<PAGE>
As filed with the Securities and Exchange Commission on March 30, 2000.
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
iGATE CAPITAL CORPORATION (Formerly Mastech Corporation)
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1802235
(State or other jurisdiction of (I.R.S. Employer
incorporation or Identification No.)
organization)
1004 McKee Road
Oakdale, Pennsylvania 15071
412-787-2100
(Address, including ZIP code, and telephone number,
including area code, of Registrant's principal executive offices)
Sunil Wadhwani
Co-Chairman and Chief Executive Officer
iGate Capital Corporation
1004 McKee Road
Oakdale, Pennsylvania 15071
412-787-2100
(Name, address, including ZIP code, and telephone number,
including area code, of agent for service)
Copies to:
James J. Barnes, Esq.
Carl A. Cohen, Esq.
Buchanan Ingersoll Professional Corporation
One Oxford Centre, 301 Grant Street, 20th Floor
Pittsburgh, Pennsylvania 15219-1410
412-562-8800
FAX 412-562-1041
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
Title of Each Class of Amount to be Proposed Maximum Proposed Maximum Amount of Registration
Securities to be Registered Registered(1) Offering Price per Share(1)(2) Aggregate Offering Price(1)(2) Fee(2)
<S> <C> <C> <C> <C>
Common Stock, par value 1,386,322 $52.5625 $72,868,550.125 $19,237.30
$.01 per share
===================================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculation of the registration fee.
Represent shares to be sold by the selling shareholders named in this
registration statement that may be acquired upon conversion of the Note.
Also includes an indeterminate number of shares that the selling
shareholders may acquire as a result of a stock split, stock dividend or
similar transaction involving the common stock pursuant to the antidilution
provisions of the Note.
(2) Calculated in accordance with Rule 457(c) under the Securities Act of 1933
on the basis of high and low sale prices of the Registrant's Common Stock
on the Nasdaq National Market on March 28, 2000.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION, DATED March 30, 2000
1,386,322 Shares
iGATE CAPITAL CORPORATION
Common Stock
The shareholders of iGate Capital Corporation as described under the
caption "Selling Shareholders" on page 9 of this prospectus are offering up to
1,386,322 shares of our common stock. The selling shareholders acquired these
shares by converting a senior convertible promissory note issued by iGate in the
aggregate principal amount of $30,000,000.
Our shares of common stock are quoted on the Nasdaq National Market under
the symbol "IGTE." The reported closing sale price for a single share for our
common stock on March 28, 2000 was $51.50 per share.
You should carefully review the "risk factors" beginning on page 2 for a
discussion of things you should consider when investing in our common stock.
Neither the securities and exchange commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
The information in this prospectus is not complete and may be changed. The
selling shareholders may not sell these securities until the registration
statement filed with the SEC is effective. This prospectus is not an offer to
sell these securities and is not soliciting an offer to buy these securities in
any state where the offer or sale is not.
The date of this Prospectus is March 30, 2000
<PAGE>
TABLE OF CONTENTS
Page
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iGATE............................................ 1
RISK FACTORS..................................... 2
SELLING SHAREHOLDERS............................. 9
PLAN OF DISTRIBUTION............................. 9
WHERE YOU CAN FIND MORE INFORMATION.............. 11
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.. 11
USE OF PROCEEDS.................................. 12
LEGAL MATTERS.................................... 12
EXPERTS.......................................... 12
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iGATE
iGate Capital Corporation, formerly named Mastech Corporation, was
incorporated in the Commonwealth of Pennsylvania on November 12, 1996 and,
through operating subsidiaries, is a worldwide provider of information
technology ("IT") services and electronic commerce services ("eServices") to
large and medium-sized organizations. From inception and throughout 1999, we
conducted the majority of our business through our wholly owned subsidiary
Mastech Systems Corporation, a Pennsylvania corporation that was formed in July
1986.
We provide our clients with a single source for a broad range of IT
applications solutions and eServices, including: client/server design and
development, conversion/migration services, ERP package implementation services,
electronic business systems and applications maintenance outsourcing. These
services are provided in a variety of computing environments and use leading
technologies, including client/server architecture, object oriented programming
languages and tools, distributed database management systems and the latest
networking and communications technologies.
In March 2000, we announced an internal reorganization in which we
changed our name to iGate Capital Corporation and we transferred substantially
all of the assets of Mastech Systems to subsidiary operating companies. We
believe that this reorganization will enhance our ability to identify and
penetrate emerging IT and eServices markets quickly and effectively. The
reorganization represents an initial step in our strategy to reassess the
products and services that we offer and to significantly expand our portfolio of
services through (i) internal creation and development of our existing services
and (ii) acquisition of, or strategic investment in, new eServices businesses.
In March 2000 we announced that our subsidiary Mascot Systems Ltd.
