series A Preferred Shares have a liquidation preference per share equal
to the greater of (i) $24 per share, subject to adjustment for share dividends,
combinations or splits, plus accumulated, but unpaid dividends, if any, or (ii)
the amount a holder of the common shares underlying a Series A Preferred Share
would have received if the Series A Preferred Share was converted into common
shares immediately prior to the liquidation or winding up. At the election of
the holders of 75% or more of the Series A Preferred Shares then outstanding,
the holders of the Series A Preferred Shares also will be entitled to receive
the liquidation preference amount per share if:
- we merge or consolidate with another entity and our outstanding shares
are exchanged for securities or other consideration issued or paid by the
other entity or its affiliate; except if
- the merger is solely to reincorporate us in a different jurisdiction;
or
- we are the surviving entity in the merger or consolidation and our
voting shares outstanding immediately prior to the merger or
consolidation constitute more than 50% of the merged entity's voting
shares after the merger or consolidation;
- we sell or transfer all or substantially all of our assets to a person or
entity other than one or more of our subsidiaries; or
- any person or group of persons acquire beneficial ownership, as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, of more than 50%
of our shareholder voting power, except as the result of a reduction of
authorized and issued shares.
DIVIDENDS
Holders of Series A Preferred Shares are entitled to receive cash dividends
when and if declared by our board of directors at the same time that cash
dividends are declared and paid on our common shares. Cash dividends declared by
our board of directors on the Series A Preferred Shares are payable in an amount
equal to the cash dividend per share payable on our common shares times the
conversion rate then in effect for each Series A Preferred Share. In addition,
we are required to use our reasonable best efforts to cause a registration
statement covering the Series A Preferred Shares to become effective and to
maintain the effectiveness of the registration statement with the Securities and
Exchange Commission under the Investor Rights Agreement between us and the
selling shareholders named in this prospectus. If we breach our obligation,
holders of the Series A Preferred Shares will be entitled to receive cash
dividends during the time that the breach continues at an annual rate of $3.36
per share when and if declared by our board of directors. As long as Series A
Preferred Shares are outstanding, no dividends may be declared or paid on our
securities which rank junior to the Series A Preferred Shares unless all
cumulative dividends have been or at the same time are declared and paid or set
aside for payment on the Series A Preferred Shares for all dividend periods
ending on or before the dividend payment date for the junior securities.
OPTIONAL REDEMPTION
We may redeem all, but not less than all, of the Series A Preferred Shares
then outstanding after May 10, 2004. In order to exercise our redemption option,
we have to notify the holders of the Series A Preferred Shares in writing at
least 20 days prior to the redemption date of our intent to redeem the shares.
The redemption is required to be made within 60 days after May 10, 2004. The
redemption price to be paid for the shares is $30.72 per share, plus any
accumulated, but unpaid, dividends on the shares. Any Series A Preferred Shares
redeemed or reacquired by us must be retired and may not be reissued.
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VARIABLE OPTIONAL CONVERSION RATE
Each Series A Preferred Share is convertible into two common shares at the
initial base conversion price of $12.00 per common share. Both the conversion
price per common share and the conversion rate applicable to the Series A
Preferred Shares are subject to adjustment from time to time, with some
exceptions, if we:
- pay a share dividend on or make a distribution of our common shares;
- combine our outstanding common shares into a smaller number of common
shares;
- issue by reclassification other securities;
- issue common shares without consideration or for consideration per share
less than the conversion price then in effect for the Series A Preferred
Shares;
- fix a record date for the issuance of rights, options or warrants to our
common shareholders or holders of other securities entitling them to
subscribe for or purchase within 60 days of the record date our common
shares at a price per share, or having a conversion price per share, if a
convertible security, less than the conversion price for the Series A
Preferred Shares in effect on the record date;
- issue rights, options other than pursuant to an employee plan approved by
our board of directors, warrants to subscribe for or to purchase our
common shares or securities convertible into our common shares, or
convertible securities at a purchase or exercise price per share less
than the conversion price for the Series A Preferred Shares; or
- fix a record date for a dividend or distribution to our common
shareholders of evidences of indebtedness, cash, assets or other
property.
If the weighted average of the last reported sale price per share of our common
shares for the 40 consecutive trading days immediately preceding May 10, 2004 is
less than $12.00, then the conversion price then in effect for the Series A
Preferred Shares is required to be reduced to the weighted average sales price.
The reduced conversion price will become effective 30 days after May 10, 2004
unless we have given the holders written notice of our intent to redeem the
shares. If we set a record date for payment of a dividend or other distribution
to our common shareholders and later abandon our plan to pay the dividend or to
make the distribution, then any prior adjustment to the conversion price per
common share or the conversion rate relating to the Series A Preferred Shares
will be reversed.
