<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 15, 1999.
REGISTRATION NO. 333-________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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AFFILIATED COMPUTER SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0310342
(State or other jurisdiction (I.R.S. Employer
Of incorporation or organization) Identification No.)
ACS CAPITAL TRUST I
(Exact name of registrant as specified in its charter)
DELAWARE TO BE APPLIED FOR
(State or other jurisdiction (I.R.S. Employer
Of incorporation or organization) Identification No.)
ACS CAPITAL TRUST II
(Exact name of registrant as specified in its charter)
DELAWARE TO BE APPLIED FOR
(State or other jurisdiction (I.R.S. Employer
Of incorporation or organization) Identification No.)
2828 NORTH HASKELL
DALLAS, TEXAS 75204
(214) 841-6111
(Address, including zip code, and telephone number, including
area code, of registrants' principal executive offices)
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DAVID W. BLACK
2828 NORTH HASKELL
DALLAS, TEXAS 75204
(214) 841-6152
(Name, address and telephone number,
including area code, of agent for service)
With a copy to:
DAVID G. LUTHER, JR.
HUGHES & LUCE, L.L.P.
1717 MAIN STREET, SUITE 2800
DALLAS, TEXAS 75201
(214) 939-5500
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement.
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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 of the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
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If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED PER UNIT (1) PRICE (2) REGISTRATION FEE
- ---------------------------- ---------------- ---------------- ------------------ ----------------
<S> <C> <C> <C> <C>
DEBT SECURITIES (3)......
COMMON STOCK (4)......... (10) (10) (10) (10)
PREFERRED STOCK (5)......
DEPOSITARY SHARES(6).....
WARRANTS (7)
ACS CAPITAL TRUST I
CAPITAL SECURITIES
ACS CAPITAL TRUST II
CAPITAL SECURITIES(8)
GUARANTEES OF AFFILIATED
COMPUTER SERVICES, INC.
WITH RESPECT TO CAPITAL
SECURITIES (9)...........
---------------- ---------------- ------------------ ----------------
TOTAL.................... $500,000,000(11) 100% $500,000,000(11) $139,000
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</TABLE>
(1) The proposed maximum offering price per unit will be determined from
time to time by the registrant in connection with the issuance by the
registrant of the securities registered hereunder.
(2) The proposed maximum aggregate offering price has been estimated solely
for the purpose of calculating the registration fee in accordance with
Rule 457(o) of the Securities Act.
(3) Subject to note (11) below, there is being registered hereunder an
indeterminate principal amount of senior and subordinated debt
securities as may be sold, from time to time, by the registrant at
indeterminate prices, including an indeterminate amount of debt
securities as may be issued in connection with the issuance of capital
securities of ACS Capital Trust I and ACS Capital Trust II or in
connection with warrants. If any debt securities are issued at an
original issue discount, then the offering price shall be in the
greater principal amount as shall result in an aggregate initial
offering price not to exceed $500,000,000 less the dollar amount of any
securities previously issued hereunder.
(4) Subject to note (11) below, there is being registered hereunder an
indeterminate number of shares of Class A common stock or, in the case
of the selling stockholder, an indeterminant number of shares of Class
A common stock up to 2,574,772, as may be sold, from time to time, by
the registrant or the selling stockholder at indeterminate prices.
There are also being registered hereunder an indeterminate number of
shares of common stock as may be issuable upon conversion of preferred
stock, debt securities or exercise of warrants registered hereby. No
separate consideration will be received for common stock issued upon
conversion of preferred stock or debt securities. Includes an
equivalent number of rights to purchase shares of Class A common stock
issuable under ACS's First Amended and Restated Rights Agreement.
(5) Subject to note (11) below, there is being registered hereunder an
indeterminate number of shares of preferred stock as may be sold, from
time to time, by the registrant at indeterminate prices. There are also
being registered hereunder an indeterminate number of shares of common
stock as may be issuable upon conversion of debt securities or exercise
of warrants registered hereby. No separate consideration will be
received for common stock issued upon conversion of debt securities.
(6) Subject to note (11), there is being registered hereunder an
indeterminate number of depositary shares to be evidenced by depositary
receipts issued pursuant to a depositary agreement. In the event ACS
elects to offer to the public fractional interests in shares of the
preferred stock registered hereunder, depositary receipts will be
distributed to those persons purchasing such fractional interests, and
such shares will be issued to the depositary bank under the depositary
agreement.
(7) Subject to note (11) below, there is being registered hereunder an
indeterminate number of warrants or other rights, including, without
limitation, share purchase or subscription rights, as may be sold, from
time to time, by the registrant at indeterminate prices.
(8) Subject to note (11) below, there is being registered hereunder an
indeterminate number of shares of capital securities of ACS Capital
Trust I and ACS Capital Trust II, as may be sold, from time to time, by
the trusts at indeterminate prices.
(9) No additional consideration will be received from the Affiliated
Computer Services, Inc. Guarantees with respect to the capital
securities.
(10) Not applicable pursuant to General Instruction II.D. of Form S-3.
(11) In no event will the aggregate initial public offering price of all
securities issued from time to time pursuant to this registration
statement exceed $500,000,000. The aggregate amount of Class A common
stock registered hereunder is further limited to that which is
permissible under Rule 415(a)(4) of the Securities Act. The securities
registered hereunder may be sold separately or as units with other
securities registered hereunder.
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THE REGISTRANTS HEREBY AMENDS THIS REGISTRATION STATEMENT ON THAT DATE OR
THOSE DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT THAT 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 THAT DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 3
WE WILL AMEND AND COMPLETE THE INFORMATION IN THIS PROSPECTUS. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THESE SECURITIES OR OUR SOLICITATION OF YOUR OFFER TO
BUY THESE SECURITIES, NOR WILL WE SELL THEM OR ACCEPT YOUR OFFER TO BUY THEM IN
ANY STATE OR OTHER JURISDICTION WHERE THAT WOULD NOT BE PERMITTED OR LEGAL PRIOR
TO REGISTRATION OR QUALIFICATION IN THAT STATE OR JURISDICTION. WE MAY NOT SELL
THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE.
SUBJECT TO COMPLETION, DATED NOVEMBER 15, 1999.
PROSPECTUS
[ACS LOGO]
$500,000,000
AFFILIATED COMPUTER SERVICES, INC.
Debt Securities
Class A Common Stock
Preferred Stock
Depositary Shares
Warrants
ACS CAPITAL TRUST I
ACS CAPITAL TRUST II
Capital Securities
Fully and Unconditionally Guaranteed,
To The Extent Described Herein, By
AFFILIATED COMPUTER SERVICES, INC.
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We, Affiliated Computer Services, Inc., may from time to time offer under
this prospectus:
o unsecured general obligations in the form of either senior
or subordinated debt;
o shares of our Class A common stock, par value $.01 per
share;
o shares of our preferred stock, par value $1.00 per share;
o our depositary shares; or
o warrants.
Senior debt includes our notes, debt and guarantees that are for money borrowed
and are not subordinated. Subordinated debt, designated as subordinated debt at
the time we issue it, is entitled to interest and principal payments after
payments on our senior debt. We have two classes of common stock outstanding.
Our Chairman of the Board, Darwin Deason, may also from time to time offer and
sell shares of Class A common stock as the selling stockholder. We will not
receive any proceeds from the sale of shares by Mr. Deason.
ACS Capital Trust I and ACS Capital Trust II, each a trust created
under the laws of the State of Delaware, may each offer and issue from time to
time capital securities representing preferred beneficial ownership interests in
those trusts with such terms as are described in this prospectus and in the
applicable prospectus supplement. We will own, directly or indirectly, all of
the common securities representing common beneficial ownership interests in each
trust. We will guarantee payment to holders of capital securities the cash
distributions on the capital securities and amounts payable upon redemption of
the capital securities, liquidation of the applicable trust or otherwise, to the
extent described in this prospectus and in the applicable prospectus supplement.
The only assets of a trust will be debt securities purchased from us with the
proceeds from the issuance of its capital securities and common securities. Our
guarantees will rank equally with the debt securities purchased with the
proceeds of the capital securities covered by each guarantee. If specified in
the applicable prospectus supplement, the debt securities may be distributed pro
rata to holders of the capital securities and common securities at those times
as may be described in the prospectus supplement.
Throughout this prospectus we will refer to our debt securities, Class
A common stock, preferred stock, depositary shares, guarantees and/or warrants
and/or the capital securities of ACS Capital Trust I or of ACS Capital Trust II
as the "securities". We and the trusts will provide the specific terms of these
securities in supplements to this prospectus. You should read this prospectus
and the supplements carefully before you invest.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE THE SALES OF THE SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
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The Class A common stock is listed on the New York Stock Exchange under the
symbol "ACS". The last reported sale price of our Class A common stock on
November 12, 1999 was $39 5/8 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 1 TO READ ABOUT RISKS THAT YOU SHOULD
CONSIDER BEFORE BUYING OUR SECURITIES.
We, the trusts, and, in the case of the Class A common stock only, Mr.
Deason, may offer and sell the offered securities directly to purchasers or
through agents, underwriters or dealers that we, the trusts or, in the case of
shares of Class A common stock that may be offered by the selling stockholder,
Mr. Deason, may choose from time to time. If we, the trusts, or Mr. Deason
chooses agents, underwriters or dealers to offer or sell the securities, we will
disclose their names and the selling commissions or discounts they will receive
in a supplement to this prospectus.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED ANY OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is , 1999.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we and the
trusts filed with the SEC utilizing a "shelf" registration process. Under this
shelf process we and the trusts may, from time to time, sell any combination of
the securities described in this prospectus in one or more offerings up to a
total dollar amount of $500,000,000, including one or more offerings of Class A
common stock by Mr. Deason as the selling stockholder, not to exceed in the
aggregate 2,574,772 shares.
This prospectus provides you with a general description of the
securities we or the trusts may offer. Each time we, the trusts, or Mr. Deason
sells securities, we or the trusts will provide a prospectus supplement that
will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information incorporated by reference into
this prospectus.
RISK FACTORS
You should carefully consider the following risk factors and warnings
before making an investment decision. If any of the following risks actually
occur, our business, financial condition or results of operations could be hurt,
the price of our securities could decline, we may not be able to repay our debt
securities, and you may lose all or part of your investment. You should also
refer to the other information contained in this prospectus and incorporated in
this prospectus by reference, including our consolidated financial statements
and the related notes, and any information contained in a supplemental
prospectus.
LOSS OF SIGNIFICANT CLIENTS, SUCH AS THE DEPARTMENT OF EDUCATION OR OTHER MAJOR
CLIENTS, COULD HURT OUR BUSINESS BY REDUCING OUR REVENUES AND PROFITABILITY
Our success depends substantially upon retaining our significant
clients. Generally, we may lose clients due to merger or acquisition, business
failure, contract expiration, conversion to a competing data processor or
conversion to an in-house data processing system. We cannot guarantee that we
will be able to retain long-term relationships or secure renewals of short-term
relationships with our significant clients in the future.
We incur a high level of fixed costs related to our technology
outsourcing and business process outsourcing clients. These fixed costs result
from significant investments in data processing centers, including computer
hardware platforms, computer software, facilities, and client service
infrastructure. The loss of any one of our significant clients could leave us
with a significantly higher level of fixed costs than is necessary to serve our
remaining clients, thereby reducing our profitability.
We also are vulnerable to reduced processing volumes from our clients,
which could occur due to business downturns, product liability issues, work
stoppages by organized labor, potential year 2000 problems affecting our
clients' business or other business reasons. Many of our clients are in
industries that are currently undergoing significant consolidation. In the past,
we have modified contracts on terms that have been both adverse and beneficial,
and it is possible that future adverse modifications may occur. Our five largest
clients accounted for approximately 19% of our revenue for the fiscal year ended
June 30, 1999. For the fiscal year ended June 30, 1998, our five largest clients
accounted for approximately 25% of our revenue. Approximately 7% of our revenue
in fiscal 1999 and 8% of our revenue in fiscal 1998 came from services performed
for the Department of Education. Our agreement with the Department of
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Education expires in September 2003; however, the agreement contains provisions
allowing the Department of Education to terminate the contract prior to the
expiration date, in specified circumstances, including termination for
convenience. If the Department of Education terminates the contract, we would
generally be reimbursed for the then remaining unamortized costs incurred with
respect to providing the services under the contract, except to the extent that
we are able to use any hardware, software or other resources for other purposes.
Our relationship with the Department of Education is also subject to the risks
of the reduction or modification of the contract due to changing needs and
requirements or to unavailability of funds from the United States government.
See "-- Our government contracts allow for termination at anytime without cause
and contain extensive audit rights, either of which could hurt our revenues and
profits" for a description of related risks. We cannot assure you that the
Department of Education will not cancel or modify the contract or that we will
maintain our historic level of revenue or profit from this relationship.
After the Department of Education, our next four largest clients
accounted for approximately 11% of our revenue in fiscal 1999 and 17% of our
revenue in fiscal 1998, and have remaining terms of one to five years.
