AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 2, 2000
REGISTRATION NO. 333 - 91983
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
IMRGLOBAL CORP.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
FLORIDA 59-2911475
- ------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
100 SOUTH MISSOURI AVENUE
CLEARWATER, FLORIDA 33756
(727) 467-8000
----------------------------------------------------------------------------
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
DILIP PATEL
IMRGLOBAL CORP.
100 SOUTH MISSOURI AVENUE
CLEARWATER, FLORIDA 33756
(727) 467-8000
------------------------------------------------------------------------
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
<TABLE>
COPIES TO:
<S> <C>
THOMAS J. EGAN, JR. JOHN R. FALLON, JR.
BAKER & MCKENZIE LEBOEUF, LAMB, GREENE & MACRAE, L.L.P.
815 CONNECTICUT AVENUE, N.W. 125 WEST 55TH STREET
WASHINGTON, DC 20006 NEW YORK, NEW YORK 10019
(202) 452-7050 (212) 424-8279
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
At various times 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. [X]
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 [X]
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. [X]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [X]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON THE 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 THE DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statements filed with the
Securiites 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 jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 2, 2000
[LOGO]
3,408,846 SHARES
OF
COMMON STOCK
This prospectus is part of a registration statement that has been filed
with the Securities and Exchange Commission and that covers 3,408,846 shares of
our common stock. The selling shareholders named on pages 24 to 28 may offer and
sell these shares from time to time.
We will not receive any of the proceeds from the sale of this common
stock
Our common stock is quoted on the Nasdaq National Market under the
symbol "IMRS." The average of the high and low prices of our common stock as
reported on the Nasdaq National Market on January 28 2000 was $9.44 per share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 TO READ ABOUT CERTAIN RISKS THAT
YOU SHOULD CONSIDER BEFORE MAKING AN INVESTMENT DECISION.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS. NO ONE HAS BEEN AUTHORIZED TO PROVIDE YOU WITH
DIFFERENT INFORMATION. THIS PROSPECTUS IS NOT AN OFFER OF THESE SHARES IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS.
The date of this prospectus is February ___, 2000
<PAGE>
TABLE OF CONTENTS
Page
----
Prospectus Summary .......................................................... 1
Risk Factors................................................................. 3
Where You Can Find More Information.......................................... 10
Special Note Regarding Forward-Looking Statements............................ 11
Use of Proceeds.............................................................. 11
Dividend Policy.............................................................. 11
Business .................................................................... 12
Selling Shareholders......................................................... 22
Plan of Distribution......................................................... 26
Legal Matters................................................................ 27
Experts ................................................................... 27
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY, ESPECIALLY THE
RISKS OF INVESTING IN OUR SECURITIES DISCUSSED UNDER "RISK FACTORS" BEFORE
MAKING AN INVESTMENT DECISION.
OUR BUSINESS
We are an international provider of innovative business and information
technology solutions to Fortune 500 and Global 2000 sized companies. Our
information technology, or IT, solutions address problems related to the use of
computers or computing power. We focus on providing our range of services to
companies in the following industries:
o Insurance
o Capital markets
o Healthcare
o Utilities
o Media and communications
o Retail and manufacturing/distribution
We believe companies in these industries are facing changes and
competition that are altering the way they conduct business.
We offer the following services to our clients in these industries:
/ / Business Consulting - provide business expertise and consulting
tailored to a specific industry
/ / IT strategy formulation - plan and develop strategies to address
problems related to the use of computers or computing power
/ / E-Business services - design and implement Internet solutions
/ / Component-based application development - build new applications
using codes constructed for specific purposes, which we refer to as
"components"
/ / Component-based industry solutions - build industry specific
applications using components
/ / Application modernization / transformation - / /ransform older
software to newer technologies
/ / Application management and support - manage and support existing
computer applications
Due to the scope and pace of the changes facing our clients, IT
solutions in these industries rarely lend themselves to packaged "off the shelf"
programs or services. Instead, a customized and technology-based approach is
needed. Since early 1998, we have been developing an approach where we utilize
reusable, industry-specific software components to quickly build industry
specific applications for our clients. We call this approach a "component-based"
solution. In addition, we have acquired companies with complementary business
knowledge or technology to assist in this development effort. Our
component-based industry solutions combine the functionality of customized
software with the speed of implementation of a packaged solution and are
generally delivered at a lesser total cost than fully customized solutions. In
addition we believe component-based solutions to be more reliable and better
tailored to the specific needs of our clients than pre-packaged products.
We provide all of our services on an outsourcing basis, which means our
clients use third party providers, like ourselves, to perform activities that
traditionally would be handled by their own internal staffs. Specifically, we
provide our clients with a global network of software development centers with
highly trained and qualified technology professionals. We utilize the time
differences between our development centers in our global network to create a
24-hour "virtual workday" during which our technology professionals can work on
projects for our clients.
An important part of our strategy is to offer our services on a
fixed-price, fixed-time basis. By offering fixed pricing, we enable our clients
to reduce their exposure to increased costs and by using our "on-site, off-site"
delivery model, which utilizes one or more of our worldwide delivery centers, we
can maintain consistent quality and reduce the project delivery time.
1
<PAGE>
In addition to fixed-priced, fixed-time projects, we provide
programming and IT consulting services at clients' sites as needed, usually on a
time and materials basis. We also help our clients with tactical issues such as
Year 2000 conversion services and the transition to the Euro currency. Our Year
2000 service offering was our largest source of revenue in each of 1997 and 1998
as our clients committed significant financial resources in addressing this
issue. As Year 2000 engagements were completed in 1999, our revenue from this
service offering decreased and we will not generate significant revenue from
Year 2000 engagements in the future.
Currently, we maintain a staff of approximately 2,500 software
development professionals to serve our clients from our 46 locations worldwide.
We intend to further broaden our geographical reach mainly through acquisitions.
In addition, we intend to continue to acquire companies that have specific
industry expertise in one of our vertical markets and/or significant expense in
new technologies.
HOW TO REACH US
Our principal executive offices are located at 100 South Missouri
Avenue, Clearwater, Florida 33756. Our telephone number at that address is
727-467-8000.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock.
2
<PAGE>
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING
AN INVESTMENT DECISION. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE
ONLY ONES FACING US. ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO
US OR THAT WE CURRENTLY DEEM IMMATERIAL MAY ALSO IMPAIR OUR OPERATIONS.
IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION
OR RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY AFFECTED. IN SUCH CASE,
THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR
PART OF YOUR INVESTMENT.
IF WE DO NOT EFFECTIVELY MANAGE OUR GROWTH , WE MAY NOT BE ABLE TO PROVIDE
QUALITY SERVICES AND MAINTAIN PROFITABILITY
If we do not manage our growth effectively, the quality of the services
we offer could decline and result in a loss of future revenue from dissatisfied
customers. In order to continue to provide quality service to our customers we
must attract and retain key personnel We expect that the number of our
employees, particularly skilled technical, marketing and management employees
will increase. Our growth places, and will continue to place, significant
demands on our employee base especially on members of senior management who have
to manage more people, and face a larger number of, and increasingly complex,
issues as our company grows. For example, we must continue to develop and
improve our operational, financial, communications and other internal systems,
both in the United States and offshore to meet the demands of a larger company.
OUR REVENUE GROWTH AND OPERATING PROFIT COULD BE ADVERSELY AFFECTED IF WE ARE
UNABLE TO INTEGRATE SEVEN RECENTLY ACQUIRED BUSINESSES.
We may be unable to successfully integrate newly acquired businesses,
which may result in lower than expected revenue growth and profitability. Over
the past 18 months, we have expanded our operations through the acquisition of
additional companies that complement our business. We may not be able to
continue to identify and acquire companies that have the potential to increase
our overall value at prices that are attractive to us, or at all.
We may not be able to achieve the anticipated benefits from our recent
acquisitions unless the operations of the acquired business are successfully
combined with our business in a timely manner. The integration of acquisitions
requires substantial attention from management. The diversion of the attention
of management and any difficulties encountered in the transition process could
have an adverse impact on this integration and, as a result, on our business
results. In addition, the process of integrating various businesses could cause
the interruption of, or a loss of momentum in, the activities of some or all of
these businesses, which could also have an adverse effect on our business
results.
WE FACE SIGNIFICANT COMPETITION IN THE INFORMATION TECHNOLOGY, INTERNET-RELATED
AND SOFTWARE MARKETS THAT ARE NEW, INTENSELY COMPETITIVE AND RAPIDLY CHANGING
We will lose clients and our business will suffer if we are unable to
successfully compete with information technology (known as "IT") consulting
firms, Internet and E-business professional service providers, software
integration firms, application software vendors and internal IT departments.
Many of the companies that provide these services have significantly greater
financial, technical and marketing resources, generate greater revenues and
3
<PAGE>
have greater name recognition than we do. In addition, there are relatively few
barriers to entry into our markets. We have faced, and expect to continue to
face, additional competition from new entrants into our markets. We believe that
the principal competitive factors in our markets include:
o quality of service, price and speed of delivery;
o ability to integrate strategy, technology and creative design
services;
o targeted industry knowledge;
o Internet expertise and talent; and
o project management capability.
We believe that our ability to compete also depends in part on
competitive factors outside our control, including:
o the ability of our competitors to hire, retain and motivate their
personnel;
o the development by others of software that is competitive with our
products and services; and
o our competitors' responsiveness to client needs.
WE MAY NOT BE ABLE TO GENERATE SUFFICIENT NEW BUSINESS TO REPLACE OUR
DIMINISHING REVENUE FROM YEAR 2000 CONVERSION PROJECTS
If we are not successful in obtaining additional business from the
clients to whom we have provided Year 2000 compliance solutions or if the
additional business is less profitable, our profitability may decline
substantially. The demand for Year 2000 conversion services has diminished and
will represent less than 1% of our revenue in fiscal year 2000. We realized a
substantial but diminishing proportion of our total revenue from Year 2000
conversion services in 1997, 1998 and 1999.
