<PAGE>
As filed with the Securities and Exchange Commission on November 26, 1996
Registration Statement No. 333-
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
----------------------
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
SAVILLE SYSTEMS PLC
(Exact name of registrant as specified in its charter)
----------------------
Republic of Ireland None
(State or other juris- (I.R.S. Employer
diction of incorpora- Identification No.)
tion or organization)
IDA Business Park
Dangan
Galway, Ireland
011-353-9-152-6611
(Address, including zip code, and
telephone number, including area code,
of registrant's principal
executive offices)
----------------------
JOHN J. BOYLE, III
President and Chief Executive Officer
SAVILLE SYSTEMS PLC
25 Burlington Mall Road
Sixth Floor
Burlington, Massachusetts 01803
(617) 270-6500
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
Copy to:
Thomas L. Barrette, Jr., Esq.
HALE AND DORR
60 State Street
Boston, Massachusetts 02109
(617) 526-6000
Approximate date of commencement of proposed sale to public: From time to
time 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 registrations 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>
==================================================================================
Proposed Proposed
Maximum Maximum Amount
Amount Offering Aggregate of Regis-
Title of Each Class to be Price Per Offering tration
of Securities to be Registered Registered Share(1) Price(1) Fee
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ordinary Shares, 2,782,000 $ 41.94 $116,677,080 $35,357
$.0025 par value per share shares
==================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) and based upon prices on the Nasdaq National Market on
November 22, 1996.
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),
shall determine.
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<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Subject to completion dated November 26, 1996
SAVILLE SYSTEMS PLC
2,782,000 American Depositary Shares
Representing
2,782,000 Ordinary Shares
_____________________
This Prospectus covers the resale of 2,782,000 American Depositary Shares
("ADS") by shareholders of Saville Systems PLC ("Saville" or the "Company"), a
public limited Company incorporated under the laws of the Republic of Ireland
(the "Selling Shareholders"). See "Selling Shareholders." Each ADS represents
the right to receive one Ordinary Share, $0.0025 par value per share (each, an
"Ordinary Share"), of the Company. The ADSs offered hereby were sold to the
Selling Shareholders (a) in private sales in connection with the founding of the
Company in 1993 or (b) in private sales by other shareholders of the Company
during the period from April 1993 to November 1995. All of the ADSs offered
hereunder are to be sold by the Selling Shareholders. The Company will not
receive any of the proceeds from the sale of the ADSs by the Selling
Shareholders.
The ADSs offered hereby involve a high degree of risk. See "Risk Factors"
beginning on page 6 hereof.
The Selling Shareholders may from time to time sell the ADSs covered by
this Prospectus on the Nasdaq National Market in ordinary brokerage
transactions, in negotiated transactions, or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. See "Plan of
Distribution." The ADSs are quoted on the Nasdaq National Market under the
symbol "SAVLY."
______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
_____________________
The date of this Prospectus is ___________ ___, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission pursuant to the informational
requirements of the Exchange Act may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices located at 7
World Trade Center, Suite 1300, New York, New York 10048, and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such materials also may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. In addition, the Company is required to file electronic versions of these
materials with the Commission through the Commission's Electronic Data
Gathering, Analysis and Retrieval (EDGAR) System. The Commission maintains a
World Wide Web site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The ADSs of the Company are traded on the
Nasdaq National Market. Reports and other information concerning the Company may
be inspected at the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the ADSs offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto, as certain items are omitted in accordance with the rules and
regulations of the Commission. For further information pertaining to the Company
and the Ordinary Shares offered hereby, reference is made to such Registration
Statement and the exhibits and schedules thereto, which may be inspected without
charge at the office of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and copies of which may be obtained from the Commission at
prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
(2) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996; and
(3) The Company's Registration Statement on Form 8-A dated November 8,
1995 registering the ADSs under Section 12(g) of the Exchange Act.
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<PAGE>
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
hereof and prior to the termination of the offering of the ADSs registered
hereby shall be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the date of filing such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents incorporated by reference into this Prospectus
(without exhibits to such documents other than exhibits specifically
incorporated by reference into such documents). Requests for such copies should
be directed to: the Chief Financial Officer of the Company, 25 Burlington Mall
Road, Sixth Floor, Burlington, Massachusetts 01803; telephone (617) 270-6500.
No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus and, if given or made, such other information and
representations must not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the registered securities to which it
relates. This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful.
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<PAGE>
THE COMPANY
The following summary is qualified by the more detailed information
appearing elsewhere in this prospectus or incorporated herein by reference.