WE HAVE SIGNIFICANT INVESTMENTS IN SOME CLIENT CONTRACTS WHICH EXPOSE US TO THE
RISK OF THESE CLIENTS' FINANCIAL CONDITION
We must make significant capital investments in order to attract and
retain large outsourcing agreements. We sometimes must purchase assets such as
computing equipment and purchased software, assume financial obligations such as
computer lease and software maintenance obligations, make investments in
securities issued by clients, incur capital expenditures or incur expenses
necessary to provide outsourcing services to a client. We cannot guarantee that
we will be able to finance and properly evaluate these assets and investments.
We record these investments and asset purchases at fair market value. We record
the remainder of the purchase amount as intangible assets, which are then
amortized over the term of each contract. The termination of a client contract
or the deterioration of the financial condition of a client has in the past, and
may in the future, result in an impairment of the net book value of the assets
recorded.
COMPETITION IN OUR MARKETS COULD FORCE US TO LOWER PRICES OR CAUSE US TO LOSE
BUSINESS TO OUR COMPETITORS
We cannot guarantee that we will be able to compete successfully in the
future. We expect to encounter additional competition as we address new markets
and as the computing and communications markets converge. If we are forced to
lower our pricing or if demand for our services decreases, our business,
financial condition, and results of operations will be materially and adversely
affected. Our markets are intensely competitive and highly fragmented. Our
market share represents a small percentage of the total technology services
market. Our clients' requirements and the technology available to satisfy those
requirements continually change. Our principal competitors include Electronic
Data Systems Corporation, IBM Global Services, Computer Sciences Corporation and
several other national and regional competitors. Many of our competitors have
greater financial, technical, and operating resources and a larger client base
than we do. They may be able to use their resources to adapt more quickly to new
or emerging technologies or to devote greater resources to the promotion and
sale of their products and services. Many of our largest competitors have a
greater international presence than us and offer a broader range of services. In
addition, we must frequently compete with a client's own internal information
technology capability, which may constitute a fixed cost for the client.
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OUR ABILITY TO MEET CHANGES IN TECHNOLOGY COULD BE EXPENSIVE AND, IF WE DO NOT
KEEP UP WITH THESE CHANGES, WE COULD LOSE EXISTING CUSTOMERS AND BE UNABLE TO
ATTRACT NEW CUSTOMERS
The markets for our information technology services are subject to
rapid technological changes and rapid changes in client requirements. To
compete, we commit substantial resources to operating multiple hardware
platforms, to customizing third-party software programs and to training client
personnel and our personnel in the use of new technologies. Future hardware and
software products may be able to manipulate large amounts of data more
cost-effectively than existing mainframe platforms which we use. Information
processing is shifting toward client-server and web-based systems, in which
individual computers or groups of personal computers and mid-range systems
replace mainframe systems. This trend could adversely affect our business and
financial results. We have committed substantial resources to developing
outsourcing solutions for these distributed computing environments. We cannot
guarantee that we will be successful in customizing products and services that
incorporate new technology on a timely basis. We also cannot guarantee that we
will continue to be able to deliver the services and products demanded by the
marketplace. Technology costs have also dropped significantly in recent years
due in large part to hardware technology advances. New contracts are generally
priced at lower unit rates than historical contracts. We sometimes renegotiate
client contracts in advance of the scheduled expiration date and will lower our
charges in return for other contractual considerations. If we are not able to
lower our technology costs to keep up with market rates, then our business,
financial condition, and results of operations could be adversely affected.
OUR RELIANCE ON SIGNIFICANT SOFTWARE VENDOR RELATIONSHIPS COULD RESULT IN
SIGNIFICANT EXPENSE OR INABILITY TO SERVE OUR CLIENTS IF WE LOSE THESE
RELATIONSHIPS
Our ability to service our clients depends to a large extent on our use
of various software programs that we license from a small number of primary
software vendors. We may not be able to replace them with alternative vendors.
If our significant software vendors assert claims against us for infringement of
intellectual property rights or other claims of breach of our contracts with
them, or if they attempt to re-price our licenses or require us to cure a
claimed breach under a license agreement, we could be required to expend
significant resources to resolve these matters. If our significant vendors were
to terminate or refuse to renew our contracts with them, we might not be able to
replace the related software programs and would be unable to serve our clients.
As a result our business would be materially adversely affected.
OUR CONTRACTS CONTAIN TERMINATION PROVISIONS AND PRICING RISKS THAT CREATE
UNCERTAIN REVENUE STREAMS AND COULD DECREASE OUR REVENUES AND PROFITABILITY
Some of our contracts with clients permit termination in the event our
performance is not consistent with service levels specified in those contracts.
Some of our government clients can terminate their contracts for any reason or
no reason. Our clients' ability to terminate contracts creates an uncertain
revenue stream. If clients are not satisfied with our level of performance, our
reputation in the industry may suffer, which could also materially and adversely
affect our business, financial condition, and results of operations. Some of our
contracts contain pricing provisions that require the client to pay a set fee
for our services regardless of whether our costs to perform these services
exceed the amount of the set fee. Many of our technology outsourcing and
business process outsourcing contracts provide for credits for our clients if we
fail to achieve specific contract standards. Some of our contracts contain
re-pricing provisions which can result in reductions of our fees for performing
our services. In these situations, we could incur significant unforeseen costs
or financial penalties in performing the contract.
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WE MAY HAVE DIFFICULTIES EXECUTING OUR ACQUISITION STRATEGY, WHICH COULD HURT
OUR FUTURE GROWTH AND FINANCIAL CONDITION BECAUSE APPROXIMATELY ONE-HALF OF OUR
REVENUE INCREASES SINCE FISCAL 1995 ARE ATTRIBUTABLE TO ACQUISITIONS
We intend to continue to expand our business through acquisitions of
companies. Through acquisitions, we intend to expand our geographic presence, to
expand the products and services we offer to existing clients and to enter new
markets. Since our inception in June 1988, we have completed 46 acquisitions.
Approximately one-half of the increase in our revenue during the five years
ended June 30, 1999 is due to acquisitions. We regularly evaluate potential
acquisition candidates. Risks that we have encountered in our acquisitions
include:
o higher acquisition prices due to increased competition for
acquisitions;
o fewer suitable acquisition candidates at acceptable prices;
o insufficient capital resources for acquisitions;
o inability to successfully integrate or operate acquired
companies;
o loss of key management and other employees of acquired companies;
and
o departure of key clients of acquired companies.
Although we have not experienced the problem to date, governmental and
regulatory constraints could prevent some acquisitions in the future. We cannot
assure you that any acquisitions, if consummated, will be advantageous to us.
Without additional acquisitions, we may not grow at historical rates. If our
acquisition strategy fails, our business, financial condition and results of
operations could be materially and adversely affected.
FAILURE TO PROPERLY MANAGE OUR OPERATIONS AND OUR GROWTH COULD HURT OUR ABILITY
TO SERVICE OUR EXISTING CLIENTS, AND COULD IMPEDE OUR ABILITY TO ATTRACT NEW
BUSINESS
We have rapidly expanded our operations in recent years. We intend to
continue expansion in the foreseeable future to pursue existing and potential
market opportunities. This rapid growth places a significant demand on our
management and operational resources. In order to manage growth effectively, we
must implement and improve our operational systems, procedures, and controls on
a timely basis. If we fail to implement these systems procedures and controls on
a timely basis, we may not be able to service our clients' needs, hire and
retain new employees, pursue new business, complete future acquisitions or
operate our businesses effectively. We could also trigger contractual credits to
clients. Failure to properly integrate acquired operations with vendors' systems
could result in increased cost. As a result of any of these problems associated
with expansion, our business, financial condition and results of operations
could be materially and adversely affected.
OUR GOVERNMENT CONTRACTS ALLOW FOR TERMINATION AT ANY TIME WITHOUT CAUSE AND
CONTAIN EXTENSIVE AUDIT RIGHTS, EITHER OF WHICH COULD HURT OUR REVENUES AND
PROFITS
Loss or termination of one or more large government contracts could
have a material adverse effect on our business and financial results.
Approximately 35% of our revenue in fiscal 1999 were derived from contracts with
the United States government or its agencies. We have over 40 active prime
contracts and numerous active subcontracts with the United States government or
its agencies. The largest of these contracts accounted for approximately 7% of
our revenue for fiscal 1999 and 8% in fiscal 1998.
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Government contracts, by their terms, generally can be terminated for
convenience by the government. This means that the government may terminate the
contract at any time, without cause. In some instances, we will receive
compensation only for the services provided or costs incurred at the time of
termination. Many of our government contracts contain base periods of one or
more years, as well as one or more option periods that may cover more than half
of the potential contract duration. The government generally has the right not
to exercise option periods. Its failure to exercise option periods could curtail
the contract term of some of our government contracts. The government's
termination of, or failure to exercise option periods for, significant
government contracts could have a material adverse effect on our business and
financial results.
Government contracts are generally subject to audits and investigations
by government agencies. These audits and investigations involve a review of the
contractor's performance on its contracts, as well as its pricing practices, its
cost structure, and its compliance with applicable laws, regulations and
standards. If the government finds that we improperly charged any costs to a
contract, the costs are not reimbursable. If already reimbursed, the cost must
be refunded to the government. If the government discovers improper or illegal
activities in the course of audits or investigations, the contractor may be
subject to various civil and criminal penalties and administrative sanctions,
which may include termination of contracts, forfeiture of profits, suspension of
payments, fines and suspensions or debarment from doing business with the
government. In recent years, the government has substantially increased the
personnel and resources it devotes to audits and investigations and has
encouraged auditors and investigators to emphasize the detection of fraud or
improper activities. We believe that this high level of industry scrutiny will
continue for the foreseeable future. The government could subject us to similar
scrutiny in the future. Any resulting penalties or sanctions could have a
material adverse effect on our business and financial results.
YEAR 2000 PROBLEMS FOR US OR OUR CLIENTS COULD INCREASE OUR LIABILITIES AND
EXPENSES AND DECREASE OUR REVENUES AND PROFITABILITY
We use many computer software programs and operating systems across our
organization. If our programs or systems contain source code that is unable to
interpret appropriately the upcoming calendar year 2000, modification or
replacement of programs or systems may be necessary. We are evaluating and
managing the risks associated with Year 2000 software failures, and we are
attempting to ensure a smooth Year 2000 transition. We believe, however, that it
is not possible to determine with complete certainty that all Year 2000 problems
affecting us or our clients have been identified or corrected. The number of
devices that could be affected and the interactions among these devices are
simply too numerous. In addition, no one can accurately predict how many Year
2000 problem-related failures will occur or the severity, duration or financial
consequences of these perhaps inevitable failures. As a result, we believe that
the following consequences are possible:
o a significant number of operational inconveniences and
inefficiencies for us and our clients that will divert
management's time and attention and financial and human resources
from its ordinary business activities;
o a few serious system failures that will require significant
efforts by us or our clients to prevent or alleviate material
business disruptions;
o several routine business disputes and claims for pricing
adjustments or penalties due to Year 2000 problems by our
clients, which will be resolved in the ordinary course of
business; and
o a few serious business disputes alleging that we failed to comply
with the terms of contracts or industry standards of performance,
some of which could result in litigation or contract termination.
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We are attempting to coordinate with our clients, suppliers and other
parties regarding their Year 2000 compliance. Most of our clients maintain their
own application programs, although they use our computer and network resources.
We do undertake to test and modify system software for our clients, and we rely
on vendors of systems software to provide Year 2000 compliant products. In some
situations, we have agreed to modify or upgrade our client application programs
to remedy any existing Year 2000 problems. We have estimated our costs to
perform these services and have taken steps to plan for these costs. We cannot,
however, guarantee that these steps will be sufficient or that our estimates are
accurate. If we fail to adequately assess these costs, our business could be
adversely affected. In addition, our business could be adversely affected if our
clients experience Year 2000 problems with applications, causing management
resources to be devoted to resulting problems. Consequently, affected clients
could use less of our computing resources, alter their pattern of usage of
resources or dedicate less of their information processing budgets to projects
we conduct. We could also be adversely affected if potential new clients decide
not to pursue outsourcing projects because they are focusing their information
technology resources on Year 2000 issues in their own organizations.
We have identified and analyzed both internally developed and acquired
software that utilizes date embedded codes that may experience operational
problems when the Year 2000 is reached. We completed substantial necessary
modifications to the identified software by June 1999. However, we expect our
efforts regarding Year 2000 compliance to continue thereafter as necessary. We
are spending or incurring significant financial and operating expenses and
resources to become Year 2000 compliant. However, we cannot guarantee that our
systems or our clients' systems will be entirely Year 2000 compliant. Of the
approximately $15 million of estimated expenditures for Year 2000 remediation
projects, approximately $11 million relates to costs incurred in the ordinary
course of business and approximately $4 million is incremental costs solely
attributable to Year 2000 related problems. Substantially all of the
expenditures for our Year 2000 remediation projects had been incurred through
June 30, 1999. Although we are not contractually responsible to ensure our
clients' application program are compliant, we will generally continue to
allocate certain resources in fiscal year 2000 to assist some of our clients in
completing their remediation projects and validating their compliance and to
modify our contingency plans based on the results of their projects. The costs
required to achieve substantial Year 2000 compliance, or our failure to do so,
could have a material adverse effect on our business, financial condition or
results of operations.