MANDATORY CONVERSION
The Series A Preferred Shares then outstanding automatically will convert
to our common shares after May 10, 2002 if the last reported sales price per
share for our common shares on each day of any period of 40 consecutive trading
days exceeds $24.00. The conversion rate for the Series A Preferred Shares would
be the conversion rate in effect as of the close of business on the last trading
day of the 40 consecutive trading day period.
CONSOLIDATION, MERGER OR SALE OF ASSETS
Each holder of Series A Preferred Shares also may convert the shares to the
securities, cash and other property which the holder would have been entitled to
receive if we:
- merge into or consolidate with another person or entity which results in
a reclassification, conversion, exchange or cancellation of our
outstanding common shares, or
- sell or transfer all or substantially all of our assets
and the Series A Preferred Shares had been converted immediately prior to the
merger, consolidation, sale or transfer.
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WARRANTS TO PURCHASE COMMON SHARES
Under the terms of the Securities Purchase Agreement described above, we
also issued to the selling shareholders named in this prospectus Warrants to
purchase an aggregate of 453,546 common shares at an exercise price of $15.00
per share, subject to adjustments. The Warrants are exercisable through May 10,
2005. In lieu of exercising the Warrant, a holder of a Warrant may elect a "net
share" settlement of the Warrant as described under "Selling Shareholders".
After May 10, 2002, the Warrants are exercised automatically if the closing
price per share for our common shares exceeds $24.00 for 40 consecutive trading
days. If a Warrant is exercised automatically as described in the preceding
sentence, the holder would be entitled to receive that number of our common
shares the holder would have received if the Warrant had been exercised on a
"net share" settlement basis.
The Warrants are not transferable except to a person who agrees to be bound
by the respective terms of the Warrant and the Investor Rights Agreement. The
Warrants contain anti-dilutions provisions which require the exercise price to
be adjusted in some cases if we:
- issue, subdivide, split, combine or reclassify our common shares;
- declare a share dividend or make a share distribution of our common
shares;
- fix a record date for the issuance of rights, options or warrants to
holders of our securities which entitle them to subscribe for or purchase
our common shares for a period of less than 60 days after the record date
at a purchase price per share less than the exercise price per share
under the Warrant;
- issue rights, options, warrants or convertible securities and the price
per common share of the rights, options, warrants or convertible
securities is less than the exercise price; or
- fix a record date for making a dividend or distribution of evidences of
indebtedness, cash, assets or other property to our common shareholders.
If the weighted average of the last reported sale price per share of our
common shares for the 40 consecutive trading days immediately preceding May 10,
2004 is less than $31.88, then the exercise price then in effect for the
Warrants is required to be reduced to the greater of the weighted average sales
price and 75% of the exercise price.
LIMITATIONS ON ADJUSTMENTS
Under the rules of the Nasdaq Stock Market, we are required to obtain
shareholder approval for the issuance of common shares upon conversion of the
Series A Preferred Shares or upon exercise of the Warrants at a price less than
the market value of the common shares on the date the Series A Preferred Shares
and the Warrants were issued if the number of common shares issuable upon
conversion of the Series A Preferred Shares and exercise of the Warrants equals
or exceeds 20% of the number of common shares outstanding before the Series A
Preferred Shares and the Warrants were issued. On the date the Series A
Preferred Shares and Warrants were issued, the conversion price of the Series A
Preferred Shares was $12.00 per share, the exercise price for the Warrants was
$15 per share and the closing sales price per share for our common shares was
$9.1875 per share.
However, the terms of the Series A Preferred Shares contain anti-dilution
and other provisions which may require the conversion price per share to be
reduced to less than the market value per share of our common shares on the date
the Series A Preferred Shares were issued. Also the Warrants contain
anti-dilution provisions which may require the exercise price for the Warrants
to be reduced to below the market value per share of our common shares on the
date the Series A Preferred Shares were issued.
The selling shareholders named in this prospectus have agreed that, without
the prior approval of our shareholders as required under the Nasdaq Stock Market
Rules, no adjustment will be made to the conversion
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price of the Series A Preferred Shares, and no adjustment will be made to the
exercise price of the Warrants, which reduces the conversion price or the
exercise price, as the case may be, to an amount which is less than the market
price per share of our common shares on the date the Series A Preferred Shares
were issued.
We have agreed with the selling shareholders named in this prospectus to
submit to our shareholders at their next annual meeting a proposal to approve
the issuance of our common shares upon conversion of the Series A Preferred
Shares at an adjusted conversion price per share, and upon exercise of the
Warrants at an adjusted exercise price per share, if required, which is less
than the market price per share of our common shares on the date the Series A
Preferred Shares were issued.
