<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 8, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
ASPEN TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2739697
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
TEN CANAL PARK
CAMBRIDGE, MASSACHUSETTS 02141
(617) 949-1000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------------
LAWRENCE B. EVANS
Chairman of the Board and Chief Executive Officer
ASPEN TECHNOLOGY, INC.
Ten Canal Park
Cambridge, Massachusetts 02141
(617) 949-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------
Copies to:
STEPHEN J. DOYLE, ESQ. MARK L. JOHNSON, ESQ.
Senior Vice President, General Counsel, FOLEY, HOAG & ELIOT LLP
Chief Legal Officer and Secretary One Post Office Square
ASPEN TECHNOLOGY, INC. Boston, Massachusetts 02109
Ten Canal Park
Cambridge, Massachusetts 02141
----------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(2)(3) OFFERING PRICE(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.10 par value(1)..... 45,000 shares $9.03 $406,406 $113
====================================================================================================================
</TABLE>
(1) Each share of common stock will be accompanied by one right to purchase
series A participating cumulative preferred stock of the registrant.
(2) Estimated solely for the purpose of determining the registration fee.
(3) In accordance with Rule 457(c) under the Securities Act of 1933, the above
calculation is based on the average of the high and low sale prices
reported in the consolidated reporting system of the Nasdaq National Market
on June 2, 1999.
----------------------
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> 2
The information in this prospectus is not complete and may be changed. The
selling stockholders 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 securities, and the selling stockholders are
not soliciting offers to buy these securities, in any state where the offer or
sale is not permitted.
SUBJECT TO COMPLETION, DATED JUNE 8, 1999
45,000 SHARES
ASPEN TECHNOLOGY, INC.
COMMON STOCK
The selling stockholders are offering 45,000 shares of common stock. We will not
receive any of the proceeds from sales of shares by the selling stockholders.
Our common stock trades on the Nasdaq National Market under the symbol "AZPN."
On June 7, 1999, the last reported sale price of our common stock on the Nasdaq
National Market was $10.50 per share.
The selling stockholders may sell these shares from time to time on the Nasdaq
National Market or otherwise. They may sell the shares at prevailing market
prices or at prices negotiated with buyers. The selling stockholders will be
responsible for any commissions or discounts due to brokers or dealers. The
amount of those commissions or discounts will be negotiated before the sales. We
will pay all of the other offering expenses, which we estimate will total
$6,500.
----------------------
INVESTING IN THESE SHARES INVOLVES RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 5.
----------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
, 1999
<PAGE> 3
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. NEITHER WE
NOR THE SELLING STOCKHOLDERS HAVE AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THE SELLING
STOCKHOLDERS ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF COMMON
STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. IN THIS
PROSPECTUS, REFERENCES TO "WE," "US" AND "OUR" REFER TO ASPEN TECHNOLOGY, INC.
AND ITS SUBSIDIARIES.
-----------------------
TABLE OF CONTENTS
PAGE
----
Prospectus Summary........................................................... 3
Risk Factors................................................................. 5
Use of Proceeds..............................................................14
Selling Stockholders.........................................................14
Plan of Distribution.........................................................14
Legal Matters................................................................15
Experts......................................................................15
Where You Can Find More Information..........................................15
2
<PAGE> 4
- --------------------------------------------------------------------------------
PROSPECTUS SUMMARY
Because this is only a summary, it does not contain all of the information that
may be important to you. You should read the entire prospectus, including "Risk
Factors" and the information incorporated by reference, before deciding to
invest in shares offered by this prospectus.
ASPEN TECHNOLOGY, INC.
OUR BUSINESS: We are the leading supplier of software and
service solutions used by companies in the
process industries to design, operate and manage
their manufacturing processes. The process
industries include manufacturers of chemicals,
petrochemicals, petroleum products,
pharmaceuticals, pulp and paper, electric power,
food and beverages, consumer products, and metals
and minerals.
OUR SOFTWARE AND SERVICES: We offer a comprehensive, integrated suite of
process manufacturing solutions that help process
manufacturers enhance their profitability by
improving their efficiency, productivity, capacity
utilization, safety and environmental compliance.
Our solutions facilitate these improvements
throughout the entire manufacturing life-cycle,
from research and development to engineering,
planning and scheduling, procurement, production
and distribution. In addition to software
solutions, we offer consulting services through
our staff of project engineers. Since May 1995, we
have acquired 16 companies and lines of business
to obtain technologies and expertise that
complement or enhance our core software and
services solutions.
OUR STRATEGY: Our objective is to extend our leadership in
providing process management solutions to the
process industries. To achieve this objective, we
pursue the following key strategies:
o extending our technology leadership position
by continuing to invest in research and
development and to identify and pursue
opportunities for strategic acquisitions;
o increasing the integration of many of our
products for the design, operation and
management of process plants, and providing
consulting services to implement this
technology around the business processes of
customers;
o leveraging our position in the process
industries to increase our supply chain
business, and incorporating our supply chain
technology as a key component of our
integrated product offerings;
o leveraging our installed customer base in the
chemical, petrochemicals, petroleum products
and pharmaceuticals industries by increasing
the number of users of software currently
licensed by our existing customers and by
licensing complementary software and services
to those customers;
- --------------------------------------------------------------------------------
3
<PAGE> 5
- --------------------------------------------------------------------------------
o increasing our penetration of other process
industries, particularly the pulp and paper,
electric power, and food and beverage
industries, as well as the semiconductor
industry;
o pursuing strategic acquisitions of
complementary technologies and services
capabilities; and
o selectively partnering with providers of
complementary products and services to
supplement our ability to offer
enterprise-wide solutions.
OUR CUSTOMERS: We currently have more than 750 customers
worldwide, including 45 of the 50 largest chemical
companies, 18 of the 20 largest petroleum refiners
and 16 of the 20 largest pharmaceutical companies.
OUR ADDRESS: Our principal executive offices are located at Ten
Canal Park, Cambridge, Massachusetts 02141. Our
telephone number is (617) 949-1000. Our website is
located at www.aspentech.com; information
contained in our website is not a part of this
prospectus.
THE OFFERING
COMMON STOCK OFFERED: All of the 45,000 shares offered by this
prospectus are being sold by the selling
stockholders. The selling stockholders are former
stockholders of Syllogistics, Inc. who acquired
these shares as the result of our acquisition of
Syllogistics, Inc. in October 1998.
USE OF PROCEEDS: We will not receive any of the proceeds from sales
of shares by the selling stockholders.
- --------------------------------------------------------------------------------
4
<PAGE> 6
RISK FACTORS
An investment in shares of our common stock is risky. You should consider
carefully the following risk factors in addition to the remainder of this
prospectus, including information incorporated by reference, before purchasing
shares offered by this prospectus.