LEGISLATION REGULATING ATM FEES COULD REDUCE OUR REVENUES AND PROFITABILITY FROM
OUR ATM TRANSACTION PROCESSING SERVICES
State, federal and local governmental entities have proposed
legislation and regulations to regulate and limit or eliminate the fees that may
be collected by automated teller machine owners. The regulation and limitation
or elimination of ATM fees may reduce the economic viability of many ATMs. If
this type of legislation is enacted or applied to us, the number of ATMs
operated in geographic areas affected by the legislation could decrease
significantly, adversely affecting our results of operations as they relate to
our ATM business. Approximately 7% of our revenue for fiscal 1999 were derived
from our ATM transaction processing business.
OUR HIGH TURNOVER IN TECHNICALLY-SKILLED EMPLOYEES REQUIRES THAT WE DEVOTE
SUBSTANTIAL RESOURCES TO ATTRACT AND RETAIN THEM; THE FAILURE TO ATTRACT AND
RETAIN TECHNICAL PERSONNEL AND SKILLED MANAGEMENT COULD HURT OUR ABILITY TO GROW
AND MANAGE OUR BUSINESS
Our success depends to a significant extent upon our ability to
attract, retain and motivate highly skilled and qualified personnel. If we fail
to attract, train, and retain sufficient numbers of these technically-skilled
people, our business, financial condition, and results of operations will be
materially
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<PAGE> 11
and adversely affected. Competition for personnel is intense in the information
technology services industry, and recruiting and training personnel requires
substantial resources. We must continue to grow internally by hiring and
training technically-skilled people in order to perform services under our
existing contracts and new contracts that we will enter into. The people capable
of filling these positions are in great demand and recruiting and training these
personnel require substantial resources. We have to pay an increasing amount to
hire and retain a technically-skilled workforce. Our business also experiences
significant turnover of technically-skilled people. Our success also depends on
the skills, experience, and performance of key members of our management team.
The loss of any key employee could have an adverse effect on our business,
financial condition and results of operations and prospects. Other than with
Darwin Deason, we have not entered into employment agreements with any of our
key personnel, although we have entered into severance agreements with each of
our executive officers and we may in the future enter into employment agreements
with our key personnel.
DARWIN DEASON HAS SUBSTANTIAL CONTROL OVER OUR COMPANY AND CAN AFFECT VIRTUALLY
ALL DECISIONS MADE BY OUR STOCKHOLDERS
Darwin Deason, our Chairman of the Board, beneficially owns 3,299,686
shares of Class B common stock and 2,574,772 shares of Class A common stock as
of September 22, 1999. Mr. Deason controls approximately 44.84% of the total
voting power of ACS. As a result, Mr. Deason has the requisite voting power to
significantly affect virtually all decisions made by ACS and our stockholders,
including the power to block corporate actions such as an amendment to most
provisions of our certificate of incorporation. In addition, Mr. Deason may
significantly influence the election of directors and any other action requiring
shareholder approval. Mr. Deason serves as the one-person nominations committee
to our Board of Directors and thus recommends management's slate of directors to
be proposed by the Board to our shareholders. In addition, pursuant to a
recently passed amendment to our certificate of incorporation, Mr. Deason has
the authority to fill any vacancy resulting from the resignation or removal of a
director. In the spring of 1999, Mr. Deason was succeeded by Jeffrey A. Rich as
Chief Executive Officer. Mr. Deason has an employment contract including
severance arrangements, which has an expiration date of May 2004, and is
annually renewable thereafter.
LEGAL PROCEEDINGS, INCLUDING A $17 MILLION JUDGMENT, COULD RESULT IN MATERIAL
CHARGES AGAINST EARNINGS
On December 16, 1998, a state district court in Houston, Texas entered
final judgment against ACS for approximately $17 million in a lawsuit brought by
former employees of Gibraltar Savings Association and/or First Texas Savings
Association. These employees alleged that they were entitled to the value of
401,541 shares of ACS stock under options issued to these employees in 1988 in
connection with a former data processing services agreement between Gibraltar
Savings Association/First Texas Savings Association and ACS. The judgment
against us was for approximately $17 million, which include attorneys' fees and
pre-judgment interest, but excludes additional attorneys' fees of approximately
$850,000 which could be awarded in the event the plaintiffs are successful upon
appeal and final judgment. We continue to believe that we have a meritorious
defense to all or a substantial portion of the plaintiffs claims. We filed our
appeal of the judgment on March 15, 1999 and plan to vigorously pursue the
appeal. The plaintiffs also have filed a notice of appeal. Should the
proceedings not be favorably resolved on appeal, we would be subject to a
material charge.
Caremark, Inc., one of our significant clients, filed a lawsuit in the
spring of 1999 seeking to terminate its outstanding contract with us as well as
damages. We have also sued Caremark and its parent, MedPartners, Inc., for
tortious interference and damages. We are also subject to other legal
proceedings, claims and disputes which arise in the ordinary course of our
business. If unfavorably resolved, these
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<PAGE> 12
proceedings could have a material adverse effect on our financial position,
results of operation and liquidity.
PROVISIONS OF OUR CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW COULD
DETER TAKEOVER ATTEMPTS THAT STOCKHOLDERS MAY THINK ARE IN THEIR BEST INTERESTS
Some provisions in our certificate of incorporation and bylaws could
also delay, defer, prevent or make more difficult a merger, tender offer, or
proxy contest involving ACS. Our stockholders might view transactions such as
these as being in their best interests because, for example, a change of control
might result in a price higher than the market price for shares of our Class A
common stock. Among other things, these provisions:
o require an 80% vote of the stockholders to amend some provisions
of our certificate of incorporation;
o require an 80% vote of the stockholders to amend some provisions
of our bylaws;
o permit only our Chairman, President or a majority of the Board of
Directors to call stockholder meetings;
o authorize our Board of Directors to issue up to 3,000,000 shares
of preferred stock in series with the terms of each series to be
fixed by our Board of Directors;
o authorize our Board of Directors to issue Class B common stock,
which shares are entitled to ten votes per share;
o divide our Board of Directors into three classes so that only
approximately one-third of the total number of directors will be
elected each year;
o permit directors to be removed, with or without cause, only by
vote of at least 80% the combined voting power; and
o specify advance notice requirements for stockholder proposals and
director nominations to be considered at a meeting of
stockholders.
In addition, with some exceptions, Section 203 of the Delaware General
Corporation Law restricts mergers and other business combinations between us and
any holder of 15% or more of our voting stock. We also have a stockholder rights
plan. Under this plan, after the occurrence of specified events, our
stockholders will be able to buy stock from us or our successor at reduced
prices. These rights will not extend, however, to persons participating in
takeover attempts without the consent of our Board of Directors. Accordingly,
this plan could delay, defer or prevent a change of control of ACS. See
"Description of Capital Stock - Stock Purchase Rights" for additional
information about the rights plan.
Further, we have entered into severance agreements with each of our
executive officers, which may have the effect of discouraging an unsolicited
takeover proposal. Finally, Mr. Deason's ownership of approximately 45% of the
voting power of ACS could have the effect of delaying, deterring or preventing a
takeover of ACS. See "--Darwin Deason has substantial control over our company
and can affect virtually all decisions made by our stockholders" for additional
information about Mr. Deason's ownership.
INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS COULD REQUIRE US TO INCUR SUBSTANTIAL
COSTS TO DEFEND THE CLAIMS, CHANGE OUR SERVICES, PURCHASE NEW LICENSES OR
REDESIGN OUR USE OF CHALLENGED TECHNOLOGY
We and other companies in our industry rely heavily on the use of
intellectual property. We do not own the majority of the software that we use to
run our business; instead we license this software
8
<PAGE> 13
from a small number of primary vendors. If these vendors assert claims that we
or our clients are infringing on their software or related intellectual
property, we could incur substantial costs to defend these claims. In addition,
if any of our vendors' infringement claims are ultimately successful, our
vendors could require us (1) to cease selling or using products or services that
incorporate the challenged software or technology, (2) to obtain a license or
additional licenses from our vendors, or (3) to redesign our products and
services which rely on the challenged software or technology. We are not
currently involved in any material intellectual property litigation, but could
be in the future to protect our trade secrets or know-how, or to defend
ourselves or our clients against alleged infringement claims.
AVAILABILITY OF SIGNIFICANT AMOUNTS OF CLASS A COMMON STOCK FOR SALE COULD CAUSE
THE MARKET PRICE OF OUR CLASS A COMMON STOCK TO DROP
Our stockholders hold a substantial number of shares of common stock
which they may be able to sell in the public market in the near future. In
addition, there are a substantial number of shares of the Class A common stock
that may be issued and subsequently sold upon exercise of employee stock
options, and upon conversion of our Class B common stock and our 4% convertible
subordinated notes. The sale or issuance of additional shares of Class A common
stock following this offering could adversely affect the prevailing market price
of the Class A common stock. See "Description of Capital Stock" for a
description of these shares.
WE MAY, IN THE FUTURE, BE EXPOSED TO RISKS RELATED TO INTERNATIONAL OPERATIONS
WHICH COULD INCREASE OUR COSTS AND HURT OUR BUSINESS
We currently have limited operations in many countries around the world
but may increase our international presence in the future. Risks that affect
international operations include:
o fluctuations in currency exchange rates;
o complicated licensing and work permit requirements;
o variations in the protection of intellectual property rights;
o restrictions on the ability to convert currency; and
o additional expenses and risks inherent in conducting operations in
geographically distant locations, with clients speaking different
languages and having different cultural approaches to the conduct
of business.
OTHER RISKS, UNKNOWN OR IMMATERIAL TODAY, MAY BECOME KNOWN OR MATERIAL IN THE
FUTURE
We have attempted to identify material risk factors currently affecting
ACS. However, additional risks that we do not yet know of, or that we currently
think are immaterial, may occur or become material. These risks could impair our
business operations or adversely affect revenues or profitability.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy the reports, statements or other information we file at the SEC's public
reference room in Washington, D.C. located at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The SEC also maintains regional offices where you can
read and copy the reports. These are located at 500 West Madison Street, Room
1400, Chicago, Illinois 60606 and at 7 World Trade Center, Suite 1300, New York,
New York 10048. You can request copies of these documents, upon payment of
photocopying fees, by writing to the SEC. Please call the SEC at 1-800-SEC-0330
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<PAGE> 14
for further information on the operation of the public reference rooms. Our SEC
filings are also available to the public on the SEC's internet site
(http://www.sec.gov). These documents are also available for viewing and copying
at the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
This prospectus is part of a registration statement on Form S-3 that we
filed with the SEC. This prospectus does not contain all the information in that
registration statement. For further information with respect to us and the
securities offered by this prospectus, you should review the registration
statement. You can obtain the registration statement from the SEC and the NYSE
at the public reference facilities we referred to above.
The SEC allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus, except for
any information superseded by information contained directly in this prospectus.
This prospectus incorporates by reference the documents set forth below that we
and ACS BRC Holdings, Inc., formerly known as BRC Holdings, Inc., have
previously filed with the SEC. These documents contain important information
about us and our financial condition. There may be statements in a document
incorporated by reference in this prospectus that are modified or updated by
statements in this prospectus or in a document filed after the date of this
prospectus. Any prior statements that are so modified or updated in this
prospectus or subsequently filed documents are not considered to be a part of
this prospectus.
The following documents we have filed with the SEC are incorporated by
reference into this prospectus:
<TABLE>
<CAPTION>
Filing Period
------ ------
<S> <C>
Quarterly Report on Form 10-Q...................... Quarter Ended September 30, 1999
Annual Report on Form 10-K......................... Year Ended June 30, 1999
Current Report on Form 8-K......................... Dated October 12, 1999
Proxy Statement on Schedule 14A.................... Dated September 28, 1999
The description of common stock purchase
rights included in the Company's registration
statement on Form 8-A............................ Dated August 21, 1997
The description of the Class A Common
Stock included in the Company's registration
statement on Form 8-A /A1 (SEC File
No. 33-024782).................................. Dated September 26, 1994
</TABLE>
The following information about ACS BRC Holdings, Inc., which was
called BRC Holdings, Inc. at the time it reported the information is
incorporated by reference into this prospectus:
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<PAGE> 15
<TABLE>
<CAPTION>
Information Period
----------- ------
<S> <C>
Financial Statements of BRC Holdings, Inc. as
of December 31, 1996 and 1997 and for the three
years ended December 31, 1997 located on pages 22
through 49 of the BRC Annual Report on Form 10-K...... Year Ended December 31, 1997
Financial Statements of BRC Holdings, Inc.