OTHER MATTERS WE HAVE AGREED TO
We are required to reserve an amount of our common shares for issuance upon
the conversion of the Series A Preferred Shares and the exercise of the
Warrants. We may not grant to any other person any registration rights relating
to our securities which take a priority over the registration rights granted to
the selling shareholders named in this prospectus. Without the consent of those
selling shareholders holding at least a majority of our common shares then
entitled to be registered, we may not grant any registration rights to any other
person which conflict with or alter our obligation to file a shelf registration
on Form S-3 covering the common shares held by them.
We are required to take all reasonably necessary or desirable legal action
within our control so that:
- the number of directors on our board of directors is increased from 6 to
9;
- a management slate of directors, including a representative of Fallen
Angel Equity Fund, L.P., a selling shareholder named in this prospectus,
is nominated and elected to our board of directors;
- if a representative of Morgan Stanley Dean Witter Venture Partners IV,
L.P., a selling shareholder named in this prospectus, is not elected as
one of our directors, its representative has the right to attend all
meetings of our board of directors as a non-voting observer and to
receive all notices and other communications we send to our directors;
- at least one representative of the selling shareholders named in this
prospectus who has been elected as one of our directors is appointed as a
member of every committee of our board of directors;
- the required quorum for meetings of our board of directors will be the
presence in person at each meeting of at least a majority of our
directors, except a majority of our directors in office will constitute a
quorum for filling a vacancy in our board of directors;
- all action of our board of directors will require (i) the affirmative
vote of at least a majority of our directors at a duly convened meeting
of our board of directors at which a quorum is present or (ii) the
unanimous written consent of our board of directors, except that if there
is a vacancy on our board of directors and an individual has been
nominated to fill the vacancy, the first order of business must be for
the board of directors to fill the vacancy; and
- if any director nominated by Fallen Angel Equity Fund, L.P., a selling
shareholder named in this prospectus, ceases to serve as a member of our
board of directors during his or her term, Fallen Angel Equity Fund, L.P.
will be entitled to nominate a designee to fill the vacancy, and our
board of directors will designate a replacement director, nominated by
Fallen Angel Equity Fund, L.P. and reasonably satisfactory to our board
of directors, to fill the remainder of the term of the director who has
ceased to be a member of our board of directors.
Each selling shareholder named in this prospectus has the preemptive right
to purchase all or any portion of any equity securities, or any securities which
may be converted into or exchanged or exercised for any equity securities, which
we or any of our subsidiaries offer in an amount equal to
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- the number of securities being offered, multiplied by,
- a fraction, the numerator of which is the number of our common shares
held by the selling shareholder and the denominator of which is the
number of our common shares held by all of our shareholders, including
the selling shareholders named in this prospectus.
If the number of equity securities being offered by our subsidiary that the
selling shareholders named in this prospectus would have a preemptive right to
purchase under the formula described above is less than 20% of the equity
securities being offered, then the selling shareholders named in this prospectus
will have a preemptive right to purchase an aggregate of at least 20% of the
equity securities being offered. The selling shareholders do not have any
preemptive rights relating to our shares issued or issuable:
- upon the exercise of options or warrants or conversion of convertible
securities, including the Series A Preferred Shares, outstanding on the
date of the Investor Rights Agreement; or
- to our officers, directors, employees, agents or consultants, or
officers, directors, employees, agents or consultants of any of our
subsidiaries, upon the exercise of any option granted or to be granted
under any stock option plan or arrangement approved by our board of
directors or the board of directors of one of our subsidiaries; or
- in an acquisition of securities or assets of any other corporation by us
or one of our subsidiaries.
The preemptive rights of each of the selling shareholders named in this
prospectus is subject to the ability of the selling shareholder to make
representations to us as reasonably required to comply with Rule 506 of
Regulation D under the Securities Act of 1933 in connection with the purchase of
any restricted securities.
If we transfer ownership of all or a part of a subsidiary to our
shareholders by dividend, then we are required to issue to the holders of the
Warrants then outstanding additional warrants to purchase common shares of the
subsidiary having substantially the same terms and conditions as the Warrants.
The number of common shares of the subsidiary covered by the additional warrant
issued to each holder must be sufficient to give the holder the same percentage
ownership in the outstanding common shares (on a fully diluted basis) of the
subsidiary that the holder has (on a fully diluted basis) in our outstanding
common shares under the Warrants on the effective date of the dividend. The
exercise price of each additional warrant will be the amount determined by
dividing:
- the product of the exercise price of a Warrant immediately prior to the
public announcement of the dividend, multiplied by the Daily Price (as
defined in the Warrant) per common share of the subsidiary immediately
after the dividend, by
- the Current Market Price Per Common Share (as defined in the Warrant)
immediately prior to the public announcement of the dividend.