("Mascot") has filed a draft prospectus with the Securities and Exchange Board
of India in order to effect an initial public offering of 10% of its equity
shares.
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RISK FACTORS
The statements contained or incorporated by reference in this prospectus
that are not historical facts are "forward-looking statements" and can be
identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "will," "should," "intends," "continue" or "anticipates" or by
similar expressions or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve risks and
uncertainties. Certain information set forth or incorporated by reference in
this prospectus, including "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our Annual Report on Form 10-K for the
year ended December 31, 1999 and in our Forms 10-Q, is forward-looking, such as
information related to the effects of our transformation into iGATE, and the
effects of competition. Such forward-looking information involves important
risks and uncertainties that could significantly affect expected results in the
future from those expressed in any forward-looking statements made by, or on
behalf of, us. These risks and uncertainties include, but are not limited to,
uncertainties relating to our new business model, government regulation, risks
associated with the acquisition of companies and risks associated with
technological changes. Persons reading this prospectus are cautioned that such
statements are only predictions and that actual events or results may differ
materially. In evaluating such statements, readers should specifically consider
the various factors which could cause actual events or results to differ
materially from those indicated by such forward-looking statements.
These statements are based on our beliefs as well as assumptions we made
using information currently available to us. Because these statements reflect
our current views concerning future events, these statements involve certain
risks, uncertainties and assumptions. Actual future results may differ
significantly from the results discussed in the forward-looking statements.
Some, but not all, of the factors that may cause such a difference include those
discussed below.
----------------
Our New Business Model is Unproven
We have significantly reorganized our business, and there is no
guarantee that this reorganization will be successful. We have adopted this new
business model based on the belief that decentralizing our business among
specialized operating subsidiaries and other companies in which we have equity
interests (collectively, the "iGate Companies"), will enable us to be more
responsive to the evolving IT and eServices markets. The success of our new
business depends in part on the ability of the iGate Companies to work
collaboratively, share information and leverage their collective resources to
optimize strategic opportunities. We cannot be certain that this reorganization
will improve our performance, and it is possible that the reorganization will
detract from our performance. In addition, if we cannot convince potential
strategic partners and acquisition targets of the value of our business model,
our ability to acquire new companies and businesses may be adversely affected
and our strategy for continued growth may not succeed.
Recruitment and Retention of IT and eServices Professionals
Our business involves the delivery of professional services and is labor-
intensive. Our success depends upon our ability to attract, develop, motivate
and retain highly skilled IT and
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eServices professionals and project managers, who possess the technical skills
and experience necessary to deliver our services. Qualified IT and eServices
professionals are in great demand worldwide and are likely to remain a limited
resource for the foreseeable future. There can be no assurance that qualified IT
and eServices professionals will continue to be available to us in sufficient
numbers, or that we will be successful in retaining current or future employees.
Failure to attract or retain qualified IT and eServices professionals in
sufficient numbers could have a material adverse effect on our business,
operating results and financial condition. Historically, we have done most of
our recruiting outside of the countries where the client work is performed.
Accordingly, any perception among our IT and eServices professionals, whether or
not well founded, that our ability to assist them in obtaining temporary work
visas and permanent residency status has been diminished, could lead to
significant employee attrition.
Government Regulation of Immigration
We recruit IT and eServices professionals on a global basis and, therefore, must
comply with the immigration laws in the countries in which we operate,
particularly the United States. As of December 31, 1999, approximately 35% of
our worldwide workforce was working under H-1B temporary work permits in the
United States. Government regulation limits the number of new H-1B permits that
may be approved in a fiscal year. On October 22, 1998, the "American
Competitiveness and Workforce Improvement Act" was signed into law. The H-1B
annual quota for fiscal year 1999 was increased from 65,000 to 115,000. The
quota for fiscal years 2000 and 2001 will be 115,000 and 107,500 respectively.
Congress is currently debating proposals to further increase the annual H-1B
quota. If we are unable to obtain H-1B visas for our employees in sufficient
quantities or at a sufficient rate for a significant period of time, our
business, operating results and financial condition could be adversely affected.
Variability of Quarterly Operating Results
The revenues and operating results of the iGate Companies are subject
to significant variation from quarter to quarter depending on a number of
factors, including the timing and number of client projects commenced and
completed during the quarter, the number of working days in a quarter, employee
hiring, attrition and utilization rates and the mix of time-and-materials
projects versus fixed-price projects during the quarter. Certain of the iGate
Companies recognize revenues on time-and-materials projects as the services are
performed, while revenues on fixed-price projects are recognized using the
percentage of completion method. Although fixed-price projects have not
contributed significantly to revenues and profitability to date, operating
results may be adversely affected in the future by cost overruns on fixed-price
projects. Because a high percentage of the expenses of many of the iGate
Companies are relatively fixed, variations in revenues may cause significant
variations in operating results. Additionally, the iGate Companies periodically
incur cost increases due to the hiring of new employees and strategic
investments in infrastructure in anticipation of future opportunities for
revenue growth.