(unaudited) as of September 30, 1998 and for the
quarter ended September 30, 1998 located on pages
1 through 9 of the BRC Quarterly Report on Form
10-Q/A................................................ Quarter Ended September 30, 1998
</TABLE>
All documents filed by us as required by Section 13(a), 13(c), 14 or
15(d)of the Securities Exchange Act of 1934 subsequent to the date of this
prospectus will be deemed to be incorporated by reference into this prospectus
and to be apart hereof from the date of filing of these documents. Documents
incorporated by reference are available from ACS without charge, excluding all
exhibits unless specifically incorporated by reference as an exhibit to this
prospectus. Prospective investors may obtain documents incorporated by reference
in this prospectus by requesting them in writing or by telephone from the
company at its executive offices: Attention: General Counsel, 2828 North Haskell
Avenue, Dallas, Texas 75204, (214) 841-6111.
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
information different from that contained in this prospectus. The reference to
our worldwide web address in this prospectus does not constitute incorporation
by reference of the information contained at the site. We may only use this
prospectus to sell securities if it is accompanied by a prospectus supplement.
We are only offering these securities in states where the offer is permitted.
You should not assume that the information in this prospectus or the applicable
prospectus supplement is accurate as of any date other than the dates on the
front of those documents.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
Some statements contained in, or incorporated by reference into, this
prospectus contain forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. These statements involve known and unknown risks, uncertainties and other
factors that may cause our or our industry's actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by these
forward-looking statements. Statements about ACS' outlook and all other
statements in this prospectus other than historical facts are forward-looking
statements. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "anticipates," "plans,"
"believes," "estimates," "predicts," "potential," "intends," "foresees,"
"projects," "forecasts" or "continue" or the negative of these terms or other
comparable terminology. These forward looking statements rely on a number of
assumptions concerning future events and are subject to a number of
uncertainties and factors, many of which are outside of our control, that could
cause actual results to differ materially from these statements. While we
believe that the assumptions concerning future events are reasonable, we caution
that there are inherent difficulties in predicting important factors, especially
the loss of any significant customers, the competition in the information
technology industry and the impact of competition on pricing, the timing and
magnitude of technological advances, reliance on key software vendors, the
performance of recently acquired businesses and prospects for future
acquisitions, uncertainties surrounding budget reductions or changes in funding
priorities or existing government programs, Year 2000 problems affecting ACS'
and its clients' business, and the costs of attracting and retaining highly
skilled personnel. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Moreover, neither we nor any
other person
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<PAGE> 16
assumes responsibility for the accuracy and completeness of any forward-looking
statements. We are under no duty to update any of the forward-looking statements
after the date of this prospectus to conform these statements to actual results.
Any or all of our forward-looking statements in this prospectus and in
any other public statements we make may turn out to be wrong. These statements
can be affected by inaccurate assumptions we might make or by known or unknown
risks and uncertainties. Consequently, no forward-looking statement can be
guaranteed. Actual future results may vary materially. We undertake no
obligation to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise. You are advised, however,
to consult any further disclosures we make on related subjects in our reports to
the SEC. This discussion is provided as permitted by the Private Securities
Litigation Reform Act of 1995.
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<PAGE> 17
AFFILIATED COMPUTER SERVICES, INC.
We are based in Dallas, Texas and have offices primarily in North
America as well as Central and South America, Europe and the Middle East. We
provide a full range of information technology services to clients which have
time-critical, transaction-intensive information processing needs. Our services
include:
o technology outsourcing;
o business process outsourcing; and
o professional and systems integration services.
A description of each of these services is provided in the following
paragraphs. Generally, when our clients engage us under an outsourcing
arrangement, they delegate to us core technology or business functions which
they may have previously performed themselves, but which we are able to perform
more economically for them on a contract basis.
Our technology outsourcing services consist of processing our clients'
data on a remote basis from our data centers to deliver significant cost savings
and service improvements to our clients. The principal technology outsourcing
services we provide include data center outsourcing, which involves processing,
storing and reporting on large volumes of clients' data, and network management
services, which involve managing clients' computer networks. In order to provide
these services, we utilize a variety of hardware and software systems.
Our business process outsourcing services, an extension of technology
outsourcing, consist of managing, through an outsourcing arrangement, our
clients' non-core, but mission-critical, business processes. The principal
business process outsourcing services we provide include loan and mortgage
processing, claims processing, accounts payable processing, data capture,
storage and retrieval services and automated teller machine transaction
processing.
Our professional and systems integration services include technology
consulting, information and computer systems design and engineering, computer
software applications maintenance and development and providing technical staff
to augment the client's permanent staff as required for particular projects.
Our primary markets are the commercial and federal government sectors.
The commercial sector accounts for approximately two-thirds of our annual
revenues, and the government sector accounts for approximately one-third of our
annual revenues. Approximately 90% of our revenues for the past three fiscal
years were recurring revenues. Recurring revenues are derived from services that
our clients use each year in connection with their ongoing businesses. Our
revenues have grown from $534 million in fiscal 1995 to $1.6 billion in fiscal
1999, representing a compounded annual growth rate of approximately 32%. Of this
growth, approximately half has come from internally generated services and
approximately half from acquisitions.
In pursuit of our ultimate goal of enhancing shareholder value, we
pursue a balanced strategy of internal and external growth strategies. Our
internal growth strategy includes:
o expanding our recurring revenue base;
o maximizing economies of scale by diligently controlling our cost
structure, adding new clients and enhancing our relationships with
existing clients;
o providing flexible solutions to those clients;
o investing in technology; and
o attracting and retaining high quality employees.
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<PAGE> 18
Our external growth strategy involves an aggressive but disciplined
acquisition program, focused on:
o expanding our service offerings, client base and geographic coverage;
and
o the rapid, effective assimilation of the companies we acquire.
We are incorporated in Delaware and our principal offices are located
at 2828 North Haskell Avenue, Dallas, Texas 75204; telephone (214) 841-6111. We
maintain a worldwide web site at www.acs-inc.com.
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<PAGE> 19
THE ISSUER TRUSTS
Each trust is a statutory business trust created under Delaware law by
the filing of a certificate of trust with the Delaware Secretary of State. Each
trust will be governed by a trust agreement among us, as depositor, Wilmington
Trust Company, as Delaware trustee, a property trustee, and two individuals
selected by the holders of the common securities to act as administrators with
respect to the trust and the holders of the capital securities and common
securities. We, as the holder of the common securities, intend to select two
individuals who are our or one of our affiliates' employees or officers to serve
as the administrators. Each trust exists for the exclusive purposes of:
o issuing and selling its capital securities and common securities;
o using the proceeds from the sale of its capital securities and common
securities to invest in a series of our debt securities; and
o engaging in only those other activities necessary, convenient or
incidental to the above purposes, such as registering the transfer of
the capital securities and common securities.
Accordingly, debt securities will be the sole assets of each trust, and payments
under the debt securities owned by a trust will be the sole revenue of each
trust.
We will directly or indirectly own all of the common securities of each
trust. The common securities of a trust will rank equally, and payments will be
made on the common securities pro rata, with the capital securities of the
trust, except that upon the occurrence and continuance of an "event of default"
with respect to debt securities arising as a result of our failure to pay any
amounts in respect of the debt securities owned by a trust when due, our rights
as holder of the common securities to payment in respect of distributions and
payments upon liquidation, redemption or otherwise will be subordinated to the
rights of the holders of the capital securities of that trust. Unless otherwise
specified in the applicable prospectus supplement, we will acquire, directly or
indirectly, common securities in an aggregate liquidation amount equal to at
least 3% of the total capital of that trust. Unless otherwise specified in the
applicable prospectus supplement, each trust will have a term of approximately
40 years from the date on which it initially issues its capital securities, but
may dissolve earlier as provided in the applicable trust agreement and described
in the applicable prospectus supplement. Unless otherwise specified in the
applicable prospectus supplement, the name and address of the Delaware trustee
for each trust will be Wilmington Trust Company, 1100 N. Market Street,
Wilmington, Delaware 19890.
It is anticipated that no trust will be subject to the reporting
requirements of the Securities Exchange Act of 1934.
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<PAGE> 20
USE OF PROCEEDS
Except as otherwise provided in the applicable supplement to this
prospectus, we or our affiliates will use the net proceeds from the sale of the
securities we are offering in this prospectus for general corporate purposes.
These general corporate purposes may include:
o repayment of indebtedness, including indebtedness incurred in
connection with acquisitions;
o redemption or repurchase of our securities;
o additions to working capital; or
o capital expenditures, including, development and future acquisitions.
We will set forth specific information about the use of proceeds from the sale
of the securities in the applicable prospectus supplement. If we intend to use
the proceeds to repay outstanding debt, we will provide details about the debt
that is being repaid in the applicable prospectus supplement. Before any net
proceeds are applied to the uses described above, the proceeds may be invested
in short-term or marketable securities.
If Mr. Deason sells any Class A common stock through this prospectus,
we will not receive any proceeds from his sale of shares of Class A common
stock.
The trusts will use all proceeds from the sale of trust securities to
purchase debt securities from us.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
for each of the five fiscal years ended June 30, 1999, which ratios are based on
our historical consolidated financial statements.
<TABLE>
<CAPTION>
Fiscal Years Ended June 30, For The Three
---------------------------------------------------- Months Ended
1995 1996 1997 1998 1999 September 30, 1999
-------- -------- -------- -------- -------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges .... 3.0 4.1 3.9 3.7 4.2 4.5
</TABLE>
If the $13.0 million charge for merger costs incurred in connection
with the ACS Government Solutions merger is excluded, then the ratio for fiscal
year 1998 is 4.0.
These computations include us and our subsidiaries. For these ratios,
"earnings" means net income plus:
o fixed charges, excluding capitalized interest; and
o income taxes.
For these ratios, "fixed charges" is determined by adding:
o interest on all debt and amortization of debt discount and expense;
o capitalized interest; and
o an interest factor attributable to rentals.
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<PAGE> 21
RECENT PRO FORMA INFORMATION
In December 1998, ACS purchased 8.7 million shares of the common stock
of BRC Holdings, Inc., now known as ACS BRC Holdings, Inc., at a purchase price
of $19 per share, representing approximately 63% of the issued and outstanding
shares at the time of the purchase. In February 1999, ACS completed the purchase
of the remaining 37% of the outstanding shares of BRC Holdings. The acquisition
was accounted for under the purchase method of accounting with assets acquired
of $298,500,000 (including cash and other liquid investments of approximately
$101,700,000) and liabilities assumed of $25,000,000, for a net purchase price
of $273,500,000.
The unaudited pro forma condensed consolidated statement of income for
the year ended June 30, 1999 set forth below presents the results of operations
of ACS for the year as if the following transactions had occurred at the
beginning of the year: (1) the consummation of the acquisition of BRC Holdings;
and (2) the six other acquisitions excluding BRC Holdings completed subsequent
to July 1, 1998. The unaudited pro forma condensed consolidated statement of
income for the year ended June 30, 1999 combines, with appropriate adjustments,
our audited consolidated statement of income for the year ended June 30, 1999
with the unaudited consolidated statement of income of BRC Holdings and the six
other acquisitions for the same twelve-month period to the extent they are not
included in our results of operations. Some reclassifications were made to
conform the historical financial statements of BRC Holdings and the six other
acquisitions with our historical financial statements.
The unaudited pro forma condensed consolidated financial statements
have been prepared on the basis of preliminary assumptions and estimates. The
pro forma adjustments represent our preliminary determinations of these
adjustments and are based on assumptions we consider reasonable under the
circumstances. Final amounts could differ from those set forth in this
prospectus. The unaudited pro forma consolidated financial statements may not be
indicative of the results of operations that would have been achieved if the
acquisition of BRC Holdings and the six other acquisitions had been effected on
the dates indicated or that may be achieved in the future. The unaudited pro
forma consolidated financial statements and notes to the financial statements
should be read in conjunction with our "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the annual consolidated
financial statements of ACS that are incorporated in this prospectus by
reference.