Certain of the information contained in this prospectus or incorporated herein
by reference, including information with respect to the Company's plans and
strategies for its business, are forward-looking statements. For a discussion of
important factors that could cause actual results to differ materially from
these forward-looking statements, see "Risk Factors."
Saville creates innovative, high quality, customized billing solutions for
service providers in the increasingly competitive global telecommunications
industry. The Company's billing systems are designed to enable these service
providers to quickly bring new offerings in voice, video and data communications
to market, while billing accurately and reliably for these services. Working
closely with its customers, Saville utilizes its library of proprietary software
applications to provide each customer with a customized, flexible and cost-
effective billing solution. The Company has typically continued to serve as a
billing partner for its customers by implementing new systems as the customer
enters new service categories or geographic markets, and by further developing
and enhancing the customer's installed systems in response to changes in the
customer's service offerings, marketing strategies and network technology. In
addition, Saville offers its customers the option of having Saville operate the
billing system in one of the Company's in-house service bureaus.
The market for telecommunications services is becoming increasingly
competitive due to worldwide deregulation and privatization. New entrants are
competing for market share with established service providers by providing
discounted service access, offering competitive prices and introducing new
features and services, such as customized usage-based calling plans. In
addition, technological advances are permitting telecommunications service
providers to offer a variety of new features and services to their customers
such as caller ID, call waiting and voice mail. These and other developments
have increased the complexity and variety of telecommunications services, as
service providers seek to differentiate themselves by being more responsive to
their customers and by expanding the number of telecommunications services and
features they offer.
These market trends have created the need for sophisticated and flexible
billing solutions because telecommunications service providers can compete only
if they are able to efficiently and accurately bill customers for the varied
services and features they provide. As a result of their multiple and evolving
billing needs, many established telecommunications service providers are
replacing or augmenting their existing billing systems, which are often
difficult and time consuming to modify. In addition, many emerging
telecommunications service providers are seeking external billing solutions
because efficient, flexible billing software is often too costly and time
consuming for them to develop internally.
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<PAGE>
Saville has developed, and continuously refines, its sophisticated base
software applications, which it combines and customizes to meet the current and
evolving requirements of its customers. They Company's systems are designed to
operate in a multiservice environment, capable of billing local exchange, long
distance and wireless (cellular, paging, satellite and PCS) telecommunications
services. These systems are designed to support the discrete service offerings
of large telecommunications service providers, including industry-leading
customers such as AT&T Corporation ("AT&T") and Sprint Corporation ("Sprint"),
or to serve as the complete billing systems of emerging and small- to medium-
sized service providers, including customers such as Energis Communications
Limited ("Energis"), a United Kingdom long distance telecommunications service
provider, and Frontier Communications of Rochester Inc. ("Frontier"), a local
exchange carrier. The Company supports its customers through offices in Galway,
Ireland; Burlington, Massachusetts; Edmonton, Alberta; and Toronto, Ontario.
The Company was incorporated in the Republic of Ireland in June 1993 as
Saville Systems Ireland Limited, a private limited company. On November 9, 1995,
the Company was re-registered as a public limited company and changed its name
to Saville Systems PLC. Unless the context otherwise requires, references to the
"Company" or "Saville" are to Saville Systems PLC and its consolidated
subsidiaries. The Company's principal executive office is located at IDA
Business Park, Dangan, Galway, Ireland, and its telephone number at that address
from the United States is (011) 353-9-152-6611. The address of the Company's
United States subsidiary is 25 Burlington Mall Road, Sixth Floor, Burlington, MA
01803, and its telephone number at that address is (617) 270-6500. The address
of the Company's Canadian subsidiary is 4445 Calgary Trail, Seventh Floor,
Edmonton, AB Canada T6H 5R7 and its telephone number at that address is (403)
430-2000.
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<PAGE>
RISK FACTORS
From time to time, information provided by the Company or statements made
by its employees may contain forward-looking information. The Company's actual
future results may differ materially from those projections or suggestions made
in such forward-looking information as a result of various potential risks and
uncertainties, including, but not limited to, the factors discussed below.
Reliance on Significant Customers. During 1995, three of the Company's
customers individually accounted for over 10% of the Company's total revenues.
