<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 11, 1997
REGISTRATION NO. ___-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
WALKER INTERACTIVE SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 95-2862954
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
--------------------------
303 SECOND STREET
SAN FRANCISCO, CALIFORNIA 94107
(415) 495-8811
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
--------------------------
LEONARD Y. LIU
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
WALKER INTERACTIVE SYSTEMS, INC.
303 SECOND STREET
SAN FRANCISCO, CALIFORNIA 94107
(415) 495-8811
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------------
COPIES TO:
BRUCE C. POLLOCK JAMES R. JONES, ESQ.
SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER COOLEY GODWARD LLP
AND ASSISTANT SECRETARY FIVE PALO ALTO SQUARE
WALKER INTERACTIVE SYSTEMS, INC. 3000 EL CAMINO REAL
303 SECOND STREET PALO ALTO, CALIFORNIA 94306
SAN FRANCISCO, CA 94107 (650) 843-5000
(415) 495-8811 FAX (650) 857-0663
FAX (415) 281-1588
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 only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
=================================================================================================================================
<S> <C> <C> <C> <C>
Common Stock
$0.001 par value............... 634,022 shares $12.4375 $7,885,648.63 $2,389.59
=================================================================================================================================
</TABLE>
(1) Estimated in accordance with Rule 457(c) solely for the purpose of computing
the amount of the registration fee based on the average of the high and low
prices of the Company's Common Stock as reported on The Nasdaq National
Market on December 4, 1997.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED DECEMBER 11, 1997
PROSPECTUS
634,022 SHARES
WALKER INTERACTIVE SYSTEMS, INC.
COMMON STOCK
___________________
This Prospectus relates to 634,022 shares of Walker Interactive Systems,
Inc. ("Walker" or the "Company") Common Stock, par value $.001 (the "Common
Stock"), which are being offered and sold by certain stockholders of the Company
(the "Selling Stockholders"). The Selling Stockholders, directly or through
agents, broker-dealers or underwriters, may sell the Common Stock offered hereby
from time to time on terms to be determined at the time of sale, in transactions
on The Nasdaq National Market or in privately negotiated transactions or in a
combination of such methods of sale, at fixed prices that may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing prices or at negotiated prices. The Selling Stockholders may effect
such transactions by selling shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders or the purchasers of the shares for
whom such broker-dealers may act as agents or to whom they sell as principal or
both (which compensation to a particular broker-dealer may be in excess of
customary commissions). The Company will not receive any proceeds from the sale
of shares by the Selling Stockholders. See "Selling Stockholders" and "Plan of
Distribution."
The Common Stock of the Company is quoted on The Nasdaq National Market
under the symbol "WALK." The last reported sales price of the Company's Common
Stock on The Nasdaq National Market on December 10, 1997 was $13.1875 per share.
____________________
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 3
_____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
No underwriting commissions or discounts will be paid by the Company in
connection with this offering. Estimated expenses payable by the Company in
connection with this offering are estimated to be $25,000. The aggregate
proceeds to the Selling Stockholders from the Common Stock will be the purchase
price of the Common Stock sold less the aggregate agents' commissions and
underwriters' discounts, if any, and other expenses of issuance and distribution
not borne by the Company. See "Plan of Distribution."
The Selling Stockholders and any agents, broker-dealers or underwriters
that participate in the distribution of the Common Stock may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Act"), and any commission received by them and any profit on the resale of the
Common Stock purchased by them may be deemed to be underwriting discounts or
commissions under the Act. The Company has agreed to indemnify the Selling
Stockholders and certain other persons against certain liabilities, including
liabilities under the Act.
_____________, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files annual and quarterly reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information may be
inspected and copied at the Commission's Public Reference Section, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, as well as at the Commission's
Regional Offices at 7 World Trade Center, 13th Floor, New York, New York 10048;
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies
of such material can be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
The Common Stock of the Company is listed on The Nasdaq National Market and
reports and other information concerning the Company may be inspected at the
offices of The Nasdaq National Market at 1735 "K" Street, N.W., Washington, D.C.