IF WE CANNOT MONITOR OUR INTERNATIONAL BUSINESS EXPOSURE IN INDIA, FRANCE, JAPAN
AND OTHER COUNTRIES WHERE WE HAVE SIGNIFICANT OPERATIONS, OUR RESULTS OF
OPERATIONS MAY DECLINE
Our international operations and business activities are subject to the
following risks:
o difficulty in managing international operations in seven
different countries due to time differences;
o potential foreign tax consequences, including taxes payable on the
repatriation of earnings from our India operations;
o compliance with, and unexpected changes in, a growing variety
of foreign laws and regulations in any of the seven major
countries where we have significant operations; and
o compliance with employment laws in France and Japan, which are
more stringent than employment laws in the US;
o unexpected changes in the local and regional political climate
in India and the possible reactions to those changes by the
international community, including economic sanctions.
SIGNIFICANT FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE RATES MAY ADVERSELY AFFECT
OUR REVENUE AND RESULTS OF OPERATION
We are subject to risks that, as a result of currency fluctuations, the
translation of foreign currencies into United States dollars for accounting
purposes will adversely affect our results of operations. For those countries
where we have significant sales, a stronger dollar will result in reduced
revenue and operating profit. Countries where we have significant sales include
U.K., France, Japan, Australia and Canada. In addition, we presently incur a
significant amount of our costs in local currency in India and may establish
additional offshore centers in other countries. In contrast, we presently
generate over one half of our revenue in United States dollars. The remaining
revenue consists of British Pounds, French Francs, Japanese Yen, Australian
dollars and Canadian dollars. A significant strengthening in the Indian Rupee
against the United States Dollar or the other foreign currencies noted above,
will result in a reduction in our results of operation.
4
<PAGE>
Historically, we have not hedged any material portion of our foreign exchange
transactions.
THE LOSS OF ANY OF LARGE CLIENTS, INCLUDING MICHELIN NORTH AMERICA INC. OR JOHN
HANCOCK MUTUAL LIFE INSURANCE COMPANY, WOULD REDUCE OUR REVENUE AND
PROFITABILITY
If we are unable to service and meet the expectations of any of our
large clients, our clients could purchase services that we provide from a
competitor and the loss of a major client could, in turn, reduce our revenues
and profitability. Because many of our contractual engagements involve projects
that are critical to our clients' businesses, our failure to meet a client's
expectations could result in a cancellation or nonrenewal of the contract and
could damage our reputation and adversely affect our ability to attract new
business. Furthermore, we generally are not the exclusive outside source of IT
products and services to our clients. Accordingly, a client's dissatisfaction
with our performance could lead the client to purchase these services from a
competitor, thereby reducing our revenue and profitability.
We derive and believe that we will continue to derive a significant
portion of our revenue from a limited number of large corporate clients. In the
nine months ended September 30, 1999, our five largest clients accounted for
18.2% of our total revenue. During that period, Michelin North America, Inc.
accounted for 5.9% of revenues and John Hancock Mutual Life Insurance Company
accounted for 5.4%. The volume of work performed for specific clients is likely
to vary from year to year.
IF WE CANNOT RECRUIT AND RETAIN HIGHLY SKILLED SOFTWARE DEVELOPMENT
PROFESSIONALS, WE MAY NOT BE ABLE TO KEEP PACE WITH THE CONTINUING CHANGES IN
INFORMATION PROCESSING TECHNOLOGY, INDUSTRY STANDARDS AND CLIENT PREFERENCES AND
AS A RESULT WE MAY NOT BE ABLE TO MANAGE AND COMPLETE EXISTING PROJECTS OR
OBTAIN NEW PROJECTS
If we are not successful in attracting, training, motivating and
retaining highly skilled software development professionals, particularly
project managers, software engineers and other senior technical personnel, we
may not be able to effect our growth strategy, manage and complete our existing
projects, and bid for or obtain new projects. In particular, we believe that
there is a shortage of, and significant competition for, internet software
development professionals with the advanced technological skills necessary to
perform the services offered by us. Our ability to maintain and renew existing
engagements and obtain new business depends, in large part, on our ability to
hire, train and retain technical personnel with the IT skills to keep pace with
the continuing changes in information processing technology, evolving industry
standards and changing client preferences.
COMPLIANCE WITH EXISTING UNITED STATES IMMIGRATION LAWS, OR CHANGES IN THESE
TYPES OF LAWS COULD MAKE IT DIFFICULT TO HIRE FOREIGN NATIONALS OR LIMIT OUR
ABILITY TO RETAIN H-1B EMPLOYEES IN THE UNITED STATES, AND COULD REQUIRE US TO
INCUR UNEXPECTED LABOR COSTS
We may not be able to bring to the United States foreign employees who
are critical to our business and who work for us pursuant to the non-immigrant
work permitted visa ("H-1B") classification in years in which the limit on the
number of new H-1B petitions that the United States Immigration and
Naturalization Services may approve in any government fiscal year has been
reached. As of September 30, 1999, approximately 500 of our United States
employees were working for us pursuant to the H-1B classification. If we are not
successful in bringing these employees in the H-1B classification to the United
States, our labor costs may increase, as we may have to subcontract our work to
outside contractors at higher rates than our current labor costs.
5
<PAGE>
THE LOSS OF SATELLITE COMMUNICATIONS WITH OUR OFFSITE SOFTWARE DEVELOPMENT
CENTERS COULD PREVENT US FROM LEVERAGING THESE OFFSITE CENTERS AND FROM
PROVIDING 24-HOUR SERVICE TO OUR CLIENTS, AND ANY ALTERNATIVE TO THIS TYPE OF
COMMUNICATION WOULD NOT PROVIDE US WITH COST ADVANTAGES OR AN EFFECTIVE MEANS OF
TRANSMISSION FOR OUR CLIENTS
Any loss of our ability to transmit voice and data through satellite
communications, at commercially reasonable prices, could have a material adverse
effect on our financial condition because a significant element of our business
strategy is to continue to leverage our offsite software development centers in
Bangalore and Mumbai, India. Furthermore, there are no cost-effective
alternatives to satellite transmission. For example, if we were to depend on
telephone lines which are an alternative means to satellite communications, we
would incur significant costs and the transmissions would be slower than those
by satellite, particularly in India where there is minimal infrastructure for
telephone lines by comparison to the U.S. or Europe.
WE ARE EXPOSED TO GREATER BUSINESS RISKS RELATING TO THE ECONOMIC ENVIRONMENT OF
OUR OPERATIONS IN OTHER COUNTRIES, ESPECIALLY INDIA, THAN WE ARE FOR OUR
OPERATIONS IN THE UNITED STATES
Our business may be harmed by future changes in inflation and interest
rates in countries in which we establish operations. For example, in the past,
India has experienced significant inflation, low growth in gross domestic
product and shortages of foreign exchange. Accordingly, the India government
tightly regulates the flow of capital out of India. At September 30, 1999, we
had approximately $9.0 million of our cash held in India. While we anticipate
that we will have access to this cash to finance our ongoing operations and
expansion, there is no guarantee that the India government will allow us access
to these funds for investment outside of India.
WE ARE EXPOSED TO GREATER BUSINESS RISKS RELATING TO THE SOCIAL ENVIRONMENT OF
OUR OPERATIONS IN OTHER COUNTRIES, ESPECIALLY INDIA , THAN WE ARE FOR OUR
OPERATIONS IN THE UNITED STATES
We may be adversely affected by political or social changes in
countries in which we establish software development facilities. For example,
India has recently experienced civil unrest and terrorism and, from time to
time, was involved in regional conflicts with Pakistan. If these instances of
civil unrest, terrorism and Pakistani conflicts continue, our India operations
could be disrupted.
THE ELIMINATION OF BENEFITS GRANTED BY THE GOVERNMENT OF INDIA COULD ADVERSELY
AFFECT OUR FINANCIAL RESULTS
The elimination of benefits granted by the government of India could
have a material adverse effect on our financial results. The Indian government
has exercised and continues to exercise significant influence over many aspects
of the Indian economy, and its actions concerning the economy could adversely
affect private sector entities, including us. During the past five years,
India's government has provided significant tax incentives and relaxed some
regulatory restrictions in order to encourage foreign investment in specified
sectors of the economy, including the software development industry. We have
directly benefited from tax holidays, liberalized import and export duties and
preferential rules concerning foreign investment and repatriation.
Notwithstanding these benefits, however, India's central and state governments
remain significantly involved in the Indian economy as regulators.
WITH OUR ANNOUNCED CLOSURE OF OUR FACILITIES IN NORTHERN IRELAND, WE MAY HAVE TO
REPAY A PORTION OF THE MONETARY GRANTS PROVIDED TO US BY THE GOVERNMENT OF
NORTHERN IRELAND
Upon closure of our facilities in Northern Ireland, we may have to
repay up to $1.8 million of the government monetary grants that were provided to
us to encourage employment in Belfast.
6
<PAGE>
IF BUSINESSES AND CONSUMERS DO NOT ADOPT THE INTERNET AS A MEANS FOR COMMERCE,
OUR E-BUSINESS CONSULTING SERVICE BUSINESS WILL FAIL AND OUR GROWTH WILL DECLINE
If commerce on the Internet does not grow, or grows more slowly than
expected, our growth would decline and our business would be seriously harmed.
The future success of our E-business consulting services depends heavily on the
acceptance and use of the Internet as a means for commerce. The widespread
acceptance and adoption of the Internet for conducting business is likely only
in the event that the Internet provides businesses with greater efficiencies and
improvements. Businesses and consumers may reject the Internet as a viable
commercial medium for a number of reasons, including:
o potentially inadequate network infrastructure;
o delays in the development of Internet enabling technologies and
performance improvements;
o delays in the development or adoption of new standards and protocols
required to handle increased levels of Internet activity;
o delays in the development of security and authentication;
o insufficient technology necessary to ensure secure transmission of
confidential information;
o changes in, or insufficient availability of, telecommunications
services to support the Internet; and
o failure of companies to meet their clients' expectations in
delivering goods and services over the Internet.
