<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 7, 2000
REGISTRATION NO. 333-48664
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ADVANCE PARADIGM, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 75-2493381
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
5215 NORTH O'CONNOR BOULEVARD, SUITE 1600
IRVING, TEXAS 75039
(469) 420-6000
(Address, including Zip Code,
and Telephone Number, including
Area Code, of Registrant's Principal Executive Offices)
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DAVID D. HALBERT With a copy to:
CHAIRMAN OF THE BOARD & CHIEF EXECUTIVE OFFICER GLENN E. MORRICAL, ESQ.
5215 NORTH O'CONNOR BOULEVARD ARTER & HADDEN LLP
SUITE 1600 1100 HUNTINGTON BUILDING
IRVING, TEXAS 75039 925 EUCLID AVENUE
(469) 420-6000 CLEVELAND, OHIO 44115
(Name, Address, including Zip Code, and Telephone Number, (216) 696-3431
Including Area Code, of Agent for Service)
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Approximate date of commencement of proposed sale to the public:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
<PAGE> 2
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 made pursuant to Rule 434, please
check the following box. [ ]
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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Subject to Completion, Dated November 7, 2000
PROSPECTUS
3,499,997 SHARES
ADVANCE PARADIGM, INC.
COMMON STOCK
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The shares covered by this prospectus may be sold, from time to time,
by the selling stockholders identified in this prospectus.
Our common stock is traded on the Nasdaq National Market under the
symbol "ADVP." On November 6, 2000, the last reported sale price of our common
stock on the Nasdaq National Market was $47.0625 per share.
INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS. THEREFORE, YOU
SHOULD CAREFULLY CONSIDER THE RISK FACTORS INCLUDED IN THIS PROSPECTUS AND
INCORPORATED BY REFERENCE INTO IT, INCLUDING THOSE FROM OUR ANNUAL REPORT ON
FORM 10-K, QUARTERLY REPORTS ON FORM 10-Q AND CURRENT REPORTS ON FORM 8-K FILED
FROM TIME TO TIME. FOR ADDITIONAL INFORMATION ON RISK FACTORS, SEE PAGE 3.
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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 REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is _______________ _____, 2000.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ADVANCE PARADIGM, INC. 3
RISK FACTORS 3
UNCERTAINTY OF FORWARD-LOOKING STATEMENTS 3
ABOUT THIS PROSPECTUS 4
USE OF PROCEEDS 4
SELLING STOCKHOLDERS 4
PLAN OF DISTRIBUTION 5
LEGAL MATTERS 6
EXPERTS 6
WHERE YOU CAN FIND MORE INFORMATION 7
</TABLE>
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ADVANCE PARADIGM, INC.
We are a leading provider of health improvement services, offering our
clients a comprehensive array of pharmacy benefit management, disease
management, clinical trials and research, web-based marketing support and other
health-related programs. Our mission is to improve the quality of care delivered
to health plan members while helping health plan sponsors reduce overall health
benefit costs. We generate revenues from providing services to two primary
customer groups: health benefit plan sponsors and pharmaceutical manufacturers.
The broad range of health plan sponsors we market to includes Blue Cross Blue
Shield plans and other managed care organizations, third-party administrators of
health plans, insurance companies, government agencies, employer groups and
labor union-based trusts. We currently serve an estimated 75 million individuals
enrolled in our customers' plans. We provide our clinical research services
primarily to pharmaceutical manufacturers. We also work closely with
pharmaceutical manufacturers in negotiating lower drug prices for our health
plan sponsor customers.
We are incorporated under the laws of the State of Delaware. Our
principal executive office is located at 5215 North O'Connor Boulevard, Suite
1600, Irving, Texas 75039. Our telephone number is (469) 420-6000 and our
website can be found at http://www.advanceparadigm.com.
Additional information concerning us is included in the company reports
and other documents incorporated by reference in this prospectus.