20006-1500. The Commission also maintains a world wide web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically. The address of the site is
http://www.sec.gov.
ADDITIONAL INFORMATION
A registration statement on Form S-3 with respect to the Common Stock
offered hereby (the "Registration Statement") has been filed with the Commission
under the Act. This Prospectus does not contain all of the information
contained in such Registration Statement and the exhibits and schedules thereto,
certain portions of which have been omitted pursuant to the rules and
regulations of the Commission. For further information with respect to the
Company and the Common Stock offered hereby, reference is made to the
Registration Statement and the exhibits and schedules thereto. Statements
contained in this Prospectus regarding the contents of any contract or any other
documents are not necessarily complete and, in each instance, reference is
hereby made to the copy of such contract or document filed as an exhibit to, or
incorporated by reference into, the Registration Statement. The Registration
Statement, including exhibits thereto, may be inspected without charge at the
Commission's principal office in Washington, D.C., and copies of all or any part
thereof may be obtained from the Public Reference Section, Securities and
Exchange Commission, Washington, D.C., 20549, upon payment of the prescribed
fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are by this reference incorporated in and made a part of
this Prospectus:
(1) The Annual Report on Form 10-K for the fiscal year ended December 31,
1996;
(2) The Company's Quarterly Reports on Form 10-Q for fiscal quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997; and
(3) The description of the Company's Common Stock set forth in the
Company's Registration Statement on Form 8-A filed with the Commission on March
24, 1992.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference
herein and to be a part of this Prospectus from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
2
<PAGE>
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents or into this Prospectus) will be
provided without charge to each person, including any beneficial owner to whom
this Prospectus is delivered, upon a written or oral request to the Senior Vice
President and Chief Financial Officer of the Company, at the Company's principal
executive offices at 303 Second Street, San Francisco, CA 94107, telephone
number (415) 495-8811.
RISK FACTORS
The Company operates in a rapidly changing environment that involves
numerous risks and uncertainties which could have a material adverse effect on
the Company. The following discussion details some, but not all, of these risks
and uncertainties.
FLUCTUATION IN OPERATION RESULTS.
The Company's operating results fluctuate as a result of a variety of
factors including (i) the execution of new license agreements; (ii) the shipment
of software products; (iii) customer acceptance criteria for services performed;
(iv) completion of milestone or other significant development requirements
pursuant to the Company's license agreements; (v) the financial terms of
consulting agreements and the inclusion of fixed as opposed to variable pricing;
(vi) third-party royalty payments for licensed software; (vii) the demand for
the Company's products; (viii) changes in the Company's product mix; (ix) the
development and launch of new products, and the life cycles of the Company's
existing products; (x) research and development expenditures required to update
and expand the Company's product portfolio and related third-party consulting
costs; (xi) sales and marketing expenses generally related to the entry into new
markets with new or existing products and maintenance of market share in
existing markets; (xii) acquisitions and the integration and development of
acquired entities or products; (xiii) competitive conditions in the industry and
(xiv) general economic conditions. As a result, the Company believes that
period-to-period comparisons of its operating results are not necessarily
meaningful and should not be relied upon as indications of future performance.
The Company's quarterly operating results are particularly dependent on the
number of license agreement bookings executed in each quarter. The amount of
quarterly bookings has varied substantially from quarter to quarter due to a
variety of reasons including; (i) a high proportion of license agreements are
negotiated during the latter part of each quarter which may not be completed
before the quarter end; (ii) the sales cycles for some of the Company's products
is relatively long due to the Company's focus on "enterprise solutions" as
opposed to individual products, which adds complexity to the customer's
selection, negotiation and approval process; (iii) the amount related to each
booking may vary significantly due to the need for different solutions for
different customers; (iv) procurement procedures may vary from customer to
customer, which may affect the timing of the bookings; (v) the period for a
customer to complete product evaluations and to complete any subsequent purchase
approval may be delayed due to resource limitations; and (vi) economic,
political and industrial conditions can adversely affect business opportunities
without notice. In addition, bookings that are executed during a particular
quarter may not be recognized as revenue during such quarter because such
bookings may not have met the Company's revenue recognition criteria. No
assurance can be given that the Company will be able to effect new bookings in
accordance with historical results or management's expectations, and the
inability of the Company to do so could have a material adverse effect on the
Company's operating results.