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Increasing Significance of Non-U.S. Operations and Risks of International
Operations
Our international consulting and offshore software development depend greatly
upon business, immigration and technology transfer laws in those countries, and
upon the continued development of technology infrastructure. There can be no
assurance that our international operations will be profitable or support our
growth strategy. The risks inherent in our international business activities
include:
. unexpected changes in regulatory environments;
. foreign currency fluctuations;
. tariffs and other trade barriers;
. difficulties in managing international operations; and
. potential foreign tax consequences, including repatriation of earnings and
the burden of complying with a wide variety of foreign laws and regulations.
Our failure to manage growth, attract and retain personnel, manage major
development efforts, profitably deliver services, or a significant interruption
of our ability to transmit data via satellite, could have a material adverse
impact on our ability to successfully maintain and develop our international
operations and could have a material adverse effect on our business, operating
results and financial condition.
Exposure to Regulatory and General Economic Conditions in India
Our subsidiary, Mascot, utilizes an offshore software development center based
in Bangalore with additional offices in Pune and Chennai, India. Mascot also
operates recruiting and training centers in India. The Indian government exerts
significant influence over its economy. In the recent past, the Indian
government has provided significant tax incentives and relaxed certain
regulatory restrictions in order to encourage foreign investment in certain
sectors of the economy, including the technology industry. Certain of these
benefits that directly affect us include, among others, tax holidays (temporary
exemptions from taxation on operating income), liberalized import and export
duties and preferential rules on foreign investment and repatriation. To be
eligible for certain of these tax benefits, we must continue to meet certain
conditions. A failure to meet such conditions in the future could result in the
cancellation of the benefits. There can be no assurance that such tax benefits
will be continued in the future at their current levels. Changes in the business
or regulatory climate of India could have a material adverse effect on our
business, operating results and financial condition.
Although wage costs in India are significantly lower than in the U.S. and
elsewhere for comparably skilled IT professionals, wages in India are increasing
at a faster rate than in the U.S. In the past, India has experienced
significant inflation and shortages of foreign exchange, and has been subject to
civil unrest and acts of terrorism. Changes in inflation, interest rates,
taxation or other social, political, economic or diplomatic developments
affecting India in the future could have a material adverse effect on our
business, operating results and financial condition.
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<PAGE>
Intense Competition in the IT Services and eServices Industries
The IT services and eServices industries are highly competitive and served by
numerous national, regional and local firms, all of which are either our
existing or potential competitors. Primary competitors include participants
from a variety of market segments, including "Big Five" accounting firms,
systems consulting and implementation firms, applications software firms,
service groups of computer equipment companies, general management consulting
firms, programming companies and temporary staffing firms. Many of these
competitors have substantially greater financial, technical and marketing
resources and greater name recognition than we have. There are relatively few
barriers to entry into our markets and we may face additional competition from
new entrants into our markets. In addition, there is a risk that clients may
elect to increase their internal resources to satisfy their applications
solutions and eServices needs. Further, the IT services industry is undergoing
consolidation, which may result in increasing pressure on margins. These
factors may limit our ability to increase prices commensurate with increases in
compensation. There can be no assurance that we will compete successfully with
existing or new competitors in the IT services and eServices markets.
iGate Companies May Compete with Each Other
iGate Companies may compete with each other for customers, talented employees
and strategic relationships. In addition, iGate Capital Corporation may compete
with various iGate Companies for acquisition opportunities in the IT services
and eServices industries. Such competition may make it more difficult or costly
for iGate Capital Corporation or other iGate Companies to enter to into
strategic relationships, negotiate acquisitions or conduct business.
Risks Related to Inability to Acquire Additional Businesses
An important component of our strategy for success is our plan to continue to
expand our operations through the acquisition of, or investment in, additional
businesses and companies. We may be unable to identify businesses that
complement our strategy for growth, and even if we succeed in identifying a
company with such a business, we may not be able to proceed to acquire the
company, its relevant business or an interest in the company for many reasons,
including:
. a failure to agree on the terms of the acquisition or investment;
. incompatibility with the management of the company which we wish
to acquire or in which we wish to invest;
. competition from other potential acquirors (including publicly-traded
Internet companies, venture capital companies and large corporations, many of
which have greater financial resources and brand name recognition than we
do);
. a lack of capital to make the acquisition or investment; and
. the unwillingness of the company to partner with us.
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<PAGE>
If we are unable to continue acquiring and investing in attractive businesses,
our strategy for growth may not succeed.