Some of the information in this prospectus contains forward-looking statements
that involve substantial risks and uncertainties. You can identify these
statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate," "continue" and similar words. You should
read statements that contain these words carefully because they (1) discuss our
future expectations, (2) contain projections of our future operating results or
financial condition or (3) state other "forward-looking" information. We believe
it is important to communicate certain of our expectations to our investors.
There may be events in the future, however, that we are not accurately able to
predict or over which we have no control. The risk factors listed in this
section, as well as any other cautionary language in this prospectus, provide
examples of risks, uncertainties and events that may cause our actual results to
differ materially from the expectations we describe in our forward-looking
statements. Before you invest in our common stock, you should be aware that the
occurrence of any of the events described in these risk factors and elsewhere in
this prospectus could have a material adverse effect on our business, financial
condition and results of operations. In such case, the trading price of our
common stock could decline and you could lose all or part of your investment.
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE
Our operating results are difficult to predict and may fluctuate significantly
from quarter to quarter. If our operating results fall below the expectations of
investors or public market analysts, the price of our common stock could fall
dramatically.
Our operating results in the fiscal quarter and fiscal year ended June 30, 1998
were below the expectations of some public market analysts and investors,
principally because our services revenues grew more slowly than anticipated and
our company-wide expenses were higher than expected. Our operating results in
the fiscal quarter ended September 30, 1998 were below the expectations of some
public market analysts and investors, principally because our license revenues
were lower than anticipated. In each of October 1998 and April 1999, we
reassessed our business prospects for the remainder of fiscal 1999 and reduced
our internal estimates of revenues and earnings from previously anticipated
levels. On April 27, 1999, we announced that we had implemented a restructuring
program intended to reduce our operating costs and improve our productivity;
this restructuring included reducing our staff by approximately 200 employees,
as well as consolidating facilities, streamlining operations and rationalizing
some non-core products and activities acquired in recent years. Since July 27,
1998, the date on which we preliminarily announced our estimated results for the
fiscal quarter and year ended June 30, 1998, through the close of business on
June 7, 1999, the price per share of our common stock, as reported by the Nasdaq
National Market, decreased from $48.25 to $10.50. See "Litigation."
Our revenues are difficult to forecast for a number of reasons:
o License fees for our software products are substantial, and as a result
the sales process for our solutions is lengthy, sometimes exceeding a year.
The length of the sales process makes our software revenues difficult to
predict, and the delay of one or more large orders could cause our
quarterly revenues to fall substantially below expectations.
5
<PAGE> 7
o We ship our software products within a short period after receipt of an
order, and we usually do not have a material backlog of unfilled orders of
software products. Consequently, our revenues from software licenses in any
quarter depend substantially on the orders booked and shipped in that
quarter. We historically have derived a majority of our quarterly software
license revenues from license agreements consummated in the final weeks of
the quarter. As a result, even a short delay in the consummation of an
agreement may cause our revenues to fall below expectations for that
quarter.
o Our revenues during the first quarter of each fiscal year historically have
declined from the immediately preceding fiscal quarter, in part because (1)
a substantial portion of our revenues have been derived from foreign
countries where business is slow during the summer months and (2) a
relatively smaller portion of our software licenses have come up for
renewal in the first quarter.
o Fluctuating economic conditions may vary demand for our products and
services in ways that are difficult to predict. For example, during an
economic downturn in the process industries, some manufacturers may cancel
orders due to cash flow concerns. Other manufacturers, however, may choose
to accelerate or increase their orders for our software and services since
they can use our solutions to improve their efficiency and productivity.
Most of our expenses, particularly employee compensation, are relatively fixed.
As a result, even relatively small variations in the timing of our revenues may
cause significant variations in our quarterly operating results and may result
in quarterly losses.
As a result of these factors, we believe that quarter-to-quarter comparisons of
our results of operations are not necessarily meaningful. You should not rely on
our quarterly results of operations to predict our future performance.
WE FACE SIGNIFICANT COMPETITION FOR A LIMITED SUPPLY OF QUALIFIED PROJECT
ENGINEERS
We derive a substantial portion of our revenues from services provided in
connection with extremely complex projects. In general, only highly qualified,
highly educated project engineers have the training and skills necessary to
complete these projects successfully. In order to continue to staff our current
and future projects, we will need to attract, motivate and retain a significant
number of qualified chemical and other project engineers. Qualified project
engineers are in short supply and we face significant competition for these
employees, from not only our competitors but also clients, academic institutions
and other enterprises. Other employers may offer project engineers significantly
greater compensation and benefits or more attractive career paths or geographic
locations than we are able to offer. Any failure on our part to hire, train and
retain a sufficient number of qualified project engineers would seriously damage
our business.
WE FACE INTENSE COMPETITION FROM A BROAD AND INCREASING RANGE OF VENDORS
We face intense competition from four primary sources:
o commercial vendors of software products and related consulting services for
one or more elements in the design, operation and management of
manufacturing processes;
o hardware vendors that offer software solutions in order to add value to
their proprietary distributed control systems, or DCS, which use computer
hardware systems, communication networks and
6
<PAGE> 8
industrial instruments to measure, record and automatically control process
variables during production;
o large operating companies in the process industries that have developed
their own proprietary software solutions; and
o companies licensing proprietary manufacturing processes and providing
consulting services.
Because of the breadth of our software and service offerings, we face
competition from different vendors depending on the solution in question:
o With respect to particular software solutions, we compete with
Chemstations, Inc., Hyprotech, Ltd. (a subsidiary of AEA Technology plc),
The Foxboro Company, Simulation Sciences, Inc. and Wonderware Corporation
(all of which are subsidiaries of Siebe plc), OSI Software, Inc., the
Simcon division of ABB Asea Brown Boveri (Holding) Ltd., and several
smaller competitors, such as Pavilion Technologies, Inc.
o With the acquisition of Chesapeake Decision Sciences, Inc., we now compete
with established commercial vendors of supply chain management software,
including i2 Technologies, Inc. and Manugistics Group, Inc.
o A number of vendors of enterprise resource planning, or ERP, software
products, such as Baan Company N.V., J.D. Edwards Inc., Oracle Corporation,
PeopleSoft, Inc., and SAP A.G., recently have entered the market for supply
chain management solutions, expanded their existing presence in that
market, or announced plans to enter into or expand their presence in that
market. ERP solutions help a process manufacturer manage resources across
the enterprise and enable the manufacturer to integrate front- and
back-office business functions.
o We also expect to encounter continuing competition from DCS solution
vendors, such as Honeywell Inc., as they expand their software and service
offerings to include additional aspects of process manufacturing.
In recent years, consolidation in our markets, such as the acquisitions by Siebe
plc of Simulation Sciences, Inc. and Wonderware Corporation and the acquisition
of Elsag Bailey by Asea Brown Boveri (Holding) Ltd. has expanded the breadth of
product and service offerings by some of our competitors. As a result of this
consolidation and the expansion of DCS and ERP vendors into additional markets,
we may compete from time to time with divisions of companies, such as Honeywell
Inc. and Siebe plc, with which we collaborate on other occasions. Our inability
to compete and cooperate simultaneously with these companies may seriously
damage our business.
