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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 20, 1998
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
SCHEDULE 14D-9/A
(Amendment No. 1)
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
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STATE OF THE ART, INC.
(Name of Subject Company)
STATE OF THE ART, INC.
(Names of Person(s) Filing Statement)
Common Stock, no par value
(Title of Class of Securities)
______________________
85730710
(CUSIP Number of Class of Securities)
______________________
David W. Hanna
President and Chief Executive Officer
State Of The Art, Inc.
56 Technology Drive
Irvine, CA 92618
(714)753-1222
(Name, address and telephone number of person
authorized to receive notice and communications on
behalf of the person(s) filing statement)
______________________
With a copy to:
John A. Fore, Esq.
Selim Day, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
(650)493-9300
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This Amendment No. 1 amends the Solicitation/Recommendation Statement on
Schedule 14D-9 (as amended, the "Schedule 14D-9") filed by State of the Art,
Inc., a California corporation (the "Company"), relating to the tender offer by
Rose Acquisition Corp., a Delaware corporation (the "Purchaser"), a direct and
indirect wholly owned subsidiary of The Sage Group plc, a company organized
under the laws of England ("Parent"), to purchase all of the outstanding shares
of Common Stock of the Company upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated February 2, 1998. Capitalized terms used
and not otherwise defined herein have the meanings ascribed to them in the
Schedule 14D-9.
ITEM 3. IDENTITY AND BACKGROUND
Item 3 of the Schedule 14D-9 is hereby amended by amending the last
paragraph of the section entitled "Stock Options" under Item 3(b) to read as
follows:
The effect of this provision in the Merger Agreement is, among others,
to accelerate the vesting of certain options granted to the Company's executive
officers. Based on data as of December 31, 1997 and assuming the Effective Time
occurs prior to April 1, 1998, James H. Clement, Jr., W. Frank King, Susan L.
Rasinski, Richard G. Lull, David W. Hanna, James R. Eckstaedt, David R. Butler,
James P. Moore, Michael F. King, Gregory G. Davidson and George Riviere will
each receive at the Effective Time in cash approximately $279,688, $260,625,
$260,625, $117,000, $143,438, $324,844, $186,303, $155,678, $41,250, $147,499
and $87,501, respectively. The amounts to be received by each of the foregoing
persons may change based on the date on which such person's options vest.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Item 4(b) of the Schedule 14D-9 is hereby amended by amending the
section under "Factors Considered by the Board of Directors" as follows:
(a) Paragraph (i) is hereby amended to read as follows:
(i) the financial and other terms of the Offer, the Merger
and the Merger Agreement, including (a) the Board of Directors'
belief that Parent could consummate the Offer and the Merger in
a short time period, (b) Parent's access to financing for the
acquisition of the Shares in the Offer and the Merger, and (c)
the all-cash payment terms of the Offer.
(b) Paragraph (v) is hereby amended to read as follows:
(v) Parent's financial condition and ability to cause the
Purchaser to meet its obligations under the Merger Agreement,
including (a) Parent's ability to finance the acquisition of the
Shares in the Offer and the Merger (b) Parent's ability to
consummate the transactions contemplated by the Merger Agreement
in a short time period and (c) Parent's ability to operate the
business of the Company on a going-forward basis.
(c) Paragraph (vi) is hereby amended to read as follows:
(vi) the familiarity of the Board of Directors with the
business, results of operations, properties and financial
condition of the Company and the nature of the industry in
which it operates, the familiarity of Parent with the
Company's business and the nature of the industry in which it
operates and the synergies achievable by combining the
Company's and Parent's businesses taking into account the
distinctive product lines of the Company and Parent.
(d) Paragraph (vii) is hereby amended to read as follows:
(vii) the Board of Director's belief that the transactions
contemplated by the Merger Agreement could offer growth
opportunities to the Company's employees, including providing
employees with the potential to participate in the combined
entity in the form of Parent options and otherwise.
(e) The following paragraph is added as new paragraph (viii) as
follows:
(viii) the willingness of certain shareholders of the Company
to enter into the Shareholder Agreement, pursuant to which,
among other things, such shareholders agreed to tender the
Shares owned by them for purchase by Parent pursuant to the
Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES
Item 6(a) of the Schedule 14D-9 is hereby amended by adding the
following information:
On December 31, 1997, the administrator of the 1997 Employee Stock
Purchase Plan ("ESPP"), on behalf of each of David R. Butler, James P. Moore,
and Gregory G. Davidson, purchased 357, 143 and 236 Shares, respectively,
pursuant to the terms of the ESPP.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
By: /s/ David W. Hanna
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David W. Hanna
President and Chief Executive Officer
Dated: February 20, 1998