Risks Related to Completed Acquisitions
There can be no assurance that we will be able to profitably manage additional
businesses or successfully integrate any acquired businesses without substantial
expenses, delays or other operational or financial problems. Further,
acquisitions may involve a number of special risks, including diversion of
management's attention, failure to retain key acquired personnel, unanticipated
events or circumstances and legal liabilities and amortization of acquired
intangible assets, some or all of which could have a material adverse effect on
our business, operating results and financial condition. Client satisfaction or
performance problems at a single acquired firm could have a material adverse
impact on our reputation as a whole. In addition, there can be no assurance
that acquired businesses, if any, will achieve anticipated revenues and
earnings. Our failure to manage our acquisition strategy successfully could have
a material adverse effect on our business, operating results and financial
condition.
Risks Associated with Capital Markets
We currently hold, and plan to increase holdings of, significant interests in
non-wholly owned companies and joint ventures. While we generally do not
anticipate selling such interests, if we were to divest all or part of them, we
might not receive maximum value for these positions. With respect to such
entities with publicly traded stock, we may be unable to sell our interest at
then-quoted market prices. Furthermore, for those entities that do not have
publicly traded stock, the realizable value of our interest may ultimately prove
to be lower than the carrying value currently reflected in our consolidated
financial statements.
Concentration of Revenues; Risk of Termination
We have in the past derived, and may in the future derive, a significant portion
of our revenues from a relatively limited number of clients. Our five largest
clients represented approximately 22%, 23% and 24% of revenues for the years
ended December 31, 1999, 1998 and 1997, respectively. EDS accounted for
approximately 11% of our revenues for each of the years ended December 31, 1998
and 1997. Most of our projects are terminable by the client without penalty.
An unanticipated termination of a major project could result in the loss of
substantial anticipated revenues and could require us to maintain or terminate a
significant number of unassigned IT professionals, resulting in a higher number
of unassigned IT professionals and/or significant termination expenses. The
loss of any significant client or project could have a material adverse effect
on our business, operating results and financial condition.
Rapid Technological Change; Dependence on New Solutions
The IT services and eServices industries are characterized by rapid
technological change, evolving industry standards, changing client preferences
and new product introductions. Our success will depend in part on our ability
to develop IT and eServices solutions that keep pace
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<PAGE>
with industry developments. There can be no assurance that we will be successful
in addressing these developments on a timely basis or that, if these
developments are addressed, we will be successful in the marketplace. In
addition, there can be no assurance that products or technologies developed by
others will not render our services noncompetitive or obsolete. Our failure to
address these developments could have a material adverse effect on our business,
operating results and financial condition.
A significant number of organizations are attempting to migrate business
applications from a mainframe environment to advanced technologies. As a result,
our ability to remain competitive will be dependent on several factors,
including our ability to help existing employees maintain or develop mainframe
skills and to train and hire employees with skills in advanced technologies.
Our failure to hire, train and retain employees with such skills could have a
material adverse impact on our business. Our ability to remain competitive will
also be dependent on our ability to design and implement, in a timely and cost-
effective manner, effective transition strategies for clients moving from legacy
systems to advanced architectures. Our failure to design and implement such
transition strategies in a timely and cost-effective manner could have a
material adverse effect on our business, operating results and financial
condition.
Dependence on Principals
Our success is highly dependent on the efforts and abilities of Sunil Wadhwani
and Ashok Trivedi, the Co-Chairman and Chief Executive Officer of iGate Capital
Corporation and the Co-Chairman and President of iGate Capital Corporation,
respectively. Although Messrs. Wadhwani and Trivedi have entered into employment
agreements containing noncompetition, nondisclosure and nonsolicitation
covenants, these contracts do not guarantee that they will continue their
employment with us or that such covenants will be enforceable. The loss of the
services of either of these key executives for any reason could have a material
adverse effect on our business, operating results and financial condition.
Risk of Preferred Vendor Contracts
We are party to several "preferred vendor" contracts and we are seeking
additional similar contracts in order to obtain new or additional business from
large or medium-sized clients. Clients enter into these contracts to reduce the
number of vendors and obtain better pricing in return for a potential increase
in the volume of business to the preferred vendor. While these contracts are
expected to generate higher volumes, they generally result in lower margins.
Although we attempt to lower costs to maintain margins, there can be no
assurance that we will be able to sustain margins on such contracts. In
addition, the failure to be designated a preferred vendor, or the loss of such
status, may preclude us from providing services to existing or potential
clients, except as a subcontractor, which could have a material adverse effect
on our business, operating results and financial condition.