RISK FACTORS
Before acquiring our common stock, you should carefully consider all of
the information in this prospectus, any prospectus supplement and the documents
and risk factors incorporated herein by reference.
In addition, in connection with our recent acquisition of PCS Holding
Corporation, or PCS, a subsidiary of Rite Aid Corporation, or Rite Aid, you
should also carefully consider the following risk factors, as well as the
discussion of our acquisition of PCS contained in the definitive proxy statement
incorporated herein by reference.
WE MAY NOT REALIZE THE BENEFITS OF INTEGRATING WITH PCS OR BE SUCCESSFUL IN
MANAGING OUR COMBINED COMPANY.
Our acquisition of PCS was consummated on October 2, 2000. Unless our
management is successful in integrating and managing the employees and assets
acquired in the transaction in a cost-efficient manner, we will not be able to
realize or maintain the operating efficiencies and other benefits sought from
the transaction. We cannot assure you that we will be able to successfully
integrate our operations with those of PCS, or that we can successfully manage
the combined company, and the failure to do so could harm our business.
WE HAVE SUBSTANTIAL DEBT OBLIGATIONS THAT COULD RESTRICT OUR OPERATIONS.
To finance our acquisition of PCS, we, among other things, entered into
an $825 million senior secured credit facility and issued to Rite Aid $200
million in senior subordinated notes. As of June 30, 2000, on a pro forma basis
giving effect to our acquisition of PCS and our acquisition of First Florida
International Holdings, Inc. and affiliates on July 5, 2000, our outstanding
debt was approximately $820 million and our ratio of debt to total stockholders'
equity was approximately 2.2 to 1.
Our substantial indebtedness could have important consequences,
including:
o increasing our vulnerability to adverse economic and industry
conditions;
o limiting our flexibility in planning for, or reacting to,
changes in our business and the industry in which we operate;
o placing us at a disadvantage compared to our competitors that
have less debt; and
o limiting our ability to borrow additional funds.
Further, failing to comply with our debt covenants could result in an event of
default which, if not cured or waived, could adversely affect us.
In addition, approximately $620 million of our outstanding debt bears
interest at a variable rate. Economic conditions could result in higher interest
rates, which could increase debt service requirements on variable rate debt. Our
debt service requirements will require the use of a substantial portion of our
operating cash flow to pay interest on our debt instead of other corporate
purposes.
NEW INVESTORS OWN A SIGNIFICANT AMOUNT OF OUR STOCK, GIVING THEM INFLUENCE OVER
CORPORATE TRANSACTIONS AND OTHER MATTERS.
In connection with our acquisition of PCS, we issued to Joseph
Littlejohn & Levy Fund III LP, or JLL, and certain other investors, (i) 65,854
shares of Series A-1 preferred stock, (ii) six shares of Series B preferred
stock and (iii) 4,207,000 shares of common stock. In addition, we issued to Rite
Aid 125,000 shares of Series A-2 preferred stock. Although the Series A-1 and
Series A-2 preferred stock is not presently convertible into our common stock,
at the 2000 annual meeting of our stockholders, we are seeking approval of our
stockholders to permit such conversion. Assuming all shares of Series A-1,
Series A-2 and Series B preferred stock are converted into common stock at the
current conversion prices set forth in the certificates of designations for the
preferred stock, JLL would beneficially own 19.2% of our common stock, Rite Aid
would beneficially own 16.1% of our common stock and together they would own
approximately 35.3% of our common stock. Accordingly, these stockholders may be
able to substantially influence the outcome of stockholder votes and otherwise
influence us. In addition, JLL and Rite Aid, as holders of the preferred stock,
have the right to designate four of our 11 directors and we cannot take certain
actions without their consent. You should carefully review our definitive proxy
statement for the 2000 annual meeting of stockholders incorporated herein by
reference for a detailed discussion of our acquisition of PCS and the rights of
the holders of preferred stock.