While the Company typically sells its software under a standard license
agreement, license agreements associated with large enterprise solutions often
require the negotiation of terms and conditions that differ substantially from
the Company's standard license agreement terms. The negotiation of these
agreements may extend the sales cycle. In certain circumstances, the Company
may not obtain terms and conditions that permit the recognition of revenue upon
shipment of the licensed product or under the percentage of completion method of
contract accounting rules. Accordingly, revenue may not be recognized despite
the shipment of a product because specified milestones have not been met or
because applicable services have not been completed.
The Company in the past has and in the future expects to enter into fixed
price consulting agreements, particularly in response to increased competition
in the industry. The Company has recognized lower profit margins
3
<PAGE>
on certain fixed-price service agreements when compared to variable agreements.
No assurance can be given that the Company will be able to conclude fixed-price
agreements on terms that will allow the company to retain its historical
operating margins.
The Company has historically generated a majority of its consulting revenue
from pre- and post-implementation services. During the second and third
quarters of 1997, the Company provided services which include, but are not
limited to, Year 2000 conversion engagements and other hardware and software
solutions. The Company intends to continue its pursuit of consulting
engagements for which the Company believes it is qualified. Such engagements may
not be pre- or post-implementation related. There can be no assurances that
these engagements will result in profit margins equal to or greater than those
engagements that are specific to a customer's product implementation.
Furthermore, there can be no assurances that consulting revenue generated from
non-implementation related projects will continue in the future.
Employee and facility related expenditures comprise a significant portion
of the Company's operating costs and expenses, and are therefore relatively
fixed over the short term. In addition, the Company's expense levels are based,
in significant part, on the Company's forecasted revenue. If revenue levels
fall below expectations, net income is likely to be adversely affected. There
can be no assurance that the Company will be able to maintain or to continue its
current level of profitability on a quarterly or annual basis in the future.
Any of the foregoing factors could cause the Company's future operating results
to fall below the expectations of public securities market analysts, which could
have an adverse effect on the trading price of the Company's common stock. See
"Volatility of Stock Price."
RELIANCE ON THIRD PARTY TECHNOLOGY.
The Company generates revenue from internally developed software products,
some of which utilize technology licensed from third parties. The Company
expects to continue utilizing third party technology and may enter into
agreements with additional business partners. If sales of software utilizing
third party technology increase disproportionately, gross margins may be below
historical levels due to third party royalty obligations. There can be no
assurances that the third parties will renew existing agreements with the
Company or will not require financial conditions which are unfavorable to the
Company. Furthermore, there can be no assurances that existing third party
agreements will not be terminated.
INDUSTRY.
Certain software companies, including the Company, have experienced
significant economic downturns as a result of technological shifts and
competitive pressures. These downturns are characterized by decreased product
demand, price erosion, work slowdowns and layoffs. The Company's operations
may, in the future, experience substantial fluctuations from period to period as
a consequence of such industry patterns and general economic and political
conditions which could affect the timing of orders from customers. There can be
no assurance that such factors will not have a materially adverse effect on the
Company's business, operating results or financial condition.
INTERNATIONAL.
The Company plans to increase its presence in international markets
including, but not limited to, marketing the Tamaris and Aptos product lines in
additional countries. Risks associated with such pursuits include, but are not
limited to, the following: changing market demands, economic and political
conditions in foreign markets, foreign exchange fluctuations, longer collections
cycles, difficulty in managing a geographically dispersed organization, and
changes in international tax laws. The recent downturn in the Asia Pacific
business climate will have an adverse effect on some market opportunities.
