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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 21, 1999.
Registration No. 333-70411
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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THE VANTIVE CORPORATION
(Exact name of Registrant as specified in its charter)
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DELAWARE 77-0266662
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2455 AUGUSTINE DRIVE
SANTA CLARA, CA 95054
(408) 982-5700
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
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THOMAS L. THOMAS
CHAIRMAN OF THE BOARD OF DIRECTORS AND CHIEF EXECUTIVE OFFICER
THE VANTIVE CORPORATION
2455 AUGUSTINE DRIVE, SANTA CLARA, CA 95054
(408) 982-5700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
DENNIS C. SULLIVAN, ESQ.
WILLIAM A. RODONI, ESQ.
JULIE F. HANIGER, ESQ.
Gray Cary Ware & Freidenrich LLP
400 Hamilton Avenue
Palo Alto, CA 94301
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Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [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>
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Proposed
Title of Each Class of Proposed Maximum Maximum Amount of
Securities Amount to be Offering Price Aggregate Registration Fee
to be Registered Registered Per Share Price Offering
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<S> <C> <C> <C> <C>
Common Stock, ($0.001 par 66,803 shares $12.063(1) $805,844.58(2) $225 (2)(3)
value per share)
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</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) Computed pursuant to Rule 457(c) based upon the average high and low
sale prices of Vantive's common stock on the Nasdaq Stock Market's
National Market for January 8, 1999.
(3) Previously paid in connection with the filing of Vantive's Registration
Statement on Form S-3 (File No. 333-70411) on January 11, 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 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to such Section 8(a), may
determine.
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The information in this prospectus is not complete and may be changed. We cannot
sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell
these securities, and it is not soliciting an offer to buy these securities in
any state where such an offer or sale is not permitted.
SUBJECT TO COMPLETION DATED MAY 21, 1999
66,803 SHARES
THE VANTIVE CORPORATION
COMMON STOCK
This is a public offering of 66,803 shares of our common stock by some
of our current stockholders listed on page 12. We will not receive any of the
proceeds from the sale of the shares.
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Vantive's common stock is listed on the Nasdaq National Market under the
symbol "VNTV." On May 18, 1999, the closing price of one share of our common
stock was $7.875.
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INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 2.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representations to the contrary is a
criminal offense.
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The date of this prospectus is May __, 1999.
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No person has been authorized to give any information or to make any
representations other than those contained in this prospectus in connection with
the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by Vantive,
any selling stockholder or by any other person. Neither the delivery of this
prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that information herein is correct as of any time subsequent to
the date hereof. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the securities covered
by this prospectus, nor does it constitute an offer to or solicitation of any
person in any jurisdiction in which such offer or solicitation may not lawfully
be made.
ABOUT VANTIVE
Vantive is a leading provider of customer relationship management
solutions. We empower companies to more effectively win, keep, and know their
customers. The Vantive Enterprise, Vantive's integrated software suite, enables
call center, marketing, field sales, help-desk and field service personnel to
deliver consistent customer service across many channels via the Internet, the
call center, or in person. The consulting implementation and integration
services that we provide are intended to help our customers implement and
optimize our software products. A "call center" is typically a functional area
of a company in which a number of employees process container orders, complaints
or service requests. "Field sales" refers to a direct sales force deployed
throughout a geographic region. "Field service" refers to repair technicians
deployed throughout a geographic region.
The Vantive Enterprise is built using a component-based, multi-tier
architecture and a common data model. "Multi-tiered architecture" is a software
design intended to enhance scalability (the capacity to expand the number of
users or the number of transactions processed for a given module of software)and
minimize use of network bandwidth. A "common data model" is a database shared by
each application in The Vantive Enterprise. Certain features of the modules in
The Vantive Enterprise are accessible via a Web browser which permits wider use
of these features than would be available under more traditional client-server
product architectures. Vantive Enterprise software may be used independently or
as part of an integrated, enterprise-wide, front-office automation system. We
believe businesses can better manage customer relationships by sharing valuable
customer information throughout their organizations. The Vantive Enterprise has
been deployed by businesses in a broad range of industries that include the
following:
<TABLE>
<S> <C>
o software o manufacturing
o communications o medical products
o consumer products o public sector/regulated industry
o finance o online services
o outsourcing/services o consumer goods
o personal computer hardware o retail
o healthcare
</TABLE>
Vantive's principal executive offices are located at 2455 Augustine
Drive, Santa Clara, California 95054, and its telephone number is (408)
982-5700.
RECENT MATTERS
On April 19, 1999, we announced that we had named Thomas L. Thomas as
our Chairman of the Board of Directors and Chief Executive Officer, replacing
John Luongo.
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RISK FACTORS
You should consider carefully the following risk factors and all other
information contained in this prospectus before purchasing our common stock.
Investing in our common stock involves a high degree of risk. Any of the
following risks could materially adversely affect our business, operating
results and financial condition and could result in a complete loss of your
investment.