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<PAGE>
Risks Associated with Intellectual Property Rights
Our success depends in part upon certain methodologies and tools we use in
designing, developing and implementing applications systems and other
proprietary intellectual property rights. We rely upon a combination of
nondisclosure and other contractual arrangements and trade secret, copyright and
trademark laws to protect our proprietary rights and the proprietary rights of
third parties from whom we license intellectual property. We enter into
confidentiality agreements with our employees and limit distribution of
proprietary information. There can be no assurance that the steps we take in
this regard will be adequate to deter misappropriation of proprietary
information or that we will be able to detect unauthorized use and take
appropriate steps to enforce our intellectual property rights.
Although we believe that our services do not infringe on the intellectual
property rights of others and that we have all rights necessary to utilize the
intellectual property employed in our business, we are subject to the risk of
litigation alleging infringement of third-party intellectual property rights.
Any claims, whether or not meritorious, could:
. be expensive and time-consuming to defend;
. cause significant and material product shipment and installation delays;
. divert management's attention and resources; and/or
. require us to enter into royalty or licensing arrangements, which may not be
available on acceptable terms, or may not be available at all.
A successful claim of product infringement against us or our failure or
inability to license the infringed or similar technology could have a material
adverse effect on our business, financial condition and results of operations.
Fixed-Price Projects
We undertake certain projects billed on a fixed-price basis, which is
distinguishable from our principal method of billing on a time-and-materials
basis. Failure to complete such projects within budget would expose us to risks
associated with cost overruns, which could have a material adverse effect on our
business, operating results and financial condition.
Potential Liability to Clients
Many of our engagements involve projects that are critical to the operations of
our clients' businesses and provide benefits that may be difficult to quantify.
Although we attempt to contractually limit our liability for damages arising
from errors, mistakes, omissions or negligent acts in rendering our services,
there can be no assurance that our attempts to limit liability will be
successful. Our failure or inability to meet a client's expectations in the
performance of our services could result in a material adverse change to the
client's operations and therefore could give rise to claims against us or damage
our reputation, adversely affecting our business, operating results and
financial condition.
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<PAGE>
SELLING SHAREHOLDERS
On July 22, 1999, we issued and sold a senior convertible promissory note
in the original aggregate principal amount of $30,000,000 to GE Capital Equity
Investments, Inc., under a Note Purchase Agreement dated as of July 22, 1999.
The promissory note matures on July 22, 2004. The holder of the note may
convert the note at any time prior to maturity and following either an
extraordinary default, as that term is defined in the purchase agreement
relating to the note, an event of default as that term is defined in the
purchase agreement relating to the note, or July 22, 2002. The note is
convertible into common stock at an initial conversion price of $21.64 per
share, subject to adjustment after the date of this prospectus as provided in
the purchase agreement relating to the note. If the selling shareholders choose
to exercise their conversion rights in full with respect to the entire amount of
the note, they may acquire, and resell with this prospectus, up to 1,386,322
shares of common stock. As used in this prospectus, the term "selling
shareholders" includes assignees, transferees and distributees of selling
shareholders permitted by the Registration Rights Agreement referred to in the
section titled "Plan Of Distribution."
Because the promissory note may be transferred by the current holder, we
are unable to provide information with respect to the identity of the selling
shareholders or their relationship with us at this time. In addition, since a
selling shareholder may sell all or part of the common stock offered with this
prospectus, we cannot estimate the number or percentage of common stock each
such selling shareholder will hold upon completion of any offering made hereby.
We will include such information in supplements to this prospectus.
PLAN OF DISTRIBUTION
The shares of common stock being offered by the selling shareholders or
anyone to whom they legally transfer such stock may be sold from time to time in
one or more transactions. Alternatively, the selling shareholders may from time
to time offer the shares through underwriters, dealers or agents who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the selling shareholders and/or the purchasers of the Shares for whom they
may act as agents.
The shares being offered by the selling shareholder(s) may be sold on the
Nasdaq National Market or the over-the-counter market or otherwise at prices and
on terms then prevailing or at prices related to the then-current market price,
or in negotiated transactions. Such prices will be determined by the selling
shareholder or by agreement between the selling shareholder and underwriters or
dealers.
The shares sold pursuant to this prospectus may be sold in or by
- - a block trade in which the broker or dealer so engaged will attempt to sell
the shares as agent, but may position and resell a portion of the block as
principal to facilitate the transaction,
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- - purchases by a broker or dealer as principal and subsequent resale by such
broker or dealer for its account pursuant to this prospectus,
- - an exchange distribution in accordance with the rules of such exchange,
- - ordinary brokerage transactions and transactions in which the broker solicits
purchases, and
- - privately negotiated transactions. In effecting sales, brokers or dealers
engaged by the selling shareholders may arrange for other brokers or dealers
to participate. A selling shareholder also may, from time to time with our
consent, authorize underwriters acting as his agent to offer and sell his
shares upon such terms and conditions as shall be set forth in any prospectus
supplement. Underwriters, brokers or dealers will receive commissions or
discounts from a selling shareholder in amounts to be negotiated. Such
underwriters, brokers or dealers and any other participating brokers or
dealers may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933 in connection with such sales and any discounts and
commissions received by them, and any profit realized by them on the resale
of the shares may be deemed to be underwriting discounts and commissions
under the Securities Act.