CERTAIN PROPOSALS TO BE VOTED ON AT OUR 2000 ANNUAL MEETING OF
STOCKHOLDERS WILL SUBSTANTIALLY AFFECT OUR COMMON STOCK.
At our 2000 annual meeting of stockholders currently scheduled for
December 7, 2000, we are asking our stockholders to, among other things:
o consider and vote upon a proposal to amend and restate our
certificate of incorporation to, among other things, create
classes of common stock to be denominated Class A, Class B-1
and Class B-2, reclassify the existing common stock as Class A
common stock, increase the number of authorized shares of
common stock and change the governance structure of our board
of directors, and
o consider and vote upon a proposal to approve the issuance of
shares of Class B-1 common stock and Class B-2 common stock
upon conversion of the Series A preferred stock recently
issued in connection with our acquisition of PCS.
In the definitive proxy statement for the 2000 annual meeting of stockholders,
we discuss various positive and negative effects of these proposals. You should
carefully review the definitive proxy statement incorporated by reference into
this prospectus for more details on these proposals.
UNCERTAINTY OF FORWARD-LOOKING STATEMENTS
This prospectus, any prospectus supplement and the documents
incorporated by reference herein may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. All statements in those documents, other than
statements of historical fact, are forward-looking statements. In addition,
words such as "anticipate," "believe," "estimate," "expect," "intend,"
"predict," "project," and similar expressions, as they relate to us or our
management, identify forward-looking statements. These forward-looking
statements are based on the beliefs of our management as well as assumptions
made by us and information currently available to us. These forward-looking
statements are subject to certain risks, uncertainties and assumptions,
including those risks, uncertainties and assumptions discussed in this
prospectus and in our filings under the Exchange Act and those related to the
following:
o our financial position;
o our business strategy;
o future business prospects;
o projected or anticipated program developments or introductions;
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o possible acquisitions and alliances; and
o projected revenues, working capital, liquidity, capital needs,
interest costs and income.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, expected or projected. Such forward-looking
statements reflect our current views with respect to future events and are
subject to these and other risks, uncertainties and assumptions relating to our
operations, results of operations, growth strategy and liquidity. All subsequent
written and oral forward-looking statements attributable to us or individuals
acting on our behalf are expressly qualified in their entirety by this
paragraph. You should specifically consider the various factors identified in
this prospectus, any prospectus supplement and the documents incorporated by
reference herein which could cause actual results to differ.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the SEC utilizing a "shelf registration" process. Under this shelf process, the
selling stockholders, or their pledgees, donees, transferees or other
successors-in-interest may, from time to time, sell our common stock described
in this prospectus. You should read and consider carefully both this prospectus,
any prospectus supplement, and the additional information described under the
heading "Where You Can Find More Information."
USE OF PROCEEDS
We will not receive any of the money from the sale of the common stock
offered by the selling stockholders.
SELLING STOCKHOLDERS
The following table sets forth the name of each selling stockholder,
the number of shares of our common stock beneficially owned by each selling
stockholder immediately before the date of this prospectus, the number of shares
covered by this prospectus, the number of shares of our common stock to be
beneficially owned by the selling stockholder upon completion of this offering,
and the percentage of shares to be owned by the selling stockholder upon
completion of this offering. However, because each selling stockholder may offer
all or a portion of the shares covered by this prospectus at any time and from
time to time hereafter, the exact number of shares that each selling stockholder
may retain after completion of the offering cannot be determined at this time.
The last two columns of this table assume that all shares covered by this
prospectus will be sold by the selling stockholders and that no additional
shares of our common stock are bought or sold by any selling stockholder.