IF WE DO NOT KEEP PACE WITH THE LATEST TECHNOLOGICAL CHANGES, PARTICULARLY
RELATING TO E-BUSINESS AND OTHER INTERNET-RELATED SERVICES, AND OUR CLIENTS
CHOSE TO INVEST IN LEADING TECHNOLOGY, WE MAY LOSE OUR CLIENT BASE AND OUR
REVENUES MAY DECLINE
Failure to respond successfully to technological developments, evolving
industry standards and changing client preferences or failure to respond in a
timely or cost-effective way, will seriously harm our business and operating
results. In addition, we must hire, train and retain technologically
knowledgeable professionals so that they can fulfill the increasingly
sophisticated needs of our clients. We expect to derive a substantial portion of
our revenue from creating E-business systems that are based upon today's leading
technologies and that are capable of adapting to future technologies. We cannot
assure you that we will be successful in addressing these developments on a
timely basis or that even if we address them, we will be successful in the
marketplace.
INCREASING GOVERNMENT REGULATION, PARTICULARLY THAT RELATING TO ELECTRONIC
COMMERCE, COULD HARM THE DEVELOPMENT OF THE INTERNET AND AS A RESULT THE DEMAND
FOR OUR SERVICES TO CREATE ELECTRONIC BUSINESS CHANNELS WOULD DECREASE
Any state, federal or foreign government legislation or regulation
applicable to electronic commerce could dampen the growth of the Internet and
decrease its acceptance as a communications and commercial medium. If this type
of decline occurs, companies may decide in the future not to use our services to
create electronic business channels. This decrease in the demand for our
services would seriously harm our business and operating results. Although there
are currently few of these laws and regulations, both state, federal and foreign
governments may adopt a number of these laws and regulations. New laws and
regulations may affect the following:
o user privacy;
o the pricing and taxation of goods and services offered over the
Internet;
o the content of websites;
o consumer protection; and
o the characteristics and quality of products and services offered over
the Internet.
For example, the Telecommunications Act of 1996 prohibits the
transmission of some types of information and content over the Internet. The
scope of the Act's prohibition is currently unsettled. In addition, although
courts recently held that substantial portions of the Communications Decency Act
are unconstitutional, federal or state governments may enact, and courts may
uphold, similar legislation in the future. Future legislation could expose
companies involved in Internet commerce to liability.
7
<PAGE>
IF OUR CONTRACTS LIMITING LIABILITY ARE NOT ENFORCEABLE OR IF WE ARE NOT
SUFFICIENTLY COVERED BY INSURANCE, WE MAY BE LIABLE TO OUR CLIENTS FOR DAMAGES
TO THEIR COMPUTER SYSTEMS AND THESE CLAIMS BY OUR CLIENTS AGAINST US COULD
RESULT IN A SUBSTANTIAL COST TO US AND HARM OUR FINANCIAL CONDITION
Any failure in a client's system could result in a claim for
substantial damages against us, regardless of our responsibility for this type
of failure. We attempt to limit contractually our liability for damages arising
from negligent acts, errors, mistakes, or omissions in rendering our IT products
and services, but the limitations of liability set forth in our service
contracts may not be enforceable in all instances or may not otherwise protect
us from liability for damages. In addition, our general liability insurance
coverage, including coverage for errors or omissions, may not continue to be
available on reasonable terms or may not be available in sufficient amounts to
cover one or more large claims, or the insurer may disclaim coverage as to any
future claim. The successful assertion of one or more large claims against us
that exceed available insurance coverage or changes in our insurance policies,
including premium increases or the imposition of large deductible or
co-insurance requirements, could materially adversely affect our results of
operations and financial condition.
WE RISK HAVING COST OVERRUNS IN FIXED-PRICE, FIXED-TIME FRAME CONTRACTS WHICH
MAY REDUCE OUR PROFITABILITY
Our failure to estimate accurately the resources and time required for
a project, future rates of inflation and currency translations, or our failure
to complete our contractual obligations within the time frame committed could
reduce our profitability. As a core element of our business philosophy, our
strategy is to offer many of our IT services on fixed-price, fixed-time frame
contracts, rather than contracts in which payment to us is determined solely on
a time and materials basis. Although we use our total software quality
management software engineering process and our past project experience to
reduce the risks associated with estimating, planning and performing
fixed-price, fixed-time frame projects, we bear the risk of cost over-runs and
inflation in connection with these projects.
INCREASING WAGE COSTS IN INDIA COULD RESULT IN FLUCTUATIONS IN OUR REVENUE AND
EARNINGS
If wage costs in India, where approximately 25% of our employees
reside, continue to increase, our revenue and earnings may fluctuate. Wage costs
in India are presently increasing at a faster rate than in the United States. As
of September 30, 1999, approximately 25% of our employees reside in India.
Historically, our wage costs in India have been significantly lower than our
wage costs in the United States for comparably skilled employees. However, in
light of the current wage increases in India, we cannot assure you that this
will remain the same.
IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS FROM INFRINGEMENT
OR MISUSE, WE MAY LOSE REVENUE TO THE UNAUTHORIZED USERS OF THESE PROPERTY
RIGHTS.
We cannot assure you that the steps we have taken to protect our
proprietary rights will be adequate to prevent misappropriation of our
proprietary rights or any of our other intellectual property. We also cannot
assure you that we will be able to detect unauthorized use and take appropriate
steps to enforce our rights. For example, we currently license the use of our
FOX products in Asia. However, we presently hold no patents or registered
copyrights for these products. The unauthorized use of our FOX technology by
potential customers or one of our competitors may result in our inability to
receive revenue from these unauthorized users. We anticipate that we will
continue to license some types of technologies to our clients. We cannot assure
you that we will be able to successfully license these technologies or protect
them from infringement or misuse.
Moreover, we cannot assure you that the combination of copyright and
trade secret laws, nondisclosure and other contractual arrangements, and
technical measures on which we rely will not change in ways that may prevent or
restrict the transfer of software components, libraries and toolsets among the
United States, India, the UK, France, Canada, Japan and Australia. Under the
Berne Convention, an international treaty, the governments of these countries
have agreed to extend copyright protection under their domestic laws to foreign
works, including works created or produced in the United States.
WE MAY BE LIABLE FOR INFRINGING THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS AND
ANY INFRINGEMENT CLAIM COULD RESULT IN SUBSTANTIAL COST TO US AND DIVERT
MANAGEMENT'S ATTENTION FROM OUR OPERATIONS
8
<PAGE>
Claims that we have infringed on the intellectual property rights of
other may be asserted against us in the future. These claims may result in
litigation and we may not prevail in this type of litigation, or we may be
unable to obtain a license for the use of any infringed intellectual property
from a third party on commercially reasonable terms. Additionally, we anticipate
that in the future, we will license some types of technologies to our clients.
We cannot assure you that we will be able to prevent infringement claims against
us in connection with our licensing efforts. We expect that the risk of
infringement claims against us will increase if more of our competitors are able
to successfully obtain patents for software products and processes. These types
of claims, regardless of their outcome, could result in substantial costs to us
and divert management's attention from our operations. Any infringement claim or
litigation against us could, therefore, have a material adverse effect on our
financial results.
In addition, we cannot assure you that the combination of contractual
arrangements and copyright and trade secret laws on which we rely will not
change in ways that may result in our infringing upon the intellectual property
rights of others. OUR CHIEF EXECUTIVE OFFICER'S STOCK OWNERSHIP PROVIDES
SUBSTANTIAL CONTROL OVER OUR COMPANY AND THIS CONCENTRATION OF OWNERSHIP COULD
DELAY OR PREVENT A CHANGE OF CONTROL
The concentration of ownership by Satish K. Sanan, our Chairman of the
Board and Chief Executive Officer, may delay or prevent a change in control and
may impede or preclude transactions in which shareholders might otherwise
receive a premium for their shares over the then current market prices. Mr.
Sanan, owns approximately 19% of our outstanding shares of common stock. As a
result, Mr. Sanan retains the voting power to exercise significant control over
the election of directors and other matters requiring a vote of shareholders.
IF WE LOSE OUR KEY PERSONNEL, PARTICULARLY MR. SATISH SANAN, OUR BUSINESS MAY
SUFFER
Our continued success depends in large part upon the continued
availability of key management personnel, particularly the services of Mr.
Sanan. The loss of the services of Mr. Sanan would have a material adverse
effect on us. We do not currently maintain nor do we intend to acquire key man
insurance on the life of Mr. Sanan.
OUR CHARTER DOCUMENTS AND FLORIDA LAW COULD DISCOURAGE ACQUISITION PROPOSALS AND
DELAY OR PREVENT A CHANGE OF CONTROL
The protective provisions in our charter documents, which are designed
to provide our board of directors with time to consider whether a hostile
takeover offer is in our shareholders' best interests, could discourage
potential acquisition proposals and could delay or prevent a change of control
of our corporation. These provisions could also diminish the opportunities for
our shareholders to participate in tender offers, including tender offers at a
price above the then current market price for our common stock. These provisions
may also inhibit fluctuations in our stock price that could result from takeover
attempts.
In addition, Florida law also contains provisions that may delay, defer
or prevent a non-negotiated merger or other business combination. These
provisions are intended to encourage any person interested in acquiring us to
negotiate with and obtain the approval from our board of directors. Some of
these provisions may, however, discourage a future acquisition not approved by
the board of directors in which shareholders might receive an attractive value
for their shares or that a substantial number or even the majority of our
shareholders might believe to be in their best interest. As a result,
shareholders who desire to participate in this type of transaction may not have
the opportunity to do so.
THERE ARE SUBSTANTIAL SHARES ELIGIBLE FOR FUTURE SALE. SALES OF THESE SHARES MAY
RESULT IN LOWER MARKET PRICES FOR OUR COMMON STOCK
Sales of a substantial number of our shares into the public market or
the perception that these sales could occur, could materially and adversely
affect the price of our shares and could impair our ability to obtain capital
through future offerings of equity securities.
Satish K. Sanan, our Chairman, beneficially owns 12,861,597 shares,
which number includes shares underlying options which are exercisable by Mr.