OUR REVENUES ARE CONCENTRATED IN THE CHEMICALS, PETROCHEMICALS AND PETROLEUM
INDUSTRIES
We derive a substantial majority of our revenues from companies in the
chemicals, petrochemicals and petroleum industries. We expect that companies in
these industries will continue to account for a substantial majority of our
revenues for the foreseeable future. Our success therefore depends directly on
continued demand for our software and services by companies in these industries.
The chemicals, petrochemicals and petroleum industries are highly cyclical. We
believe that in the past chemical, petrochemical and petroleum companies have
delayed and reduced capital and operating
7
<PAGE> 9
expenditures as the result of economic downturns, as well as pricing pressures
experienced in connection with cost-containment measures and environmental
regulations. These industry patterns, as well as general domestic and foreign
economic conditions, could seriously damage our business.
On April 27, 1999, we announced that our revenues for the fiscal quarter ended
March 31, 1999 were below our expectations because of, among other things,
difficult economic conditions in the petroleum, chemicals and petrochemicals
sectors. In this environment, purchase decisions are taking longer and sales
cycles are more complex. In light of this situation, we implemented a
restructuring program intended to reduce our operating costs and improve our
productivity. This restructuring included reducing our staff by approximately
200 employees, as well as consolidating facilities, streamlining operations and
rationalizing some non-core products and activities acquired in recent years.
Recently some of our clients have completed or announced mergers with other of
our clients. For example, British Petroleum and Amoco merged their operations on
December 31, 1998, and the resulting entity, BP Amoco, announced in April 1999
that it had entered into an agreement to combine with ARCO. Exxon Corporation
and Mobil Corporation executed a merger agreement in December 1998. We are
unable to predict the effect, if any, that these consolidations will have on the
nature and quantity of software and services we provide to these clients.
OUR ACQUISITION STRATEGY INVOLVES RISKS
From May 1995 through October 1998, we completed 16 acquisitions. Through these
acquisitions, we have expanded our product and service offerings, entered new
markets, and increased the scope of our operations and the number of our
employees. While we are not currently a party to any agreements or
understandings for any material acquisitions, we expect to continue to acquire
both domestic and foreign companies as part of our growth strategy. Acquisitions
involve risks that could cause our actual growth to differ from our
expectations. For example:
o We may be unable to continue to identify suitable acquisition candidates.
In light of the consolidation trend in our industry, we face increasing
competition for acquisition opportunities. This competition may
substantially increase the cost of any acquisition we complete.
o In future acquisitions, we may issue equity securities that could be
dilutive to our shareholders. In those acquisitions, we also may incur
additional debt and amortization expense related to goodwill and other
intangible assets. This additional debt and amortization expense may
materially and adversely affect our business and operating results.
o We may be unable to integrate acquired businesses successfully and to
realize anticipated economic, operational and other benefits in a timely
manner. Integration of an acquired business is especially difficult when we
acquire a business in a market in which we have limited or no expertise or
a business with a corporate culture different from ours. If we are unable
to successfully integrate acquired businesses, we may incur substantial
costs and delays or other operational, technical or financial problems. In
addition, the failure to integrate acquisitions successfully may divert
management's attention from our existing business and may damage our
relationships with our key clients and employees.
8
<PAGE> 10
WE NEED TO DEVELOP NEW SOFTWARE AND SERVICES
We face rapidly changing technology and continuing improvements in computer
hardware, operating systems, programming tools, programming languages and
database technology. In order to be successful, we must:
o enhance our current software products and services;
o integrate our current and future software offerings;
o modify our products to operate on additional or new operating platforms or
systems; and
o develop in a timely and cost-effective manner new software and services
that meet changing market conditions, including evolving customer needs,
new competitive software and service offerings, emerging industry standards
and changing technology.
We face rapidly changing technology and continuing improvements in computer
hardware, operating systems, programming tools, programming languages, and
database technology, as well as the development of open standards and interfaces
between our products and the products of other companies.
In the past, we have experienced delays in developing new products and enhancing
existing products, and on occasion we have postponed scheduled delivery dates
for products. Like many other software products, our software on occasion has
contained undetected errors or "bugs" that may not be detected for a number of
months after the delivery of the software. In order to be successful, we must
meet our customers' expectations with respect to product development,
enhancement and integration and our software and services must address
adequately the needs of our customers.
WE DEPEND ON THE SERVICES OF OUR CURRENT CHIEF EXECUTIVE OFFICER
Our future success depends to a significant degree on the skills, experience and
efforts of our executive officers, particularly Lawrence B. Evans, our principal
founder and Chairman and Chief Executive Officer. Dr. Evans has led us since our
incorporation in 1981. We do not have any employment contract requiring Dr.
Evans or any of our other executive officers to continue their employment for
any period of time, and we do not maintain any significant amount of key-person
life insurance on any of our executive officers. The loss of the services of Dr.
Evans would seriously damage our business.
WE MAY INCUR SIGNIFICANT COSTS AS THE RESULT OF PENDING SECURITIES LITIGATION
On October 5, 1998, a purported class action lawsuit was filed in the United
States District Court for the District of Massachusetts against us and certain
of our officers and directors, on behalf of purchasers of our common stock
between April 28, 1998 and October 2, 1998. This lawsuit seeks an unspecified
amount of damages and claims violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, alleging that we and the named officers and
directors issued a series of materially false and misleading statements
concerning our financial condition, operations and integration of several
acquisitions. On October 26, 1998, a second purported class action lawsuit was
filed in the United States District Court for the District of Massachusetts
against us and certain of our officers and directors, on behalf of purchasers of
our common stock between April 28, 1998 and October 2, 1998. The complaint for
this second lawsuit is identical to the complaint for the first lawsuit, except
for the plaintiff's name. On November 20, 1998, a third purported class action
lawsuit was filed in the United States District
9
<PAGE> 11
Court for the District of Massachusetts against us and certain of our officers
and directors, on behalf of purchasers of our common stock between January 27,
1998 and October 2, 1998. The complaint for this third lawsuit is identical to
the two prior complaints, except for the plaintiff's name and the additional
reference to statements made between January 27, 1998 and April 28, 1998. On
January 27, 1999, in response to a motion to dismiss that we had filed, the
plaintiffs in the three class actions consolidated the three complaints. We
believe that we have meritorious legal defenses to these lawsuits, and we intend
to defend vigorously against these actions. We currently are unable, however, to
determine whether resolution of these matters will have a material adverse
impact on our financial position or results of operations, or we are unable to
estimate the amount of the loss, if any, that may result from resolution of
these matters. It is difficult for us to predict the results of complex legal
proceedings such as the securities litigation described above. This securities
litigation may be expensive and may disrupt our normal business operations.