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<TABLE>
<CAPTION>
PERCENTAGE
BENEFICIAL OF SHARES
OWNERSHIP NUMBER OF NUMBER OF TO BE
OF SHARES SHARES SHARES TO BE OWNED
PRIOR TO COVERED BY OWNED AFTER AFTER
NAME OFFERING THIS PROSPECTUS OFFERING OFFERING
---- --------- --------------- ------------- ----------
<S> <C> <C> <C> <C>
Paul F. Wutz 829,862 829,862 -0- -0-
James J. Mindala 823,862 823,862 -0- -0-
John L. Puls, Jr. 960,215 960,215 -0- -0-
Margaret Wutz 270,000 270,000 -0- -0-
Joanne Mindala 276,000 276,000 -0- -0-
Kevin Nagle 129,500 129,500 -0- -0-
Michael Cartier 45,500 45,500 -0- -0-
James Puls 39,529 39,529 -0- -0-
Hal Holzman 39,529 39,529 -0- -0-
Barry Katz 84,000 84,000 -0- -0-
Michael Howard 2,000 2,000 -0- -0-
</TABLE>
None of the selling stockholders holds any position, office or has had any other
material relationship with us, or any of our predecessors or affiliates, during
the past three years, except that all of the selling stockholders were formerly
stockholders of companies acquired by us from them on July 5, 2000, and James
Mindala, Paul Wutz and John Puls entered into employment agreements with us on
that date as chief executive officer, president and executive vice president,
respectively, of our FFI Rx Managed Care subsidiary.
PLAN OF DISTRIBUTION
The shares may be sold or distributed from time to time by or for the
account of any of the selling stockholders in transactions on Nasdaq, in
privately negotiated transactions, put or call option transactions, hedging
transactions, in a combination of such methods, or by any other legally
available means. The selling stockholders may conduct these methods of sale at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at prices otherwise negotiated. The selling
stockholders may effect these transactions directly, or indirectly through
broker-dealers or agents acting on their behalf. In connection with such sales,
broker-dealers or agents may receive compensation in the form of commissions or
discounts from the selling stockholders or the purchasers of the shares for whom
they act as agent or to whom they sell shares as principal or both.
The selling stockholders have advised us that they have not entered
into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities, nor is there an
underwriter or coordinating broker acting in connection with the proposed sale
of shares by the selling stockholders.
Depending upon the circumstances of any sale hereunder, the selling
stockholders and any underwriter or broker-dealer who acts in connection with
the sale of shares hereunder may be deemed to be "underwriters," within the
meaning of Section 2(11) of the Securities Act, and any compensation
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received by them and any profit on any resale of shares sold by them while
acting as principals may be deemed to be underwriting discounts or commissions
under the Securities Act.
The shares may be sold from time to time by the selling stockholders,
or by pledgees, donees, transferees or other successors in interest. The selling
stockholders may also loan or pledge the shares registered hereunder to a
broker-dealer and the broker-dealer may sell the shares so loaned or upon a
default, the broker-dealer may effect sales of the pledged shares pursuant to
this prospectus.
Under applicable rules and regulations under the Securities Exchange
Act of 1934, any person engaged in a distribution of any of the shares may not
simultaneously engage in market activities with respect to our common stock
except in accordance with applicable law. In addition and without limiting the
foregoing, the selling stockholders will be subject to the prospectus delivery
requirements of the Securities Act of 1933 and the applicable provisions of the
Securities Exchange Act of 1934, including Rule 10b-5 and Regulation M, which
may limit the timing of purchases and sales of any of the shares by the selling
stockholders. All of the foregoing may affect the marketability of our common
stock.
We have agreed to maintain the effectiveness of this Registration
Statement until the earlier of July 5, 2001 or the sale of all of the shares
pursuant to this prospectus. We will not receive any of the proceeds from the
sale of the shares offered pursuant to this prospectus. We will bear all
expenses incident to the registration of the shares under federal and state
securities laws and the sale of the shares hereunder other than expenses
incident to the delivery of the shares to be sold by the selling stockholders.
Any transfer taxes payable on any shares and any commissions and discounts
payable to underwriters, agents or dealers shall be paid by the selling
stockholders. We have agreed to indemnify the selling stockholders against
certain liabilities and expenses arising out of or based upon the information
set forth or incorporated by reference in this prospectus, and the registration
statement of which this prospectus is a part, including liabilities under the
Securities Act of 1933.