Sanan. A significant number of these shares have been pledged by Mr. Sanan. In
the past, large numbers of shares owned by Mr. Sanan have been sold, either by
him or by the pledgee of the shares. The same may occur in the future and those
sales may have a negative effect on the price of our shares. Shares outstanding
at December 31, 1999 are summarized as follows:
9
<PAGE>
Shares being registered and that may be sold
with this prospectus. 3,408,846
Shares previously registered under a separate
prospectus and freely tradable while this separate
prospectus is effective. 2,513,159
Unregistered shares, which are expected to become
freely tradable between March 26, 2000 and
June 15, 2000. 2,586,282
Freely tradable shares, including 1,615,666 shares
which are subject to volume limitations. 28,487,411
----------
36,995,698
==========
In addition to the 37.0 million shares we had outstanding at December
31, 1999, there are in excess of 12.5 million shares we will issue when stock
options are exercised that are outstanding as of the date of this prospectus. Of
the shares to be issued upon exercise of stock options, approximately 6.5
million will be freely tradable and the remainder are expected to be freely
tradable over the next five years.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the public reference facilities of the SEC at 450 Fifth Street, N.W.,
Washington, D.C., or at the public reference rooms of the SEC in Chicago,
Illinois and New York, New York. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public from the SEC's web site at http:\www.sec.gov and from
our website at http://www.imrglobal.com.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus and any later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any additional documents
we file with the SEC until the offering of the common stock is terminated. This
prospectus is part of a registration statement on Form S-3 that we filed with
the SEC. The documents we incorporate by reference are:
o Our Annual Report on Form 10-K for the fiscal year ended December 31,
1998
o Our Quarterly Report on Form 10-Q for the quarter ended September 30,
1999
o The description of our common stock that is contained in our
Registration Statement on Form 8-A filed on October 20, 1996
o Our Current Reports on Form 8-K filed on January 15, 1999, April 8,
1999, June 29, 1999, August 27, 1999, October 29, 1999, November 4,
1999, November 15, 1999, November 18, 1999, December 16, 1999,
January 4, 2000 and, January 25, 2000.
You may request a copy of these filings, at no cost, by writing,
telephoning or e-mailing us at the following address:
Investor Relations
IMRglobal Corp.
100 South Missouri Avenue
Clearwater, Florida 33756
10
<PAGE>
727-467-8000 - tel
727-467-8001 - fax
[email protected] - e-mail
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus contains forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act. These statements express or are based on
expectations about future events and generally include forward-looking language
such as "will likely result," "may," are expected to," "is anticipated,"
"believes," "estimated," "projected," "intends to" or other similar words. Our
actual results are likely to differ, and could differ materially, from the
results expressed in, or implied by, these forward-looking statements. There are
many factors that could cause these forward-looking statements to be incorrect,
including but not limited to the risks described above under "Risk Factors".
When considering these forward-looking statements, you should keep in mind these
risk factors and the other cautionary statements in this prospectus, and should
recognize that those forward-looking statements speak only as of the date made.
We do not undertake any obligation to update any forward-looking statement
included in this prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock by
the selling shareholders.
DIVIDEND POLICY
We do not anticipate paying cash dividends on our stock in the
foreseeable future. We anticipate that we will retain our earnings and other
cash resources for reinvestment in our business.
11
<PAGE>
BUSINESS
GENERAL
We are an international provider of innovative business and information
technology solutions to Fortune 500 and Global 2000 sized companies. Our
information technology or IT, solutions address problems related to the use of
computers or computing power. We focus on providing our range of services to
companies in the following industries:
o Insurance
o Capital markets
o Healthcare
o Utilities
o Media and communications
o Retail and manufacturing/distribution
We believe companies in these specific industries are facing changes
and competition that are altering the way they conduct business. Due to the
scope and the pace of these changes, we believe that the IT solutions needed for
these industries rarely lend themselves to packaged "off the shelf" programs or
services. Instead, a customized and technology-based approach, provided in a
short time frame, is needed. However, the development of customized applications
is expensive and time consuming.
Since early 1998, we have been developing an approach where we utilize
reusable, industry-specific software components to quickly build industry
specific applications for our clients. We call this approach a "component-based"
solution. In addition, we have acquired companies with complementary business
knowledge or technology to assist in this development effort. Our
component-based industry solutions combine the functionality of customized
software with the speed of implementation of a packaged solution. These
solutions usually require a relatively low level of customization and lower
maintenance costs and are easily modified to meet changing business
requirements.
Examples of some of our specific market solutions include:
o Our insurance solution includes a suite of component-based
applications that support definition of new products, acquisition
of new businesses, and the administration, billing, processing and
paying of claims and commissions. We customize these applications
for clients in property and casualty, life and reinsurance sectors
of the insurance business.
o Our capital markets solution includes a number of asset management
and order execution component-based applications that we market
under the name of FOX(TM). The FOX solution enables securities
firms to manage portfolios of securities, monitor changing market
conditions and send orders to purchase or sell securities
electronically.
o Our healthcare solution allows health insurance companies to
analyze data and identify trends and anomalies in claims, which
can then be targeted for further investigation. This allows our
clients to screen their incoming claims and to identify erroneous
reimbursement claims more efficiently.
While our component-based solutions do not represent a material part of
our business at this time, we intend to continue to focus on developing
component solutions because we believe that they provide significant benefits to
our clients including a faster deployment time and generally at a lesser total
cost than fully customized solutions. In addition, we believe that our
component-based solutions are more reliable and better tailored to the specific
needs of our clients than pre-packaged products.
12
<PAGE>
We offer our customers the following services, separately or in
combination:
o Business Consulting - provide industry business expertise and
consulting tailored to a specific industry
o IT strategy formulation - plan and develop IT strategies to
address problems related to the use of computers or computing power
o E-business services - design and implement Internet solutions
o Component-based application development - build new applications
using components
o Application modernization / transformation - transform older software
to newer technologies
o Application management and support - manage and support existing
computer applications
We provide all of our services on an outsourcing basis. Outsourcing is
the use by a client of third party providers to perform activities traditionally
handled by that company's internal staff. We believe that outsourcing has proven
effective in helping in-house IT departments manage costs while reducing the
time needed to complete projects. We augment the benefits of outsourcing by
providing our clients with a global network of centers with highly trained and
qualified technology professionals. We utilize the time differences between our
development centers in our global network to create a 24-hour "virtual workday"
during which our technology professionals can work on projects for our clients.
An important part of our strategy is to offer our services on a
fixed-price, fixed-time basis. We believe that a high percentage of projects
started by internal IT departments are not completed on time or on budget, with
many not completed at all. By offering fixed pricing, we enable our clients to
reduce their exposure to increased costs and by using our "on-site, off-site"
delivery model, which utilizes one or more of our worldwide delivery centers, we
can maintain consistent quality and reduce the project delivery time. Typically,
we split the project team into an "on-site" team and one or more "off-site"
teams. For a typical application management and support engagement,
approximately 20% to 30% of the people are located at the client's site and the
balance at one of our delivery centers. For large-scale development projects we
can deliver projects faster by using multiple delivery centers. Over the past
two years, we have successfully delivered over 100 fixed-price projects while
improving our gross margins.
In addition to fixed-price, fixed-time projects, we provide programming
and IT consulting services at clients' sites as needed, usually on a time and
materials basis. We also help our clients with tactical issues such as Year 2000
conversion services and the transition to the Euro currency. Our Year 2000
service offering was our largest source of revenue in each of 1997 and 1998 as
our clients committed significant financial resources in addressing this issue.
As Year 2000 engagements were completed in 1999, our revenue from this service
offering decreased and will not generate significant revenue in 2000.
Currently, we maintain a staff of approximately 2,500 software
development professionals to serve our clients. We maintain three dedicated
software development centers in Belfast, Mumbai and Bangalore, and operate five
software development centers, in our corporate and international headquarters in
Clearwater, London, Paris, Sydney and Tokyo. However, during December 1999, we
made the decision to close down our software development facilities in Belfast
and London in order to focus on our E-business service offering. We also have 29
domestic branch/sales offices. We intend to further broaden our geographical
reach and are considering additional locations in Europe, Asia and Eastern
Europe. We expect this expansion to be accomplished primarily through
acquisitions.
In addition to seeking acquisitions to broaden our geographical reach,
we intend to continue to acquire companies that have specific industry expertise
in one of our targeted markets and/or significant expertise in new technologies
. For example, in March 1999, we acquired Fusion Systems Japan Co., Ltd.,
headquartered in Tokyo, Japan, which provides asset management and order
execution solutions for companies in the capital markets industry. In 1999, we
acquired Professional Partners, Inc. and Lakewood Software Technology Center,
collectively referred to as "PLP," and Neverdahl - Loft and Associates, Inc.
("Neverdahl"). PLP provides solutions for companies in the property and casualty
insurance market and Neverdahl provides solutions in the life insurance market.
In addition, in June 1999 we acquired Orion Consulting, Inc., which is
headquartered in Cleveland, Ohio and provides solutions to facilitate
transactions with payers and providers in the healthcare industry.
13
<PAGE>
INDUSTRY OVERVIEW
We believe that the industries for which we are developing solutions
are faced with dramatic business, technological and economic changes that are
forcing them to alter their traditional business methods. These changes include
demutualization and merger and acquisition activities in the insurance industry,
deregulation of the utility industry, merger and acquisition activity in the
financial services industry and privatization in the healthcare industry.
Intense competition and globalization in turn are driving the development of new
products and services which must be made available on a cost and time efficient
basis. In addition, the integration of e-commerce into companies has become an
integral part of the competitive environment.
These changes require the support of IT solutions. We believe companies
in our targeted industries are faced with competitive pressures to reduce the
time needed to develop and market new products. As a consequence, many companies
can no longer develop new applications relying solely on their internal IT
staff. Moreover, the complexities of the industries in which our clients operate
often preclude the use of packaged solutions. We believe these industries
require customized solutions with the speed of packaged solutions, and the
flexibility to constantly integrate these solutions with updated technologies
and pre-existing systems.
In addition, technology is enabling companies to increase productivity,
shorten product cycles, enhance client services and create new lines of
business. We believe that the rapid pace of these changes has overwhelmed many
internal IT departments and has created a skills gap that IT service providers
help to bridge. By outsourcing IT services, companies can focus on their core
business, access specialized technical skills and implement IT solutions more
rapidly while significantly reducing the costs of recruiting, training and
retaining IT professionals.