WE ARE SUBJECT TO PRODUCT LIABILITY CLAIMS
The sale and implementation of our software products and services potentially
may result in significant product liability claims. Process manufacturers use
our software products and services in designing, operating and managing their
manufacturing processes at large facilities. Any failure of the software at
those facilities could result in significant claims for damages or for
violations of environmental, safety and other laws and regulations. Our
agreements with our customers generally contain provisions designed to limit our
exposure to potential product liability claims. These provisions may, however,
not be effective as a result of applicable laws or judicial decisions.
OUR PROPRIETARY TECHNOLOGY IS SUBJECT TO LIMITED PROTECTION
Our business could be materially and adversely affected if we are not able to
protect adequately our proprietary software and other proprietary intellectual
property rights. We rely on a combination of copyright, patent, trademark and
trade secret laws, license and confidentiality agreements, and software security
measures to protect our proprietary rights. Although we presently hold U.S. and
foreign registered trademarks and U.S. patents on certain of our proprietary
technology, we may be unable to obtain similar protection for our other
intellectual property. In addition, the laws of certain countries in which our
products are licensed do not protect our products and intellectual property
rights to the same extent as U.S. laws. We generally enter into non-disclosure
agreements with our employees and customers and restrict access to, and
distribution of, our proprietary information. Nevertheless, we may be unable to
deter misappropriation of our proprietary information, detect unauthorized use
and take appropriate steps to enforce our intellectual property rights. Our
competitors also may independently develop technologies that are substantially
equivalent or superior to our technology. Although we believe that our services
and products do not infringe on the intellectual property rights of others, we
cannot prevent someone else from asserting a claim against us in the future for
violating their technology rights.
OUR INTERNATIONAL OPERATIONS INVOLVE ADDITIONAL RISKS
In fiscal 1996, 1997 and 1998 and the first nine months of fiscal 1999, we
derived 42.0%, 50.0%, 45.4% and 53.3% of our revenues from customers outside the
United States. We anticipate that revenues from international customers will
continue to account for a significant portion of our revenues for the
foreseeable future. Our international operations are subject to additional
risks, including:
10
<PAGE> 12
o fluctuations in exchange rates may reduce our earnings, particularly where
we denominate arrangements with international customers in the currency of
the country in which our software or services are provided, and the hedging
techniques we implement may be expensive and may not fully eliminate the
impact of exchange rate fluctuations on our operating results;
o tariffs and other barriers may reduce our ability to sell our solutions or
may reduce the profitability of those solutions;
o political and economic instability, such as the economic downturn in Asia
in 1998, may lead to reduced demand for our solutions or make it difficult
for us to offer our products;
o changes in technology standards, such as interfaces between products, that
are developed by European or foreign groups may require additional
development efforts by us or may change the buying behavior of some of our
customers;
o unexpected changes in regulatory requirements may decrease the usefulness
of our solutions for process manufacturers and therefore reduce the demand
for those solutions;
o we may experience difficulties in managing a global network of distributors
or representatives and in staffing and managing foreign subsidiary
operations;
o we may encounter difficulties or delays in translating products and product
documentation into foreign languages;
o we may suffer potentially adverse tax consequences from operations in a
large number of countries; and
o the adoption and use of the euro, the single European currency introduced
in January 1999, may adversely affect our business in ways we cannot
currently predict.
WE MUST INCREASE OUR MARKET PENETRATION
Our failure to achieve increased market penetration in the process industries
would substantially restrict our future growth and damage our business
prospects. Our ability to increase market penetration will depend upon a number
of factors, including product performance, accuracy of results, reliability,
breadth and integration of product offerings, scope of applications, and ease of
implementation and use.
OUR PRODUCTS, SERVICES AND SYSTEMS MAY NOT BE YEAR 2000 COMPLIANT
Many existing computer systems and software applications use only two digits to
identify a year in the date field. These systems and applications were designed
and developed without considering the impact of the upcoming change in the
century. If not corrected, year 2000 problems may cause many computer
applications to fail or create erroneous results for calculations involving
years after 1999.
If we are not able to develop or offer, in a timely manner, year 2000 compliant
products and product updates, we may suffer the following consequences:
11
<PAGE> 13
o We could experience a significant loss of revenues. Customers may decide
not to purchase our products and services, or may decide to delay
purchasing our products or services in anticipation of our future release
of year 2000 compliant products.
o Year 2000 errors in our products could materially impair the utility of our
products and services and could result in significant product liability
claims against us.
o We could incur significant expenses in making our products, services and
internal systems year 2000 compliant. We currently believe the total costs
to be incurred for all of our year 2000 related projects will not have a
material impact on our operating results. Currently unidentified year 2000
problems may, however, cause us to incur material unanticipated expenses.
We are assessing these costs on an ongoing basis in order to adjust our
spending plans as necessary.
We have undertaken, but not completed, a program to determine whether and to
what extent we may need to update our software products and service processes to
become year 2000 compliant. We have tested and determined that substantially all
of our standard products are compliant. We have not, however, completed testing
on the work processes of our service groups. We do not intend to test or modify
all prior versions of our software products, current products used on year 2000
non-compliant systems, custom applications developed by or for customers, or
certain current software products that we plan to replace with either new
software products or year 2000 compliant releases by the end of 1999. Until we
have completed our assessment, we cannot be sure that our efforts to address
year 2000 issues are adequate. Although we have obtained representations as to
year 2000 compliance from the sellers of certain of our recently acquired
technologies, we cannot be certain that we will not encounter year 2000 problems
arising from these technologies. Moreover, the ability of our software products
and services to comply with year 2000 requirements depends in part upon the
availability of year 2000 compliant versions of operating systems and software
applications used by or with our products and services.
We are evaluating the readiness of those of our internal systems that are
business-critical. We consider hardware, software, systems, technologies and
applications to be "business-critical" if a failure would either have a material
adverse impact on our business or involve a safety risk to our employees or
customers. We have reviewed certain of our internal systems and future system
plans to assess year 2000 compliance. We expect that our internal system
development plans will address the year 2000 issue and will correct any existing
non-compliant systems without the need to accelerate the overall information
systems implementation plans. Our business would be adversely affected if there
are unidentified dependencies on internal systems to operate the business, or if
any required modifications are not completed on a timely basis or are more
costly to implement than currently anticipated.
OUR STOCK PRICE MAY FLUCTUATE SIGNIFICANTLY
Our common stock is traded on the Nasdaq National Market. The market price of
our common stock could fluctuate substantially based on a variety of factors
such as our financial performance, announcements concerning us or our key
clients or competitors, technological innovations, litigation or changes in
earnings estimates by analysts. Stock prices may fluctuate widely for reasons
unrelated to operating results. Fluctuations in general economic, political and
market conditions, such as recessions or international currency fluctuations,
may adversely affect the market price of our common stock.