In order to comply with various states' securities laws, if applicable,
the shares will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the common stock may
not be sold unless it has been registered or qualified for sale in such state or
an exemption from registration or qualification is available and is complied
with.
LEGAL MATTERS
Arter & Hadden LLP, Cleveland, Ohio, is passing on the validity of the
shares of our common stock to be offered by this prospectus.
EXPERTS
The audited consolidated financial statements and schedules and audited
supplemental consolidated financial statements and schedules of Advance
Paradigm, Inc. and subsidiaries incorporated by reference in this prospectus and
elsewhere in the registration statement to the extent and for the periods
indicated in their reports 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 giving
said reports.
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The audited combined financial statements and schedules of First Florida
International Holdings, Inc., Phoenix Communications International, Inc.,
Innovative Pharmaceutical Strategies, Inc., HMN Health Services, Inc. and Mature
Rx Plus of Nevada, Inc. (collectively "FFI Health Services") incorporated by
reference in this prospectus and elsewhere in the registration statement to the
extent and for the periods indicated in their reports 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 giving said reports.
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements of PCS Holding Corporation and Subsidiaries included in our
Form 8-K/A dated October 26, 2000, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Such financial statements are incorporated by reference in reliance
on Ernst & Young LLP's report, given on their authority as experts in accounting
and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Government filings. We file proxy statements and annual, quarterly and
special reports with the Securities and Exchange Commission. You may read and
copy any document that we file at the Securities and Exchange Commission's
public reference rooms in Washington, D.C., New York, New York, and Chicago,
Illinois. The Securities and Exchange Commission's Washington, D.C. public
reference room is located at 450 Fifth Street N.W., Washington, D.C. 20549. You
may also call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information on the public reference rooms. Our Securities and Exchange
Commission filings are also available to you free of charge at the Securities
and Exchange Commission's website at http://www.sec.gov or our website at
http://www.advanceparadigm.com.
Stock market. Our common stock is traded on the Nasdaq National Market
under the symbol "ADVP." Material filed by us can be inspected at the offices of
the National Association of Securities Dealers, Inc., Reports Section, 1735 K
Street, N.W., Washington, D.C. 20006.
Information incorporated by reference. The Securities and Exchange
Commission allows us to "incorporate by reference" the information we file with
it, 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 information that we file later with the
Securities and Exchange Commission will automatically update and supersede
previously filed information, including information contained in this document.
We are incorporating by reference the documents listed below and any
future filings we will make with the Securities and Exchange Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, until this offering has been completed:
o our Definitive Proxy Statement on Schedule 14A as filed with
the Securities and Exchange Commission on November 6, 2000;
o Our Current Report on Form 8-K as filed with the Securities
and Exchange Commission on July 19, 2000 and as amended on
September 18, 2000 and October 26, 2000;
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o our Current Report on Form 8-K as filed with the Securities
and Exchange Commission on July 31, 2000;
o our Quarterly Report on Form 10-Q for the quarter ended June
30, 2000 as filed with the Securities and Exchange Commission
on August 14, 2000;
o our Annual Report on Form 10-K for the fiscal year ended March
31, 2000 as filed with the Securities and Exchange Commission
on June 29, 2000 and as amended on July 28, 2000;
o our Current Report on Form 8-K as filed with the Securities
and Exchange Commission on July 5, 2000; and
o the description of our Common Stock contained in or
incorporated by reference in, our Registration Statement under
the Securities Exchange Act of 1934, as amended, on Form 8-A
filed with the Securities and Exchange Commission on September
30, 1996, as amended from time to time.
You may request free copies of these filings by writing or telephoning
us at the following address:
Advance Paradigm, Inc.