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE IN FUTURE PERIODS AND THIS MAY
CAUSE US TO FAIL TO MEET EXPECTATIONS
Our quarterly operating results have varied significantly in the past
and we expect that they will vary significantly from quarter to quarter in the
future. In addition, our operating results may not follow any past trends. If
our operating results are below the expectations of public market analysts and
investors, the price of our common stock may fall. These quarterly variations
are caused by various factors, including:
o variations in demand for our products and services;
o the timing and execution of individual contracts, particularly
large contracts that would materially affect our operating
results in a given quarter;
o delays in customer orders and in the closing of sales near the
end of a quarter;
o timing of product deployments and achievement of milestones,
particularly for large orders;
o delays in recognition of revenue in accordance with applicable
accounting principles;
o the timing and mix of our license and services orders;
o changes in the development of the market for our products and
services;
o the amount and time of increases in expenses;
o costs and complications relating to acquisitions and integration
of new technologies or businesses; and
o the utilization rate of our services personnel.
It is particularly difficult to predict the timing or amount of our
license revenues because we recognize a substantial portion of our license
revenues in the last month of a quarter, and often in the last weeks or days of
a quarter. Nevertheless, we base our decisions regarding our operating expenses
in part on anticipated revenue trends. Because many of our expenses are
relatively fixed in the short term, a delay in recognizing revenue from a
limited number of license transactions could cause our operating results to vary
significantly from quarter to quarter and could result in operating losses. To
the extent these expenses are not followed by increased revenues that match our
projections, our operating results will suffer.
OUR FUTURE SUCCESS WILL DEPEND ON OUR ABILITY TO MANAGE TECHNOLOGICAL CHANGE
Our failure to enhance our product line and develop new products to
successfully respond to rapid technological change would materially harm our
business. The software market in which we compete is characterized by rapid
technological change. Existing products may become obsolete and unmarketable
when products using new technologies are introduced and or when industry
standards emerge. For example, Vantive's customers have adopted a wide variety
of hardware, software, database, Internet-based and networking platforms; we
must continue to support and maintain our products on a variety of such
platforms. As a result, the life cycles of our products are difficult to
estimate. To be successful, we must continue to enhance our current product line
and develop new products that successfully respond to such developments. In
addition, customers may defer or
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forego purchases of our products if we, our competitors or major hardware,
systems or software vendors introduce or announce new products or product
enhancements. Such events could materially adversely affect our business,
financial condition and operating results.
OUR BUSINESS WILL SUFFER IF WE FAIL TO DEVELOP NEW PRODUCTS ON A TIMELY BASIS OR
IF OUR PRODUCT DEVELOPMENT IS DELAYED
We may experience difficulties that could delay or prevent the
successful development, introduction or marketing of new or enhanced products in
the future. Our product development requires substantial investment. There can
be no assurance that we will have sufficient resources to make the necessary
investments. We have delayed enhancements or new product release dates several
times in the past and may not be able to introduce enhancements or new products
successfully or in a timely manner in the future. We believe that such delays
have not to date had a material adverse impact on our financial condition or
operating results. Our business could be materially harmed if we delay the
release of our products and product enhancements or if these products or product
enhancements fail to achieve market acceptance when released.
OUR BUSINESS WILL SUFFER IF OUR SOFTWARE PRODUCT CONTAINS ERRORS
We face possible claims and higher costs as a result of the complexity
of our products and the potential for undetected errors. Our software products
are complex and may contain errors that may be detected at any point in the
products' life cycles. We have in the past discovered software errors in certain
of our products and as a result have experienced delays in shipment of products
during the period required to correct these errors. Although we have not
experienced any material adverse effect on our operating results from any such
errors to date, there can be no assurance that, despite testing by us and by
current and potential customers, errors will not be found in new products or
releases after shipment, resulting in loss of revenue or delay in market
acceptance and sales, diversion of development resources, injury to our
reputation, or increased service and warranty costs, any of which could severely
harm our business. Our products are generally used in systems with other
vendors' products, and as a result, they must integrate successfully with
existing systems. System errors, whether caused by our products or those of
another vendor, could adversely affect the market acceptance of our products,
and any necessary revisions could cause us to incur significant expenses. The
occurrence of any such problems could harm our business.
Since our products are often used for mission critical applications such
as sales, marketing or field services, errors, defects or other performance
problems could result in financial or other damages to our customers. Although
our license agreements generally contain provisions designed to limit our
exposure to product liability claims, existing or future laws or unfavorable
judicial decisions could negate such limitation of liability provisions.
Although no product liability claim has been made against us to date, such a
claim, even if it were unsuccessful, would be time-consuming and costly to
defend and could harm our business.
OUR GLOBAL OPERATIONS AND OUR PLANNED EXPANSION OF OUR INTERNATIONAL OPERATIONS
MAKE US MUCH MORE SUSCEPTIBLE TO RISKS FROM INTERNATIONAL OPERATIONS
We believe that international operations carry inherent risks for U.S.
based companies like ours. International revenue, or revenue derived from sales
to customers in foreign countries, accounted for approximately 32% and 29% of
the Company's revenue for the quarters ended March 31, 1999 and 1998,
respectively. We intend to substantially expand our international operations and
to enter new international markets. We face the following risks from doing
business on an international basis:
o significant management attention and financial resources to
successfully translate and localize our software products into
various languages;
o difficulties in staffing and managing foreign operations;
o our ability to maintain or increase international market demand
for our products;.
o licenses, tariffs and other trade barriers; and
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o political and economic instability.