The market price of our common stock has been volatile over the past year. Our
operating results in the fiscal quarter and fiscal year ended June 30, 1998 were
below the expectations of some public market analysts and investors, principally
because our services revenues grew more slowly than anticipated and
12
<PAGE> 14
our company-wide expenses were higher than expected. Our operating results in
the fiscal quarter ended September 30, 1998 were below the expectations of some
public market analysts and investors, principally because our licenses revenues
were lower than anticipated. During the fiscal quarter ending December 31, 1998,
we reassessed our business prospects for the last three quarters of fiscal 1999
and significantly reduced our internal estimates of revenues and earnings from
previously anticipated levels. On April 27, 1999, we announced that we had
implemented a restructuring program intended to reduce our operating costs and
improve our productivity; this restructuring included reducing our staff by
approximately 200 employees, as well as consolidating facilities, streamlining
operations and rationalizing some non-core products and activities acquired in
recent years. Since July 27, 1998, the date on which we preliminarily announced
our estimated results for the fiscal quarter and year ended June 30, 1998, the
price per share of our common stock, as reported by the Nasdaq National Market,
decreased from $48.25 to a low of $6.125 on October 5, 1998. On June 7, 1999,
the last reported sale price of our common stock on the Nasdaq National Market
was $10.50. See "Litigation" for a brief description of three purported class
actions against us and certain of our officers and directors on behalf of
purchasers of our common stock during certain periods in 1998.
OUR ANTI-TAKEOVER PROVISIONS MAY DISCOURAGE POTENTIAL TAKEOVER ATTEMPTS
Certain provisions of our certificate of incorporation and Delaware law could be
used by our incumbent management to make it more difficult for a third party to
acquire control of us, even if the change in control might be beneficial to our
stockholders. This could discourage potential takeover attempts and could
adversely affect the market price of our common stock.
In particular, we may issue preferred stock in the future without stockholder
approval, upon terms determined by our board of directors. The rights of holders
of our common stock would be subject to, and may be adversely affected by, the
rights of holders of any preferred stock issued in the future. The issuance of
preferred stock could have the effect of making it more difficult for a third
party to acquire, or of discouraging a third party from acquiring, a majority of
our outstanding stock. We have adopted a stockholder rights plan that may deter
or delay attempts to acquire us or to accumulate shares of common stock.
13
<PAGE> 15
USE OF PROCEEDS
All of the shares of common stock offered by this prospectus are being offered
by the selling stockholders. For information about the selling stockholders, see
"Selling Stockholders." We will not receive any proceeds from sales of these
shares.
SELLING STOCKHOLDERS
The selling stockholders are the former stockholders of Syllogistics, Inc.,
which we acquired in October 1998. The shares they received in the acquisition
have been registered in accordance with the provisions of a registration rights
covenant entered into in connection with the acquisition.
The following table sets forth certain information with respect to the
beneficial ownership of our common stock by the selling stockholders as of June
1, 1999 and as adjusted to reflect the sale of the shares of common stock
offered by this prospectus. Beneficial ownership is determined in accordance
with the rules of the Securities and Exchange Commission and generally includes
voting or investment power with respect to securities. Except as indicated, each
of the selling stockholders possesses sole voting and investment power with
respect to all of the shares of common stock owned by them, subject to community
property laws where applicable.
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY OWNED
BENEFICIALLY OWNED NUMBER AFTER OFFERING IF
PRIOR TO OFFERING OF SHARES ALL SHARES SOLD
----------------- BEING ---------------
NAME NUMBER PERCENT OFFERED NUMBER PERCENT
- ---- ------ ------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
Jacob B. Bercu.............. 4,500 * 4,500 -- --
Daniel Mark Sims............ 40,500 * 40,500 -- --
</TABLE>
- ----------------
* Percentage of shares beneficially owned is less than 1.0%.
PLAN OF DISTRIBUTION
The shares offered by this prospectus may be sold from time to time by selling
stockholders, who consist of the persons named under "Selling Stockholders"
above and those persons' pledgees, donees, transferees or other successors in
interest. The selling stockholders may sell the shares on the Nasdaq National
Market or otherwise, at market prices or at negotiated prices. They may sell
shares by one or a combination of the following:
o a block trade in which a broker or dealer so engaged will attempt to
sell the shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by the broker
or dealer for its account pursuant to this prospectus; and
o ordinary brokerage transactions and transactions in which a broker
solicits purchasers.
In effecting sales, brokers or dealers engaged by the selling stockholders may
arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from selling stockholders in amounts to be
negotiated prior to the sale. The selling stockholders and any broker-dealers
that participate in the distribution may be deemed to be "underwriters" within
the meaning of
14
<PAGE> 16
Section 2(11) of the Securities Act of 1933, and any proceeds or commissions
received by them, and any profits on the resale of shares sold by
broker-dealers, may be deemed to be underwriting discounts and commissions.
If any selling stockholder notifies us that a material arrangement has been
entered into with a broker-dealer for the sale of shares through a block trade,
special offering, exchange distribution or secondary distribution or a purchase
by a broker or dealer, we will file, a prospectus supplement, if required
pursuant to Rule 424(c) under the Securities Act of 1933, setting forth:
o the name of each of the participating broker-dealers,
o the number of shares involved,
o the price at which the shares were sold,
o the commissions paid or discounts or concessions allowed to the
broker-dealers, where applicable,
o a statement to the effect that the broker-dealers did not conduct any
investigation to verify the information set out or incorporated by
reference in this prospectus, and
o any other facts material to the transaction.
LEGAL MATTERS
Foley, Hoag & Eliot LLP, Boston, Massachusetts, has advised us with respect to
the validity of the shares of common stock offered by this prospectus.
EXPERTS
Our consolidated balance sheets as of June 30, 1997 and 1998 and our related
consolidated statements of operations, stockholders' equity and cash flows for
the years ended June 30, 1996, 1997 and 1998 incorporated by reference in this
prospectus from our Annual Report on Form 10-K for the fiscal year ended June
30, 1998 have been audited by Arthur Andersen LLP, independent public
accountants, to the extent and for the periods indicated in their reports
included in that Form 10-K and are incorporated by reference in this prospectus
in reliance upon the authority of Arthur Andersen LLP as experts in auditing and
accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual reports, quarterly reports, current reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy our SEC filings at the SEC's public reference room at 450
Fifth Street, N.W., Washington D.C. 20549. You may call the SEC at
1-800-SEC-0330 for further information about the public reference room. Our SEC
filings also are available on the SEC's website at http://www.sec.gov.