Operating results are likely to be adversely affected if the Company's expansion
into international markets is not successful.
COMPETITION.
The financial applications and business software market is intensely
competitive and rapidly changing. A number of competitors offer products similar
to the Company's products and target the same customers. The Company believes
that its ability to compete depends upon many factors within and outside its
control, including
4
<PAGE>
the timing and market acceptance of new products and enhancements developed by
the Company and its competitors, product functionality, performance, price,
reliability, customer service and support, sales and marketing efforts and
product distribution. The primary competition for the Company's products is the
financial applications software offered by Geac Computer Corporation Limited
(formerly Dun & Bradstreet Software Services, Inc.), Oracle Software
Corporation, PeopleSoft, Inc. and SAP AG. In addition, the Company's products
compete with the software offered by Coda Group plc, Lawson Software, Systems
Union Group Ltd, Agresso AS, State of the Art and Platinum Software. The
Company's products also compete with products offered by other vendors, with
systems integrators and with consulting companies that offer custom software
development services. In addition, the Company competes with in-house
management information services and programming resources of its potential
customers. Many of the Company's competitors have substantially greater
financial, technical, and sales and marketing resources than the Company. Some
of these competitors also offer business application products not offered by the
Company. There can be no assurances that the Company will be able to compete
successfully in the future.
RAPID TECHNOLOGICAL CHANGE.
The software industry is characterized by rapid technological change. The
pace of change has accelerated due to advances in mainframe and client/server
technology and the growth in internet, intranet and extranet utilization. The
Company expects to evaluate potential opportunities and may invest in those
which are compatible with the Company's strategic direction. However, there can
be no assurances that any such investments will be profitable. Furthermore, the
Company's products are designed primarily for use with certain mainframe and
client/server systems. The introduction of products embodying new technologies
and the emergence of new industry standards can render existing products
obsolete. Accordingly, the Company's future success depends in part upon its
ability to continue to enhance its current products and to develop and introduce
new products that respond to evolving customer requirements and keep pace with
technological development and emerging industry standards, such as new operating
systems, hardware platforms, interfaces and third party applications software.
There can be no assurances that the Company will be successful in developing and
marketing product enhancements or new products that respond to technological
change, changes in customer requirements or emerging industry standards, that
the Company will not experience difficulties that could delay or prevent the
successful development, introduction and marketing of such products and
enhancements or that any new products or enhancements that it may introduce will
achieve market acceptance.
PRODUCT DEVELOPMENT.
The Company's continued success is dependent on its continued ability to
introduce, develop and market new and enhanced versions of its software
products, although there can be no assurance that such ability can be
maintained. The Company expects product development expenses to grow in future
periods. However, there can be no assurances that revenues will be sufficient
to support the future product development which is required for the Company to
be competitive. Although the Company may be able to release new products in
addition to enhancements to existing products, there can be no assurances that
the Company's new or upgraded products will be accepted, will not be delayed or
canceled, or will not contain errors or "bugs" that could affect the performance
of the product or cause damage to users' data.
PROPRIETARY RIGHTS.
The Company regards its products as proprietary. Through its license
agreements with customers and its internal security systems, confidentiality
procedures and employee agreements, the Company has taken steps to maintain the
trade secrecy of its products. However, there can be no assurances that
misappropriation will not occur. In addition, the laws of some countries do not
protect the Company's proprietary rights to the same extent as do the laws of
the United States. There can be no assurance that the confidentiality of any
proprietary information will provide any meaningful competitive advantage. The
Company has no patents relating to its products. The Company believes that,
because of the rapid pace of technological change in the computer software
industry, that trade secrets are less significant than factors such as the
knowledge, ability and experience of the Company's employees, frequent product
enhancements and the timeliness and quality of support services. There can be
no assurance that the current efforts to retain its products as proprietary will
be adequate.
5
<PAGE>
Although the Company believes that its products do not infringe upon the
propriety rights of third parties, there can be no assurance that third parties
will not assert infringement claims against the Company in the future with
respect to current or future products or that any such assertions may not
require the Company to enter into royalty arrangements or result in costly
litigation.