We, or our distributors or resellers, may also not be able to sustain or
increase international revenues from licenses or from consulting and customer
support or our relationships with our distributors may deteriorate.
Moreover, our foreign subsidiaries operate primarily in local currencies
and their results are translated into U.S. dollars. The Company began hedging
activities in the second quarter of 1999 to limit the exposure resulting from
increases in the value of the U.S. dollar relative to foreign currencies.
Hedging activities do not guarantee complete protection from exchange rate
fluctuation risk and as such exposure resulting from a fluctuation in the value
of the U.S. dollar relative to foreign currencies could materially harm our
operating results.
OUR BUSINESS SUBSTANTIALLY DEPENDS UPON SERVICE REVENUES
If service revenues are lower than anticipated, our business, financial
condition and operating results could be adversely affected. Support and service
revenues represented 50.5% of our total revenues in the first quarter 1999 and
37.9% of our total revenues in the first quarter 1998. We anticipate that
service revenues will continue to represent a significant percentage of total
revenues. Service revenues depend in part on ongoing renewals of support
contracts by our customers, some of which may not renew their support contracts.
In addition, consulting revenues as a percentage of our total revenues could
decline if customers select third-party service providers to install and service
our products more frequently than they have in the past.
Our ability to increase service revenues will depend in large part on
our ability to increase the scale of our services organization, including our
ability to successfully recruit and train a sufficient number of qualified
services personnel. We may not be able to do so.
OUR BUSINESS DEPENDS ON OUR ABILITY TO MANAGE THE MIX BETWEEN SERVICE REVENUES
AND GROSS MARGINS
Because service revenues have lower gross margins than license revenues,
a continued increase in the percentage of total revenues represented by service
revenues could have a detrimental impact on our overall gross margins and could
adversely affect our operating results.
We subcontract certain consulting, customer support and training
services to third-party service providers. Third-party contract revenues
generally carry lower gross margins than our service business overall. As a
result, our service revenues and related margins may vary from period to period,
depending on the mix of these third-party contract revenues.
WE INCORPORATE SOFTWARE LICENSED FROM THIRD PARTIES WITH OUR PRODUCTS AND ANY
SIGNIFICANT INTERRUPTION IN THE AVAILABILITY OF THESE THIRD-PARTY SOFTWARE
PRODUCTS OR DEFECTS IN THESE PRODUCTS COULD HARM OUR BUSINESS
We license technology on a non-exclusive basis from several businesses
for use with our products and anticipate that we will continue to do so in the
future. Our inability to continue to license these products or to license other
necessary products for use with our products or substantial increases in royalty
payments under third-party licenses could harm our business. In addition, the
effective implementation of our products depends upon the successful operation
of third-party licensed products in conjunction with our products, and therefore
any undetected errors in such licensed products may prevent the implementation
or impair the functionality of products, delay new product introductions and/or
injure our reputation.
Vantive currently markets products that allow customers to make
modifications to tailor our software to their business. While we believe, based
on interactions with our customers, and potential customers, that customers
derive significant competitive advantage from such modifications, we believe
that competitive pressures, technological changes demanded by customers, and
significant advances in the sophistication of third-party application
development tools such as Visual Basic for Applications will require us to make
greater use of third-party software in the future. Additionally, our commitment
to adopt or interface with best-of-breed software
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technology may require us to increase use of third-party software. To qualify as
"best-of-breed," we must determine that the technology has a clear future market
direction, is extremely robust and is commercially supported. The greater use of
third-party software could require us to invest significant resources in
rewriting some or all of our software applications products utilizing
third-party software and/or to enter into license arrangements with third
parties which could result in higher royalty payments and a loss of product
differentiation. There can be no assurance that we would be able to successfully
rewrite our products or enter into commercially reasonable licenses, and the
costs of, or inability or delays in, doing so could materially harm our
business.
THE MARKETS IN WHICH WE SELL OUR PRODUCTS ARE HIGHLY COMPETITIVE AND WE MAY NOT
BE ABLE TO COMPETE EFFECTIVELY
The market for enterprise relationship management software and services
is intensely competitive, fragmented and rapidly changing. We face competition
or potential competition in the customer relationship management software market
and services primarily from the following types of companies:
o front-office software applications vendors such as (in
alphabetical order) Aurum Software, Inc. (a subsidiary of The
Baan Company), Clarify, Inc., Onyx Software Corporation, Pivotal
Software and Siebel System, Inc.;
o large enterprise hardware and software vendors such as Oracle
Corporation, PeopleSoft Inc., SAP AG, IBM's CorePoint business
unit and JD Edwards & Company;
o system integrators;
o Internet start-ups such as Silknet Software, Inc. and Vignette
Corporation; and
o our potential customers' internal information technology
departments, which may seek to develop proprietary enterprise
relationship management systems.
In addition, as we develop new products, particularly applications
focused on particular industries, we may begin competing with companies with
whom we have not previously competed. It is also possible that new competitors
will enter the market or that our competitors will form alliances that may
enable them to rapidly increase their market share or that our current alliance
partners may now or in the future compete with us.