The IT services industry has evolved into a highly fragmented
environment with several large, national service providers, a small number of
international providers and a large number of regional service providers. We
believe that, in light of recent globalization trends, IT service providers with
an increasing global presence will be better able to address the IT needs of the
large Fortune 500 and Global 2000 sized companies.
OUR SOLUTIONS MODEL
The model of the traditional IT services provider has long been
three-dimensional, with the level of customer service largely determined by the
caliber of the provider's people, the level of its technology and the process by
which it manages and delivers projects. We have been able to enhance customer
service by adding a fourth dimension to the model utilizing our international
network of software development and sales centers which provide a global
presence while permitting local service and support to our clients. Our offices
are distributed among nine time zones which gives us the ability to offer
24-hours of service per day, and thereby significantly decreases the time needed
to complete clients projects. In addition, we are focusing on the business needs
of companies within our targeted vertical industries and intend to continue to
acquire more industry-specific knowledge. As a result, we have added industry
knowledge as the fifth dimension to our model. We believe this five-dimensional
model represents the ideal IT product and services provider.
[CHART]
Our solutions and service offerings reflect the five-dimensional
approach we have taken to build our business. We provide solutions to selected
vertical markets utilizing advanced tools and technology together with highly
qualified personnel using proprietary methodologies. We deliver these solutions
using an international network of development and support facilities that permit
a lower cost alternative and shorter development times.
14
<PAGE>
o MARKET SOLUTION PROVIDER. We believe that what we offer our clients
within our targeted industries is unique. We act as a business partner who can
provide our clients with industry specific solutions that reflect a thorough
understanding and appreciation of the challenges they face and the business
implications of those challenges. We believe we are one of the first to market
component-based solutions that are tailored to meet industry specific business
requirements, are platform independent, and are deployed using a rapid
application development environment. Our solutions position us to become a
long-term strategic partner and solution provider to our clients in these
industries.
o TOOLS AND TECHNOLOGY. We continue to invest in research and
development of tools and technologies that enable us to increase the overall
quality and productivity and shorten the "time-to-market" for delivering our
services and solutions. For example, our Maintenance Improvement Workbench
enables us to more effectively manage and maintain large software applications.
Our component-based development allows us to deliver software solutions,
including vertical industry specific solutions, significantly faster than
building entirely customized software.
o GLOBAL BUSINESS MODEL. Our international network of software
development centers provides us with a significant cost advantage and the
ability to provide 24-hour service to our clients. Many of our clients are
linked by satellite communications to our offsite development centers, where we
perform a substantial amount of each project's work.
This global network allows us to take maximum advantage of the time
differences between our clients' offices and ours, creating a seamless, 24 hour
"virtual workday" to speed project completion. Working during our clients'
off-peak hours also often allows us to use the excess capacity of their existing
computing facilities, enabling us to undertake additional projects without
substantial client investment in new hardware and software. For projects with
critically short time frames, our multiple shifts allow us to further accelerate
delivery by "concurrent development" - working on many development phases
simultaneously in different offices. Cost savings and efficiencies are further
enhanced because we are able to spread the costs of satellite communications and
infrastructure at these centers among multiple clients and projects.
Our international network of software development centers is supported
by a separate network of sales and support offices located close to our client.
Currently, we have 29 offices in the United States and 13 international sales
offices, six of which are in Canada with the remainder in London, Paris,
Frankfurt, Luxembourg, Bangalore, Sydney and Tokyo.
o TSQM. We use our proprietary Total Software Quality Management (TSQM)
set of defined software development processes, techniques and tools to maximize
the quality of our operations and client services, and to minimize project
risks. For every project, we implement a two-staged approach that provides: (a)
an extensive initial assessment of the project's scope and risks, and (b) a
fixed-price implementation stage, divided into phases with frequent deliverables
and client feedback. Continuously refined, TSQM allows us to detect, correct and
mitigate quality defects and to establish appropriate contingencies for each
project.
The responsibilities of completing each TSQM phase are allocated
between an on-site and an off-site team to optimize cost savings and accelerate
project delivery. The specific tasks allocated to each team member are
determined principally by the amount of client interaction required. The
initial, front-end phase, which may include business area analysis, technical
strategy development, requirements definition and analysis, and high level
technical architecture design, is completed by the on-site team. The
implementation phase, which may include programming, unit and system testing, is
largely performed via satellite link by our off-site teams.
Our TSQM process is based in part on software standards published by
the Institute of Electrical and Electronic Engineers and the Software
Engineering Institute (SEI) software engineering process models and the
International Organization for Standardization (ISO) 9001 quality processes,
which are processes specific to information technology. To position us for
future business from companies in Europe, and from international affiliates of
our North American clients, our facilities in Bangalore and Mumbai, India;
London, England; Paris France; and Belfast, Northern Ireland have achieved ISO
9001 certification. We are currently pursuing company-wide ISO 9001 and SEI
certification.
15
<PAGE>
GROWTH STRATEGIES
To enhance our position in the market, we believe it will be necessary
for us to further develop our industry expertise and expand our component-based
application offerings to those industries. To do that, we have identified
several key strategies we intend to pursue.
o CONTINUE TO DEVELOP EXPERTISE IN SELECTED MARKETS. We will continue
to build a comprehensive understanding of the business needs of our clients in
our targeted industries. We shifted from a traditional technology-based focus to
an industry-based focus beginning in 1998. In part, we have built on our
relationships and integrated the industry knowledge that we acquired from
previous Year 2000 and other engagements into our new service offerings. Since
then, we have continued to build our industry expertise by investing in
industry-specific research and development, by acquiring companies with industry
specific knowledge or technology and by hiring individuals with proven expertise
in these industries. For example, in February 1999, we hired John Alexander,
former Chief Information Officer of Unum Life Insurance Company, as Director of
our Insurance Vertical Practice. In addition, some of our acquisitions have
provided us with additional expertise in these markets.
o ACQUIRE AND DEVELOP PRODUCTIVITY-ENHANCING SOFTWARE TOOLS. We
continue to improve our proprietary software engineering methodologies and
toolsets through a combination of strategic acquisitions and internal research
and development. In May 1998, we acquired Lyon Consultants which provided us
with core technologies in component-based architectures, which, we believe, will
be the dominant development technology over the next several years.
o DEVELOP LONG-TERM STRATEGIC PARTNERSHIPS WITH CLIENTS. A key element
of our strategy is to expand the scope of the services that we provide to each
client with the goal of forging lasting strategic partnerships with them. By
striving to exceed our client expectations and delivering projects on time and
on budget, we have been successful in retaining clients and converting projects
into additional engagements. Our significant investment in the technology
necessary to support our clients' business strategies and the addition of new
services such as E-business and component-based development, should help us
further to develop their loyalty and trust and should provide us with the
ability to sell additional services to our existing clients as well as to
attract new clients. To underscore our commitment to our clients, we actively
solicit feedback with client satisfaction surveys, consultant performance
surveys and regularly scheduled client meetings with senior management. We also
link a substantial portion of our senior executives' performance based
compensation directly to client satisfaction.
o CONCENTRATE ON KEY TECHNOLOGIES. We continue to focus on obtaining
the most advanced software development technologies. The acquisition of ECWerks
in January 1999 provided us with enhanced capabilities to design, develop and
deliver large-scale solutions in the electronic commerce market. We also utilize
software provided by companies such as Forte Software, Inc., in addition to our
internally developed toolsets in offering the most advanced technology
solutions. We conduct on-going personnel training to ensure that our employees
are up to date in key technology areas.
o EXPAND GEOGRAPHIC PRESENCE. As we continue to expand our client base,
we intend to open additional regional offices in other geographic areas. We have
eight software development facilities around the world and 42 sales offices, of
which 22 were added in 1999.
o PURSUE SELECTIVE STRATEGIC ACQUISITIONS. Our acquisition strategy is
to select companies with well-established client bases, a strong cultural fit
and one or more of the following criteria:
o Geography - located where we want to increase our global
presence
o Technology - significant expertise in new technologies
o Targeted Market - specific industry expertise in one of our targeted
markets
By acquiring companies that meet these requirements, we believe we can
create opportunities to sell additional products and services throughout our
client base. For example, component development solutions obtained from Lyon
have been sold to our existing clients in the United States, and some of our
core services have been sold to Lyon's clients in France.
16
<PAGE>
Our most significant acquisitions over the last two years met our
requirements as follows:
Geography Technology Targeted Market
1999
- ----
Orion [CHECK] [CHECK] [CHECK]
PLP [CHECK] [CHECK]
Fusion [CHECK] [CHECK] [CHECK]
ECWerks [CHECK]
Atechsys [CHECK] [CHECK]
Neverdahl [CHECK]
1998
- ----
Visual [CHECK] [CHECK]
RHO [CHECK] [CHECK]
Lyon [CHECK] [CHECK]
o LEVERAGE TACTICAL OPPORTUNITIES. We intend to continue to identify
tactical opportunities and use them to sell additional products and services to
our clients. Our Year 2000 and European Monetary Union (Euro) conversion
services are examples of tactical opportunities we have used to develop new
business.