In connection with distributions of the shares or otherwise, the selling
shareholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the shares registered hereunder in the course of hedging the positions they
assume with the selling shareholders. The selling shareholder may also sell
shares short and deliver the Shares to close out such short positions. The
selling shareholder may also enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the shares
registered hereunder, which the broker-dealer may resell pursuant to this
prospectus.
The selling shareholder may also pledge the shares registered hereunder to
a broker or dealer and upon a default, the broker or dealer may effect sales of
the pledged shares pursuant to this prospectus.
Any dealer or broker participating in any distribution of the shares may be
required to deliver a copy of this prospectus, including the prospectus
supplement, if any, to any person who purchases any of the shares from or
through such dealer or broker.
In order to comply with certain state securities laws, if applicable, the
shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In certain states, the shares may not be sold unless they
have been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act of 1934, any
person engaged in a distribution of the shares may not simultaneously engage in
market-making activities with respect to such shares, except in accordance with
applicable laws. The selling shareholders and any other persons participating
in the sale or distribution of the shares of
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common stock will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder which may limit the timing of purchases and
sales of those persons. The foregoing may affect the marketability of the
Shares.
Pursuant to a Registration Right Agreement between us and GE Capital Equity
Investments, Inc., we have agreed to pay all the fees and expenses incident to
the registration of the shares and the reasonable fees and expenses of counsel
representing the selling shareholders. However, in the event of an underwritten
offering in which the shares are registered, we have agreed to cover only those
expenses of the selling shareholders that do not in the aggregate exceed
$100,000. In addition, iGate has agreed to maintain the effectiveness of the
registration statement until the earlier of (i) such time as all of the shares
registered hereunder have been sold pursuant to this prospectus supplement or
(ii) the fourth anniversary of the issuance of the shares to the selling
shareholders upon conversion of the note. We have also agreed to indemnify the
selling shareholders against certain liabilities, including liabilities under
the Securities Act. In addition, the selling shareholders have agreed to
indemnify us against certain liabilities, including liabilities under the
Securities Act.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available
to the public through the SEC's site on the Internet's World Wide Web located at
http://www.sec.gov. Our common stock is traded on the Nasdaq National Market
and, as such, reports and other information concerning iGate can also be
inspected at the offices of the National Association of Securities Dealers,
Inc., in Washington, D.C.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
until our offering is completed:
- Annual Report on Form 10-K, for the fiscal year ended December 31, 1999;
- Current Report for events reported on Forms 8-K dated March 9, 2000 and
March 13, 2000.
- The description of the Common Stock, which is registered under Section
12 of the Exchange Act, contained in our registration statement on Form
8-A, filed with the Commission on November 19, 1996.
-11-
<PAGE>
- All other reports and other documents filed by us since December 31,
1999, pursuant to Section 13(a), (c), 14 or 15(d) of the Exchange Act.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address or telephone number: iGate Capital
Corporation, 1004 McKee Road, Oakdale, Pennsylvania 15071, Attention: Bruce E.
Haney, Managing Director, Chief Financial Officer, telephone: 412-787-2100.
Our Internet addresses are http://www.mastech.com and
http://www.igatecapital.com.
You should rely only on the information incorporated by reference or
provided in this prospectus or the prospectus supplement. We have authorized no
one to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus or the prospectus supplement is
accurate as of any date other than the date on the front of the document.
USE OF PROCEEDS
We will not receive any proceeds from the sale of common stock by the
selling shareholders.
LEGAL MATTERS
The validity of the Shares will be passed upon for us by Buchanan Ingersoll
Professional Corporation, Pittsburgh, Pennsylvania. Carl A. Cohen, a
shareholder of Buchanan Ingersoll Professional Corporation, owned 2,000 shares
of Common Stock as of March 30, 2000.
EXPERTS
The consolidated financial statements and related financial statement
schedules incorporated by reference in this prospectus as of December 31, 1999
and 1998 and for each of the three years ended December 31, 1999, 1998 and 1997
have been audited by Arthur Andersen LLP, independent public accountants, to the
extent and for the periods as indicated in their reports with respect thereto,
and are incorporated herein by reference in reliance upon the authority of said
firm as experts in giving said reports.