OUR BUSINESS WILL SUFFER IF WE FAIL TO SUCCESSFULLY MANAGE OUR GROWTH
Our rapid growth and expansion places significant demands on our
managerial, administrative, operational, financial and other resources. Our
ability to successfully offer new products and services in a rapidly evolving
market requires an effective planning and management process. We have recently
experienced a period of growth and expansion. Our new employees include a number
of key managerial, marketing, planning, technical and operations personnel who
have not yet been fully integrated into our organization.
We intend to continue to expand our operations internationally and
domestically, grow our customer base and pursue market opportunities through
multiple growth strategies. To accommodate continued anticipated growth and
expansion, we will be required to:
o improve existing and implement new operational and financial
systems, procedures and controls;
o hire, train, manage, retain and motivate qualified personnel and
enter into relationships with strategic partners;
o integrate our new management team; and
o anticipate and respond to changing market conditions.
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These measures may place a significant burden on our management and our
internal resources. If we are not able to install adequate control systems in an
efficient and timely manner, if our current or planned personnel systems,
procedures and controls are not adequate to support our future operations, or if
we are unable to otherwise manage growth effectively, our business could be
harmed.
OUR FUTURE SUCCESS DEPENDS ON OUR ABILITY TO ATTRACT AND RETAIN ADDITIONAL
QUALIFIED PERSONNEL
Our success depends on our ability to attract and retain additional
qualified engineering, sales and marketing and professional services personnel.
Competition for such personnel is intense, especially in Silicon Valley, where
our principal facilities are located. If we are unable to retain our existing
key personnel, or attract and train additional qualified personnel, our business
could be harmed. Our success also depends on the continued contributions of our
key management, engineering, sales and marketing and professional services
personnel, many of whom would be difficult to replace.
In addition, companies in the software industry whose employees accept
positions with competitors frequently claim that such competitors have breached
non-competition agreements. Although no such claim has been made against us to
date, we may receive such claims in the future as we hire qualified personnel,
and if such a claim were to be made against us, it may result in material
litigation. We could incur substantial costs in defending ourselves against any
such claims, regardless of the merits of such claims.
WE DEPEND ON EMERGING MARKETS FOR THE GROWTH OF FRONT-OFFICE AUTOMATION SOFTWARE
AND A SLOWER GROWTH IN THE DEMAND FOR INTEGRATED FRONT-OFFICE PRODUCTS WOULD
HARM OUR BUSINESS
Vantive's future financial performance will depend in large part on the
growth in demand for individual front-office automation software as well as the
number of organizations adopting comprehensive front-office automation software
information systems for their client/server and Web computing environments. We
believe that an important competitive advantage for our products is their
ability to be integrated with one another and with other back office software
into a front-office automation information system. If the demand for integrated
suites of front-office automation applications fails to develop, or develops
more slowly than we currently anticipate, this could have a material adverse
effect on the demand for our products and on our business, results of operations
and financial condition.
OUR SUCCESS DEPENDS ON A LIMITED NUMBER OF PRODUCTS
To date, a significant portion of our license revenue is derived from
the sale of a limited number of individual products, and in particular, Vantive
Support, Vantive FieldService, Vantive Sales and Vantive HelpDesk. We expect
license revenues from these products and their enhanced versions to continue to
account for a significant portion of our future revenues. As a result, factors
adversely affecting the pricing of or demand for such products such as
competition or technological change could materially affect our business.
Additionally, we are investing in the field service, eCommerce and Web product
markets. "Ecommerce," or electronic commerce, represents paperless transactions
between businesses or between a business and a customer. "Web product" is a
product that can be easily used or adapted for the Internet. Should these
markets fail to develop, not accept our products, or cause us to lose new
business and/or customers in our traditional markets our business, our business
could be adversely affected.
OUR FUTURE SUCCESS DEPENDS ON OUR ABILITY TO EXPAND AND LEVERAGE OUR
DISTRIBUTION CHANNELS
We have historically sold our products through our direct sales force.
Our ability to achieve significant revenue growth in the future will depend in
large part on our success in recruiting and training sufficient sales personnel
and establishing relationships with distributors, resellers and systems
integrators. We are currently investing, and plan to continue to invest,
significant resources to expand our domestic and international direct sales
force and to develop distribution relationships with certain third-party
distributors, resellers and systems integrators. There can be no assurance that
we will be able to attract a sufficient number of third-party distribution
partners or that such partners will recommend our products. The inability to
establish successful relationships with distributors, resellers or systems
integrators could have a material adverse effect on our business, operating
results
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and financial condition. In addition, there can be no assurance that we will be
able to successfully expand our direct sales force or other distributors. If we
fail to expand our direct sales force or other distribution channels our
business could be harmed.