OUR SERVICE OFFERINGS
o BUSINESS CONSULTING. We provide industry business experience such as
helping our healthcare clients by simplifying complex business issues in the
healthcare industry, evaluating their financial and operational performance and
supplying advice in the ever-changing healthcare industry. Our healthcare
consultants have a national reputation as experts in healthcare payment
methodologies and help our clients to improve the quality of their services,
increase productivity and reduce costs. We have been significantly increasing
our industry business expertise in each of our targeted markets by hiring people
with extensive experience in particular industries and by acquiring companies
that focus exclusively on a particular vertical industry.
o IT STRATEGY FORMULATION. By combining industry business expertise
with our technological experience, we are able to assist our clients in
formulating effective IT strategies that best match the business objectives of
our clients. For example, we assisted Baylor College of Medicine in a strategic
software selection and subsequently established a project management office that
supported the on-time implementation of that selection.
o E-BUSINESS SOLUTIONS. We help clients design and implement solutions
involving the Internet and electronic commerce. This service includes the
development of Internet strategies, management of web content and training. Our
senior e-commerce consultants assist clients in understanding the opportunities,
procedures and technologic challenges associated with conducting electronic
commerce. Our technical staff concurrently design, develop and implement the
underlying technologies supporting the e-business initiative, using
state-of-the-market development technologies. The scope of e-business projects
includes: web retailing, client extranets, online service centers, supply chain
optimization, electronic data interface, corporate intranets, back office
integration, sales force extranets and knowledge base management.
o APPLICATION MODERNIZATION/TRANSFORMATION. We have developed a
proprietary methodology for deploying new technologies and managing the
successful transformation of mainframe systems with new technologies. Our
TRANSFORM series of re-engineering tools automate many of the processes
required, thereby substantially reducing the time and cost to perform these
services. These "productivity tools" enable us to perform source code analysis,
redesign target databases and convert selected programming languages.
o APPLICATION MANAGEMENT AND SUPPORT. We have four distinct processes
for our application management and support services:
1) CORRECTIVE MAINTENANCE requires software failures to be diagnosed
and fixed as they occur. These failures can directly affect
business operations and require the highest level of support.
Quick fixes and poor documentation often result in increased code
complexity and increased future maintenance costs.
17
<PAGE>
2) ADAPTIVE MAINTENANCE requires software modification to support
changing business requirements or changing technical environments.
This includes user enhancements, operating system upgrades and
other outside improvements. Enhancement backlogs are generally the
biggest source of concern for IT management.
3) PERFECTIVE MAINTENANCE involves modifications to application
systems to improve performance, without changing the basic system.
4) PREVENTIVE MAINTENANCE identifies and eliminates the maintenance
problems that create the need for corrective maintenance. Year
2000 compliance services are forms of preventive maintenance.
o COMPONENT-BASED INDUSTRY SOLUTIONS. Using an approach similar to the
popular Lego(R)-building block approach, we utilize reusable, industry-specific
software components to quickly build vertical industry specific applications for
our clients. These pre-built, pre-tested software components, along with
components customized for company specific purposes, are assembled in
significantly less time than building an application from scratch and provide
clients a solution that fits their business better than a packaged solution.
This approach can be used to deliver projects on an accelerated basis for
selected platforms, avoiding the functional shortcomings of traditional
standardized, pre-packaged software solutions or the time and cost of developing
completely new custom solutions.
o COMPONENT-BASED APPLICATION DEVELOPMENT. We utilize reusable
technical and generic business components to quickly build applications for our
clients. This approach can be used to deliver highly customized applications on
an accelerated basis where no pre-packaged software solution exists. For example
we recently built a supply chain management and billing system for CGM, a large
European shipping company, using this approach. We also develop customized
applications using our world wide development centers in significantly less time
than building an application from scratch.
In addition, we provide Year 2000 services to support the ongoing needs
of our clients and Euro conversion services to help large international
companies and organizations transition to the Euro currency. We also provide
programming services on a time and materials basis. In addition to staffing our
client's short-term needs, our objective is to leverage professional staffing
engagements to learn more about the client's business and IT system needs and
position ourselves to provide additional services.
REPRESENTATIVE CLIENTS
<TABLE>
<CAPTION>
INSURANCE CAPITAL MARKETS HEALTHCARE
--------- --------------- ----------
<S> <C> <C>
AMPlus Merrill Lynch Health Plan Services
CGU Insurance Morgan Stanley Blue Cross/Blue Shield
John Hancock Mutual Life Schroders International Foundation Health System
Reliastar Banque National de Paris American Medical Association
RETAIL AND
UTILITIES MEDIA AND COMMUNICATIONS MANUFACTURING/ DISTRIBUTION OTHER
--------- ------------------------ --------------------------- -----
Ameritech EBSCO Industries Blockbuster Amtrak
SAUR Thompson EC Resources Dayton Hudson TWA
Southern California Edison Fingerhut Mitsui
Salt River Project Winn Dixie CGM
Dow Corning
Michelin
Renault
</TABLE>
18
<PAGE>
SALES AND MARKETING
We market and sell our services directly through our professional staff
and senior management operating at our United States and international regional
offices and sales branch offices. We focus our marketing efforts on large
corporations within our six targeted industries that have significant IT budgets
and recurring staffing or software development needs. Marketing personnel
identify prospects and enter the information into a database which is
consistently maintained. Direct sales representatives utilize these records to
initiate the sales cycle from prospect qualification to closing. As a result, we
can prequalify sales opportunities and minimize the time that direct sales
representatives spend on prospect qualification.
Our marketing programs include direct mail campaigns, advertising,
seminars, conferences and other activities. The sales executive and technical
support teams define the scope, deliverables, assumptions and execution
strategies for a proposed project. They also develop project estimates, prepare
pricing, margin, and cash flow analyses, and finalize sales proposals.
Management reviews and approves the proposal, then the sales staff presents the
proposal to the prospective client. Sales personnel are actively involved
throughout the execution phase.
As we expand in Europe and Asia, we will consider establishing branch
sales offices to pursue business opportunities in these regions.
INTELLECTUAL PROPERTY
Our business consists of software applications development and other
deliverables including written specifications and documentation in connection
with specific client engagements. Ownership of these products is generally
retained by or assigned to the client. We also develop reusable software
components and vertical industry component libraries for application
development, as well as software toolsets and proprietary methodologies. Many
are developed in one country and subsequently used in another country.
Furthermore, we maintain trademarks and service marks in our various service
offerings. To protect our intellectual properties, we rely on copyright and
trade secret laws, nondisclosure and other contractual arrangements, and
technical measures.
COMPETITION
The IT services market is highly competitive and is served by numerous
national, regional and local firms. Our clients generally consist of large
corporations principally in the insurance, capital markets, utilities,
healthcare, retail, manufacturing and distribution, and media and communications
industries. Many of our competitors are aggressively pursuing business from
these entities. In addition to in-house IT departments, market participants
include systems consulting and integration firms, professional service
companies, applications software firms, temporary employment agencies,
professional services divisions of large integrated manufacturing and other
companies, facilities management and outsourcing companies, accounting and
business consulting firms such as the "Big 5" and related entities.
We believe that many of our competitors have significantly greater
financial, technical and market resources and generate greater revenue than we
do. We compete by offering component-based software products, a successful
services delivery model, excellent referral base, continued focus on client
needs, quality of services, competitive prices and strong project management
capabilities and technical expertise.
HUMAN RESOURCES
As of December 31, 1999, we had approximately 2,800 employees,
including approximately 1,900 people in our United States, U.K., France, Japan,
Canada and Australian headquarters and branch offices, and approximately 900 in
our software development centers in India and Northern Ireland. Additionally, we
had approximately 200 independent contractors performing various services. None
of our employees are subject to a collective bargaining arrangement, except for
approximately 200 employees in France. During December 1999, we announced a
restructuring plan which will result in the termination of approximately 200
employees in our United States and Northern Ireland locations.
19
<PAGE>
As of the end of September 1999, approximately 500 of our United States
employees were working under the H-1B non-immigration work permitted visa
classification, which we processed for those employees through the United States
Immigration and Naturalization Service. The H-1B visa classification enables
United States employers to hire qualified foreign workers in positions which
require education at least equal to a United States baccalaureate degree in
specialty occupations such as software systems engineering and systems analysis.
We believe that there is a shortage of, and significant competition
for, IT professionals and that our future success will depend in large part upon
our ability to attract, train, motivate and retain highly skilled employees with
the advanced technical skills necessary to perform the services we offer. We
have active recruiting programs in North America, Europe, Australia, India and
other countries and have developed a recruiting system and database that
facilitates the rapid identification of skilled candidates. We also have adopted
a career and education management program working with employees to define their
objectives and career plans. Through an intensive orientation and training
program, we introduce new employees to our TSQM software engineering process and
our products and services.
PROPERTIES
The following table sets forth a description of our principal
facilities:
<TABLE>
<CAPTION>
SQUARE FEET OWNED/
LOCATION (APPROX.) LEASE EXPIRATION DATE FUNCTION
- ------------------------------ ----------- --------------------- --------
<S> <C> <C> <C>
Clearwater, Florida 51,000 Owned Corporate headquarters and
software development facility
London (Chesham),England 12,500 March 2013 U.K. headquarters and software
development facility
Howell, New Jersey 22,700 September 1999 - Insurance facility
July 2003
Bangalore, India 66,000 June 2000 Software development facility
Belfast, Northern Ireland 21,500 September 2002 Software development facility
Cleveland, Ohio 30,900 September 2007 Healthcare industry facility
Mumbai, India 28,000 Owned Software development facility
New Delhi, India 28,000 Owned Future facility
Paris, France 18,900 May 2005 France headquarters and
software development facility
Paris, France 5,600 October 2000 - European Capital Market
November 2001 Industry facility
Sydney, Australia 6,800 May 2002 Australian headquarters and
software development facility
Toronto, Canada 6,300 October 2002 Canada headquarters
Tokyo, Japan 16,200 January 2001 Japan headquarters and software
development facility
Tampa, Florida 20,000 January 2004 ECWerks headquarters
</TABLE>
In 1998, we purchased approximately 15 acres in Clearwater, Florida for
the purpose of constructing a headquarters complex. In July 1999, we took
possession of land and our 51,000 square foot headquarters building. A second
80,000 square foot building is scheduled for completion in January 2000. The
second building will also house the entire research and development team that is
currently housed in Clearwater, France, Australia and India. The property has
room for two additional buildings and a parking garage if further development is
needed. In connection with taking possession of the headquarters building in
Clearwater, the Tampa, Florida ECWerks headquarters is being vacated and
employees are moving to the headquarters in Clearwater.
The leases for our headquarters in Bangalore, Belfast and Paris and our
facilities in Toronto contain options to extend the term for an additional five
years.
20
<PAGE>
We own the building at our software development facility in Mumbai,
India and we lease the land through March 2096. We own land and a building in
New Delhi, India which may be renovated to house a future facility.
We are in the process of restructuring our UK operations and will
abandon the 66,000 square foot facility in Belfast, Northern Ireland and 12,500
square foot facility in Chesham, England. We are in the process of settling
these leases or subleasing these properties to outside parties.