TRANSFER AGENT AND REGISTRAR
Our transfer agent and registrar for our common shares is Fifth Third Bank,
38 Fountain Square Plaza, Cincinnati, Ohio 45263.
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 with the
SEC 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
Public Reference Room. Our SEC filings are also available to the public at the
SEC's web site at http://www.sec.gov.
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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 information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, until the selling shareholders sell all of
their shares covered by this prospectus. This prospectus is part of a
registration statement we filed with the SEC (Registration No. 333-
). The documents we incorporate by reference are:
1. Our annual report on Form 10-K for the fiscal year ended June 30, 1999;
2. Our quarterly reports on Form 10-Q for the fiscal quarters ended
September 30, 1999, December 31, 1999 and March 31, 2000, respectively;
3. Our definitive proxy statement filed with the SEC in connection with our
1999 annual meeting of shareholders; and
4. The description of our common shares contained in our registration
statement on Form 8-A dated February 12, 1991, as amended, as filed with
the Securities and Exchange Commission.
All reports and other documents we subsequently file pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date
of this prospectus and prior to the termination of this offering will be deemed
to be incorporated by reference and to be a part of this prospectus from the
date of filing. Any statement incorporated into this prospectus is modified or
superseded to the extent that a statement contained in this prospectus or in any
other subsequently filed document incorporated by reference in this prospectus
modifies or supersedes that statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this prospectus.
We will provide a copy of any or all of these filings to you without charge upon
your written or oral request. However, we will not provide to you copies of
exhibits to a filing unless the exhibits are specifically incorporated by
reference into the filing. Requests for these filings should be made to Symix
Systems, Inc., 2800 Corporate Exchange Drive, Suite 400, Columbus, Ohio 43231,
Attention: Corporate Counsel or by telephone at (614) 523-7218.
LEGAL MATTERS
Legal matters regarding whether the common shares are validly issued, fully
paid and nonassessable will be passed upon for us by Vorys, Sater, Seymour and
Pease LLP, Columbus, Ohio, our legal counsel. As of July 31, 2000, the partners
of and attorneys employed by Vorys, Sater, Seymour and Pease LLP, together with
members of their immediate families, owned in the aggregate approximately
151,537 common shares. Duke W. Thomas, a member of that firm, serves on our
board of directors.
EXPERTS
Our consolidated financial statements and schedule appearing in our Annual
Report (Form 10-K) for the year ended June 30, 1999, have been audited by Ernst
& Young LLP, independent auditors, as set forth in their report included in the
Annual Report and incorporated in this prospectus by reference. The consolidated
financial statements and schedule are incorporated in this prospectus by
reference in reliance upon their report given upon the authority of that firm as
experts in accounting and auditing.
21
<PAGE> 23
------------------------------------------------------
------------------------------------------------------
WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY
STATEMENT OR REPRESENTATION THAT DIFFERS FROM WHAT IS IN THIS PROSPECTUS. IF ANY
PERSON DOES MAKE A STATEMENT THAT DIFFERS FROM WHAT IS IN THIS PROSPECTUS, YOU
SHOULD NOT RELY ON IT. THIS PROSPECTUS IS NOT AN OFFER TO SELL, AND IT IS NOT A
SOLICITATION OF AN OFFER TO BUY, THESE SECURITIES IN ANY STATE IN WHICH THE
OFFER OR SALE IS NOT PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS COMPLETE
AND ACCURATE AS OF ITS DATE, BUT THE INFORMATION MAY CHANGE AFTER THAT DATE.
------------------------------
<TABLE>
<S> <C>
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
1,587,412 COMMON SHARES
SYMIX SYSTEMS, INC.
------------------
PROSPECTUS
, 2000
------------------
------------------------------------------------------
------------------------------------------------------
<PAGE> 24
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated (except for SEC registration
fee and National Association of Securities Dealers, Inc. filing fee) fees and
expenses payable by Symix in connection with the distribution of the common
shares.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 3,222
Legal fees and expenses..................................... *
Accountants' fees and expenses.............................. *
NASDAQ fee.................................................. $17,500
Printing.................................................... *
Miscellaneous expenses...................................... *
-------
Total............................................. $ *
=======
</TABLE>
---------------
* To be filed by amendment.
The selling shareholders will not pay any portion of the expenses listed
above.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Division (E) of Section 1701.13 of the Ohio Revised Code governs
indemnification by an Ohio corporation and provides as follows:
(E)(1) A corporation may indemnify or agree to indemnify any person
who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, other than an action by
or in the right of the corporation, by reason of the fact that he is or was
a director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, trustee, officer,
employee, member, manager, or agent of another corporation, domestic or
foreign, nonprofit or for profit, a limited liability company, or a
partnership, joint venture, trust, or other enterprise, against expenses,
including attorneys' fees, judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with such action,
suit, or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, if he
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order,
settlement, or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, he had reasonable cause to believe that
his conduct was unlawful.