These customers, AT&T, Energis and AT&T Canada Long Distance Services Company
(formerly, Unitel Communications, Inc., of which AT&T owns a 33% equity
interest), accounted for 37.3%, 15.5% and 11.2%, respectively, of the Company's
total revenues. During the first nine months of 1996, AT&T (at 41.4% of the
Company's total revenues) was the only customer to account for over 10% of the
Company's total revenues. This concentration of customers can cause the
Company's revenues and earnings to fluctuate from quarter to quarter, based on
these customers' requirements and the timing of their orders. Although the
Company believes it has good relationships with its largest customers and has in
the past received a substantial portion of its revenues from repeat business
with established customers, none of the Company's major customers has a
significant obligation to purchase additional products or services. Therefore,
there can be no assurance that any of the Company's major customers will
continue to purchase new systems, systems enhancements and services in amounts
similar to previous years. A significant decrease in business from any of its
major customers would have a material adverse effect on the Company's results of
operations and financial condition. Additionally, the acquisition by a third
party of one of the Company's major customers could result in the loss of that
customer and have a material adverse effect on the Company's results of
operations and financial condition.
Fluctuations in Quarterly Operating Results. The Company has experienced
fluctuations in its quarterly operating results and anticipates that such
fluctuations will continue and could intensify. Fluctuations in operating
results may result in volatility in the price of the ADSs. Although the Company
was profitable in each of the last twelve quarters, there can be no assurance
that such profitability will continue in the future or that the levels of
profitability will not vary significantly among quarterly periods. The Company's
operating results may fluctuate as a result of many factors, including increased
competition, the size and timing of significant client projects and license
fees, cancellations of significant projects by customers, changes in operating
expenses, changes in Company strategy, personnel changes, foreign currency
exchange rates and general economic factors.
The Company's expense levels are based in significant part on its
expectations regarding future revenues. Accordingly, the Company may be unable
to adjust spending in a timely manner to compensate for any unexpected revenue
shortfall. Any significant revenue shortfall could therefore have a material
adverse effect on the Company's results of operations. In addition, the Company
hired a significant number of employees in 1995 and the first three quarters of
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<PAGE>
1996, including several senior executives, and expects to continue hiring
additional sales, marketing and software development employees during the
remainder of 1996 and 1997.
Management of Expanding Operations. Recently, the Company has expanded its
operations rapidly, which has placed significant demands on the Company's
administrative, operational and financial personnel and systems. Additional
expansion by the Company may further strain the Company's management, financial
and other resources. There can be no assurance that the Company's systems,
procedures, controls and existing space will be adequate to support expansion of
the Company's operations. The Company's future operating results will
substantially depend on the ability of its officers and key employees to manage
changing business conditions and to implement and improve its operational,
financial control and reporting systems. If the Company is unable to respond to
and manage changing business conditions, the quality of the Company's services,
its ability to retain key personnel and its results of operations could be
materially adversely affected.
Highly Competitive Market; Competition. The market for telecommunications
billings systems is highly competitive, and the Company expects this competition
to increase. The Company competes with both independent providers of billing
systems and services and with internal billing departments of telecommunications
service providers. The Company anticipates continued growth and competition in
the telecommunications industry and consequently, the entrance of new
competitors into the billing systems market in the future.
The Company believes that its ability to compete depends in part on a
number of competitive factors outside its control, including the development by
others of software that is competitive with the Company's services and products,
the price at which others offer comparable services and products, the extent of
competitors' responsiveness to customer needs and the ability of the Company's
competitors to hire, retain and motivate key personnel. In addition, the Company
competes with a number of companies that have substantially greater financial,
technical, sales, marketing and other resources, as well as greater name
recognition, than the Company. As a result, the Company's competitors may be
able to adapt more quickly to new or emerging technologies and changes in
customer requirements, or to devote greater resources to the promotion and sale
of their products than can the Company. There can be no assurance that the
Company will be able to compete successfully with its existing competitors or
with new competitors.
Developing Market and New Service Providers. The Company provides
customized software billing solutions to telecommunications service providers in
the local exchange, long distance and wireless markets. Although these markets
have experienced significant growth and have been characterized by increased
deregulation and competition in recent years, there can be no assurance that
such trends will continue at similar rates, if at all, or that the Company will
be able to effectively market and sell its billing systems. In addition, many
new entrants into the telecommunications market lack significant financial and
other
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<PAGE>
resources. The Company's future success depends in large part on its ability to
develop new customer relationships with successful telecommunications service
providers. There can be no assurance that the Company will be able to develop
such relationships or that service providers that become customers of the
Company will be successful. As the Company has been dependent historically on a
limited number of long-term customer relationships, the failure of the Company's
customers to compete effectively in the telecommunications market could have a
material adverse effect on the Company's business and results of operations.
Reliance on AS/400. Currently, the Company's billing software runs
primarily on the IBM AS/400 platform, although the Company has also developed
software for UNIX-based operating systems. While the AS/400 platform currently
represents a leading platform for existing and new billing systems, there can be
no assurance that other platforms will not emerge as an industry standard. If
there should be a rapid shift away from the current use of the AS/400 platform
by many telecommunications service providers for billing, the Company would be
required to expend substantial capital resources to develop new software and
would be likely to experience delays or losses in customer orders, and as a
result, its business would be materially adversely affected.