In addition, we lease branch offices, which are used primarily for
sales and marketing purposes, in Atlanta, Boston, Chicago, Dallas, Detroit, Los
Angeles, Minneapolis, New York, Seattle, Boston, Denver, Greenville,
Jacksonville, Ashburn, Cincinnati, Clifton Park, Deerfield Beach, Harrisburg,
Kansas City, Midlothian, New Iberia, Pittsburgh, San Francisco, Saratoga
Springs, St. Louis, Tempe in the United States, Montreal, Quebec City, Winnipeg,
Calgary and Vancouver in Canada, Frankfurt, Germany and Luxembourg.
LEGAL PROCEEDINGS
We are not a party to any pending material litigation.
21
<PAGE>
SELLING SHAREHOLDERS
Some shares registered for sale under this prospectus are owned by the
former shareholders of Fusion Systems Japan Co., Ltd. ("Fusion") and Orion
Consulting, Inc. ("Orion"). The shares offered by the selling shareholders were
acquired in connection with the March 26, 1999 merger with Fusion as amended and
the June 15, 1999 merger with Orion.
Under the terms of the above merger agreements, as amended in the case
of Fusion, we agreed to register the shares of common stock received by these
selling shareholders in connection with the above business combinations. In the
past three years, none of the selling shareholders has had a material
relationship with us, except that several selling shareholders have become
non-officer employees of our company, or a subsidiary of our company, after the
above transactions were consummated.
The remaining shares registered for sale under this prospectus are
owned by two unaffiliated entities. These shares were acquired in a private
placement from IMRglobal's CEO on November 12, 1999. By contract agreement,
these selling shareholders can only sell up to 25% of these shares until May 12,
2000.
The following table sets forth information regarding the beneficial
ownership of our common stock by the selling shareholders. The table organizes
the selling shareholders according to the business combinations pursuant to
which they became shareholders. Information provided in this table is organized
as follows in six columns, from left to right:
(1) Selling shareholders names and addresses
(2) Shares owned prior to this offering (number) - The number of shares
of our common stock beneficially owned by each selling shareholder at November
15, 1999.
(3) Shares owned prior to this offering (percent) - The percentage, if
1% or more, of the total outstanding shares of our common stock beneficially
owned by each selling shareholder at November 15, 1999.
(4) Shares offered - The number of shares of our common stock that are
being registered under this registration statement for each selling shareholder.
Some or all of these shares may be sold pursuant to this Prospectus.
(5) Shares owned after this offering (number) - The number of our
common shares that will be beneficially owned following this offering, assuming
all of the shares in the column entitled "Shares Offered" are sold by the
selling shareholder.
(6) Shares owned after this offering (percent) - The percentage, if 1%
or more, of our total outstanding common shares that will be beneficially owned
following this offering, assuming all of the shares in the column entitled
"Shares Offered", as defined above, are sold by the selling shareholder.
22
<PAGE>
<TABLE>
<CAPTION>
SHARES OWNED PRIOR
TO SHARES OWNED AFTER
SELLING SHAREHOLDERS THIS OFFERING (1) THIS OFFERING (1)
-------------------- -------------------- --------------------
Shares
Number Percent Offered Number Percent
<S> <C> <C> <C> <C> <C>
FUSION ACQUISITION:
Michael J. Alfant 812,364 2.2% 324,690 487,674 1.3%
c/o Fusion Systems Japan Co., Ltd.
Daiwa Naka-Meguro Bldg. 5-8F
4-6-1 Naka-Meguro, Meguro-ku
Tokyo, Japan 153-0061
Mami Alfant 63,822 -- 20,725 43,097 --
c/o Fusion Systems Japan Co., Ltd.
Daiwa Naka-Meguro Bldg. 5-8F
4-6-1 Naka-Meguro, Meguro-ku
Tokyo, Japan 153-0061
Boris Umylny 40,361 -- 40,361 0 --
c/o Fusion Systems Japan Co., Ltd.
Daiwa Naka-Meguro Bldg. 5-8F
4-6-1 Naka-Meguro, Meguro-ku
Tokyo, Japan 153-0061
Raymond F. Ribble 109,290 -- 40,361 68,929 --
c/o Fusion Systems Japan Co., Ltd.
Daiwa Naka-Meguro Bldg. 5-8F
4-6-1 Naka-Meguro, Meguro-ku
Tokyo, Japan 153-0061
Ian L. Chun 40,361 -- 40,361 0 --
c/o Fusion Systems Japan Co., Ltd.
Daiwa Naka-Meguro Bldg. 5-8F
4-6-1 Naka-Meguro, Meguro-ku
Tokyo, Japan 153-0061
Judith Fitzgerald 124,290 -- 124,290 0 --
602 Sanribu
2-6-3 Ebisu-Nishi
Shibuya
Tokyo, Japan 150
Huw Rogers 13,454 -- 13,454 0 --
c/o Fusion Systems Japan Co., Ltd.
Daiwa Naka-Meguro Bldg. 5-8F
4-6-1 Naka-Meguro, Meguro-ku
Tokyo, Japan 153-0061
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
SHARES OWNED PRIOR
TO SHARES OWNED AFTER
SELLING SHAREHOLDERS THIS OFFERING (1) THIS OFFERING (1)
-------------------- ---------------------- ---------------------
Shares
Number Percent Offered Number Percent
<S> <C> <C> <C> <C> <C>
FUSION ACQUISITION (CONTINUED):
Gary Hyman 41,430 -- 13,454 27,976 --
c/o Fusion Systems Japan Co., Ltd.
Daiwa Naka-Meguro Bldg. 5-8F
4-6-1 Naka-Meguro, Meguro-ku
Tokyo, Japan 153-0061
Gregory Tucker 13,454 -- 13,454 0 --
c/o Fusion Systems Japan Co., Ltd.
Daiwa Naka-Meguro Bldg. 5-8F
4-6-1 Naka-Meguro, Meguro-ku
Tokyo, Japan 153-0061
Andrew Howells 31,430 -- 13,454 17,976 --
c/o Fusion Systems Japan Co., Ltd.
Daiwa Naka-Meguro Bldg. 5-8F
4-6-1 Naka-Meguro, Meguro-ku
Tokyo, Japan 153-0061
Ian Gardner 13,454 -- 13,454 0 --
c/o Fusion Systems Japan Co., Ltd.
Daiwa Naka-Meguro Bldg. 5-8F
4-6-1 Naka-Meguro, Meguro-ku
Tokyo, Japan 153-0061
Tony Fujii 31,430 -- 13,454 17,976 --
c/o Fusion Systems Japan Co., Ltd.
Daiwa Naka-Meguro Bldg. 5-8F
4-6-1 Naka-Meguro, Meguro-ku
Tokyo, Japan 153-0061
Stephen F. Siegel 32,297 -- 32,297 0 --
c/o FSJ, Inc.
185 Devonshire Street
Boston, MA 02110
Kevin G. Weber 25,788 -- 13,454 12,334 --
c/o FSJ, Inc.
185 Devonshire Street
Boston, MA 02110
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
SHARES OWNED PRIOR
TO SHARES OWNED AFTER
SELLING SHAREHOLDERS THIS OFFERING (1) THIS OFFERING (1)
-------------------- ---------------------- ---------------------
Shares
Number Percent Offered Number Percent
<S> <C> <C> <C> <C> <C>
FUSION ACQUISITION (CONTINUED):
Marvin A. Wolfthal 41,430 -- 13,454 27,976 --
c/o FSJ, Inc.
185 Devonshire Street
Boston, MA 02110
Total Fusion Acquisition 1,444,655 3.9% 730,717 713,938 1.9%
ORION ACQUISITION:
Phillip J. Campanella, Trustee of 31,957 -- 6,392 25,565 --
the Phillip J. Campanella Trust
dated May 21, 1997
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, OH 44114-2688
Charles M. Ciuni, Trustee of 11,020 -- 2,204 8,816 --
the Phillip J. Campanella Irrevocable Trust
dated July 31, 1996
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, OH 44114-2688
Firstar Bank (formerly Star Bank, N.A.) Trustee 14,326 -- 2,866 11,460 --
of the Joseph A. Campanella Irrevocable Trust
dated January 1, 1998
c/o George M. Arsenault
The Tower of Eireview
Suite 3000
1301 East Ninth Street
Cleveland, OH 44114-1800
Total Orion Acquisition 57,303 -- 11,462 45,841 --
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
TO SHARES OWNED AFTER
SELLING SHAREHOLDERS THIS OFFERING (1) THIS OFFERING (1)
-------------------- ---------------------- ---------------------
Shares
Number Percent Offered Number Percent
<S> <C> <C> <C> <C> <C>
OTHER:
Bridge East Capital, L.P. 800,000 2.2% 800,000 0 --
c/o W.S. Walker & Co.
Caledonian House
Mary Street
Georgetown, Grand Cayman
Cayman Islands, BWI
BV-IT Global LLC 1,866,667 5.0% 1,866,667 0 --
8065 Leesburg Pike - Suite 140
Vienna, Virginia 22182
--------- --------- -------
Total other 2,666,667 7.2% 2,666,667 --
--------- --------- -------
0
Total selling shareholders 4,168,625 11.2% 3,408,846 759,779 2.0%
========= ===== ========= ======= ====
</TABLE>
(1) Beneficial ownership is sole voting and investment power with respect to the
shares beneficially owned.
PLAN OF DISTRIBUTION
Shares covered by this prospectus will be sold by the selling
shareholders as principals for their own account. We will not receive any
proceeds from sales of any shares by selling shareholders.
We are registering the common stock covered by this prospectus for the
selling shareholders. As used in this prospectus, the words "selling
shareholders" include the pledgees, donees, transferees or others who may later
hold the selling shareholders' interests. We will pay the costs and fees of
registering the shares of common stock, but the selling shareholders will pay
any brokerage commissions, discounts or other expenses relating to the sale of
their shares of common stock.