OUR BUSINESS DEPENDS ON OUR ABILITY TO LEVERAGE THIRD-PARTY RELATIONSHIPS
We rely heavily on our relationships with a number of organizations that
are important to worldwide sales and marketing of our products. If we fail to
maintain our existing relationships, or to establish new relationships, or if
our partners do not perform to our expectations, our business, financial
condition and operating results could be materially adversely affected. We also
rely on a number of systems consulting and integration firms to implement our
software, provide customer support services and endorse our products during the
competitive evaluation stage of the sales cycle. Although we seek to maintain
relationships with these service providers, many of them have similar, and often
more established, relationships with our competitors. These third parties, many
of which have significantly greater resources than we have, may in the future
market software products that compete with ours or reduce or discontinue their
relationships with us or their support of our products. In addition, our
business, financial condition and operating results could be materially
adversely affected if:
o we are unable to develop and retain effective, long-term
relationships with systems integrators;
o we are unable to adequately train a sufficient number of systems
integrators;
o systems integrators do not have or do not devote the resources
necessary to facilitate implementation of our products; or
o systems integrators endorse a product or technology other than
ours.
THE PRICE OF OUR COMMON STOCK MAY BE VOLATILE
In the past, the price of our common stock has been volatile. The market
price of the common stock could substantially fluctuate due to future
announcements concerning Vantive or our competitors such as:
o quarterly variations in operating results;
o announcements of technological innovations;
o the introduction of new products or changes in product pricing
policies by Vantive or its competitors;
o proprietary rights or other litigation; or
o changes in earnings estimates by analysts .
In addition, stock prices for many technology companies fluctuate widely
for reasons that may be unrelated to operating results of such companies and
could result from many other factors. These fluctuations, as well as general
economic, market and political conditions such as recessions or military
conflicts, may materially and adversely affect the market price of our common
stock, which could in turn harm our business.
OUR PROPRIETARY RIGHTS MAY BE INADEQUATELY PROTECTED
Our success and ability to compete depend on our proprietary technology.
We rely primarily on copyright, trade secret and trademark law and, to a lesser
extent, patent law, to protect our proprietary software and other proprietary
information. We presently have two patents and one patent application pending.
We also enter into agreements with our employees, consultants and customers to
control their access to and distribution of our software, documentation and
other proprietary information. Nevertheless, a third-party could copy or
otherwise obtain our software or other proprietary information without
authorization, or could develop software competitive to ours. In addition,
effective trademark protection may not be available. Our competitors may adopt
names
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similar to our trade-names, thereby impeding our ability to build brand identity
and possibly leading to customer confusion.
We may have to litigate to enforce our intellectual property rights, to
protect our trade secrets or know-how or to determine their scope and validity,
or the scope, validity or enforceability of the proprietary rights of other
third parties. Enforcing or defending our proprietary technology is expensive,
could cause the diversion of our resources, and may not prove successful. In
addition, the laws of other countries may not protect our products and
intellectual property rights to the same extent as the laws of the United
States. Our protective measures may be inadequate in these countries to protect
our proprietary rights. Any failure to enforce or protect our intellectual
property rights could cause us to lose a valuable asset and could harm our
business.
WE MAY INFRINGE THE PROPRIETARY RIGHTS OF OTHERS
Although we are not aware of any infringement by any of our products of
the patent, trademark, copyright or other proprietary rights of any third-party,
claims may be made against us in the future that allege violation of such
proprietary rights as a result of the use by us, our customers or other
third-parties of our products. Any such claim would be costly and time-consuming
to defend, would divert our management's attention, could cause product delays
and could otherwise harm our business. If we were to discover that our products
violate a third-party's proprietary rights, we could be required to enter into
royalty or licensing agreements in order to be able to sell our products. Such
arrangements may not be available to us, and even if they are available, they
might be prohibitively expensive.
YEAR 2000 ISSUES PRESENT TECHNOLOGICAL RISKS, COULD CAUSE DISRUPTION TO OUR
BUSINESS AND COULD HARM OUR FUTURE SALES
As is true for most companies, the Year 2000 issue creates risks for
Vantive. If systems do not correctly recognize date information when the year
changes to 2000, there could be an adverse impact on our operations. The Year
2000 issue not only has an impact on Vantive at the end of the calendar year
1999, but could also have an impact on us in the year 2000. The risks posed by
Year 2000 issues could adversely affect our business in a number of significant
ways. Our risk exists primarily in the following areas:
o systems used by Vantive to run its business including
information systems, equipment and facilities;
o systems used by Vantive's suppliers;
o potential warranty or other claims from our customers with
respect to our products or services; and
o potential for reduced spending, or a moratorium on spending, by
potential customers due to Year 2000 remediation.
While we believe that our current products are materially Year 2000
compliant, we have not tested all previous releases or versions of all of our
products, nor have we tested all current products within all customers' systems
environments. The inability of any of our products to operate properly in the
Year 2000 could result in increased warranty costs, customer satisfaction
issues, litigation or other material costs and liabilities, which could
materially harm our results of operations or financial condition. Additionally,
because there is no uniform definition of Year 2000 "compliance" and because all
customer situations cannot be anticipated, particularly those involving other
vendors' products, we may see a change in demand or an increase in warranty and
other claims as a result of the Year 2000 transition. Such events, should they
occur, could have a material adverse impact on future results.