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<PAGE> 22
AFFILIATED COMPUTER SERVICES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Year Ended June 30, 1999
(Unaudited)
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
--------------------------------------------
BRC Holdings BRC Holdings
BRC Acquisition Divested BRC Holdings Other
ACS Holdings(A) Adjustments Operations(B) Subtotal Acquisitions(G)
---------- ----------- ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Revenues........................ $1,642,216 $ 54,540 $ -- $ (5,690) $ 48,850 $ 17,999
Operating expenses
Wages and benefits ......... 713,984 27,557 (925)(C) (4,171) 22,461 6,690
Services and supplies ...... 500,631 13,791 (516)(C) (1,731) 11,544 5,899
Rent, lease and
maintenance .............. 183,116 4,123 (151)(C) (357) 3,615 968
Depreciation and
amortization ............. 66,723 3,105 (227)(D) (235) 2,643 429
Other operating expenses ... 19,178 612 275 887 1,182
---------- ---------- ---------- ---------- ---------- ----------
Total operating
expenses ............. 1,483,632 49,188 (1,819) (6,219) 41,150 15,168
---------- ---------- ---------- ---------- ---------- ----------
Operating Income ........... 158,584 5,352 1,819 529 7,700 2,831
Other non-operating
(income) expense, net .... 13,047 (3,282) 7,134 (E) 32 3,884 88
---------- ---------- ---------- ---------- ---------- ----------
Pretax profit from
continuing operations .... 145,537 8,634 (5,315) 497 3,816 2,743
Income tax expense ......... 59,307 3,419 $ (1,364)(F) 199 2,254 1,217
---------- ---------- ---------- ---------- ---------- ----------
Income from continuing
operations ............... $ 86,230 $ 5,215 $ (3,951) $ 298 $ 1,562 $ 1,526
========== ========== ========== ========== ========== ==========
Earnings per common share
Basic ...................... $ 1.77
Diluted .................... $ 1.66
Shares used in computing
earnings per common share:
Basic ...................... 48,839 -- -- -- -- --
Diluted .................... 55,668 -- -- -- -- --
<CAPTION>
Pro Forma
------------------------
Other
Acquisition
Adjustments(H) Combined
-------------- ----------
<S> <C> <C>
Revenues........................ $ (1,369) $1,707,696
Operating expenses
Wages and benefits ......... (151) 742,984
Services and supplies ...... (1,401) 516,673
Rent, lease and
maintenance .............. -- 187,699
Depreciation and
amortization ............. 435 70,230
Other operating expenses ... (5) 21,242
---------- ----------
Total operating
expenses ............. (1,122) 1,538,828
---------- ----------
Operating Income ........... (247) 168,868
Other non-operating
(income) expense, net .... 179 17,198
---------- ----------
Pretax profit from
continuing operations .... (426) 151,670
Income tax expense ......... (166) 62,612
---------- ----------
Income from continuing
operations ............... $ (260) $ 89,058
========== ==========
Earnings per common share
Basic ...................... $ 1.81
Diluted .................... $ 1.70
Shares used in computing
earnings per common share:
Basic ...................... 273(I) 49,112
Diluted .................... 273(I) 55,941
</TABLE>
<PAGE> 23
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
FOR THE YEAR ENDED JUNE 30, 1999
(A) Information obtained from the unaudited financial statements of BRC
Holdings for the six months ended December 31, 1998 to the extent they
are not included in ACS's results of operations.
(B) Reflects an adjustment to eliminate operating results for businesses of
BRC Holdings which we either divested or shut down after consummation
of the merger. The operating results for these businesses are included
in BRC Holdings' historical financial information noted in (A) above.
(C) Reflects employee terminations (i.e., salary and related expenses of
general and administration personnel) and elimination of redundant
public company and facility costs effected immediately after
consummation of the acquisition.
(D) Reflects the additional amortization of expense of approximately $2.0
million resulting from the allocation of the excess cost of the
acquisition to software, non-compete agreements and goodwill, offset by
a reduction in depreciation and amortization expense of approximately
$2.2 million as a result of recording BRC Holdings' fixed assets at
their respective fair values based upon an independent appraisal.
(E) Reflects interest expense for the financing of the transaction based
upon the terms of our increase in our revolving line of credit.
(F) Reflects the income tax effect for the pro forma adjustments at the
statutory tax rate adjusted for the impact of non-deductible goodwill
amortization.
(G) The column for the six other acquisitions reflects the aggregate
historical results of operations for the four acquisitions we made
during the year ended June 30, 1999 excluding BRC Holdings. Two other
acquisitions we made during the year ended June 30, 1999 were effective
July 1, 1998 and are therefore included in our audited historical
consolidated statement of operations for the year ended June 30, 1999.
(H) Reflects the aggregate pro forma adjustments from the four acquisitions
we made during the period noted in (G) above. The adjustments represent
primarily: (1) decreases to revenue to conform revenue recognition
policies to those of ACS, (2) net decreases to expenses upon the
consolidation of the acquired business operations, including the
elimination of costs associated with the prior owners and overhead
allocations by the prior owners which would not be reflective of the
ongoing operations of the acquired operations, (3) the net decrease to
depreciation and amortization expense from the allocation of the
purchase price of each acquisition to the assets and liabilities of the
business acquired, (4) the increase to amortization expense resulting
from the allocation of the excess cost of the acquisition to client
contracts, software and goodwill after recording the fair value of the
asset acquired and the liabilities assumed, (5) the net increase to
interest expense reflecting the financing of the transactions, (6) the
related
<PAGE> 24
tax effect of the pro forma adjustments at the statutory tax rates
adjusted for the impact of non-deductible goodwill amortization, and
(7) the elimination of sales between ACS and the acquired businesses
during the period presented.
(I) Reflects an adjustment to the shares used in computing earnings per
common share issued in connection with the purchase of the six other
acquisitions as if the issuance had occurred at the beginning of the
period.
20
<PAGE> 25
SELLING STOCKHOLDER
Darwin Deason founded ACS in 1988 and until February 1999 served as our
Chairman and Chief Executive Officer. Since February 1999, he has continued to
serve as our Chairman of the Board. As of September 22, 1999 he owned
beneficially 2,574,772 shares of our Class A common stock and 3,299,686 shares
of our Class B common stock. Up until just prior to the acquisition of Computer
Data Systems, Inc. (now known as ACS Government Solutions, Inc.) in December
1997 by merger, all of Mr. Deason's ACS stock holdings were in Class B common
stock. Just prior to that merger, Mr. Deason converted sufficient shares of his
Class B common stock on a one for one basis into Class A common stock in order
to establish the Class A common stock as a majority voting class. This creation
of a majority voting class in our Class A common stock enabled ACS to account
for a qualifying acquisition, such as the ACS Government Solutions merger, as a
"pooling of interests". At the time of Mr. Deason's conversion of Class B common
stock, there was an understanding between Mr. Deason and ACS that we would
include his shares in a subsequent registration statement so that his shares
could become freely tradeable, like those held by other ACS shareholders.
Mr. Deason may or may not sell pursuant to the registration statement
of which this prospectus is a part any or all of the Class A common stock he
received pursuant to the conversion of Class B common stock just prior to the
ACS Government Solutions merger. Whether Mr. Deason makes any sales or not, the
registration statement of which this prospectus is a part is intended to satisfy
the obligation he has under the federal securities laws to make sales pursuant
to an effective registration statement or pursuant to some exemption from
registration.
The following table sets forth information with respect to Mr. Deason's
beneficial ownership of Class A common stock and of Class B common stock, both
as adjusted to reflect the sale by Mr. Deason of up to 2,574,772 shares of Class
A common stock registered for possible sale by the registration statement of
which this prospectus is a part. In calculating the percent of total voting
power, the voting power of the Class A common stock, which has one vote per
share, and the Class B common stock, which has ten votes per share, is
aggregated.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED IF ALL REGISTERED SHARES
PRIOR TO OFFERING ARE SOLD
----------------------------------------------------- ----------------------------------------------------
PERCENT PERCENT
PERCENT OF TOTAL SHARES OF PERCENT OF TOTAL
NUMBER OF TOTAL NUMBER SHARES OF CLASS A NUMBER OF TOTAL NUMBER SHARES OF
OF SHARES SHARES OF OF SHARES CLASS A PERCENT COMMON OF SHARES SHARES OF OF SHARES CLASS A PERCENT
OF CLASS CLASS A OF CLASS AND CLASS OF TOTAL STOCK OF CLASS CLASS A OF CLASS AND CLASS OF TOTAL
A COMMON COMMON B COMMON B COMMON VOTING REGISTERED A COMMON COMMON B COMMON B COMMON VOTING
STOCK STOCK STOCK STOCK POWER FOR SALE STOCK STOCK STOCK STOCK POWER
--------- --------- --------- --------- -------- ---------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DARWIN
DEASON 2,574,772 5.56% 3,299,686 11.84% 44.84% 2,574,772 -0- -0- 3,299,686 6.64% 41.56%
</TABLE>
The shares listed above include 1,628,397 shares of Class A common stock
owned by The Deason International Trust and 72,728 of the shares of Class A
common stock owned by the Deason Foundation. Mr. Deason holds the sole voting
power with respect to these shares through an irrevocable proxy granted by the
trust and a board resolution passed by the foundation. The investment power with
respect to these shares is held by the trust and the foundation. The shares of
Class A common stock also include 7,310
21
<PAGE> 26
shares owned by Mr. Deason's spouse and her daughter, to which Mr. Deason
disclaims beneficial ownership.
Mr. Deason has over 30 years of experience in the information technology
services industry. Mr. Deason is also a director of Precept Business Services,
Inc., which might be considered an affiliate of ACS and a publicly traded
company, where he is Chairman of the Board and has voting control.
22
<PAGE> 27
DESCRIPTION OF OUR DEBT SECURITIES
The debt securities will be our direct unsecured general obligations.
The debt securities will be either senior debt securities or subordinated debt
securities. The debt securities will be issued under one or more separate
indentures between us and a trustee. Senior debt securities will be issued under
senior indentures and subordinated debt securities will be issued under
subordinated indentures. Together, the senior indentures and the subordinated
indentures are called the indentures. You are encouraged to read the indenture.
GENERAL
A prospectus supplement and a supplemental indenture relating to any
series of debt securities being offered will include specific terms relating to
the offering. These terms will include some or all of the following:
o the title, type, denominations and amount of the debt securities;
o the total principal amount and priority of the debt securities;
o the percentage of the principal amount at which the debt
securities will be issued and any payments due if the maturity of
the debt securities is accelerated;
o the dates on which the principal of the debt securities will be
payable;
o the interest rate, the date from which interest will accrue and
the interest payment dates, or discount to face value and
accretion rate, in the case of debt securities issued at a
substantial discount to the principal amount and the record dates
for determination of the holders to whom interest is payable;
o the price, date, terms and conditions of any redemption at our
option;
o our obligation, if any, to redeem, repurchase or repay the
offered securities and any requirement to maintain a "sinking
fund" to support such obligation;
o if other than U.S. dollars, the currency or currencies or units
based on or relating to currencies in which the securities are
denominated and in which we will pay principal, interest or
additional amounts;
o any conversion features;
o whether the offered securities will be represented by one or more
global securities registered in the name of a depositary or its
nominee;
o any sinking fund or other provisions that would obligate us to
repurchase or otherwise redeem the debt securities;
o any provisions granting special rights to holders when a
specified event occurs;
o any changes to or additional events of defaults or covenants;
23
<PAGE> 28
o any special tax implications of the debt securities, including
provisions for original issue discount securities, if offered; and
o any other terms of the debt securities.
The indentures will not limit the amount of debt securities that may be
issued. Each indenture allows debt securities to be issued up to the principal
amount that may be authorized by us and may be in any currency or currency unit
designated by us.
Debt securities of a series may be issued in registered, bearer, coupon
or global form.
SOME COVENANTS
Under the indentures, we will:
o pay the principal, interest and any premium on the debt securities
when due;
o maintain a place of payment;
o deliver a report to the trustee at the end of each fiscal year
reviewing our obligations under the indentures; and
o deposit sufficient funds with any paying agent on or before the
due date for any payment of principal, interest or any premium.
An indenture may or may not include other covenants which will be
described in a prospectus supplement.
PAYMENT AND TRANSFER
Unless we designate otherwise, we will pay principal, interest and any
premium on fully registered securities in Dallas, Texas. We will make interest
payments by check mailed to the persons in whose names the debt securities are
registered on days specified in the indentures or any prospectus supplement. We
will make debt securities payments in other forms at a place we designate and
specify in a prospectus supplement. You may transfer or exchange fully
registered securities at the corporate trust office of the trustee or at any
other office or agency maintained by us for these purposes, without having to
pay any service charge except for any tax or governmental charge.
OUR SENIOR DEBT SECURITIES
Generally speaking, our senior debt securities will rank equally with
all of our other senior debt and unsubordinated debt. As of September 30, 1999,
the total amount of our debt that would rank equally with our senior debt
securities was approximately $243 million, including approximately $187 million
outstanding pursuant to our revolving credit agreement, as restated and amended,
with Wells Fargo Bank (Texas) N.A., as agent, Bank One, Texas, N.A., as
co-agent, and the other lenders that are parties to the agreement, which has a
total credit line of $ 200 million; $11 million outstanding under our revolving
credit agreement entered into in September 1999, with Wells Fargo Bank (Texas)
N.A., as agent, and the other lenders that are parties to the agreement, which
has a total credit line of $50 million, subject to increase up to $100 million;
$12.8 million of letters of credit outstanding; $3.5 million outstanding under
leases required to be capitalized on our balance sheet under generally accepted
accounting principals; $3.4 million outstanding under a credit facility with
Bank One Texas, N.A.; $17.4 million of debt of two companies for which we
provide a guarantee; and $8.1 million outstanding of other senior debt. The
unused commitment under our revolving credit agreements is $39.2 million,
subject to increase up to $89.2 million, of which all could be used for
additional direct borrowings. All
24
<PAGE> 29
series of senior debt securities will rank equally in right of payment with each
other. The senior indentures will not prohibit us from issuing additional debt
securities that may rank equally in right of payment to the senior debt
securities.