The selling shareholders may sell their shares of common stock in the
over-the-counter market or otherwise, at market prices prevailing at the time of
sale, at prices related to the prevailing market prices, or at negotiated
prices. In addition, the selling shareholders may sell some or all of their
shares through:
o a block trade in which a broker-dealer may resell a portion of the
block, as principal, in order to facilitate the transaction;
o purchase by a broker-dealer, as principal, and resale by the
broker-dealer for its account; or
o ordinary brokerage transactions and transactions in which a broker
solicits purchasers.
When selling the common shares, the selling shareholders may enter into
hedging transactions. For example, the selling shareholders may:
o enter into transactions involving short sales of the shares by
broker-dealers;
26
<PAGE>
o sell shares of the common stock short themselves and redeliver
these shares to close out their short positions;
o enter into an option or other type of transactions that requires
the selling shareholder to deliver their shares of common stock to
a broker-dealer, who will then resell or transfer them under this
prospectus; or
o loan or pledge the shares to a broker-dealer, who may sell the
loaned shares or, in the event of default, sell the pledged
shares.
The selling shareholders may negotiate and pay broker-dealers
commissions, discounts or concessions for their services. Broker-dealers engaged
by the selling shareholders may allow other broker-dealers to participate in
resales. However, the selling shareholders and any broker-dealers involved in
the sale or resale of the shares of common stock may qualify as "underwriters"
within the meaning of the Section 2(a)(11) of the Securities Act of 1933 (the
"1933 Act"). In addition, the broker-dealers' commissions, discounts or
concession may qualify as underwriters' compensation under the 1933 Act. If the
selling shareholders qualify as "underwriters," they will be subject to the
prospectus delivery requirements of Section 5(b)(2) of the 1933 Act.
In addition to selling their shares of common stock under this
prospectus, the selling shareholders may:
o agree to indemnify any broker-dealer or agent against some
liabilities related to the selling of their shares, including
liabilities arising under the 1933 Act;
o transfer their common shares in other ways not involving market
makers or established trading markets, including directly by gift,
distribution, or other transfer; or
o sell their shares of our common stock under Rule 144 of the 1933
Act rather than under this prospectus, if the transaction meets
the requirements of Rule 144.
LEGAL MATTERS
For purposes of this offering, our Co-General Counsel, is giving his
opinion on the validity of the common shares.
EXPERTS
The consolidated financial statements of IMRglobal Corp. appearing in
IMRglobal Corp.'s current report on Form 8-K for each of the three years ended
December 31, 1998, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference, which as to the years 1997 and 1996, are based in part on the reports
of PricewaterhouseCoopers LLP, independent auditors. These consolidated
financial statements are incorporated herein by reference in reliance upon the
reports given on the authority of these firms as experts in accounting and
auditing.
The consolidated financial statements of Fusion Systems Japan Co., Ltd.
appearing in IMRglobal Corp.'s current report on Form 8-K for the nine month
period ended December 31, 1998, have been audited by Ernst & Young, LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. These consolidated financial statements are
incorporated herein by reference in reliance upon the report given on the
authority of this firm as experts in accounting and auditing.
The financial statements of Orion Consulting, Inc. appearing in
IMRglobal Corp.'s current report on Form 8-K for the year ended December 31,
1998, have been audited by Arthur Andersen LLP, independent public accountants,
as set forth in their report thereon included therein and incorporated herein by
reference. These consolidated financial statements are incorporated herein by
reference in reliance upon the report given on the authority of this firm as
experts in accounting and auditing.
27
<PAGE>
[LOGO
3,408,846 SHARES
OF
COMMON STOCK
Prospectus
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the securities offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus current only as of its date.
January ___, 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses relating to the registration of Shares will be borne by
IMRglobal. These expenses are estimated to be as follows:
Registration Fee - Securities and Exchange Commission $ 9,713.51
Accounting Fees and Expenses 10,000.00
Legal Fees and Expenses 30,000.00
Printing Fees 5,000.00
Miscellaneous 5,000.00
========
Total $59,713.51
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Florida Business Corporation Act ("FBCA") provides that, in
general, a business company may indemnify any person who is or was a party to
any proceeding (other than action by, or in the right of, the company) by reason
of the fact that he or she is or was a director or officer of the company,
against liability incurred in connection with a proceeding of this nature,
including any appeal thereof, provided certain standards are met, including that
that officer or director acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
company, and provided further that, with respect to any criminal action or
proceeding, the officer or director had no reasonable cause to believe his or
her conduct was unlawful. In the case of proceedings by or in the right of the
company, the FBCA provides that, in general, a company may indemnify any person
who was or is a party to any proceeding of this nature by reason of the fact
that he or she is or was a director or officer of the company against expenses
and amounts paid in settlement actually and reasonably incurred in connection
with the defense or settlement of this type of proceeding, including any appeal
thereof, provided that this person acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interest of the
company, except that no indemnification shall be made in respect of any claim as
to which this person is adjudged liable unless a court of competent jurisdiction
determines upon application that this person is fairly and reasonably entitled
to indemnity. To the extent that any officers or directors are successful on the
merits or otherwise in the defense of any of the proceedings described above,
the FBCA provides that the company is required to indemnify these officers or
directors against expenses actually and reasonably incurred in connection
therewith. However, the FBCA further provides that, in general, indemnification
or advancement of expenses shall not be made to or on behalf of any officer or
director if a judgment or other final adjudication establishes that his or her
actions, or omissions to act, were material to the cause of action so
adjudicated and constitute: (i) a violation of the criminal law, unless the
director or officer had reasonable cause to believe his or her conduct was
lawful or had no reasonable cause to believe it was unlawful; (ii) a transaction
from which the director or officer derived an improper personal benefit; (iii)
in the case of a director, circumstances under which the director has voted for
or assented to a distribution made in violation of the FBCA or the company's
Articles of Incorporation; or (iv) willful misconduct or a conscious disregard
for the best interests of the company in a proceeding by or in the right of the
company to procure a judgment in its favor or in a proceeding by or in the right
of a shareholder. Article IX of our company's Amended and Restated Bylaws
provides that we shall indemnify any director or officer or any former director
or officer to the fullest extent permitted by law.
II-1
<PAGE>
ITEM 16. LIST OF EXHIBITS
The exhibits to this registration statement are listed in the Index to
Exhibits on page II-4.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
1933 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 to the registration statement, which,
individually or in the aggregate, represent a 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 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 this 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 IMRglobal pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the 1933
Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of those securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) For purposes of determining any liability under the 1933 Act,
each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act, and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange act, that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of those securities at
that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission this type of
indemnification is against public policy as expressed in the 1933 Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against these type of liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by a director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether this type of indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of this issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Pre-Effective Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized on this 2nd day of February, 2000.
IMRGLOBAL CORP.
By: /s/ SATISH K. SANAN
-------------------
Satish K. Sanan
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment to the Registration Statement has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ SATISH K. SANAN Chief Executive Officer February 2, 2000
- ---------------------------- (Principal Executive Officer),
Satish K. Sanan President and Director
*
- ---------------------- Chief Financial Officer February 2, 2000
Robert M. Molsick (Principal Financial and Accounting
Officer)
*
- ----------------------- Senior Vice President and February 2, 2000
Vincent Addonisio Director
* Senior Vice President-Global Sales February 2, 2000
- ---------------------- and Director
Philip Shipperlee
* Director February 2, 2000
- -------------------------
Charles C. Luthin
*
- -------------------------- Director February 2, 2000
Jeffrey S. Slowgrove
*By:
/s/ SATISH K. SANAN
- --------------------------
Satish K. Sanan
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
5* Opinion of Counsel re: legality
23.1 Consent of Ernst & Young LLP as Independent Certified Public
Accountants
23.2 Consent of PricewaterhouseCoopers LLP as Independent Certified
Public Accountants
23.3 Consent of Ernst & Young as Independent Auditors
23.4 Consent of Arthur Andersen LLP as Independent Public Accountants
23.5* Consent of Legal Counsel (contained in Exhibit 5)
24* Power of Attorney (included in the signature page in Part II of
this Registration Statement).
27* Financial Data Schedule
*Previously filed
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 2 to the Registration Statement (Form S-3 No. 333-91983) and related
Prospectus of IMRglobal Corp. for the registration of 3,408,846 shares of its
common stock and to the incorporation by reference therein of our report dated
August 20, 1999 (except for Note 23, as to which the date is October 25, 1999)
with respect to the consolidated financial statements of IMRglobal Corp.
included in the Current Report on Form 8-K dated November 15, 1999 filed with
the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
---------------------
ERNST & YOUNG LLP
Tampa, Florida
February 1, 2000
EXHIBIT NUMBER 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in Amendment No. 2 to
this Registration Statement on Form S-3 of our report dated February 13, 1998,
relating to the consolidated financial statements of IMRglobal Corp. as of
December 31, 1997 and for the years ended December 31, 1997 and 1996, which
appears in the Current Report (Form 8-K) of IMRglobal Corp. We also consent to
the reference to us under the heading "Experts" in such Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
------------------------------
PRICEWATERHOUSECOOPERS LLP
Tampa, Florida
February 1, 2000
EXHIBIT NUMBER 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 2 to the Registration Statement (Form S-3 No. 333-91983) and related
Prospectus of IMRglobal Corp. for the registration of 3,408,846 shares of its
common stock and to the incorporation by reference therein of our report dated
November 12, 1999, with respect to the consolidated financial statements of
Fusion Systems Japan Co., Ltd. for the nine month period ended December 31,
1998, included in the Current Report on Form 8-K filed on November 18, 1999 with
the Securities and Exchange Commission.
/s/ ERNST & YOUNG
-----------------
ERNST & YOUNG
Tokyo, Japan
February 1, 2000
EXHIBIT NUMBER 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on amended (No. 2) Form S-3 (No.
333-91983) of our report dated January 22, 1999 (relating to the financial
statements of Orion Consulting, Inc. as of December 31, 1998 and for the year
then ended), included in the Current Report on Form 8-K (No. 000-28840) of
IMRglobal Corp. and to all references to our Firm included in this registration
statement.
/s/ ARTHUR ANDERSEN LLP
-----------------------
ARTHUR ANDERSEN LLP
Cleveland, Ohio,
February 1, 2000.