We have completed our evaluation of most of our internal applications
for Year 2000 compliance, and have begun remediation or replacement of systems,
where necessary. We expect to achieve remediation without significant impact on
the operational results of our business by September 1999, with continued
testing through the end of 1999. In the event that implementation of replacement
systems is delayed, or if significant new compliance issues are identified, our
ability to conduct our business or record transactions could be disrupted which
could harm
8
<PAGE> 11
our results of operations or financial condition. We are also in the process of
evaluating Year 2000 compliance of our equipment and critical suppliers of goods
and services. Critical equipment, such as manufacturing equipment, has been
identified, and we are currently in the process of contacting our suppliers to
ascertain Year 2000 compliance. In the event that identification of
non-compliant equipment and any upgrade or replacement of equipment is delayed,
our design, production and shipping capabilities could be disrupted, which could
harm our results of operations or financial condition.
The purchasing patterns of our customers and potential customers based
on Year 2000 issues may make it difficult to predict future sales. Companies
owning and operating such systems may plan to devote a substantial portion of
their information technology spending to fund such upgrades and modifications
and divert spending away from projects such as customers relationship management
or front office software applications. We believe that some companies have
instituted a moratorium on new information technology projects until their Year
2000 issues are satisfactorily addressed. Such changes in customers; spending
patterns could materially harm our sales, operating results or financial
condition.
REMEDIATION OF PROBLEMS RELATED TO THE EUROPEAN MONETARY CONVERSION MAY INVOLVE
SIGNIFICANT TIME AND EXPENSE AND MAY REDUCE OUR FUTURE SALES
Our business may be harmed if we are not able to successfully address
and remedy any problems related to the European monetary conversion. We are
aware of the issues associated with the changes in Europe aimed at forming a
European economic and monetary union. One of the changes resulting from this
union required member countries to irrevocably fix their respective currencies
to a new currency, the Euro, on January 1, 1999, at which date the Euro became a
functional legal currency of these countries. During the next three years,
business in member countries will be conducted in both the existing national
currency, such as the French Franc or the Deutschemark, and the Euro. As a
result, companies operating in or conducting business in member countries will
need to ensure that their financial and other software systems are capable of
processing transactions and properly handling these currencies, including the
Euro.
We are still assessing the impact the conversion to the Euro will have
on both our internal systems and the products we sell. We will take appropriate
corrective actions based on the results of such assessment. We have not yet
determined the costs related to addressing this issue. This issue and its
related costs could harm our business.
OUR REVENUE RECOGNITION POLICY MAY CHANGE IF ACCOUNTING GUIDANCE CHANGES
We recognize revenues from sales of software licenses when we sign a
non-cancellable license agreement with a customer, the software is shipped, no
significant post-delivery vendor obligations remain and collection is deemed
probable. We recognize customer support revenues ratably over the contract term
(which is typically one year) and recognize revenues for consulting services as
such services are performed. We believe our current revenue recognition policies
and practices are consistent with applicable accounting standards. However,
recently introduced software revenue recognition standards are subject to
on-going interpretation, and new guidelines may be issued on a periodic basis.
Such changes could lead to unanticipated changes in our current revenue
accounting practices, and such changes could have a significant impact on the
timing of our future revenues and earnings.
9
<PAGE> 12
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from our web site at http://www.vantive.com or at the SEC's web site at
http://www.sec.gov. Our common stock is traded on The Nasdaq National Market
and, as such, reports and other information concerning Vantive can also be
inspected at the offices of the National Association of Securities Dealers,
Inc., in Washington, D.C.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until our
offering is completed.
o Quarterly Report on Form 10-Q for the quarter ended March 31,
1999, filed on May 14, 1999;
o Annual Report on Form 10-K for the year ended December 31, 1998,
filed on March 31, 1999; and
o The descriptions of Vantive's capital stock contained in its
registration statements on Form 8-A filed on August 9, 1995 and
December 18, 1998, including any amendments or reports filed for
the purpose of updating such descriptions.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
The Vantive Corporation
2455 Augustine Drive
Santa Clara, CA 95054
(408) 982-5700
Attn: Chief Financial Officer
You should rely only on the information incorporated by reference or
provided in this prospectus or the prospectus supplement. We have authorized no
one to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus or the prospectus supplement is
accurate as of any date other than the date on the front of the document.
FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements." When used in this
prospectus, the words "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates" and similar expressions are generally intended to identify
forward-looking statements. Because these forward-looking statements involve
risks and uncertainties, actual results could differ materially from those
expressed or implied by these forward-looking statements for a number of
reasons, including those discussed under "Risk Factors" and elsewhere in this
prospectus. Vantive assumes no obligation to update any forward-looking
statements.
10
<PAGE> 13
PLAN OF DISTRIBUTION
All 66,803 shares of common stock being registered by this prospectus
are being registered on behalf of the selling stockholders who are listed on
page 12. We issued all of these shares in connection with our acquisition of
Scotch Bonnet Integration, Inc. Vantive will receive no proceeds from this
offering. As used in this prospectus, the term "selling stockholders" includes
donees and pledgees selling shares received from a named selling stockholder
after the date of this prospectus.