YEAR 2000 COMPLIANCE.
The Company's internal business information systems include some of the
same commercial application software products generally offered for license by
the Company to end user customers. These applications are Year 2000 compliant,
therefore the Company does not expect any Year 2000 compliance issues to arise
related to its primary internal business information systems. However, the
Company utilizes third party vendor network equipment, telecommunication
products, and software products some of which may not be fully Year 2000
compliant. In general, the Company believes that its key internal business
information systems are Year 2000 compliant. However, failure of any critical
technology components to operate properly in the Year 2000 may have an adverse
impact on business operations or require the Company to incur unanticipated
expenses to remedy any problems.
PRODUCT LIABILITY.
The Company's license agreements with its customers contain provisions
designed to limit the Company's exposure to potential product liability claims.
It is possible, however, that the limitation of liability provisions contained
in such license agreements may not be enforced as a result of international,
federal, state and local laws or ordinances or unfavorable judicial decisions.
The license and support of the Company's software for use in mission critical
applications creates the risk of product liability claims against the Company.
Damage liability or injunctive relief resulting from such a claim could cause a
materially adverse impact on the Company's business, operating results and
financial condition.
EMPLOYEES.
The Company believes that its continued success will depend in large part
upon its ability to attract, train and retain highly-skilled technical, sales
and marketing, and managerial personnel. The Company continues to hire a
significant number of sales, marketing, services and technical personnel.
Because of the high level of demand, competition for such personnel is intense
and the Company from time to time experiences difficulty in locating candidates
with appropriate qualifications or within desired geographic locations. Revenue
growth is dependent on the Company's ability to attract, train, retain and
productively manage such personnel.
EXPANSION OF FACILITIES.
Recently, commercial building vacancy rates have significantly dropped in
San Francisco, California, where the Company has its headquarters. As a
consequence, the Company may experience difficulty obtaining additional space if
the Company's space requirements in San Francisco significantly exceed the
quantity of space the Company currently has under lease. In addition, the
increased demand for office space has caused commercial rental rates to increase
substantially. Failure to either obtain space, or obtain it on reasonably
attractive commercial terms, may inhibit the Company's ability to grow or
otherwise adversely effect the Company's operations and financial results.
ACQUISITION RELATED RISKS.
The Company has and may continue to acquire complimentary businesses,
products or technology. The process of integrating an acquired company's
business into the Company's operations may result in unforseen operating
difficulties and expenditures and may require significant management attention
that would otherwise be available for the ongoing development of the Company's
business. There can be no assurance that any anticipated benefits of an
acquisition will be realized. Future acquisitions by the Company could result
in potentially dilutive issuances of equity securities, the incurrance of debt
and contingent liabilities and amortization related to goodwill and other
intangible assets, which could materially affect the Company's operating results
and financial condition. Acquisitions involve numerous risks, including
difficulties in the assimilation of operations, technologies and
6
<PAGE>
products of the acquired company, risks associated with entering markets in
which the Company has no or limited direct prior experience and the potential
loss of key employees of the acquired company.
VOLATILITY OF STOCK PRICE.
High technology companies, including the Company, frequently experience
volatility in their common stock prices. Factors such as quarterly fluctuations
in results of operations, announcements of technological innovations by the
Company or its competitors or the introduction of new products by the Company or
its competitors, and macroeconomic conditions in the computer hardware and
software industries generally, may have a significant adverse impact on the
market price of the Company's stock. If revenues or earnings in any quarter
fail to meet the expectations of the investment community, there could be an
immediate impact on the Company's stock price. In addition, the Company has
issued shares and stock options which if sold directly or exercised and sold on
the open market in large concentrations, could cause the Company's stock price
to decline in the short term. Recent tax legislation which lowered tax rates on
capital gains could potentially result in increased sales of all U.S. equity
securities including the Company's common stock. Such sales, if material, could
negatively impact the stock price. Furthermore, the stock market has from time
to time experienced extreme price and volume fluctuations which have
particularly affected the market price for many high technology companies, in
some cases unrelated to the operating performance of those companies. These
broad market fluctuations may materially adversely affect the market price of
the stock of the Company.