The SEC allows us to "incorporate by reference" information from certain of our
other SEC filings. This means that we can disclose information to you by
referring you to those other filings, and the information incorporated by
reference is considered to be part of this prospectus. In addition, certain
information that
15
<PAGE> 17
we file with the SEC after the date of this prospectus will automatically
update, and in some cases supersede, the information contained or otherwise
incorporated by reference in this prospectus. We are incorporating by reference
the information contained in the following SEC filings:
o our Annual Report on Form 10-K for the fiscal year ended June 30, 1998 (as
filed on September 28, 1998);
o our Quarterly Reports on Form 10-Q for the fiscal quarters ended September
30, 1998 (as filed on November 16, 1998 and as amended by Amendment No. 1
filed on November 20, 1998), December 31, 1998 (as filed on February 16,
1999) and March 31, 1999 (as filed on May 13, 1999);
o our Current Reports on Form 8-K dated October 2, 1998 (as filed on October
6, 1998), October 5, 1998 (as filed on October 7, 1998) and April 27, 1999
(as filed on May 10, 1999);
o our definitive Proxy Statement (as amended by Amendment No. 1 filed on
November 18, 1998) being used in connection with our Annual Meeting of
Stockholders held on December 15, 1998;
o the description of our common stock contained in our Registration Statement
on Form 8-A (as amended by Amendment No. 1 filed on June 12, 1998);
o the description of our rights to purchase Series A Participating Cumulative
Preferred Stock contained in our Registration Statement on Form 8-A filed
on October 10, 1997 under Section 12 of the Exchange Act; and
o any filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 after the date of this prospectus
(information in these filings will be incorporated as of the filing date).
You may request copies of these filings, at no cost, by writing, telephoning or
e-mailing our Manager of Investor Relations as follows:
Aspen Technology, Inc.
Ten Canal Park
Cambridge, Massachusetts 02141
Telephone: (617) 949-1000
E-mail: [email protected].
This prospectus is part of a Registration Statement on Form S-3 we filed with
the SEC under the Securities Act of 1933. This prospectus does not contain all
of the information contained in the Registration Statement.
16
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses to be paid by the Registrant
in connection with the issuance and distribution of the shares of common stock
being registered. All amounts shown are estimates except for the Securities and
Exchange Commission registration fee. The Registrant will pay all expenses in
connection with the distribution of the shares of common stock being sold by the
selling stockholders (including fees and expenses of counsel for the
Registrant), except for any commissions or discounts due to any broker or dealer
in connection with sales of shares offered by this prospectus.
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission registration fee...................... $ 113
Accounting fees and expenses............................................. 1,500
Legal fees and expenses.................................................. 3,500
EDGAR formatting, production and mailing expenses........................ 500
Miscellaneous............................................................ 887
------
Total............................................................... $6,500
======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article SEVENTH of the Registrant's Certificate of Incorporation (the
"Certificate of Incorporation"), provides that no director of the Registrant
shall be personally liable for any monetary damages for any breach of fiduciary
duty as a director, except to the extent that the Delaware General Corporation
Law prohibits the elimination or limitation of liability of directors for breach
of fiduciary duty.
Article EIGHTH of the Certificate of Incorporation provides that a director or
officer of the Registrant shall be indemnified by the Registrant against:
(a) all expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement incurred in connection with any litigation or other
legal proceeding (other than an action by or in the right of the
Registrant) brought against him or her by virtue of his or her
position as a director or officer of the Registrant if he or she acted
in good faith and in a manner he or she reasonably believed to be in,
or not opposed to, the best interests of the Registrant, and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe his or her conduct was unlawful and
(b) all expenses (including attorneys' fees) and amounts paid in
settlement incurred in connection with any action by or in the right
of the Registrant brought against him or her by virtue of his or her
position as a director or officer of the Registrant if he or she acted
in good faith and in a manner he or she reasonably believed to be in,
or not opposed to, the best interests of the Registrant, except that
no indemnification shall be made with respect to any matter as to
which such person shall have been adjudged to be liable to the
Registrant, unless a court determines that, despite such adjudication
but in view of all of the circumstances, he or she is entitled to
indemnification of such expenses.
Notwithstanding the foregoing, to the extent that a director or officer has been
successful, on the merits or otherwise, including the dismissal of an action
without prejudice, he or she is required to be indemnified by the Registrant
against all expenses (including attorneys' fees) incurred in connection
II-1
<PAGE> 19
therewith. Expenses shall be advanced to a director or officer at his or her
request, provided that he or she undertakes to repay the amount advanced if it
is ultimately determined that he or she is not entitled to indemnification for
such expenses.
Indemnification is required to be made unless the Registrant determines that the
applicable standard of conduct required for indemnification has not been met. In
the event of a determination by the Registrant that the director or officer did
not meet the applicable standard of conduct required for indemnification, or if
the Registrant fails to make an indemnification payment within sixty days after
such payment is claimed by such person, such person is permitted to petition the
court to make an independent determination as to whether such person is entitled
to indemnification. As a condition precedent to the right of indemnification,
the director or officer must give the Registrant notice of the action for which
indemnity is sought and the Registrant has the right to participate in such
action or assume the defense thereof.
Article EIGHTH of the Certificate of Incorporation further provides that the
indemnification provided therein is not exclusive, and provides that in the
event that the Delaware General Corporation Law is amended to expand the
indemnification permitted to directors or officers the Registrant must indemnify
those persons to the fullest extent permitted by such law as so amended.
Section 145 of the Delaware General Corporation Law provides that a corporation
has the power to indemnify a director, officer, employee or agent of the
corporation and certain other persons serving at the request of the corporation
in related capacities against amounts paid and expenses incurred in connection
with an action or proceeding to which he or she is or is threatened to be made a
party by reason of such position, if such person shall have acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, and, in any criminal proceeding, if such
person had no reasonable cause to believe his or her conduct was unlawful;
provided that, in the case of actions brought by or in the right of the
corporation, no indemnification shall be made with respect to any matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances.
The Registrant maintains a directors' and officers' insurance policy that covers
certain liabilities of directors and officers of the Registrant, including
liabilities under the Securities Act of 1933. The Registrant maintains a general
liability insurance policy that covers certain liabilities of directors and
officers of the Registrant arising out of claims based on acts or omissions in
their capacities as directors or officers.
ITEM 16. EXHIBITS
EXHIBIT NO.
- ----------
5.1 Opinion of Foley, Hoag & Eliot LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5.1)
24.1 Powers of Attorney (included on page II-5)
99.1 Section 6 (Registration Rights) of Share Exchange Agreement dated
as of October 14, 1998 among Aspen Technology, Inc.,
Syllogistics, Inc., Daniel Mark Sims and Jacob B. Bercu
II-2
<PAGE> 20
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) To include any prospectus required pursuant to Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8, or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
this Registration Statement.
(2) 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 the initial bona fide offering thereof.
(3) To remove from registration, by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes 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 to
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.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 21
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 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cambridge, Commonwealth of Massachusetts, as of
June 4, 1999.
ASPEN TECHNOLOGY, INC.