Attn.: Legal Department
5215 North O'Connor Boulevard
Suite 1600
Irving, Texas 75039
(469) 420-6000
You should rely on the information incorporated by reference or provided in this
prospectus or any prospectus supplement. We have authorized no one to provide
you 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 any prospectus supplement is accurate as of
any date other than the date on the front of the documents.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14 -- OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expected expenses, payable by
Advance Paradigm, Inc. in connection with the issuance and distribution of the
securities being registered hereby. All items other than the filing fee are
estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee $ 39,011
Legal Fees and Expenses 10,000
Accounting Fees and Expenses 200,000
Miscellaneous Expenses 989
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Total $ 250,000
</TABLE>
ITEM 15 -- INDEMNIFICATION OF DIRECTORS AND OFFICERS
Advance Paradigm, Inc., a Delaware corporation (the "Company"), is
empowered by Section 145 of the Delaware General Corporation Law (the "Delaware
Act"), subject to the procedures and limitations stated therein, to indemnify
certain parties. Section 145 of the Delaware Act provides in part that a
corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding (other than an action by or in the right of the
corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Similar
indemnity is authorized for such persons against expenses (including attorneys'
fees) actually and reasonably incurred in defense or settlement of any
threatened, pending or completed action or suit by or in the right of the
corporation, if such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation, and
provided further that (unless a court of competent jurisdiction otherwise
provides) such person shall not have been adjudged liable to the corporation.
Where an officer or a director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses which such officer or director actually and reasonably
incurred. Section 145 further provides that any indemnification, unless ordered
by a Court, shall be made by the corporation only as authorized in each specific
case upon a determination that indemnification of such person is proper because
he has met the applicable standard of conduct. Such determination shall be made,
with respect to a person who is a director or officer at the time of such
determination, by: (i) the stockholders; (ii) by a majority vote of the
directors who are not parties to such action, suit or proceeding even if less
than a quorum; (iii) a committee of directors who are not parties to such
action, suit or proceeding designated by majority vote by such disinterested
directors even if less than a quorum; or (iv) an independent legal counsel in a
written opinion, if there are no such disinterested directors, or if such
disinterested directors so direct.
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Section 145 provides further that indemnification pursuant to its
provisions is not exclusive of other rights of indemnification to which a person
may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Article VIII of the Company's Certificate of Incorporation (the
"Certificate") eliminates the personal liability of the Company's directors to
the fullest extent permitted under Section 102(b)(7) of the Delaware Act, as
amended. Such section permits a company's certificate of incorporation to
eliminate or limit personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided that such provision shall not eliminate or limit the liability of a
director: (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders; (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii) under
Section 174 of the Delaware Act (which addresses director liability for unlawful
payment of a dividend or unlawful stock purchase or redemption) or (iv) for any
transaction from which the director derived an improper personal benefit.
Article IX of the Certificate provides that the Company shall indemnify
any and all persons whom it has the power to indemnify under Section 145 of the
Delaware Act to the fullest extent permitted under such section, and such
indemnity shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
The right to indemnification under Article IX of the Certificate is a
contract right which includes, with respect to directors and officers, the right
to be paid by the Company the expenses incurred in defending any such proceeding
in advance of its disposition; provided, however, that, if the Delaware Act
requires, the payment of such expenses incurred by a director or officer in
advance of the final disposition of a proceeding shall be made only upon
delivery to the Company of an undertaking, by or on behalf of such director or
officer, to repay all amounts so advanced if it shall ultimately be determined
that such director or officer is not entitled to be indemnified under Article IX
or otherwise.
Article VIII of the bylaws of the Company (the "Bylaws") provides that
the Company shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Company) by reason of the fact that he is or
was a director, officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines, and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, to the fullest extent
permitted by the Delaware Act.
Article VIII of the Bylaws further provides for the authority to
purchase and maintain insurance with respect to indemnification on behalf of any
person who is or was a director, officer, employee or agent of the Company or is
or was serving at the request of the Company as director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise. The Company maintains directors' and officers' liability insurance.