THE COMPANY
Walker was originally incorporated in California in 1973 and reincorporated
in Delaware in March 1992. Unless otherwise indicated, "Walker" and the
"Company" refer to Walker Interactive Systems, Inc., a Delaware corporation and
its wholly-owned subsidiaries. Walker's principal executive offices are located
at 303 Second Street, San Francisco, California 94107. Its telephone number is
(415) 495-8811.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders in the offering.
7
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders, the
number of shares of Common Stock owned beneficially by each of them as of
December 9, 1997 and the number of shares which may be offered pursuant to this
Prospectus. This information is based upon information provided by the Selling
Stockholders. The Selling Stockholders may sell all, some or none of their
Common Stock being offered.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY NUMBER SHARES BENEFICIALLY
OWNED PRIOR TO OF SHARES OWNED AFTER
OFFERING(1) BEING OFFERING(1)(3)
---------------------- ----------------------
NAME NUMBER PERCENT(2) OFFERED NUMBER PERCENT(2)
- ---------------------------- -------- ----------- --------- -------- -----------
<S> <C> <C> <C> <C> <C>
Robert W. Carter............ 486 * 486 - *
Joseph J. Colletti, Jr...... 364 * 364 - *
Colstab & Co................ 39,739 * 39,739 - *
James B. Drury.............. 2,684 * 2,684 - *
Thierry Guyader............. 3,579 * 3,579 - *
John P. Hamilton............ 364 * 364 - *
W. Samuel Hess.............. 2,793 * 2,793 - *
Alecia D. Holmes............ 58 * 58 - *
Humanade, LLC............... 8,020 * 8,020 - *
Patsy B. Hyde............... 1,271 * 1,271 - *
Charles A. Jett, Jr......... 100,423 * 100,423 - *
Mark P. Kajdos.............. 100,423 * 100,423 - *
James F. Milbery............ 375 * 375 - *
Vicki L. Millican........... 1,324 * 1,324 - *
Robert Keith Newbern........ 243 * 243 - *
Allen Scott Sides........... 243 * 243 - *
Summit Investors II, L.P.... 6,992 * 6,992 - *
Summit Ventures III, L.P.... 342,643 2.6% 342,643 - *
Lionel J. Tehini............ 5,597 * 5,597 - *
Updata Capital, Inc. ....... 16,037 * 16,037 - *
Gary N. Wesson.............. 243 * 243 - *
William Scott White......... 121 * 121 - *
</TABLE>
* Less than one percent.
(1) Unless otherwise indicated below, the persons named in the table have sole
voting and investment power with respect to all shares beneficially owned by
them, subject to community property laws where applicable.
(2) Applicable percentage of ownership is based on 13,248,110 shares of Common
Stock outstanding on December 9, 1997.
(3) Assumes the sale of all shares offered hereby.
8
<PAGE>
PLAN OF DISTRIBUTION
The Company is registering the shares of Common Stock offered by the
Selling Stockholders hereunder pursuant to contractual registration rights
contained in the Agreement and Plan of Merger and Reorganization among Walker,
Copper Acquisition Corporation and Revere, Inc. ("Revere"), dated as of October
29, 1997 (the "Reorganization Agreement"). Sales may be made on The Nasdaq
National Market or in private transactions or in a combination of such methods
of sale, at fixed prices that may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Selling Stockholders and any persons who participate in
the distribution of the Common Stock offered hereby may be deemed to be
underwriters within the meaning of the Act, and any discounts, commissions or
concessions received by them and any provided pursuant to the sale of shares by
them might be deemed to be underwriting discounts and commissions under the Act.
In order to comply with the securities laws of certain states, if
applicable, the Common Stock may be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Common Stock may not be sold unless it has been registered or qualified for sale
or an exemption from registration or qualification requirements is available and
is complied with.