By /s/ LAWRENCE B. EVANS
-------------------------------------------
LAWRENCE B. EVANS
Chairman of the Board and Chief Executive
Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Aspen Technology, Inc., hereby
severally constitute and appoint Lawrence B. Evans, Lisa W. Zappala and Stephen
J. Doyle, and each of them singly, our true and lawful attorneys with full power
to them, and each of them singly, to sign for us and in our names in the
capacities indicated below, the Registration Statement on Form S-3 filed
herewith and any pre-effective and post-effective amendments to said
Registration Statement, and generally to do all such things in our names and on
our behalf in our capacities as officers and directors to enable Aspen
Technology, Inc. to comply with the provisions of the Securities Act of 1933 and
all requirements of the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by our said attorneys, or any of
them, to said Registration Statement and any amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated as of June 4, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ LAWRENCE B. EVANS Chairman of the Board and Chief Executive Officer
- ----------------------------------- (Principal Executive Officer)
LAWRENCE B. EVANS
/s/ LISA W. ZAPPALA Chief Financial Officer
- ----------------------------------- (Principal Financial and Accounting Officer)
LISA W. ZAPPALA
/s/ JOSEPH F. BOSTON Director
- -----------------------------------
JOSEPH F. BOSTON
/s/ GRESHAM T. BREBACH, JR. Director
- -----------------------------------
GRESHAM T. BREBACH, JR.
/s/ DOUGLAS R. BROWN Director
- -----------------------------------
DOUGLAS R. BROWN
/s/ JOAN C. MCARDLE Director
- -----------------------------------
JOAN C. MCARDLE
/s/ ALISON ROSS Director
- -----------------------------------
ALISON ROSS
</TABLE>
II-4
<PAGE> 1
EXHIBIT 5.1
FOLEY, HOAG & ELIOT LLP
ONE POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109-2170
TELEPHONE 617-832-1000 1747 PENNSYLVANIA AVE., N.W.
FACSIMILE 617-832-7000 WASHINGTON, D.C. 20006
http://www.fhe.com TEL: 202-223-1200
FAX: 202-785-6687
June 8, 1999
ASPEN TECHNOLOGY, INC.
Ten Canal Park
Cambridge, Massachusetts 02141
Ladies and Gentlemen:
We have acted as special counsel for Aspen Technology, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, of a Registration Statement on Form S-3 (the "Registration Statement")
relating to the offering of up to 45,000 shares (the "Shares") of the Company's
common stock, $.10 par value, by certain stockholders of the Company.
In arriving at the opinion expressed below, we have examined and relied on:
(i) the Registration Statement; (ii) the Certificate of Incorporation and the
By-Laws of the Company; and (iii) resolutions adopted by the Board of Directors
of the Company at meetings held on September 15, 1998 and November 3, 1998. In
addition, we have examined and relied on the originals or copies certified or
otherwise identified to our satisfaction of all such other records, documents
and instruments of the Company and such other persons, and we have made such
investigations of law, as we have deemed appropriate as a basis for the opinions
expressed below. We have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the original documents of all documents submitted to us as certified or
photostatic copies.
We express no opinion other than as to the corporation laws of the State of
Delaware.
Based upon the foregoing, we are of the opinion that the Shares have been
duly authorized and validly issued and are fully paid and non-assessable.
We consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement and to the reference to us under the heading "Legal Matters" in the
prospectus forming a part of the Registration Statement.
Very truly yours,
FOLEY, HOAG & ELIOT LLP
By /s/ MARK L. JOHNSON
-----------------------------
A Partner
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 of our reports dated
August 11, 1998 included in the Annual Report on Form 10-K of Aspen Technology,
Inc. for the fiscal year ended June 30, 1998 and to the reference to our firm in
this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Boston, Massachusetts
June 3, 1999
<PAGE> 1
EXHIBIT 99.1
[Excerpted from Share Exchange Agreement dated as of October 14, 1998
among Aspen Technology, Inc., Syllogistics, Inc., Daniel Mark Sims and Jacob B.
Bercu]
6. REGISTRATION RIGHTS
6.1 REGISTRATION STATEMENT. After the Publication Date, Aspen shall
prepare and file with the SEC a registration statement on Form S-3 (a
"Shelf Registration") that shall register under the Securities Act the
Registrable Shares as soon as practicable after the Publication Date
(the "Registration Statement"). Aspen agrees to use reasonable efforts
to keep such registration statement continuously effective for a
period of sixty (60) days after its effective date. The Stockholder
and Bercu shall furnish all information that Aspen may reasonably
request in connection with the foregoing registration or any other
filings required to be made in connection with this transaction.
6.2 OBLIGATIONS OF ASPEN.
(a) In connection with registration under this Section, and subject
to the limitations of this Section, Aspen shall:
(i) prepare and file with the SEC such amendments and
supplements to such Registration Statement as may be
necessary, and comply with the provisions of the Securities
Act with respect to the sale or other disposition of all
Registrable Shares registered in such Registration
Statement;
(ii) furnish to the Stockholder and Bercu such number of copies
of any documents, as they may reasonably request in order
to effect the offering and sale of the Registrable Shares
to be offered and sold, but only while Aspen shall be
required under the provisions hereof to cause the
Registration Statement to remain current;
(iii) use its reasonable efforts to register or qualify the
Registrable Shares covered by such Registration Statement
under the securities or blue sky laws of such jurisdictions
as the Stockholder and Bercu shall reasonably request
(provided that Aspen shall not be required in connection
therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process
in any such jurisdiction where it has not been qualified).
(b) Aspen shall promptly notify the Stockholder and Bercu once the
Registrable Shares are covered by a Registration Statement
hereunder:
(i) when any post-effective amendment has been filed, and, with
respect to the Registration Statement or any post-effective
amendment, when the same has become effective;
(ii) of any request by the SEC or any other federal or state
governmental authority during the period of effectiveness
of the Registration Statement for amendments or supplements
to the Registration Statement or for additional information
relating to the Registration Statement;
<PAGE> 2
(iii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by Aspen of any notification with respect to
the suspension of the qualification or exemption from
qualification of any of the Registrable Shares for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose; or
(v) of the happening of any event which makes any statement
made in the Registration Statement or any document
incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires
the making of any changes in the Registration Statement so
that, in the case of the Registration Statement, they will
not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
Upon the happening of any event that, in the good faith judgment
of Aspen's Board of Directors, renders it advisable to suspend or
terminate use of the Registration Statement, Aspen may either
suspend or terminate the Shelf Registration on written notice to
the Stockholder and Bercu, in which case the Stockholder and
Bercu shall discontinue dispositions of such Registrable Shares
and in the event of termination, Aspen shall de-register any
shares registered but unsold thereunder. In such event the Chief
Financial Officer shall furnish a certificate of Aspen stating
that in the good faith judgment of the Board of Directors of
Aspen it would be significantly disadvantageous to Aspen and its
stockholders for any such registration statement to be amended or
supplemented or continued because Aspen would be required to
disclose in such registration statement, either directly or
through incorporation by reference, non-public information that
it would not otherwise be obligated to disclose at such time. If
Aspen provides Stockholder and Bercu with notice of suspension,
Aspen shall extend the period during which such Shelf
Registration shall be maintained effective pursuant to this
Agreement by the same number of days the Stockholder and Bercu
are required to discontinue dispositions thereunder. If Aspen
provides Stockholder and Bercu with notice of termination, Aspen
shall file a new shelf registration as provided herein as soon as
practicable after the cause for such termination ceases to
prohibit the registration, and such new shelf registration shall
be maintained for a subsequent two months subject to the
provisions of this Agreement.