II-2
<PAGE> 13
ITEM 16 -- EXHIBITS
The following Exhibits are filed as part of this Registration
Statement.
Exhibit No. Exhibit
3.1 Amended and Restated Certificate of Incorporation of
the Company (previously filed in connection with the
Company's Registration Statement on Form S-1 filed
with the Securities and Exchange Commission on
October 8, 1996 and incorporated herein by reference)
3.2 Second Amended and Restated Bylaws of the Company
(previously filed as Exhibit 3.1 to the Company's
Form 8-K filed with the Securities and Exchange
Commission on October 16, 2000 and incorporated
herein by reference)
4 Form of Stock Certificate of common stock of the
Company (previously filed in connection with the
Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 1997 and incorporated herein by
reference)
5.1** Opinion of Arter & Hadden LLP
23.1** Consent of Arter & Hadden LLP (included in
Exhibit 5.1)
23.2* Consent of Arthur Andersen LLP
23.3* Consent of Ernst & Young LLP
24** Power of Attorney
----------
* filed herewith
** previously filed
ITEM 17 --- UNDERTAKINGS
(a) The undersigned 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;
(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
II-3
<PAGE> 14
fundamental change in the information set
forth in this 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) 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 this Registration
Statement or any material change to such
information in this Registration Statement;
Provided, however, that Paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if this Registration Statement is on Form S-3, Form
S-8 or Form F-3 and the information required to be included in
a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the Company pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) that, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) to remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the Offering.
(b) The undersigned Company hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the Company's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof;
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Company pursuant to the
foregoing provisions, 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> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Irving, State of Texas,
on November 7, 2000.
ADVANCE PARADIGM, INC.
By: /s/ DAVID D. HALBERT
----------------------------------
David D. Halbert, Chairman of the
Board and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to the Registration Statement has been signed by the
following persons in the capacities indicated on November 7, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ DAVID D. HALBERT Chairman of the Board and Chief
------------------------------- Executive Officer (Principal
David D. Halbert Executive Officer)
By: * Vice Chairman, Head of e-Business
------------------------------- and Technology and Director
Jon S. Halbert
</TABLE>
II-5
<PAGE> 16
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
By: * Chief Financial Officer,
---------------------------------- Executive Vice President,
T. Danny Phillips Secretary and Treasurer
(Principal Financial and
Accounting Officer)
By: * President and Director
----------------------------------
David A. George
By: * Director
----------------------------------
Ramsey A. Frank
By: * Director
----------------------------------
Stephen L. Green
By: * Director
----------------------------------
Jeffrey R. Jay, M.D.
By: * Director
----------------------------------
David R. Jessick
By: * Director
----------------------------------
Paul S. Levy
By: * Director
----------------------------------
Robert J. Miller
By: * Director
----------------------------------
Jean-Pierre Millon
By: * Director
----------------------------------
Michael D. Ware
By: /s/ DAVID D. HALBERT
----------------------------------
David D. Halbert, Attorney-in-Fact
</TABLE>
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<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
3.1 Amended and Restated Certificate of Incorporation of the Company
(previously filed in connection with the Company's Registration
Statement on Form S-1 filed with the Securities and Exchange Commission
on October 8, 1996 and incorporated herein by reference)
3.2 Second Amended and Restated Bylaws of the Company (previously filed as
Exhibit 3.1 to the Company's Form 8-K filed with the Securities and
Exchange Commission on October 16, 2000 and incorporated herein by
reference)
4 Form of Stock Certificate of common stock of the Company (previously
filed in connection with the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 1997 and incorporated herein by
reference)
5.1** Opinion of Arter & Hadden LLP
23.1** Consent of Arter & Hadden LLP (included in Exhibit 5.1)
23.2* Consent of Arthur Andersen LLP
23.3* Consent of Ernst & Young LLP
24** Power of Attorney
</TABLE>
----------
*filed herewith
**previously filed
II-7