(2) A corporation may indemnify or agree to indemnify any person who
was or is a party, or is threatened to be made a party, to any threatened,
pending, or completed action or suit by or in the right of the corporation
to procure a judgment in its favor, by reason of the fact that he is or was
a director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, trustee, officer,
employee, member, manager, or agent of another corporation, domestic or
foreign, nonprofit or for profit, a limited liability company, or a
partnership, joint venture, trust, or other enterprise, against expenses,
including attorney's fees, actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit, if he
acted in good faith and in a
II-1
<PAGE> 25
manner he reasonably believed to be in or not opposed to the best interests
of the corporation, except that no indemnification shall be made in respect
of any of the following:
(a) Any claim, issue, or matter as to which such person is adjudged
to be liable for negligence or misconduct in the performance of his duty
to the corporation unless, and only to the extent that, the court of
common pleas or the court in which such action or suit was brought
determines, upon application, that, despite the adjudication of
liability, but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses as the
court of common pleas or such other court shall deem proper.
(b) Any action or suit in which the only liability asserted against
a director is pursuant to section 1701.95 of the Revised Code.
(3) To the extent that a director, trustee, officer, employee, member,
manager, or agent has been successful on the merits or otherwise in defense
of any action, suit, or proceeding referred to in division (E)(1) or (2) of
this section, or in defense of any claim, issue, or matter therein, he
shall be indemnified against expenses, including attorney's fees, actually
and reasonably incurred by him in connection with the action, suit, or
proceeding.
(4) Any indemnification under division (E)(1) or (2) of this section,
unless ordered by a court, shall be made by the corporation only as
authorized in the specific case, upon a determination that indemnification
of the director, trustee, officer, employee, member, manager, or agent is
proper in the circumstances because he has met the applicable standard of
conduct set forth in division (E)(1) or (2) of this section. Such
determination shall be made as follows:
(a) By a majority vote of a quorum consisting of directors of the
indemnifying corporation who were not and are not parties to or
threatened with the action, suit, or proceeding referred to in division
(E)(1) or (2) of this section;
(b) If the quorum described in division (E)(4)(a) of this section
is not obtainable or if a majority vote of a quorum of disinterested
directors so directs, in a written opinion by independent legal counsel
other than an attorney, or a firm having associated with it an attorney,
who has been retained by or who has performed services for the
corporation or any person to be indemnified within the past five years;
(c) By the shareholders;
(d) By the court of common pleas or the court in which the action,
suit, or proceeding referred to in division (E)(1) or (2) of this
section was brought.
Any determination made by the disinterested directors under division
(E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this
section shall be promptly communicated to the person who threatened or brought
the action or suit by or in the right of the corporation under division (E)(2)
of this section, and, within ten days after receipt of such notification, such
person shall have the right to petition the court of common pleas or the court
in which such action or suit was brought to review the reasonableness of such
determination.
(5)(a) Unless at the time of a director's act or omission that is the
subject of an action, suit, or proceeding referred to in division (E)(1) or
(2) of this section, the articles or the regulations of a corporation
state, by specific reference to this division, that the provisions of this
division do not apply to the corporation and unless the only liability
asserted against a director in an action, suit, or proceeding referred to
in division (E)(1) or (2) of this section is pursuant to section 1701.95 of
the Revised Code, expenses, including attorney's fees, incurred by a
director in defending the action, suit, or proceeding shall be paid by the
corporation as they are incurred, in advance of the final disposition of
the action,
II-2
<PAGE> 26
suit, or proceeding, upon receipt of an undertaking by or on behalf of the
director in which he agrees to do both of the following:
(i) Repay such amount if it is proved by clear and convincing
evidence in a court of competent jurisdiction that his action or failure
to act involved an act or omission undertaken with deliberate intent to
cause injury to the corporation or undertaken with reckless disregard
for the best interests of the corporation;
(ii) Reasonably cooperate with the corporation concerning the
action, suit, or proceeding
(b) Expenses, including attorney's fees, incurred by a director,
trustee, officer, employee, member, manager, or agent in defending any
action, suit, or proceeding referred to in division (E)(1) or (2) of this
section, may be paid by the corporation as they are incurred, in advance of
the final disposition of the action, suit, or proceeding, as authorized by
the directors in the specific case, upon receipt of an undertaking by or on
behalf of the director, trustee, officer, employee, member, manager, or
agent to repay such amount, if it ultimately is determined that he is not
entitled to be indemnified by the corporation.