(c) REPORTS UNDER EXCHANGE ACT. Aspen agrees to (a) use its
reasonable efforts to file with the SEC in a timely manner all
reports and other documents required of Aspen under the
Securities Act and the Exchange Act and (b) furnish to the
Stockholder and Bercu forthwith upon request (i) a written
statement by Aspen that it has complied with the reporting
requirements of the Securities Act and the Exchange Act or that
it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time that it so qualifies) and (ii)
such other information as may be reasonably requested in availing
the Stockholder and Bercu of any rule or regulation of the SEC
which permits the selling of any such securities pursuant to Form
S-3.
2
<PAGE> 3
6.3 OBLIGATIONS OF STOCKHOLDER AND BERCU.
In order for any Registrable Shares to be included in a Shelf
Registration, the Stockholder and Bercu shall provide all such
information and materials to Aspen and take all such action as may be
required in order to permit Aspen to comply with all applicable
requirements of the SEC and any state securities commission and to
obtain the effectiveness of and any desired acceleration of the
effective date of the Registration Statement. Such provision of
information and materials is a condition precedent to the obligations
of Aspen pursuant to Section 6.1, provided that Aspen shall have used
its reasonable efforts to provide reasonable advance notice of the
need for such information, materials or action and shall have afforded
the Stockholder and Bercu a reasonable opportunity to provide such
materials and to take such action.
6.4 EXPENSES.
Aspen shall pay all expenses incident to its performance of or
compliance with this Section 6, regardless of whether any registration
becomes effective, including all registration and filing fees of the
SEC, the National Association of Securities Dealers, Inc. and the
NASDAQ Stock Market, Inc., all fees and expenses incurred in complying
with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of
the Registrable Shares), all printing, messenger and delivery
expenses, all fees and expenses of Aspen's transfer agent and
registrar, all fees and disbursements of Aspen's independent public
accountants and counsel and all fees and expenses of any special
experts retained by Aspen in connection with any registration pursuant
to the terms of this Section; provided, however, that in connection
with the sale of Registrable Shares by the Stockholder and Bercu under
an S-3 registration filing through a broker other than Nationsbank
Montgomery Securities, then in each such event the Stockholder shall
be liable for any fees or commissions of brokers with respect to the
Registrable Shares, and any fees or expenses of consultants, financial
advisors, counsel and other professionals acting on behalf of the
Stockholder and Bercu in connection with any registration pursuant to
the terms of this Section.
6.5 INDEMNIFICATION.
In the event of any offering registered pursuant to this Section:
(a) Aspen will indemnify the Stockholder and Bercu against all
claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement
of any litigation, commenced or threatened, arising out of or
based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement,
prospectus, or any amendment or supplement thereto, incident to
any offering registered pursuant to this Section, or based on any
omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they are made,
not misleading, or any violation by Aspen of any rule or
regulation promulgated under the Securities Act, or state
securities laws applicable to Aspen in connection with any such
registration, and subject to Section 6.4, will reimburse the
Stockholder and Bercu for any legal and any other out-of-pocket
expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or
action, provided that Aspen will not be liable in any such case
to the extent that any such claim, loss, damage, or liability
arises out of or is based on any untrue statement or omission or
alleged untrue statement or omission,
3
<PAGE> 4
made in reliance upon and in conformity with written information
furnished to Aspen by the Stockholder and Bercu.
(b) The Stockholder and Bercu will indemnify Aspen, each of its
directors and officers and its legal counsel and independent
accountants, each underwriter, if any, of Aspen's securities
covered by such a registration statement, each person who
controls Aspen or such underwriter within the meaning of Section
15 of the Securities Act, and each other such stockholder of
shares included in the offering, and such stockholder's legal
counsel and independent accountants, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue
statement) or a material fact contained in any such registration
statement, or any amendment or supplement thereto, or any
omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse Aspen, such
stockholders, such directors, officers, legal counsel,
independent accountants, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or any amendment or
supplement thereto in reliance upon and in conformity with
written information furnished to Aspen by the Stockholder and
Bercu.
(c) Each party entitled to indemnification under this Section 6.5
(the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly
after such Indemnified Party receives written notice of any claim
as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose
approval shall not be unreasonably withheld), and the Indemnified
Party may participate in such defense at such Indemnified Party's
expense, and provided further that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section, except
to the extent, but only to the extent, that the Indemnifying
Party's ability to defend against such claim or litigation is
impaired as a result of such failure to give notice.
Notwithstanding the foregoing sentence, the Indemnified Party may
retain its own counsel to conduct the defense of any such claim
or litigation, and shall be entitled to be reimbursed by the
Indemnifying Party for expenses reasonably incurred by the
Indemnified Party in defense of such claim or litigation, in the
event that (i) the Indemnifying Party does not assume the defense
of such claim or litigation within ten days after the
Indemnifying Party receives notice thereof from the Indemnified
Party or (ii) the Indemnified Party reasonably determines that
counsel for the Indemnifying Party has a conflict of interest in
representing the Indemnified Party. Further, an Indemnifying
Party shall be liable for amounts paid in settlement of any such
claim or litigation only if the Indemnifying Party consents in
writing to such settlement (which consent shall not be reasonably
withheld). No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter any
settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such
Indemnified Party a release from all liability in respect to such
claim or litigation.
4
<PAGE> 5
(d) The obligations of Aspen, the Stockholder and Bercu under this
Section 6 shall survive the completion of any offering of stock
in a registration statement under this Section and otherwise.
[For purposes of the foregoing Section 6, the following terms have the indicated
meanings:
"Aspen" means Aspen Technology, Inc.
"Bercu" means Jacob B. Bercu.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Publication Date" means the date on which Aspen initially publishes financial
results reflecting the first thirty days of combined operations of Aspen and
Syllogistics, Inc.
"Registrable Shares" means, with respect to the Stockholder and Bercu, (a)
twenty percent (20%) of the shares of Aspen common stock issued to each of the
Stockholder and Bercu pursuant to this Agreement, (b) any other securities
issued by Aspen in exchange for any of such shares (but, with respect to any
particular Registrable Share, only so long as it continues to be a Registrable
Share) and (c) any shares of Aspen common stock issued as a dividend or
distribution on account of Registrable Shares or resulting from a subdivision of
outstanding Registrable Shares into a greater number of securities (by
reclassification, stock split or otherwise), provided that a security that was
at one time a Registrable Share shall cease to be a Registrable Share when (a)
it has been effectively registered under the Securities Act and has been
disposed of pursuant to a registration statement or (b) it has been transferred
and is no longer held of record by the Stockholder.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Stockholder" means Daniel Mark Sims.]
5