Any senior debt securities offered pursuant to the senior indentures
will rank prior to our $230 million of 4% convertible subordinated notes
due March 15, 2005.
Senior debt is defined to include all notes or other unsecured
evidences of indebtedness, including our guarantees, not expressed to be
subordinate or junior in right of payment to any other indebtedness that we
have.
OUR SUBORDINATED DEBT SECURITIES
Our subordinated debt securities will have a junior position to all of
our senior debt. Under the subordinated indentures, payment of the principal,
interest and any premium on the subordinated debt securities will generally be
subordinated and junior in right of payment to the prior payment in full of all
senior debt. The subordinated indentures will provide that no payment of
principal, interest and any premium on the subordinated debt securities may be
made in the event:
o of any insolvency, bankruptcy or similar proceeding involving us
or our property until we have paid holders of our senior debt in
full; or
o we fail to pay the principal, interest, any premium or any other
amounts on any senior debt when due.
The subordinated indentures will not limit the amount of senior debt
that we may incur.
Any subordinated debt securities offered pursuant to the subordinated
indentures will rank equally in right of payment with each other and to our $230
million of 4% convertible subordinated notes due March 15, 2005 and will rank
junior in right of payment to our revolving credit agreement and all other
senior debt.
The subordinated indentures will prohibit us from making for a
specified time period any payment of principal of or premium, if any, or
interest on, or sinking fund requirements for, the subordinated debt securities
during the continuance of any default in respect of some senior debt, unless and
until the default on the senior debt is cured or waived.
Upon any distribution of our assets in connection with any dissolution,
winding up, liquidation, reorganization, bankruptcy or other similar proceeding
relative to us, our creditors or our property, the holders of our senior debt
will first be entitled to receive payment in full of the principal thereof and
premium, if any, and interest due on the senior debt securities before the
holders of the subordinated debt securities are entitled to receive any payment
of the principal of and premium, if any, or interest on the subordinated debt
securities. Because of this subordination, if we become insolvent, our creditors
who are not holders of our senior debt or of our subordinated debt securities
may recover less, ratably, than holders of our senior debt securities but may
recover more, ratably, than holders of our subordinated debt securities.
25
<PAGE> 30
GLOBAL CERTIFICATES
The debt securities of a series may be issued in whole or in part in
the form of one or more global certificates that will be deposited with a
depository identified in a prospectus supplement.
The specific terms of the depository arrangements with respect to any
debt securities of a series will be described in a prospectus supplement.
Unless otherwise specified in a prospectus supplement, debt securities
issued in the form of a global certificate to be deposited with a depository
will be represented by a global certificate registered in the name of the
depository or its nominee. Upon the issuance of a global certificate in
registered form, the depository for the global certificate will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the debt securities represented by the global certificate to the accounts of
institutions that have accounts with the depository or its nominee. The
depository or its nominee are referred to in this prospectus as participants.
The accounts to be credited shall be designated by the underwriters or agents of
the debt securities, or by us if the debt securities are offered and sold
directly by us. Ownership of beneficial interests in a global certificate will
be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests by participants in a global
certificate will be shown on, and the transfer of that ownership interest will
be effected only through, records maintained by the depository or its nominee
for the global certificate. Ownership of beneficial interests in a global
certificate by persons that hold through participants will be shown on, and the
transfer of that ownership interest within a participant will be effected only
through, records maintained by that participant. The laws of some jurisdictions
require that some purchasers of securities take physical delivery of their
securities in definitive form. These limits and laws may impair your ability to
transfer beneficial interests in a global certificate.
So long as the depository for a global certificate in registered form,
or its nominee, is the registered owner of the global certificate, the
depository or its nominee, as the case may be, will be considered the sole owner
or holder of the debt securities of the series represented by the global
certificate for all purposes under the indentures. Except as set forth below,
owners of beneficial interests in a global certificate will not be entitled to
have debt securities of the series represented by the global certificate
registered in their names, will not receive or be entitled to receive physical
delivery of debt securities in definitive form, and will not be considered the
owners or holders of the global certificate under the applicable indenture.
Payment of principal of, premium, if any, and any interest on debt
securities of a series registered in the name of or held by a depository or its
nominee will be made to the depository or its nominee, as the case may be, as
the registered owner or the holder of a global certificate representing the debt
securities. None of us, the trustee, any paying agent, or the applicable debt
security registrar for the debt securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a global certificate for debt securities or
for maintaining, supervising or reviewing any records relating to beneficial
ownership interests.
We expect that the depository for debt securities of a series, upon
receipt of any payment of principal, premium or interest in respect of a
permanent global certificate, will credit immediately participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of the global certificate as shown on the records of the
depository. We also expect that payments by participants to owners of beneficial
interests in a global certificate held through those participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in street name, and those payments will be the responsibility of the
participants. However, we have no control over the practices of
26
<PAGE> 31
the depository and/or the participants and there can be no assurance that these
practices will not be changed.
Unless it is exchanged in whole or in part for debt securities in
definitive form, a global certificate may generally be transferred only as a
whole unless it is being transferred to particular nominees of the depository.
Unless otherwise stated in any prospectus supplement, The Depository
Trust Company, New York, New York will act as depository. Beneficial interests
in global certificates will be shown on, and transfers of global certificates
will be effected only through, records maintained by The Depository Trust
Company and its participants.
EVENTS OF DEFAULT
Under the indentures an event of default, unless a prospectus
supplement provides otherwise, will mean any of the following:
o failure to pay the principal or any premium on any debt security
when due;
o failure to deposit any sinking fund payment when due;
o failure to pay interest on any debt security for 30 days;
o failure to perform any other covenant in the indenture that
continues for 60 days after being given written notice;
o some events involving our bankruptcy, insolvency or
reorganization; or
o any other event of default included in any indenture or
supplemental indenture.
An event of default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities issued under an indenture. The trustee may withhold notice to the
holders of debt securities of any default (except in the payment of principal or
interest) if it considers withholding of notice to be in the best interests of
the holders.
If an event of default for any series of debt securities occurs and
continues, the trustee or the holders of at least 25% of the total principal
amount of the debt securities of the series may declare the entire principal of
that series due and payable immediately. If this happens, the holders of a
majority of the aggregate principal amount of the debt securities of that series
can void the declaration, subject to certain conditions. The trustee will not be
charged with knowledge of any event of default other than our failure to make
principal and interest payments unless actual written notice is received by the
trustee.
The indentures will limit the right to institute legal proceedings. No
holder of any debt securities will have the right to bring a claim under an
indenture unless:
o the holder has given written notice of default to the trustee;
o the holders of not less than 25% of the aggregate principal amount
of debt securities of the series shall have made a written request
to the trustee to bring the claim and furnished the trustee
reasonable indemnification as the trustee may require;
27
<PAGE> 32
o the trustee has not commenced an action within 60 days of receipt
of the notice and indemnification; and
o no direction inconsistent with the request has been given to the
trustee by the holders of not less than a majority of the
aggregate principal amount of the debt securities of the series
then outstanding.
Subject to applicable law and any applicable subordination provisions, the
holders of debt securities may enforce payment of the principal of or premium,
if any, or interest on their debt securities.
The holders of a majority in aggregate principal amount of any series
of debt securities may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any power
conferred on the trustee, provided, however, that the trustee may decline to
follow the holders' direction if, being advised by counsel, the trustee
determines that the action is not lawful, or if the trustee in good faith
determines that the action would unduly prejudice the holders of the debt
securities not taking part in the action or would impose personal liability on
the trustee.
Each indenture will provide that, in case an event of default in
respect of a particular series of debt securities has occurred, the trustee is
to use the degree of care of a prudent man in the conduct of his own affairs.
Subject to these provisions, the trustee is under no obligation to exercise any
of its rights or power under the indenture at the request of any of the holders
of the debt securities of any series unless they have furnished to the trustee
reasonable security or indemnity.
We will be required to furnish to the trustee an annual statement as to
our fulfillment of all of our obligations under the relevant indenture.
DEFEASANCE
We will be discharged from our obligations on the debt securities of
any series at any time we deposit with the trustee sufficient cash or government
securities to pay the principal, interest, any premium and any other sums due to
the stated maturity date or a redemption date of the debt securities of the
series. If this happens, the holders of the debt securities of the series will
not be entitled to the benefits of the indenture except for registration of
transfer and exchange of debt securities and replacement of destroyed, lost,
stolen or mutilated debt securities.
Under Federal income tax law as of the date of this prospectus, a
discharge may be treated as an exchange of the related debt securities. Each
holder might be required to recognize a gain or loss equal to the difference
between the holder's cost or other tax basis for the debt securities and the
value of the holder's interest in the trust. Holders might be required to
include as income a different amount than would be includable without the
discharge. We urge you to consult your tax adviser as to the consequences of a
discharge, including the applicability and effect of tax laws other than the
Federal income tax law.
CONSOLIDATION, MERGER OR SALE
Each indenture will generally permit us to consolidate or merge with
another entity. The indentures will also permit us to sell all or substantially
all of our property and assets. If this happens, the remaining or acquiring
entity shall assume all of our responsibilities and liabilities under the
indentures including the payment of all amounts due on the debt securities and
performance of the covenants in the indentures.
28
<PAGE> 33
However, we will only consolidate or merge with or into any other
entity or sell all or substantially all of our assets according to the terms and
conditions of the indentures. The remaining or acquiring entity will be
substituted for us in the indentures with the same effect as if it had been an
original party to the indentures. Thereafter, the successor entity may exercise
our rights and powers under any indenture, in our name or in its own name. Any
act or proceeding required or permitted to be done by our board of directors or
any of our officers may be done by the board or officers of the successor
entity.
MODIFICATION OF THE INDENTURES
Under each indenture, we may modify our rights and obligations and the
rights of the holders with the consent of the holders of a majority in aggregate
principal amount of the outstanding debt securities of each series affected by
the modification. We cannot, however, modify the principal or interest payment
terms, or reduce the percentage required for modification, against any holder
without its consent. We may also enter into supplemental indentures with the
trustee, without obtaining the consent of the holders of any series of debt
securities, to cure any ambiguity or to correct or supplement any provision of
an indenture or any supplemental indenture which may be defective or
inconsistent with any other provision, to pledge any property to or with the
trustee or to make any other provisions with respect to matters or questions
arising under the indentures, provided that the action does not adversely affect
the interests of the holders of the debt securities. We may also enter into
supplemental indentures without the consent of holders of any series of debt
securities to set forth the terms of additional series of debt securities, to
evidence the succession of another person to our obligations under the indenture
or to add to our covenants.
CERTIFICATES AND OPINIONS TO BE FURNISHED TO TRUSTEE
Each indenture will provide that, in addition to other certificates or
opinions that may be specifically required by other provisions of an indenture,
every time we ask the trustee to take action under the indenture, we must
provide a certificate of some of our officers and an opinion of counsel (who may
be our counsel) stating that, in the opinion of the signers, all conditions
precedent to the action have been complied with.
REPORT TO HOLDERS OF DEBT SECURITIES
We will provide audited financial statements annually to holders of
debt securities. The trustee will be required to submit an annual report to the
holders of the debt securities regarding, among other things, the trustee's
eligibility to serve as trustee, the priority of the trustee's claims regarding
some advances made by it, and any action taken by the trustee materially
affecting the debt securities.
THE TRUSTEE
A prospectus supplement will name the trustee under the subordinated
indentures and the senior indentures.
Pursuant to applicable provisions of the indentures and the Trust
Indenture Act of 1939 governing trustee conflicts of interest, any uncured event
of default with respect to any series of debt securities will force the trustee
to resign as trustee under either the subordinated indentures or the senior
indentures. Any resignation requires the appointment of a successor trustee
under the applicable indenture in accordance with the terms and conditions.
The trustee may resign or be removed by us with respect to one or more
series of debt securities and a successor trustee may be appointed to act with
respect to any series. The holders of a majority in
29
<PAGE> 34
aggregate principal amount of the debt securities of any series may remove the
trustee with respect to the debt securities of that series.
Each indenture will contain limitations on the right of the trustee
thereunder, in the event that the trustee becomes our creditor, to obtain
payment of claims in particular cases or to realize on some property received in
respect of any claim as security or otherwise.
30
<PAGE> 35
DESCRIPTION OF OUR CAPITAL STOCK
We are authorized to issue up to 500,000,000 shares of Class A common
stock, $.01 par value, up to 14,000,000 shares of Class B common stock, $.01 par
value, and up to 3,000,000 shares of preferred stock, $1.00 par value.