(6) The indemnification authorized by this section shall not be
exclusive of, and shall be in addition to, any other rights granted to
those seeking indemnification under the articles, the regulations, any
agreement, a vote of shareholders or disinterested directors, or otherwise,
both as to action in their official capacities and as to action in another
capacity while holding their offices or positions, and shall continue as to
a person who has ceased to be a director, trustee, officer, employee,
member, manager, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
(7) A corporation may purchase and maintain insurance or furnish
similar protection, including, but not limited to, trust funds, letters of
credit, or self-insurance, on behalf of or for any person who is or was a
director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, trustee, officer,
employee, member, manager, or agent of another corporation, domestic or
foreign, nonprofit or for profit, a limited liability company, or a
partnership, joint venture, trust, or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under this section.
Insurance may be purchased from or maintained with a person in which the
corporation has a financial interest.
(8) The authority of a corporation to indemnify persons pursuant to
division (E)(1) or (2) of this section does not limit the payment of
expenses as they are incurred, indemnification, insurance, or other
protection that may be provided pursuant to divisions (E)(5), (6), and (7)
of this section. Divisions (E)(1) and (2) of this section do not create any
obligation to repay or return payments made by the corporation pursuant to
division (E)(5), (6), or (7).
(9) As used in division (E) of this section, "corporation" includes
all constituent entities in a consolidation or merger and the new or
surviving corporation, so that any person who is or was a director,
officer, employee, trustee, member, manager, or agent of such a constituent
entity, or is or was serving at the request of such constituent entity as a
director, trustee, officer, employee, member, manager, or agent of another
corporation, domestic or foreign, nonprofit or for profit, a limited
liability company, or a partnership, joint venture, trust, or other
enterprise, shall stand in the same position under this section with
respect to the new or surviving corporation as he would if he had served
the new or surviving corporation in the same capacity.
Article Five of the Semi's Amended Regulations governs indemnification and
provides further as follows:
Section 5.01. Mandatory Indemnification. The corporation shall
indemnify any officer or director of the corporation who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, any action threatened or
instituted by or in the right of the corporation), by reason of
II-3
<PAGE> 27
the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee or agent of another corporation
(domestic or foreign, nonprofit or for profit), partnership, joint venture,
trust or other enterprise, against expenses (including, without limitation,
attorney's fees, filing fees, court reporters' fees and transcript costs),
judgments fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and with respect to any
criminal action or proceeding, he had no reasonable cause to believe this
conduct was unlawful. A person claiming indemnification under this Section
5.01 shall be presumed, in respect of any act or omission giving rise to
such claim for indemnification, to have acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interest of the
corporation, and with respect to any criminal matter, to have had no
reasonable cause to believe his conduct was unlawful, and the termination
of any action, suit or proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of itself, rebut such presumption.
Section 5.02. Court-Approved Indemnification. Anything contained in
the Regulations or elsewhere to the contrary notwithstanding:
(A) the corporation shall not indemnify any officer or director of the
corporation who was a party to any completed action or suit instituted by
or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation
as a director, trustee, officer, employee or agent of another corporation
(domestic or foreign, nonprofit or for profit), partnership, joint venture,
trust or other enterprise, in respect of any claim, issue or matter
asserted in such action or suit as to which he shall have been adjudged to
be liable for acting with reckless disregard for the best interests of the
corporation or misconduct (other than negligence) in the performance of his
duty to the corporation unless and only to the extent that the Court of
Common Pleas of Franklin County, Ohio or the court in which such action or
suit was brought shall determine upon application that, despite such
adjudication of liability, and in view of all the circumstances of the
case, he is fairly and reasonably entitled to such indemnity as such Court
of Common Pleas or such other court shall deem proper and
(B) the corporation shall promptly make any such unpaid
indemnification as is determined by a court to be proper as contemplated by
this Section 5.02.
Section 5.03. Indemnification for Expenses. Anything contained in the
Regulations or elsewhere to the contrary notwithstanding, to the extent
that an officer or director of the corporation has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred
to in Section 5.01, or in defense of any claim, issue or matter therein, he
shall be promptly indemnified by the corporation against expenses
(including, without limitation, attorneys fees, filing fees, court
reporter's' fees and transcript costs) actually and reasonably incurred by
him in connection therewith.