Rapid Technological Change. The market for the Company's products and
services is characterized by rapidly changing technology, evolving industry
standards and changing customer needs. Therefore, the Company's success will
depend upon its ability to enhance its existing products and to introduce new
products and features to meet changing customer requirements. The Company is
continuing to devote significant resources to refining and expanding its base
software modules and to enhancing its billing software that operates on UNIX-
based operating systems. There can be no assurance that the Company will
successfully complete these projects or that the Company's present or future
products will satisfy the evolving needs of the telecommunications market. If
the Company were unable, due to resource, technological or other constraints, to
adequately anticipate or respond to such changes, the Company's business and
results of operations would be materially adversely affected.
New Management; Dependence on Key Personnel. The current management
structure and the senior management team of the Company have been in place for a
relatively short time. These individuals have not, therefore, been significantly
involved in other than the most recent operating history of the Company. The
Company's future success depends in large part on the continued service of its
management, sales, product development and operational personnel, and on its
ability to continue to attract, motivate and retain highly qualified employees,
including technical, managerial and sales and marketing personnel. The Company
expects to continue to expand the number of employees engaged in sales,
marketing and product development. The inability to hire and retain qualified
personnel or the loss of the services of key personnel could have a material
adverse effect upon the Company's current business, new product development
efforts and future business prospects. Although the Company has entered into
employment agreements with its key executives and certain senior managers and
employees that contain covenants not to compete with the Company, there can be
no assurance that the
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<PAGE>
Company will be able to retain such key executives, senior managers and
employees. If such personnel do not remain active in the Company's business, the
Company's operations could be materially adversely affected.
Operations Outside the United States. In 1995 and the first nine months of
1996, the Company's sales outside the United States represented a significant
portion of the Company's total revenues. The Company expects that non-U.S.
operations will continue to account for a significant portion of its revenues
and intends to continue to expand its operations outside of the United States.
In addition, the Company is incorporated in the Republic of Ireland and its
research and development organization is located outside the United States. The
Company's business outside the United States is subject to risks such as
fluctuations in exchange rates, difficulties or delays in developing and
supporting non-English language versions of the Company's products, political
and economic conditions in various jurisdictions, unexpected changes in
regulatory requirements, tariffs and other trade barriers, difficulties in
staffing and managing foreign operations and longer accounts receivable payment
cycles. There can be no assurance that such factors will not have a material
adverse effect on the Company's revenues outside the United States or its
overall financial performance.
Currency Fluctuations. While the Company's consolidated financial
statements are prepared in United States dollars, the Company's Canadian
subsidiary has a functional currency other than the United States dollar, and a
portion of the Company's revenues are denominated in currencies other than the
United States dollar. Fluctuations in exchange rates may have a material adverse
effect on the Company's results of operations, particularly its operating
margins, and could also result in exchange losses. The impact of future exchange
rate fluctuations on the Company's results of operations cannot be accurately
predicted. To date, the Company has not sought to hedge the risks associated
with fluctuations in exchange rates, but may undertake such transactions in the
future. There can be no assurance that any hedging techniques implemented by the
Company would be successful or that the Company's results of operations will not
be materially adversely affected by exchange rate fluctuations.
Concentration of Ownership. Prior to this offering, the Company's executive
officers, directors and their affiliates together will beneficially own
approximately 27.6% of the outstanding Ordinary Shares of the Company (as
determined in accordance with the rules of the Securities and Exchange
Commission). The beneficial owners of a majority of the Company's outstanding
Ordinary Shares voting in an election of directors may elect all directors
nominated for election and may determine the outcome of certain corporate
actions requiring shareholder approval irrespective of how other shareholders of
the Company may vote. This concentration of ownership, therefore, may have the
effect of delaying or preventing a change in control of the Company.
Risk of Increasing Taxes. The Company has significant operations and
generates a substantial portion of its taxable income in the Republic of Ireland
and, under an incentive tax program due to terminate in 2010, is taxed on its
"manufacturing income" at a 10% rate, which is substantially lower than United
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States tax rates. For Irish tax purposes, most of the Company's operating income
earned in the Republic of Ireland is considered "manufacturing income." Other
types of income such as income earned by the Company on its cash investments and
income earned by Saville U.S. and Saville Canada are not considered
"manufacturing income." To qualify for the 10% tax rate, the Company must
satisfy certain conditions, including achieving target employment levels in the
Republic of Ireland and rendering computer services there. Although the Company
believes that it satisfies these conditions, there can be no assurance that the
Company will continue to qualify for this 10% tax rate. If the Company could no
longer qualify for this 10% tax rate or if the tax laws were rescinded or
changed, the Company's net income could be materially adversely affected. In
addition, if United States, Canadian or other foreign tax authorities were to
challenge successfully the manner in which profits are recognized among the
Company and its subsidiaries, the Company's effective tax rate could increase,
and its cash flow and results of operations could be materially adversely
affected. To date, no tax authority has challenged the manner in which profits
are recognized among the Company and its subsidiaries, but there can be no
assurance that such a challenge will not occur in the future.