-12-
<PAGE>
=====================================================
1,386,322 Shares
iGATE CAPITAL
CORPORATION
Common Stock
_______________
PROSPECTUS
________________
March 30, 2000
=====================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses of this offering in connection with the distribution
of the Common Stock being registered hereby, all of which are to be borne by the
Registrant, are as follows:
<TABLE>
<S> <C>
SEC registration fee.................................................. $19,250
Accounting fees and expenses.......................................... $ 2,500
Legal fees and expenses............................................... $ 7,500
Printing.............................................................. $ 750
Miscellaneous......................................................... 1,000
Total................................................................. $31,000
</TABLE>
Item 15. Indemnification of Directors and Officers
Subchapter D of Chapter 17 of the Pennsylvania Business Corporation Law
("PBCL") provides in general that a corporation may indemnify any person,
including its directors, officers and employees, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative (including
actions by or in the right of the corporation) by reason of the fact that he or
she is or was a representative of or serving at the request of the corporation,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
the action or proceeding if he or she is determined by the board or directors,
or in certain circumstances by independent legal counsel or the shareholders, to
have acted in good faith and in a manner he or she reasonably believed to be in,
or not opposed to, the best interests of the corporation and, with respect to
any criminal proceeding, had no reason to believe his or her conduct was
unlawful. In the case of actions by or in the right of the corporation,
indemnification is not permitted in respect of any claim, issue or matter as to
which the person has been adjudged to be liable to the corporation except to the
extent a court determines that the person is fairly and reasonably entitled to
indemnification. In any case, to the extent that the person has been successful
on the merits or otherwise in defense of any claim, issue or matter, he or she
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith. Subchapter D of
Chapter 17 also provides that the indemnification permitted or required thereby
is not exclusive of any other rights to which a person seeking indemnification
may be entitled.
Article 10 of our Articles of Incorporation provides that iGate shall
indemnify and hold harmless to the full extent not prohibited by law, as the
same exists or may be amended, interpreted or implemented (but, in the case of
any amendment, only to the extent that such amendment permits the Company to
provide broader indemnification rights than the Company is permitted to provide
prior to such amendment), each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in (as witness or
otherwise) any
II-1
<PAGE>
threatened, pending or completed action, suit, or proceeding, whether civil,
criminal, administrative or investigative and whether or not by or in the right
of the Company or otherwise (hereinafter, a "proceeding"), by reason of the fact
that he or she, or a person of whom he or she is the heir, executor or
administrator, is or was a director or executive officer of the Company or is or
was serving at the request of the Company as a director, officer or trustee of
another corporation or of a partnership, joint venture, trust or other
enterprise (including without limitation service with respect to employee
benefit plans), or where the basis of such proceeding is any alleged action or
failure to take any action by such person while acting in an official capacity
as a director or executive officer of the Company, or in any other capacity on
behalf of the Company while such person is or was serving as a director or
executive officer of the Company, against all expenses, liability and loss,
including but not limited to attorney's fees, judgments, fines, excise taxes or
penalties and amounts paid or to be paid in settlement (whether with or without
court approval), actually and reasonably incurred or paid by such person in
connection therewith. The right to indemnification is a contract right and
includes the right to be paid by the Company the expenses incurred in defending
any such proceeding (or part thereof) or in enforcing his or her rights to
indemnification in advance of the final disposition thereof promptly after
receipt by the Company of a request therefor stating in reasonable detail the
expenses incurred; provided, however, that to the extent required by law, the
payment of such expenses incurred by a director or executive officer of the
Company in advance of the final disposition of a proceeding shall be made only
upon receipt of an undertaking, by or on behalf of such person, to repay all
amounts so advanced if and to the extent it shall ultimately be determined by a
court that he or she is not entitled to be indemnified by the Company.
The Company has entered into employment agreements with Sunil Wadhwani and
Ashok Trivedi, Co-Chairman and Chief Executive Officer and Co-Chairman and
President, respectively, which entitle them to be indemnified in their
capacities as directors, officers and controlling shareholders of the Company to
the full extent not prohibited by law. The Company also has entered into a
Shareholders Agreement with Messrs. Wadhwani and Trivedi pursuant to which the
Company agrees to indemnify them against certain liabilities, including
liabilities under the securities laws, that they may incur in connection with
any offering effected pursuant to their registration rights under the
Shareholders Agreement.
The Articles of the Company also provide pursuant to Section 1713 of the
PBCL that a director of iGate shall not be personally liable for monetary
damages as such for any action taken, or any failure to take any action, unless:
(1) the director has breached or failed to perform the duties of his/her office
under Section 1712 of the PBCL (relating to standard of conduct and justifiable
reliance); and (2) the breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness. This limitation on the personal liability of
directors of Company does not apply to: (1) the responsibility or liability of a
director pursuant to any criminal statute; or (2) the liability of a director
for the payment of taxes pursuant to local, state or Federal law.
The Company has purchased insurance insuring its directors and officers
against certain liabilities which they might incur as directors or officers of
the Company or of any other organization which they serve at its request,
including certain liabilities under the Securities Act.
II-2
<PAGE>
Item 16. Exhibits
The following is a complete list of Exhibits filed as part of this
Registration Statement.