Section 5.04 Determination Required. Any indemnification required
under Section 5.01 and not precluded under Section 5.02 shall be made by
the corporation only upon a determination that such indemnification of the
officer or director is proper in the circumstances because he has met the
applicable standard of conduct set forth in Section 5.01. Such
determination may be made only (A) by a majority vote of a quorum
consisting of directors of the corporation who were not and are not parties
to, or threatened with, any such action, suit or proceeding, or (B) if such
a quorum is not obtainable or if a majority of a quorum of disinterested
directors so directs, in a written opinion by independent legal counsel
other than an attorney, or a firm having associated with it an attorney,
who has been retained by or who has performed services for the corporation,
or any person to be indemnified, within the past five years, or (C) by the
shareholders, or (D) by the Court of Common Pleas of Franklin County, Ohio
or (if the corporation is a party thereto) the court in which such action,
suit or proceeding was brought, if any; any such determination may be made
by a court under division (D) of this Section 5.04 at any time [including,
without limitation, any time before, during or after the time when any such
determination may be requested of, be under consideration by or have been
denied or disregarded by the disinterested
II-4
<PAGE> 28
directors under division (A) or by independent legal counsel under division
(B) or by the shareholders under division (C) of this Section 5.04]; and no
failure for any reason to make any such determination, and no decision for
any reason to deny any such determination, by the disinterested directors
under division (A) or by independent legal counsel under division (B) or by
shareholders under division (C) of this Section 5.04 shall be evidence in
rebuttal of the presumption recited in Section 5.01. Any determination made
by the disinterested directors under division (A) or by independent legal
counsel under division (B) of this Section 5.04 to make indemnification in
respect of any claim, issue or matter asserted in an action or suit
threatened or brought by or in the right of the corporation shall be
promptly communicated to the person who threatened or brought such action
or suit, and within ten (10) days after receipt of such notification such
person shall have the right to petition the Court of Common Pleas of
Franklin County, Ohio or the court in which such action or suit was
brought, if any, to review the reasonableness of such determination.
Section 5.05. Advances for Expenses. Expenses (including, without
limitation, attorney's' fees, filing fees, court reporter's' fees and
transcript costs) incurred in defending any action, suit or proceeding
referred to in Section 5.01 shall be paid by the corporation in advance of
the final disposition of such action, suit or proceeding to or on behalf of
the officer or director promptly as such expenses are incurred by him, but
only if such officer or director shall first agree, in writing, to repay
all amounts so paid in respect of any claim, issue or other matter asserted
in such action, suit or proceeding in defense of which he shall not have
been successful on the merits or otherwise:
(A) if it shall ultimately be determined as provided in Section 5.04
that he is not entitled to be indemnified by the corporation as provided
under Section 5.01; or
(B) if, in respect of any claim, issue or other matter asserted by or
in the right of the corporation in such action or suit, he shall have been
adjudged to be liable for acting with reckless disregard for the best
interests of the corporation or misconduct (other than negligence) in the
performance of his duty to the corporation, unless and only to the extent
that the Court of Common Pleas of Franklin County, Ohio or the court in
which such action or suit was brought shall determine upon application
that, despite such adjudication of liability, and in view of all the
circumstances, he is fairly and reasonably entitled to all or part of such
indemnification.
Section 5.06. Article Five Not Exclusive. The indemnification provided
by this Article Five shall not be exclusive of, and shall be in addition
to, any other rights to which any person seeking indemnification may be
entitled under the Articles or the Regulations or any agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in
his official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be an
officer or director of the corporation and shall inure to the benefit of
the heirs, executors, and administrators of such a person.
Section 5.07. Insurance. The corporation may purchase and maintain
insurance or furnish similar protection, including but not limited to trust
funds, letters of credit, or self-insurance, on behalf of any person who is
or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, trustee,
officer, employee, or agent of another corporation (domestic or foreign,
nonprofit or for profit), partnership, joint venture, trust or other
enterprise, against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not
the corporation would have the obligation or the power to indemnify him
against such liability under the provisions of this Article Five. Insurance
may be purchased from or maintained with a person in which the corporation
has a financial interest.
Section 5.08. Definitions. For purposes of this Article Five, and as
examples and not by way of limitation:
(A) A person claiming indemnification under this Article 5 shall be
deemed to have been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 5.01, or in defense of
any claim, issue or other matter therein, if such action, suit or
proceeding shall be terminated
II-5
<PAGE> 29
as to such person, with or without prejudice, without the entry of a
judgment or order against him, without a conviction of him, without the
imposition of a fine upon him and without his payment or agreement to pay
any amount in settlement thereof (whether or not any such termination is
based upon a judicial or other determination of the lack of merit of the
claims made against him or otherwise results in a vindication of him); and
(B) References to an "other enterprise" shall include employee benefit
plans; references to a "fine" shall include any excise taxes assessed on a
person with respect to an employee benefit plan; and references to "serving
at the request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants or beneficiaries; and
a person who acted in good faith and in a manner he reasonably believed to
be in the best interests of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" within the meaning of
that term as used in this Article Five.
Section 5.09. Venue. Any action, suit or proceeding to determine a
claim for indemnification under this Article Five may be maintained by the
person claiming such indemnification, or by the corporation, in the Court
of Common Pleas of Franklin County, Ohio. The corporation and (by claiming
such indemnification) each such person consent to the exercise of
jurisdiction over its or his person by the Court of Common Pleas of
Franklin County, Ohio in any such action, suit or proceeding.