The Company has agreed in the Reorganization Agreement to register the
shares of Walker Common Stock received by the Selling Stockholders pursuant to
the Reorganization Agreement under applicable Federal and state securities laws
under certain circumstances and at certain times. Pursuant to such agreement,
the Company has filed a registration statement related to the shares offered
hereby and has agreed to keep such registration statement effective until the
earliest of (i) the date thirty (30) days after the first scheduled release of
shares held in escrow to the Selling Stockholders pursuant to the Reorganization
Agreement or if no such release occurs the date 210 days after the effectiveness
of the registration statement or (ii) the sale of all the securities registered
thereunder. The Company will pay substantially all of the expenses incident to
the offering and sale of the Common Stock to the public, other than commissions,
concessions and discounts of underwriters, dealers or agents. Such expenses
(excluding such commissions and discounts), are estimated to be $25,000. The
Reorganization Agreement provides for cross-indemnification of the Selling
Stockholders and the Company to the extent permitted by law, for losses, claims,
damages, liabilities and expenses arising, under certain circumstances, out of
any registration of the Common Stock.
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Cooley Godward LLP, Palo Alto, California.
EXPERTS
The consolidated financial statements and related financial statement
schedule of the Company as of December 31, 1996 and 1995 and for each of the
three years in the period ended December 31, 1996 incorporated herein by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
----------------------------
9
<PAGE>
No dealer, salesman or other person has been authorized to give any information
or to make any representations other than those contained in this Prospectus
and, if given or made, such other information and representations must not be
relied upon as having been authorized by the Company. This Prospectus does not
constitute an offer or solicitation by anyone in any state in which such offer
or solicitation is not authorized, or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make such offer or solicitation. The delivery of this Prospectus at any time
does not imply that the information herein is correct as of any time subsequent
to the date hereof.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information...... 2
Additional Information..... 2
Incorporation of Certain
Documents by Reference..... 2
Risk Factors............... 3
The Company................ 7
Use of Proceeds............ 7
Selling Stockholders....... 8
Plan of Distribution....... 9
Legal Matters.............. 9
Experts.................... 9
</TABLE>
---------------------
--------------------------------
634,022 Shares
Common Stock
WALKER INTERACTIVE
SYSTEMS, INC.
---------------------
Prospectus
------------------
__________, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the Common Stock being registered. All the amounts shown are estimates
except for the registration fee.
<TABLE>
<CAPTION>
<S> <C>
Registration fee............... $ 2,390
Legal fees and expenses........ 15,000
Accounting Fees and Expenses... 5,000
Miscellaneous.................. 2,610
-------
Total........................ $25,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Under Section 145 of the Delaware General Corporation Law, Walker has broad
powers to indemnify its directors and officers against liabilities they may
incur in such capacities, including liabilities under the Act. Walker's Bylaws
provide that Walker will indemnify its directors and executive officers to the
fullest extent permitted by law, except as otherwise agreed in writing by any
such director or executive officer and except under certain circumstances for
proceedings by any such director or executive officer and Walker. The Bylaws
also require Walker to advance litigation expenses in the case of proceedings
involving directors or executive officers, against an undertaking by the
indemnified party to repay such advances if it is ultimately determined that the
indemnified party is not entitled to indemnification.
In addition, Walker's Amended and Restated Certificate of Incorporation
provides that, pursuant to Delaware law, its directors shall not be liable for
monetary damages for breach of the directors' fiduciary duty of care to Walker
and its stockholders. This provision in the Amended and Restated Certificate of
Incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such an injunctive or other forms of non-
monetary relief will remain available under Delaware law. In addition, each
director will continue to be subject to liability for breach of the director's
duty of loyalty to Walker, for acts or omissions not in good faith or involving
intentional misconduct, for knowing violation of law, for actions leading to
improper personal benefit to the director, and for payment of dividends or
approval of stock repurchases or redemptions that are unlawful under Delaware
law. The provision also does not affect a director's responsibilities under any
other law, such as the federal securities laws or state or federal environmental
laws.