<TABLE>
<CAPTION>
Exhibit No. Reference Page
- --------------- ------------------ ------------
<C> <S> <C> <C>
5.01 Opinion of Buchanan Ingersoll Professional Corporation. Filed herewith E-1
23.01 Consent of Arthur Andersen LLP. Filed herewith E-2
23.02 Consent of Buchanan Ingersoll Professional Corporation (included in
its opinion).
24.01 Power of Attorney (included on signature page). Filed herewith
</TABLE>
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the Registration Statement (or the most
recent post-effective amendment thereof); and
(iii) To include in such prospectus any additional or changed
material information on the plan of distribution contained
in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To file a post-effective amendment to remove from registration
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report
II-3
<PAGE>
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the success defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pittsburgh, Commonwealth of Pennsylvania, on March
29, 2000.
iGATE CAPITAL CORPORATION
By: /s/ Sunil Wadhwani
------------------------------------
Sunil Wadhwani
Co-Chairman and Chief Executive Officer
We, the undersigned officers and directors of iGate Capital Corporation,
hereby severally constitute Sunil Wadhwani, Ashok Trivedi and Bruce E. Haney,
and each of them singly, our true and lawful attorneys with full power to any of
them, and to each of them singly, to sign for us and in our names in the
capacities indicated below, the Registration Statement on Form S-3 filed
herewith and any and all pre-effective and post-effective amendments to said
Registration Statement (or any other registration statement for the same
offering that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act) and generally to do all such things in our name and behalf in
our capacities as officers and directors to enable iGate Capital Corporation to
comply with the provisions of the Securities Act and all requirements of the
Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement (or any other registration statement for the same
offering that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act) and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Sunil Wadhwani Co-Chairman, Chief Executive March 28, 2000
- --------------------------------------------- Officer and Director (principal
Sunil Wadhwani executive officer)
/s/Bruce E. Haney Managing Director, Chief Financial March 28, 2000
- --------------------------------------------- Officer
Bruce E. Haney
/s/ Neil M. Ebner Corporate Controller March 28, 2000
- --------------------------------------------- (principal accounting officer)
Neil M. Ebner
Co-Chairman, President and Director March ___, 2000
- ---------------------------------------------
Ashok Trivedi
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
Director March ___, 2000
- ---------------------------------------------
Ed Yourdon
/s/ J. Gordon Garrett Director March 29, 2000
- ---------------------------------------------
J. Gordon Garrett
/s/ Michel Berty Director March 29, 2000
- ---------------------------------------------
Michel Berty
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Reference Page
- ----------- -------------------- ---------------
<S> <C> <C> <C>
5.01 Opinion of Buchanan Ingersoll Professional Corporation Filed herewith E-1
23.01 Consent of Arthur Andersen LLP Filed herewith E-2
23.02 Consent of Buchanan Ingersoll Professional Corporation (included in
its opinion in Exhibit 5.01)
24.01 Power of Attorney (included on Signature Page) Filed herewith
</TABLE>
<PAGE>
Exhibit 5.01
March 30, 2000
iGate Capital Corporation
1004 McKee Road
Oakdale, Pennsylvania 15071
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 (the
"Registration Statement") to be filed by iGate Capital Corporation, a
Pennsylvania corporation (the "Company"), under the Securities Act of 1933, as
amended (the "Securities Act") relating to the registration for resale by the
selling shareholders named therein of 1,386,322 shares of the Company's common
stock, par value $.01 per share (the "Shares"), we, as counsel for the Company,
have examined such corporate records, other documents, and questions of law as
we have considered necessary or appropriate for the purpose of this opinion.
Upon the basis of such examination, we advise you that in our opinion the
Shares to be sold by the selling shareholders are duly and validly authorized,
validly issued, fully paid and non-assessable.
It is our understanding that this opinion is to be used only in connection
with the offer and sale of the Shares while the Registration Statement is in
effect.
We consent to the filing of this opinion letter as an exhibit to the
Registration Statement and any amendment thereto, including any and all post-
effective amendments and any registration statement relating to the same
offering that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act, and to reference to this firm under the caption "Legal Matters."
In giving such consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Securities and Exchange Commission.
Sincerely,
BUCHANAN INGERSOLL PROFESSIONAL CORPORATION
By: /s/ James J. Barnes
-------------------
James J. Barnes
E-1
<PAGE>
Exhibit 23.01
FORM OF
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 27, 2000,
included in iGate Capital Corporation's Form 10-K for the year ended December
31, 1999, and all references to our Firm included in this registration
statement.
/s/ ARTHUR ANDERSEN, LLP
- ------------------------
ARTHUR ANDERSEN, LLP
Pittsburgh, Pennsylvania
March 30, 2000
- ---------------
E-2