In addition, Symix has purchased directors' and officers' liability
insurance coverage under policies which insure its directors and officers with
respect to liabilities.
ITEM 16. EXHIBITS
4.1 Certificate of Amendment to Amended Articles of Incorporation of
Symix Systems, Inc., as amended, as filed with the Secretary of State
of Ohio on May 10, 2000.
4.2 Form of Warrant issued to Selling Shareholders.
5.1 Opinion of Vorys, Sater, Seymour and Pease LLP as to the legality of
the common shares being offered.
10.1 Investor Rights Agreement dated May 10, 2000 among the registrant and
the Selling Shareholders.
10.2 Securities Purchase Agreement dated May 10, 2000 among the registrant
and the Selling Shareholders.
23.1 Consent of Ernst & Young LLP
23.2 Consent of Vorys, Sater, Seymour and Pease LLP (included in Exhibit
5.1).
24.1 Powers of Attorney
ITEM 17. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes:
(a) to file, during any period in which offers or sales are being made
of the securities registered by this Registration Statement, 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, unless the information required to be included
in such post-effective amendment is contained in a periodic report filed
by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 and incorporated in this registration
statement by reference;
II-6
<PAGE> 30
(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, unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 and incorporated in this
registration statement by reference; 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;
(b) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement, relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be in the initial bona fide offering thereof;
(c) 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; and
(d) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
2. 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 provisions described under Item 15 above, 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 Act and will be governed by the final adjudication of such
issue.
3. The undersigned Registrant hereby undertakes that:
(a) for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and
(b) for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-7
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Columbus, State of Ohio, on the 2nd day of
August, 2000.
SYMIX SYSTEMS, INC.
By /S/ LAWRENCE W. DELEON
------------------------------------
LAWRENCE W. DELEON
Vice President, Chief Financial
Officer and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
LAWRENCE J. FOX* Chairman of the Board of Directors August 2, 2000
------------------------------------------------
LAWRENCE J. FOX
STEPHEN A. SASSER* President, Chief Executive Officer August 2, 2000
------------------------------------------------ and Director (Principal Executive
STEPHEN A. SASSER Officer)
Vice President
/S/ LAWRENCE W. DELEON Vice President, Chief Financial August 2, 2000
------------------------------------------------ Officer and Secretary (Principal
LAWRENCE W. DELEON Financial and Accounting Officer)
LARRY L. LIEBERT* Director August 2, 2000
------------------------------------------------
LARRY L. LIEBERT
DUKE W. THOMAS* Director August 2, 2000
------------------------------------------------
DUKE W. THOMAS
JOHN T. TAIT* Director August 2, 2000
------------------------------------------------
JOHN T. TAIT
JAMES A. RUTHERFORD* Director August 2, 2000
------------------------------------------------
JAMES A. RUTHERFORD
ROGER D. BLACKWELL* Director August 2, 2000
------------------------------------------------
ROGER D. BLACKWELL
GUY L. DE CHAZAL* Director August 2, 2000
------------------------------------------------
GUY L. DE CHAZAL
BARRY GOLDSMITH* Director August 2, 2000
------------------------------------------------
BARRY GOLDSMITH
</TABLE>
*By: /S/ LAWRENCE W. DELEON
---------------------------------
LAWRENCE W. DELEON
(Attorney-in-Fact)
II-8
<PAGE> 32
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<S> <C> <C> <C>
4.1 Certificate of Amendment to Amended Articles of Incorporated herein by
Incorporation of Symix Systems, Inc. as filed with the reference to Exhibit 3(a)(3) to
Secretary of State of Ohio on May 10, 2000. the Quarterly Report on Form
10-Q of the Registrant for the
quarter ended March 31, 2000.
4.2 Form of Warrant issued to Selling Shareholders Incorporated herein by
reference to Exhibit 4(d) to
Quarterly Report on Form 10(Q)
of the Registrant for the
quarter ended March 31, 2000.
5.1 Opinion of Vorys, Sater, Seymour and Pease LLP as to the
legality of the common shares being offered (to be filed
by amendment).
10.1 Investor Rights Agreement dated as of May 10, 2000 among Incorporated herein by
the Registrant and the selling shareholders. reference to Exhibit 4(c) to
the Quarterly Report on Form
10-Q of the Registrant for the
quarter ended March 31, 2000.
10.2 Securities Purchase Agreement dated May 10, 2000 among the Incorporated herein by
Registrant and the selling shareholders. reference to Exhibit 10(a) to
the Quarterly Report on Form
10-Q of the Registrant for the
quarter ended March 31, 2000.
23.1 Consent of Ernst & Young LLP Filed herein
23.2 Consent of Vorys, Sater, Seymour and Pease LLP (included
in Exhibit 5.1).
24.1 Powers of Attorney Filed herein
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