The selling stockholders will act independently of Vantive in making
decisions with respect to the timing, manner and size of each sale. The selling
stockholders may choose to sell the shares from time to time at market prices
prevailing at the time of the sale or at prices related to the then prevailing
market prices. The selling stockholders may also choose to sell the shares from
time to time in negotiated transactions, including an underwritten offering or
through the use of one or more of the following methods:
o a block trade in which the broker or dealer will attempt to sell
the shares as agent but may position and resell a portion of the
block as principal in order to facilitate the transaction,
o purchases by a broker or dealer as principal and resale by that
same broker or dealer for its account under this prospectus, and
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers.
In connection with the sale of the shares, the selling stockholders may
engage broker-dealers who in turn may arrange for other broker-dealers to
participate. Broker-dealers may receive commissions or discounts from the
selling stockholders in amounts to be negotiated immediately prior to the sale.
In addition, underwriters or agents may receive compensation from the selling
stockholders or from purchasers of the shares for whom they may act as agents,
in the form of discounts, concessions or commissions. Underwriters may sell
shares to or through dealers, and these dealers may receive compensation in the
form of discounts, concessions or commissions from the underwriters or
commissions from the purchasers for whom they act as agents. Underwriters,
dealers and agents that participate in the distribution of the shares may be
deemed to be underwriters. Any discounts or commissions received by them from
the selling stockholders and any profit on the resale of the shares by them may
be deemed to be underwriting discounts and commissions under the Securities Act.
At the time a particular offer of shares is made, to the extent
required, a supplement to this prospectus will be distributed which will
identify and set forth the aggregate amount of shares being offered and the
terms of the offering. Such supplement will also disclose the following
information:
o the name or names of any underwriters, dealers or agents,
o the purchase price paid by any underwriter for shares purchased
from the selling stockholders,
o any discounts, commissions and other items constituting
compensation from the selling stockholders and/or Vantive, and
o any discounts, commissions or concessions allowed or reallowed
or paid to dealers, including the proposed selling price to the
public.
Vantive has agreed to indemnify the selling stockholders in certain
circumstances against certain liabilities, including liabilities under the
Securities Act. The selling stockholders have agreed to indemnify Vantive in
certain circumstances against certain liabilities, including liabilities under
the Securities Act.
The selling shareholders and any other persons participating in the sale
or distribution of the shares being registered by this prospectus will be
subject to the provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, to the extent applicable. These provisions
may limit the timing of purchases and sales of any of the shares by the selling
shareholders or any other such person. This may affect the
11
<PAGE> 14
marketability of the shares. The selling shareholders also will comply with the
applicable prospectus delivery requirements under the Securities Act in
connection with the sale or distribution of the shares being registered by this
prospectus.
In order to comply with state securities laws, if applicable, the shares
will be sold in such jurisdictions only through registered or licensed brokers
or dealers. In some states, the shares may not be sold unless the shares have
been registered or qualified for sale in that state, or unless an exemption from
registration or qualification is available and is obtained.
Vantive will bear all out-of-pocket expenses incurred in connection with
the registration of the shares. These expenses include without limitation, all
registration and filing fees imposed by the SEC, the NASD and blue sky laws,
printing expenses, transfer agents' and registrars' fees, and the fees and
disbursements of Vantive's outside counsel and independent pubic accountants.
The selling stockholders will bear all underwriting discounts and commissions
and transfer or other taxes.
SELLING STOCKHOLDERS
The following table sets forth the number of shares owned by each of the
selling stockholders. None of the selling stockholders has had a material
relationship with Vantive within the past three years other than as a result of
the ownership of the shares or other securities of Vantive. No estimate can be
given as to the amount of shares that will be held by the selling stockholders
after completion of this offering because the selling stockholders may offer all
or some of the shares and because there currently are no agreements,
arrangements or understandings with respect to the sale of any of the shares.
The shares offered by this prospectus may be offered from time to time by the
selling stockholders named below. Each selling stockholder has sole voting and
investment power with respect to all shares shown as beneficially owned by the
selling stockholder, subject to community property laws where applicable.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY NUMBER OF SHARES PERCENT OF
OWNED BEFORE REGISTERED FOR OUTSTANDING
SELLING STOCKHOLDER OFFERING SALE HEREBY SHARES
- ------------------- ---------------- ---------------- ------------
<S> <C> <C> <C>
Marian Abrams 12,238 12,238 *
Mark Dirrim 12,238 12,238 *
Daniel Kenyon 12,238 12,238 *
Guy Pasela 21,738 21,738 *
Systar, Inc. 8,351 8,351 *
====== ====== =
TOTALS 66,803 66,803 *
</TABLE>
- ----------
* Represents beneficial ownership of less than 1%.
This registration statement also shall cover any additional shares of
common stock which become issuable in connection with the shares registered for
sale by this prospectus by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt of
consideration which results in an increase in the number of Vantive's
outstanding shares of common stock.
LEGAL MATTERS
For the purpose of this offering, Gray Cary Ware & Freidenrich LLP,
Vantive's outside legal counsel, is giving its opinion on the validity of the
shares.