Risks Associated with Intellectual Property. The Company regards its
software products as proprietary and relies primarily on a combination of
statutory and common law copyright, trademark and trade secret laws, customer
licensing agreements, employee and third-party nondisclosure agreements and
other methods to protect its proprietary rights. The Company generally enters
into confidentiality agreements with its employees, consultants, clients and
potential clients and limits access to, and distribution of, its proprietary
information. Despite these precautions, it may be possible for a third party to
copy or otherwise obtain and use the Company's technology without authorization,
or to develop similar technology independently. Furthermore, the laws of certain
countries in which the Company sells its products do not protect the Company's
software and intellectual property rights to the same extent as do the laws of
the United States. The Company does not include in its software any mechanisms
to prevent or inhibit unauthorized use, but generally requires the execution of
an agreement that restricts copying and use of the Company's products. If
unauthorized copying or misuse of the Company's products were to occur to any
substantial degree, the Company's business and results of operations could be
materially adversely affected. There can be no assurance that the Company's
means of protecting its proprietary rights will be adequate or that the
Company's competitors will not independently develop similar technology.
Although the Company has not received any notices from third parties
alleging infringement claims, there can be no assurance that third parties will
not claim that the Company's current or future products infringe the proprietary
rights of others. The Company expects that software developers will increasingly
be subject to such claims as the number of products and competitors providing
software and services to the telecommunications industry grows and overlaps
occur. Any such claim, with or without merit, could result in costly litigation
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or might require the Company to enter into royalty or licensing agreements. Such
royalty or licensing agreements, if required, may not be available on terms
acceptable to the Company or at all.
Differences in Shareholders' Rights between United States and Irish
Corporations. The Company is incorporated under the laws of the Republic of
Ireland. The rights of holders of Ordinary Shares and, therefore, certain of the
rights of ADS holders, are governed by Irish law, including the Companies Acts
of the Republic of Ireland, and by the Company's Articles of Association and
certain laws of the European Union. These rights differ in certain respects from
the rights of shareholders in typical United States corporations. In particular,
Irish law significantly limits the circumstances under which shareholders of
Irish corporations may bring derivative actions.
Volatility of ADS Price. The market price of the Company's ADSs has
increased significantly since the Company's initial public offering of ADSs in
November 1995. The period since the initial public offering was marked by
generally rising stock prices, favorable industry conditions and improved
operating results of the Company, all of which are subject to change. The
trading price of the ADSs could be subject to wide fluctuations in response to
the announcement of operating results that differ from financial analysts'
projections, changes in such projections, quarter-to-quarter variations in
operating results, announcements of technological innovations or new products by
the Company or its competitors and other events. In addition, in recent years
the stock market in general, and the shares of technology companies in
particular, have experienced extreme price and volume fluctuations. This
volatility has had a substantial effect on the market prices of securities
issued by many companies for reasons unrelated to their operating performance.
These broad market fluctuations may adversely affect the market price of the
ADSs. The Company has not listed or applied for listing of the Ordinary Shares
on any market in the United States or elsewhere, and it is not expected that a
public market for the Ordinary Shares will develop after this offering.
Effect of Anti-Takeover Provisions. The Company's Articles of Association
provide for a classified Board of Directors serving staggered terms of three
years, which could delay or impede the removal of incumbent directors. In
addition, Irish law requires that any action by written consent must be
unanimous. These provisions may have the effect of deterring hostile takeovers
or delaying or preventing changes in control or management of the Company,
including transactions in which shareholders might otherwise receive a premium
for their shares over then current market prices. In addition, these provisions
may limit the ability of shareholders to approve transactions that they may deem
to be in their best interests.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of ADSs by the
Selling Shareholders.
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SELLING SHAREHOLDERS
The following table sets forth certain information regarding the ownership
of the Company's Ordinary Shares as of November 21, 1996 and as adjusted to
reflect the sale of the ADSs offered hereby. Except as specified below, the
Selling Shareholders have not held any positions or offices with, been employed
by, or otherwise had a material relationship with, the Company.