Walker has entered into indemnity agreements with each of its directors and
executive officers. Such indemnity agreements contain provisions which are in
some respects broader than the specific indemnification provisions contained in
Delaware law.
Walker maintains a policy providing directors and officers liability
insurance which insures directors and officers of Walker in certain
circumstances.
II-1
<PAGE>
ITEM 16. EXHIBITS.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney (see page II-4).
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) 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.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to provisions described in Item 15, or otherwise, the registrant has
been advised that in the opinion of the 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.
The undersigned registrant hereby undertakes:
(1) To file, during any period during which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the Act;
(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.
Notwithstanding the foregoing, any increase or any decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low end or high end
of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
II-2
<PAGE>
(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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Exchange Act
that are incorporated by reference in the registration statement.
(2) That, for purposes of determining liability under the Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities to be offered therein, and the offering of such
securities at that time shall be deemed to be an initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which shall remain unsold at the termination
of the offering.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco, County of San Francisco, State of
California, on the 10th day of December, 1997.
WALKER INTERACTIVE SYSTEMS, INC.
By /s/Leonard Y. Liu
-----------------------------
Leonard Y. Liu
Chairman of the Board, President, and
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Leonard Y. Liu and Bruce C. Pollock, and
each or any one of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitutes or substitute, may lawfully do or cause to be
done by virtue hereof.
II-4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/Leonard Y. Liu Chairman of the Board, December 10, 1997
- ----------------- President, Chief Executive
Leonard Y. Liu Officer and Director
(Principal Executive
Officer)
/s/Bruce C. Pollock Senior Vice President, December 10, 1997
- -------------------- Chief Financial Officer
Bruce C. Pollock and Assistant Secretary
(Principal Financial
Officer)
/s/Barbara M. Hubbard Vice President, Corporate December 10, 1997
- --------------------- Controller (Principal
Barbara M. Hubbard Accounting Officer)
/s/Richard C. Alberding Director December 10, 1997
- -----------------------
Richard C. Alberding
/s/Tania Amochaev Director December 10, 1997
- -----------------
Tania Amochaev
/s/William A. Hasler Director December 10, 1997
- --------------------
William A. Hasler
/s/John M. Lillie Director December 10, 1997
- -----------------
John M. Lillie
/s/David C. Wetmore Director December 10, 1997
- -------------------
David C. Wetmore
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
5.1 Opinion of Cooley Godward LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Cooley Godward LLP. Reference is
made to Exhibit 5.1
24.1 Power of Attorney (Reference is made to page II-4)
</TABLE>
<PAGE>
EXHIBIT 5.1
December 10, 1997
Walker Interactive Systems, Inc.
303 Second Street
San Francisco, CA 94107
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Walker Interactive Systems, Inc. (the "Company") of a
Registration Statement on Form S-3 on or about December 11, 1997 (the
"Registration Statement") with the Securities and Exchange Commission covering
the offering of up to 634,022 shares of the Company's Common Stock, $.001 par
value (the "Shares").
In connection with this opinion, we have examined the Registration Statement and
related Prospectus, your Amended and Restated Certificate of Incorporation and
Bylaws, as amended, and such other documents, records, certificates, memoranda
and other instruments as we deem necessary as a basis for this opinion. We have
assumed the genuineness and authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies thereof, and the due execution and delivery of all documents where due
execution and delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the Registration
Statement and related Prospectus, will be validly issued, fully paid, and
nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
COOLEY GODWARD LLP
/s/ James R. Jones
- -------------------
James R. Jones
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Walker Interactive Systems, Inc. on Form S-3 of our report dated February 4,
1997 appearing in the Annual Report on Form 10-K of Walker Interactive Systems,
Inc. for the year ended December 31, 1996, and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
- -------------------------
DELOITTE & TOUCHE LLP
San Francisco, California
December 9, 1997