12
<PAGE> 15
EXPERTS
The financial statements and schedules incorporated by reference in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
13
<PAGE> 16
==================================== ====================================
THE VANTIVE CORPORATION
We have not authorized any person to
make a statement that differs from
what is in this prospectus. If any
person does make a statement that
differs from what is in this
prospectus, you should not rely on
it. This prospectus is not an offer
to sell, nor is it seeking an offer ----------------------------
to buy, these securities in any
state in which the offer or sale is
not permitted. The information in
this prospectus is complete and 66,803 SHARES
accurate as of its date, but the OF
information may change after that COMMON STOCK
date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ABOUT VANTIVE......................1 ----------------------------
RECENT MATTERS.....................1 PROSPECTUS
RISK FACTORS.......................2 ----------------------------
WHERE YOU CAN FIND MORE
INFORMATION....... .............10
FORWARD-LOOKING STATEMENTS........10
PLAN OF DISTRIBUTION..............11
SELLING STOCKHOLDERS..............12
LEGAL MATTERS.....................12
EXPERTS...........................13
</TABLE>
May __, 1999
==================================== ====================================
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses in connection with
the sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are estimates
except the Securities and Exchange Commission registration and listing and
filing fees.
<TABLE>
<CAPTION>
To be Paid
By The
Registrant
----------
<S> <C>
SEC Registration Fee ......................... $ 225
Nasdaq filing fee ............................ 2,000
Accounting fees and expenses ................. 5,000
Legal fees and expenses ...................... 10,000
Miscellaneous expenses ....................... 775
-------
Total ................................ $18,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or a corporation's Board of Directors to grant indemnity to officers,
directors, and other corporate agents under certain circumstances and subject to
certain limitations. Vantive's Certificate of Incorporation and Bylaws provide
for indemnification of its directors, officers, employees, and agents to the
full extent permitted by the Delaware General Corporation Law, including in
circumstances in which indemnification is otherwise discretionary under Delaware
Law. In addition, Vantive has entered into separate indemnification agreements
with its directors and officers. Vantive also currently has directors' and
officers' liability insurance in place.
These indemnification provisions may be sufficiently broad to permit
indemnification of the Registrant's officers and directors for liabilities
(including reimbursement of expenses incurred) arising under the Securities Act
of 1933.
II-1
<PAGE> 18
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<S> <C>
3.1* Agreement and Plan of Merger by and among The Vantive
Corporation, Solar Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of The Vantive
Corporation, and Scotch Bonnet Integration, Inc., a Delaware
corporation.
5.1* Opinion of Gray Cary Ware & Freidenrich LLP.
23.1 Consent of Arthur Andersen LLP, Independent Accountants.
23.2* Consent of Gray Cary Ware & Freidenrich LLP.
24.1* Power of Attorney.
</TABLE>
- ----------
* Previously filed with the Registrant's Registration Statement on Form
S-3 (File No. 333-70411) on January 11, 1999.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act each filing of the Vantive's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (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 Securities
Act 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 Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
II-2
<PAGE> 19
(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act;
(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 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 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) of the Securities Act of 1933,
if, in the aggregate, the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement;
(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 (1)(i) and (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 by the registrant pursuant to
section 13 or section 15(d) of the Exchange Act of 1934, that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
II-3
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Santa
Clara, State of California, on May 21, 1999.
THE VANTIVE CORPORATION
By: /s/ Thomas L. Thomas*
-------------------------------------
Thomas L. Thomas
Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Thomas L. Thomas* Chairman of the Board of Directors May 21, 1999
- ---------------------------------------- and Chief Executive Officer and
Thomas L. Thomas Director (Principal Executive
Officer)
/s/ Leonard LeBlanc Executive Vice President, Chief May 21 , 1999
- ---------------------------------------- Financial Officer and Secretary
Leonard LeBlanc (Principal Financial Officer)
/s/ Michael M. Loo* Vice President Finance and May 21, 1999
- ---------------------------------------- Assistant Secretary (Chief
Michael M. Loo Accounting Officer)
/s/ William H. Davidow* Director May 21, 1999
- ----------------------------------------
William H. Davidow
Director May 21, 1999
- ----------------------------------------
Raymond L. Ocampo Jr.
/s/ Peter A. Roshko* Director May 21, 1999
- ----------------------------------------
Peter A. Roshko
/s/ Patti Manuel* Director May 21, 1999
- ----------------------------------------
Patti Manuel
*By: /s/ Leonard LeBlanc
------------------------------------
Leonard LeBlanc
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<S> <C>
3.1* Agreement and Plan of Merger by and among The Vantive
Corporation, Solar Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of The Vantive
Corporation, and Scotch Bonnet Integration, Inc., a Delaware
corporation.
5.1* Opinion of Gray Cary Ware & Freidenrich LLP.
23.1 Consent of Arthur Andersen LLP, Independent Accountants.
23.2* Consent of Gray Cary Ware & Freidenrich LLP.
24.1* Power of Attorney.
</TABLE>
- ----------
* Previously filed with the Registrant's Registration Statement on Form
S-3 (File No. 333-70411) on January 11, 1999.
<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 of our report dated
January 22, 1999 included in The Vantive Corporation's Form 10-K for the year
ended December 31, 1998 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
----------------------------------------
ARTHUR ANDERSEN LLP
San Jose, California
May 20, 1999