<TABLE>
<CAPTION>
Number of Ordinary Number of
Shares Beneficially Ordinary Shares
Name of Selling Owned as of Shares Being Owned after the
Shareholder November 21, 1996 Offered Offering
- --------------- -------------------- ------------ -----------------
<S> <C> <C> <C>
Bruce A. Saville(1) 1,231,479 1,000,000 231,479
Technology Crossover 287,252 287,252 0
Ventures, L.P.
Technology Crossover 22,748 22,748 0
Ventures, C.V.
Applewood Associates, 120,000 120,000 0
L.P.
Woodland Venture Fund 60,000 60,000 0
Seneca Ventures 42,000 42,000 0
Bayview III, L.P. 20,000 20,000 0
Margaret L. Taylor 10,000 10,000 0
David A. Duffield Trust 20,000 20,000 0
dated 7/14/88
Robert B. Blow 1,203,718 239,039 964,679
Mark J. Kington 461,099 158,300 302,799
David P. Mixer(2) 1,281,099 248,240 1,032,859
James B. Murray, Jr.(3) 1,281,100 248,240 1,032,859
Mark R. Warner 1,308,600 274,561 1,034,039
Neil P. Byrne 12,653 7,315 5,338
Philip Herget 20,203 12,122 8,081
</TABLE>
-12-
<PAGE>
<TABLE>
<S> <C> <C> <C>
Barton Schneider 18,045 11,105 6,940
Harry F. Hopper, III 2,289 1,078 1,211
</TABLE>
___________________
(1) Mr. Saville is the Chairman and a Director of the Company. Includes 10,589
shares issuable upon the exercise of options that are exercisable within 60
days of November 21, 1996.
(2) Mr. Mixer is a Director of the Company.
(3) Mr. Murray is a Director of the Company.
PLAN OF DISTRIBUTION
The ADSs covered hereby may be offered and sold from time to time by the
Selling Shareholders. The Selling Shareholders will act independently of the
Company in making decisions with respect to the timing, manner and size of each
sale, but may act together with other Selling Shareholders. Such sales may be
made in the over-the-counter market or otherwise, at prices related to the then
current market price or in negotiated transactions, including pursuant to an
underwritten offering or one or more of the following methods: (a) purchases by
a broker-dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; (b) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (c) block trades in
which the broker-dealer so engaged will attempt to sell the ADSs as agent but
may position and resell a portion of the block as principal to facilitate the
transaction. The Company has been advised by the Selling Shareholders that they
have not made any arrangements relating to the distribution of the shares
covered by this Prospectus. In effecting sales, broker-dealers engaged by the
Selling Shareholders may arrange for other broker-dealers to participate.
Broker-dealers will receive commissions or discounts
-13-
<PAGE>
from the Selling Shareholders in amounts to be negotiated immediately prior to
the sale. The Company will indemnify the Selling Shareholders against certain
liabilities, including liabilities under the Securities Act.
In offering the ADSs covered hereby, the Selling Shareholders and any
broker-dealers and any other participating broker-dealers who execute sales for
the Selling Shareholders may be deemed to be "underwriters" within the meaning
of the Securities Act in connection with such sales, and any profits realized by
the Selling Shareholders and the compensation of such broker-dealer may be
deemed to be underwriting discounts and commissions.
The Company has advised the Selling Shareholders that during such time as
they may be engaged in a distribution of ADSs included herein they are required
to comply with Rules 10b-6 and 10b-7 under the Exchange Act and, in connection
therewith, that they may not engage in any stabilization activity in connection
with the Company's securities, are required to furnish to each broker-dealer
through which ADSs included herein may be offered copies of this Prospectus, and
may not bid for or purchase any securities of the Company or attempt to induce
any person to purchase any of the Company's securities except as permitted under
the Exchange Act. The Selling Shareholders have agreed to inform the Company
when the distribution of the ADSs is completed.
Rule 10b-6 under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for or purchasing, for an account in
which the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Rule 10b-7 governs bids and purchases made in
order to stabilize the price of a security in connection with a distribution of
the security.
This offering will terminate on the earlier of (a) November 26, 1997 or (b)
the date on which all shares offered hereby have been sold by the Selling
Shareholders.
LEGAL MATTERS
The validity of the Ordinary Shares represented by the ADSs offered hereby
will be passed upon by McCann FitzGerald, Irish counsel for the Company.
EXPERTS
The consolidated financial statements of Saville Systems PLC incorporated
by reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 have been audited by Ernst & Young, independent auditors, as
set forth in their reports thereon incorporated by reference thereon and
incorporated herein by reference. Such consolidated financial statements are
incorporated by reference in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.