As of September 30, 1999, we had issued and outstanding 46,011,378
shares of Class A common stock, 3,299,686 shares of Class B common stock, and no
shares of preferred stock. As of September 30, 1999, we had 5,585,193 shares of
Class A common stock subject to outstanding options, of which options
representing 378,000 shares of Class A common stock were then currently
exercisable. In addition, up to 5,391,936 shares of Class A common stock could
be issued upon conversion of our 4% convertible subordinated notes due March 15,
2005 in the aggregate principal amount of $230 million at a conversion price of
$42.66 per share (equivalent to a conversion rate of 23.4432 shares per $1,000
principal amount of 4% notes), and 3,299,686 shares of Class A common stock
could be issued upon conversion of all outstanding shares of Class B common
stock.
The relative rights and limitations of the Class A common stock and the
Class B common stock, as well as our preferred stock, are summarized below. The
following is a summary description of our capital stock. We refer you to the
certificate of incorporation and the bylaws, copies of which have been filed as
exhibits to our reports or registration statements filed with the SEC, for the
complete terms of our capital stock
CLASS A COMMON STOCK AND CLASS B COMMON STOCK
VOTING RIGHTS
Each share of Class A common stock is entitled to one vote and each
share of Class B common stock is entitled to ten votes on all matters submitted
to a vote of the stockholders. Except as otherwise provided by law, Class A
common stock and Class B common stock vote together as a single class on all
matters presented for a vote of the stockholders. Neither class of our common
stock has cumulative voting rights.
CONVERSION
Class A common stock has no conversion rights. Each share of Class B
common stock is convertible at any time, at the option of and without cost to
the stockholder, into one share of Class A common stock upon surrender to our
transfer agent of the certificate or certificates evidencing the Class B common
stock to be converted, together with a written notice of the election of a
stockholder to convert shares into Class A common stock. Shares of Class B
common stock will also be automatically converted into shares of Class A common
stock on the occurrence of events described below. Once shares of Class B common
stock are converted into shares of Class A common stock, the shares may not be
converted back into Class B common stock.
RESTRICTIONS ON TRANSFER OF CLASS B COMMON STOCK
No person or entity holding shares of Class B common stock may transfer
the shares, whether by sale, assignment, gift, bequest, appointment or
otherwise, except to a permitted transferee (as described below). In the case of
a Class B holder who is a natural person and the beneficial owner of shares of
Class B common stock to be transferred, a permitted transferee consists of:
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o the Class B holder's spouse; provided, however, that upon divorce
any Class B common stock held by the spouse shall automatically
be converted into Class A common stock;
o any lineal descendant of any great-grandparent of the Class B
holder, including adopted children, and the descendant's spouse
(the descendants and their spouses, together with the Class B
holder's spouse, are referred to as "family members");
o the trustee of a trust for the sole benefit of the Class B holder
or any of the Class B holder's family members;
o any charitable organization established by the Class B holder or
any of the Class B holder's family members; and
o any partnership made up exclusively of the Class B holder and any
of the Class B holder's family members or any corporation
wholly-owned by the Class B holder and any of the Class B
holder's family members; provided that, if there is any change in
the partners of the partnership or in the stockholders of the
corporation that would cause the partnership or corporation no
longer to be a permitted transferee, any Class B common stock
held by the partnership or corporation shall automatically be
converted into Class A common stock.
In the case of a Class B holder that is a partnership or corporation and the
beneficial owner of shares of Class B common stock to be transferred, a
permitted transferee consists of:
o the partnership's partners or the corporation's stockholders, as
the case may be;
o any transferor to the partnership or corporation of shares of
Class B common stock after the record date of the initial
distribution of Class B common stock; and
o successors by merger or consolidation.
In the case of a Class B holder that is an irrevocable trust on the record date
of the distribution of Class B common stock and the beneficial owner of shares
of Class B common stock to be transferred, a permitted transferee consists of:
o successor trustees of the trust;
o any person to whom or for whose benefit principal or income may
be distributed under the terms of the trust or any person to whom
the trust may be obligated to make future transfers, provided the
obligation exists prior to the date the trust becomes a holder of
Class B common stock; and
o any family member of the creator of the trust.
In the case of a Class B holder that is any trust other than an irrevocable
trust on the date of the distribution of Class B common stock and the beneficial
owner of shares of Class B common stock to be transferred, a permitted
transferee consists of:
o successor trustees of the trust; and
o the person who established the trust and the person's permitted
transferees.
Upon the death or permanent incapacity of any Class B holder, the
holder's Class B common stock shall automatically be converted into Class A
common stock. All shares of Class B common stock will automatically convert into
shares of Class A common stock on the ninetieth day after the death of Darwin
Deason or upon the conversion by Mr. Deason of all Class B common stock
beneficially owned by Mr. Deason into shares of Class A common stock. Subject to
compliance with applicable securities laws, shares of Class B common stock are
freely transferable among permitted transferees, but any other transfer of Class
B common stock will result in its automatic conversion into Class A common
stock. The
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restriction on transfers of shares of Class B common stock to other than a
permitted transferee may preclude or delay a change in control of ACS.
DIVIDENDS AND LIQUIDATION RIGHTS
The holders of Class A common stock and Class B common stock are
entitled to receive dividends out of assets legally available therefore at times
and in amounts as the board of directors may from time to time determine. Upon
liquidation and dissolution of ACS, the holders of Class A common stock and
Class B common stock are entitled to receive all assets available for
distribution to stockholders.
OTHER RIGHTS
The holders of Class A common stock and Class B common stock are not
entitled to preemptive or subscription rights, and there are no redemption or
sinking fund provisions applicable to the common stock.
Our Board of Directors has authority, without shareholder action, to issue up to
3,000,000 shares of preferred stock in one or more series. The issuance of
preferred stock could:
o adversely affect the voting power of the holders of Class A common
stock;
o adversely affect the likelihood that holders will receive dividend
payments and payments upon liquidation; and
o may have the effect of delaying, deferring or preventing a change
in control of ACS.
STOCK PURCHASE RIGHTS
We entered into a rights agreement on August 5, 1997, which was amended
on April 2, 1999, and authorizes and declares a dividend distribution of one
right for each share of Class A common stock and one right for each share of
Class B common stock, each as outstanding at the close of business on August 25,
1997. Class A common stock and Class B common stock issued after August 25, 1997
will be issued with an associated right. Each right entitles the registered
holder to purchase from us one share of Class A common stock at an exercise
price of $150.00 per share, subject to adjustment from time to time.
PREFERRED STOCK
We have no preferred stock outstanding. This section describes the
general terms and provisions of the preferred stock that we may offer by this
prospectus. We may issue preferred stock in one or more series. Each series of
preferred stock will have its own rights and preferences. We will describe in a
prospectus supplement:
o the specific terms of the series of any preferred stock offered
through this prospectus; and
o any general terms outlined in this section that will not apply to
those shares of preferred stock.
This summary of terms is not complete. For additional information before you buy
any preferred stock, you should read our charter and bylaws that are in effect
on the date that we offer any preferred stock, as well as any applicable
amendment to our charter designating terms of a series of preferred stock.
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Under our charter, we have the authority to issue up to 3,000,000
shares of preferred stock. Prior to issuing shares of preferred stock of a
particular series, our board of directors will determine or fix the terms of
that series of preferred stock, including:
o voting rights;
o redemption provisions;
o conversion rights;
o dividend rights;
o any sinking fund provisions;
o any transfer restrictions; and
o preferences in liquidation.
When we issue shares of preferred stock, they will be fully paid and
nonassessable. This means the full purchase price for the outstanding preferred
stock will be paid at issuance and that you, as the purchaser of those shares of
preferred stock, will not be required later to pay us any additional amount for
that preferred stock. The preferred stock will have no preemptive rights to
subscribe for any additional securities that we may issue in the future. This
means that you, as holders of preferred stock, will not receive any rights to
buy any portion of the securities that we may issue in the future. Because our
board of directors has the power to establish the preferences and rights of each
class or series of preferred stock, our board of directors may grant the holders
of any series or class of preferred stock preferences, powers and rights senior
to the rights of holders of shares of our common stock. It is not possible to
state the actual effect of the authorization and issuance of additional series
of preferred stock upon the rights of holders of our common stock until our
board of directors determines the specific terms, rights and preferences of a
series of preferred stock. These effects might include, among other things:
o granting the holders of preferred stock priority over the holders
of our common stock with respect to the payment of dividends;
o diluting the voting power of our common stock; or
o granting the holders of preferred stock preference with respect
to liquidation rights.
In addition, the issuance of preferred stock may, under some circumstances,
render more difficult or tend to discourage a merger, tender offer or proxy
contest, the assumption of control by a holder of a large block of our
securities or the removal of incumbent management.
CERTIFICATE OF INCORPORATION AND BYLAWS
Our certificate of incorporation and bylaws contain several provisions
that may be deemed to have an anti-takeover effect and may delay, defer or
prevent a tender offer or takeover attempt. Among other things, these provisions
require 80% vote of stockholders to amend some provisions of our certificate of
incorporation or our bylaws; permit only our Chairman, President or a majority
of our Board of Directors to call stockholder meetings; divide our Board of
Directors into three classes so that only approximately one-third of the total
number of directors will be elected each year; and permit directors to be
removed, with or without cause, only by vote of at least 80% of the combined
voting power. Pursuant to a recently passed amendment to our certificate of
incorporation, Mr. Deason has the authority to fill any vacancy resulting from
the removal or resignation of a director.
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The certificate of incorporation does not provide for cumulative
voting. Any action required or permitted to be taken by our stockholders may be
taken at a duly called annual or special meeting of stockholders. The bylaws
provide that special meetings of the stockholders may be called only by the
Chairman of the board of directors, the President or a majority of the members
of the board of directors. These provisions could have the effect of delaying
until the next annual stockholders' meeting actions that are not favored by the
holders of a majority of the voting power of our outstanding capital stock.
Moreover, the bylaws authorize the stockholders to take action by written
consent signed by the holders of a majority of the voting power of our
outstanding capital stock, provided that written notice is given to those
stockholders who have not consented in writing.
Under the Delaware General Corporation Law, the approval of a Delaware
corporation's board of directors, in addition to stockholder approval, is
required to adopt any amendment to the company's certificate of incorporation,
but the exclusive power to adopt, amend and repeal the bylaws is conferred
solely upon the stockholders, unless the corporation's certificate of
incorporation also confers the power on its board of directors. Our certificate
of incorporation grants the power to amend the bylaws to the board of directors.
Our certificate of incorporation also contains provisions permitted under the
Delaware General Corporation Law that limit the liability of directors.
In addition to these provisions of the certificate of incorporation and
bylaws, we are subject to the provisions of Section 203 of the Delaware General
Corporation Law, which restricts the consummation of some business combination
transactions, including mergers, stock and asset sales and other transactions
resulting in financial benefit to the stockholder, between a Delaware public
corporation and an "interested stockholder" for a period of three years after
the date the interested stockholder acquired its stock. An "interested
stockholder" is defined as a person who, together with any of the person's
affiliates and/or associates, beneficially owns 15% or more of any class or
series of stock entitled to vote in the election of directors. However, a person
is not an "interested stockholder" if:
o the transaction is approved by (1) the corporation's board of
directors prior to the date the interested stockholder acquired
the shares or (2) a majority of the board of directors and by the
affirmative vote of the holders of two-thirds of the outstanding
shares of each class or series of stock entitled to vote generally
in the election of directors, not including the shares owned by
the interested stockholder; or
o the interested stockholder acquired at least 85% of the voting
stock of the corporation in the transaction in which it became an
interested stockholder.
Section 203 of the Delaware General Corporation Law is intended to discourage
some takeover practices by impeding the ability of a hostile acquirer to engage
in some types of transactions with the target company. Moreover, the bylaws
contain a provision that permits any contract or other transaction between ACS
and any of our directors, officers or stockholders, or any corporation or firm
in which any of them are directly or indirectly interested, to be valid
notwithstanding the presence of the director, officer or stockholder at the
meeting authorizing the contract or transaction, or his participation or vote in
the stockholder's meeting or authorization, subject to conditions, including
disclosure.
TRANSFER AGENT AND REGISTRAR
First City Transfer Company, our affiliate, serves as transfer agent
and registrar for the Class A common stock and preferred stock.
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NEW YORK STOCK EXCHANGE LISTING
Our Class A common stock is listed for trading on the New York Stock
Exchange under the symbol "ACS".
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DESCRIPTION OF DEPOSITARY SHARES
We have no depositary shares outstanding. We may issue depositary
receipts for depositary shares, each of which will represent a fractional
interest of a share of a particular series of preferred stock, as specified in
the applicable prospectus supplement. Shares of preferred stock of each series
represented by depositary shares will be deposited under a separate deposit
agreement among ACS, the depositary named in the deposit agreement and the
holders from time to time of the depositary receipts. You are encouraged to read
the deposit agreement and depositary receipts.
Subject to the terms of the deposit agreement, each owner of a
depositary receipt will be entitled, in proportion to the fractional interest of
a share of a particular series of preferred stock represented by the depositary
shares evidenced by the depositary receipt they own, to all the rights and
preferences of the preferred stock represented by the depositary shares,
including:
o dividend rights;
o voting rights;
o conversion rights;
o redemption rights; and
o liquidation rights.