-14-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Nature of Expense
- -----------------
<TABLE>
<S> <C>
SEC Registration Fee................................................. $ 35,357
Legal Fees and Expenses.............................................. 15,000
Miscellaneous........................................................ 14,643
TOTAL $ 65,000
</TABLE>
Item 15. Indemnification of Directors and Officers.
Except as hereinafter set forth, there is no provision of the Company's
Memorandum or Articles of Association, or any contract, arrangement or statute
under which any director or officer of the Company is insured or indemnified in
any manner against any liability that he may incur in his capacity as such.
Article 130 of the Articles of Association of the Company provides:
"Subject to the provisions of and so far as may be admitted by the Acts,
but without prejudice to any indemnity to which he or they may otherwise be
entitled, every Director and other officer of the Company and the Auditors
shall be indemnified out of the assets of the Company against any
liability, loss or expenditure incurred by him or them in the execution or
discharge of his or their duties or the exercise of his or their powers or
otherwise in relation to or in connection with his or their duties, powers
or office including (without prejudice to the generality of the foregoing)
any liability incurred by him or them in defending any proceedings, whether
civil or criminal, which relate to anything done or omitted to be done or
alleged to have been done or omitted to be done by him or them as officers
or employees of the Company and in which judgment is given in his or their
favour or in which he or they are acquitted or which are otherwise disposed
of without any finding or admission of guilt or breach of duty on his or
their part, or incurred by him or them in connection with any application
under any statute for relief from liability in respect of any such act or
omission in which relief is granted to him or them by the Court. To the
extent permitted by law, the Directors may arrange insurance cover at the
cost of the Company in respect of any liability, loss or expenditure
incurred by any Director, officer or the Auditors of the Company in
relation to anything done or alleged to have been done or omitted to be
done by him or them as Director, officer or Auditors."
II-1
<PAGE>
Section 200 of the Companies Act, 1963 of the Republic of Ireland (as
amended by the Companies (Amendment) Act, 1983) prohibits the giving (whether in
the articles of association of a company or in any contract with a company or
otherwise) of any exemption from or indemnity against any liability which by
virtue of any rule of law would otherwise attach to an officer in respect of any
negligence, default, breach of duty or breach of trust of which he may be guilty
in relation to the company. Any such officer may however be indemnified by the
company against any liability incurred by him in defending proceedings, whether
civil or criminal, in which judgment is given in his favor or in which he is
acquitted, or in connection with any application under section 391 of the
Companies Act, 1963 or section 42 of the Companies (Amendment) Act, 1983 in
which relief is granted to him by the court.
Section 391 of the Companies Act, 1963 permits an Irish court to relieve an
officer from liability for negligence, default, breach of duty or breach of
trust if the court considers that the officer acted honestly and reasonably, and
that, having regard to all the circumstances of the case, it considers that the
officer ought fairly to be excused from liability.
Under section 42 of the Companies (Amendment) Act, 1983, a director of a
company may be held liable for any amount that a nominee of the company fails to
pay for the purposes of paying up any outstanding capital or paying any premium
on shares held by the nominee on behalf of the company. Section 42 of the
Companies (Amendment) Act, 1983, however, also permits an Irish court to relieve
a director from such liability if the court considers that the director acted
honestly and reasonably, and that, having regard to all the circumstances of the
case, it considers that the director ought fairly to be excused from liability.
The Company maintains directors and officers liability insurance for the
benefit of its directors and certain of its officers.
Item 16. Exhibits.
Exhibit Description of Exhibit Page
- ------- ---------------------- ----
4.1 -- Memorandum of Association
of the Company.......................................... *
4.2 -- Articles of Association
of the Company.......................................... *
4.3 -- Specimen Certificate for Shares
of the Company.......................................... *
5.1 -- Opinion of McCann Fitzgerald............................
23.1 -- Consent of Ernst & Young................................
23.2 -- Consent of McCann Fitzgerald (included in Exhibit 5.1)..
24.1 -- Power of Attorney (appears on Page II-5)................
- ---------------
* Filed as an exhibit to the Company's Registration Statement on
Form S-1 and incorporated herein by reference (File No. 33-97576)
II-2
<PAGE>
Item 17. Undertakings.
The Company 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 of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this 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 Company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") that are incorporated by reference in this Registration
Statement.
(2) That, for the purposes 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 the 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.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the indemnification provisions described herein, or otherwise, the
Company 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 Company
of expenses incurred or paid by a director, officer or controlling person of the
Company 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 Company 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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 Town of Burlington, Commonwealth of Massachusetts on the 26th
day of November, 1996.
SAVILLE SYSTEMS PLC
By: /s/ John J. Boyle, III
--------------------------
John J. Boyle, III
President and Chief
Executive Officer
SIGNATURES AND POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints John J.
Boyle, III, Marc J. Venator, Mark G. Borden and Thomas L. Barrette, Jr., each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution in each of them, for him and in his name, place
and stead, and in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement on Form S-3
of Saville Systems PLC and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them or
their or his substitutes or substitute, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 26th day of November, 1996.
Signature Title
--------- -----
/s/ John J. Boyle, III President and Chief Executive Officer
- ----------------------------- (Principal Executive Officer)
John J. Boyle, III
II-5
<PAGE>
/s/ Mark J. Venator
- ------------------------------ Chief Financial Officer (Principal
Mark J. Venator Financial and Accounting Officer)
/s/ William F. Cunningham
- ------------------------------ Director
William F. Cunningham
/s/ Bruce A. Saville
- ------------------------------ Chairman of the Board of Directors
Bruce A. Saville
/s/ John A. Blanchard
- ------------------------------ Director
John A. Blanchard
/s/ Brian E. Boyle
- ------------------------------ Director
Brian E. Boyle
/s/ Fergus McGovern
- ------------------------------ Director
Fergus McGovern
/s/ David P. Mixer
- ------------------------------ Director
David P. Mixer
/s/ James B. Murray, Jr.
- ------------------------------ Director
James B. Murray, Jr.
/s/ John W. Sidgmore
- ------------------------------ Director
John W. Sidgmore
/s/ Richard A. Licursi
- ------------------------------ Director
Richard A. Licursi
II-6
<PAGE>
Exhibit 5.1
[LETTERHEAD OF MCCANN FITZGERALD APPEARS HERE]
November 26, 1996
Saville Systems PLC
IDA BUSINESS PARK
Dangan, Galway
Ireland
Ladies and Gentlemen:
This opinion is furnished to you in connection with a Registration Statement on
Form S-3 (the "Registration Statement"), filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended,
relating to the proposed sale of up to 2,782,000 American Depositary Shares
("ADSs"), representing an aggregate of 2,782,000 ordinary shares, par value
$0.0025 per share (the "Ordinary Shares"), of Saville Systems PLC, a public
limited company incorporated under the laws of the Republic of Ireland, (the
"Company"), held by certain shareholders of the Company (the "Shares").
We have acted as counsel for the Company in connection with the proposed sale by
the Selling Shareholders of the Shares. This opinion is limited to Irish law as
applied by the Irish courts and is given on the basis that it will be governed
by and construed in accordance with Irish law. We have made no investigation of
the laws of any jurisdiction other than the Republic of Ireland and neither
express nor imply any opinion as to any other laws, including the laws of the
United States of America or any state thereof.
We have examined signed copies of the Registration Statement and all exhibits
thereto, all as filed with the Commission. We have also examined and relied upon
the original or copies of minutes of meetings of the shareholders and Board of
Directors of the Company, the share register of the Company, a copy of the
Articles of Association of the Company, and a copy of the Memorandum of
Association of the Company, as amended. In our examination of the above
documents, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic copies
and the authenticity of the originals of such latter documents.
We have assumed that each of the Selling Shareholders is the beneficial owner of
registered shares, or ADSs representing registered shares at least equal in
number to the number of Shares set forth opposite such Selling Shareholder's
name in the Section of the Registration Statement titled "Selling
Shareholders."
<PAGE>
Based upon the foregoing, we are of the opinion that the Shares proposed to be
sold by the Selling Shareholders have been duly authorized and that, when sold
by the Selling Shareholders, will be validly issued, fully paid and not subject
to further calls thereon.
We hereby consent to the filing of this opinion as part of the Registration
Statement and to the use of our name therein and in the related Prospectus under
the caption "Legal Matters".
It is understood that this opinion is to be used only in connection with the
offer and sale of the Shares while the Registration Statement is in effect.
Very truly yours,
/s/ McCANN FITZGERALD
- ----------------------------
McCANN FITZGERALD
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Saville Systems PLC
for the registration of 2,782,000 American Depositary Shares representing
2,782,000 Ordinary Shares of the Company and to the incorporation by reference
therein of our reports dated January 26, 1996, with respect to the consolidated
financial statements of Saville Systems PLC, incorporated by reference in its
Annual Report (Form 10-K) for the year ended December 31, 1995 and the related
financial statement schedule included thereon, filed with the Securities and
Exchange Commission.
/s/ ERNST & YOUNG
November 26, 1996.