The depositary shares will be evidenced by depositary receipts issued pursuant
to the applicable deposit agreement. Immediately following us issuing and
delivering the preferred stock to the preferred stock depositary, we will cause
the preferred stock depositary to issue, on our behalf, the depositary receipts.
A prospectus supplement will include the form of deposit agreement and
depositary receipt. These documents will include the provisions described in
this prospectus.
DIVIDENDS AND OTHER DISTRIBUTIONS
The preferred stock depositary will distribute all cash dividends or
other cash distributions received relating to the preferred stock to the record
holders of depositary receipts evidencing the related depositary shares in
proportion to the number of depositary receipts owned by those holders, subject
to some obligations of holders to:
o file proofs, certificates and other information; and
o to pay some charges and expenses to the preferred stock
depositary.
In the event of a distribution other than in cash, the preferred stock
depositary will distribute property received by it to the record holders of
depositary receipts entitled to the distribution, subject to some obligations of
holders to:
o file proofs, certificates and other information; and
o to pay some charges and expenses to the preferred stock
depositary,
unless the preferred stock depositary determines that it is not feasible to make
those distributions, in which case the preferred stock depositary may, with our
approval, sell the property and distribute the net proceeds from the sale to
holders of the relevant depositary receipts. No distribution will be made
relating to any depositary share to the extent that it represents any preferred
stock converted into other securities.
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WITHDRAWAL OF STOCK
Upon surrender of the depositary receipts at the corporate trust office
of the preferred stock depositary (unless the related depositary shares have
previously been called for redemption or converted into other securities), the
holders of those depositary receipts will be entitled to delivery at the
corporate trust office, to or upon that holder's order, of the number of whole
or fractional shares of the preferred stock and any money or other property
represented by the depositary shares evidenced by the depositary receipts owned
by the holder. Holders of depositary receipts will be entitled to receive whole
or fractional shares of the related preferred stock on the basis of the
proportion of preferred stock represented by the depositary share surrendered as
specified in the applicable prospectus supplement, but holders of shares of
preferred stock will not thereafter be entitled to receive depositary shares for
such stock. If the depositary receipts delivered by the holder evidence a number
of depositary shares in excess of the number of depositary shares representing
the number of shares of preferred stock to be withdrawn, the preferred stock
depositary will deliver to the holder surrendering the depositary receipt at the
same time a new depositary receipt evidencing the excess number of depositary
shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever we redeem shares of preferred stock held by the preferred
stock depositary, the preferred stock depositary will redeem as of the same
redemption date the number of depositary shares representing shares of the
preferred stock so redeemed, provided we shall have paid in full to the
preferred stock depositary the redemption price of the preferred stock to be
redeemed plus an amount equal to any accrued and unpaid dividends thereon to the
date fixed for redemption. The redemption price per depositary share will be
equal to the corresponding proportion of the redemption price and any other
amounts per share payable with respect to the preferred stock. If fewer than all
the depositary shares are to be redeemed, the depositary shares to be redeemed
will be selected pro rata (as nearly as may be practicable without creating
fractional depositary shares) or by any other equitable method determined by us.
From and after the date fixed for redemption, all dividends in respect of the
shares of preferred stock called for redemption will cease to accrue, the
depositary shares called for redemption will no longer be deemed to be
outstanding and all rights of the holders of the depositary receipts evidencing
the depositary shares called for redemption will cease, except the right to
receive any moneys payable upon redemption of the depositary receipts and any
money or other property to which the holders of the depositary receipts redeemed
were entitled upon redemption and surrender, which moneys or other property will
be paid to the preferred stock depositary.
VOTING OF PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the
preferred stock are entitled to vote, the preferred stock depositary will mail
the information contained in such notice of meeting to the record holders of the
depositary receipts evidencing the depositary shares which represent such
preferred stock. Each record holder of depositary receipts evidencing depositary
shares on the record date (which will be the same date as the record date for
the preferred stock) will be entitled to instruct the preferred stock depositary
as to the exercise of the voting rights pertaining to the amount of preferred
stock represented by each holder's depositary shares. The preferred stock
depositary will vote the amount of preferred stock represented by the depositary
shares in accordance with the instructions provided by the holder of the
depositary shares, and we will agree to take all reasonable action which may be
deemed necessary by the preferred stock depositary in order to enable the
preferred stock depositary to vote in accordance with the instructions provided
by the holders. The preferred stock depositary will abstain from voting the
amount of preferred stock represented by depositary shares to the extent it does
not receive specific instructions from the holders of depositary receipts
evidencing the depositary shares. The preferred stock depositary shall not be
responsible for any failure to carry out any instruction to vote, or
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for the manner or effect of any such vote made, as long as such action or
non-action is in good faith and does not result from negligence or willful
misconduct of the preferred stock depositary.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of ACS,
whether voluntary or involuntary, the holders of each depositary receipt will be
entitled to the fraction of the liquidation preference accorded each share of
preferred stock represented by the depositary shares evidenced by the respective
depositary receipt, as set forth in the applicable prospectus supplement.
CONVERSION OF PREFERRED STOCK
The depositary shares are not convertible into common stock or any
other of our securities or property. Nevertheless, if so specified in the
applicable prospectus supplement relating to an offering of depositary shares,
the depositary receipts may be surrendered by holders of the depositary receipts
to the preferred stock depositary with written instructions to the preferred
stock depositary to instruct us to cause conversion of the preferred stock
represented by the depositary shares evidenced by the depositary receipts
surrendered into whole shares of common stock, other shares of our preferred
stock or other shares of stock, and we have agreed that upon receipt of
instructions to convert and any amounts payable in respect of the conversion, we
will cause the conversion of depositary receipts utilizing the same procedures
as those provided for delivery of preferred stock to effect conversion of the
depositary receipts. If the depositary shares evidenced by a depositary receipt
are to be converted in part only, a new depositary receipt or receipts will be
issued for any depositary shares not to be converted. No fractional shares of
common stock will be issued upon conversion, and if conversion would result in a
fractional share being issued, an amount will be paid in cash by us equal to the
value of the fractional interest based upon the closing price of the common
stock on the last business day prior to the conversion.
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AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of depositary receipt evidencing the depositary shares that
represent the preferred stock and any provision of the deposit agreement may at
any time be amended by agreement between us and the preferred stock depositary.
However, any amendment that materially and adversely alters the rights of the
holders of depositary receipts or that would be materially and adversely
inconsistent with the rights granted to the holders of the related preferred
stock will not be effective unless the amendment has been approved by the
existing holders of at least sixty-six and two-third percent (66 2/3%) of the
depositary shares evidenced by the depositary receipts then outstanding. No
amendment will impair the right, subject to some exceptions in the deposit
agreement, of any holder of depositary receipts to surrender any depositary
receipt with instructions to deliver to the holder the related preferred stock
and all money and other property, if any, represented thereby, except in order
to comply with law. Every holder of an outstanding depositary receipt at the
time any amendment becomes effective will be deemed, by continuing to hold such
receipt, to consent and agree to the amendment and to be bound by the deposit
agreement as amended by such amendment. The deposit agreement may be terminated
by us upon not less than 30 days' prior written notice to the preferred stock
depositary if the holders of a majority of each series of preferred stock
affected by the termination consents to the termination. Upon a termination that
has been consented to the preferred stock depositary will deliver or make
available to each holder of depositary receipts, upon surrender of the
depositary receipts held by the holder, the number of whole or fractional shares
of preferred stock as are represented by the depositary shares evidenced by the
depositary receipts surrendered by the holder together with any other property
held by the preferred stock depositary with respect to the depositary receipts
surrendered by the holder. In addition, the deposit agreement will automatically
terminate if:
o all outstanding depositary shares have been redeemed;
o there has been a final distribution in respect of the related
preferred stock in connection with any liquidation, dissolution or
winding up of ACS and the distribution has distributed to the
holders of depositary receipts evidencing the depositary shares
representing such preferred stock; or
o each share of the related preferred stock has been converted into
our securities not represented by depositary shares.
CHARGES OF PREFERRED STOCK DEPOSITARY
We will pay all transfer and other taxes and governmental charges
arising solely from the existence of the deposit agreement. In addition, we will
pay the fees and expenses of the preferred stock depositary in connection with
the performance of its duties under the deposit agreement. However, holders of
depositary receipts will pay the fees and expenses of the preferred stock
depositary for any duties requested by those holders to be performed which are
outside of those expressly provided for in the deposit agreement.
RESIGNATION AND REMOVAL OF PREFERRED STOCK DEPOSITARY
The preferred stock depositary may resign at any time by delivering to
us notice of its election to do so, and we may at any time remove the preferred
stock depositary. Any resignation or removal of the preferred stock depositary
will take effect upon the appointment of a successor preferred stock depositary.
A successor preferred stock depositary must be appointed within 60 days after
delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000.
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MISCELLANEOUS
The preferred stock depositary will forward to holders of depositary
receipts any reports, notices, proxy soliciting materials or other
communications from us that are received by the preferred stock depositary with
respect to the related preferred stock. Neither the preferred stock depositary
nor us will be liable if it is prevented from or delayed in, performing its
obligations under the deposit agreement, by law or any circumstances beyond its
control. Our obligations and the obligations of the preferred stock depositary
under the deposit agreement will be limited to performing their duties under the
deposit agreement in good faith and without negligence (in the case of any
action or in action in the voting of preferred stock represented by the
depositary shares), gross negligence or willful misconduct, and we and the
preferred stock depositary will not be obligated to prosecute or defend any
legal proceeding in respect of any depositary receipts, depositary shares or
shares of preferred stock represented thereby unless satisfactory indemnity is
furnished. We and the preferred stock depositary may rely on written advice of
counsel or accountants, or information provided by persons presenting shares of
preferred stock represented by the depositary receipts for deposit, holders of
depositary receipts or other persons believed in good faith to be competent to
give information to us and the preferred stock depositary, and on documents
believed in good faith to be genuine and signed by a proper party. In the event
the preferred stock depositary receives conflicting claims, requests or
instructions from any holders of depositary receipts, on the one hand, and us,
on the other hand, the preferred stock depositary will be entitled to act on
those claims, requests or instructions received from us.
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DESCRIPTION OF OUR WARRANTS
We have no warrants outstanding. We may issue warrants for the purchase
of our preferred stock, Class A common stock or debt securities by this
prospectus. Warrants may be:
o issued independently;
o issued together with any other securities offered by any
prospectus supplement;
o issued through a dividend or other distribution to our
stockholders; or
o attached to or separate from securities.
We may issue warrants under a warrant agreement to be entered into between us
and a warrant agent. We will name any warrant agent in the applicable prospectus
supplement. The warrant agent will act solely as our agent in connection with
the warrants of a particular series and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial owners of
warrants. You are encouraged to read the warrant.
WARRANTS FOR PREFERRED STOCK OR CLASS A COMMON STOCK
In the applicable prospectus supplement, we will describe the terms of
the warrants for the purchase of our preferred stock or Class A common stock,
the warrant certificates and applicable warrant agreement, including, where
applicable, the following:
o the title of the warrants;
o their aggregate number;
o the price or prices at which we will issue them;
o changes to the exercise price;
o the designation, number and terms of the preferred stock or Class
A common stock that can be purchased upon exercise of the
warrants;
o the designation and terms of the other securities, if any, with
which the warrants are issued and the number of warrants that are
issued with each of those securities;
o any provisions for adjustment of the number or amount of shares
of preferred stock or Class A common stock receivable upon
exercise of the warrants;
o the date, if any, on and after which the warrants and the related
preferred stock or Class A common stock, if any, will be
separately transferable;
o the price at which each share of preferred stock or Class A common
stock that can be purchased upon exercise of the warrants may be
purchased;
o the date on which the right to exercise them will commence and the
date on which that right will expire;
o the minimum or maximum number of the warrants that may be
exercised at any one time;
o information with respect to book-entry procedures, if any;
o a discussion of material federal income tax considerations; and
o any other terms of the warrants, including terms, procedures and
limitations relating to the transferability, exchange and exercise
of the warrants.
WARRANTS FOR DEBT SECURITIES
In the applicable prospectus supplement, we will describe the terms of
the warrants for the purchase of our debt securities, the warrant certificates,
and applicable warrant agreement, including the following:
o the title of the warrants;
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o the aggregate number of the warrants;
o the price or prices at which the warrants will be issued;
o the designation, aggregate principal amount and terms of the debt
securities purchasable upon exercise of the warrants, the exercise
price and the procedures, terms, limitations and conditions
relating to the exercise of the warrants;
o the designation and terms of any related debt securities with
which the warrants are issued, and the number of the warrants
issued with each debt security;
o the date, if any, on and after which warrants and the related debt
securities will be separately transferable;
o the date on which the right to exercise the warrants will
commence, and the date on which the right will expire;
o the maximum or minimum number of warrants which may be exercised
at any time;
o a discussion of the material United States Federal income tax
considerations applicable to the warrants; and
o any other terms of the warrants.
Prior to the exercise of the warrants, holders of warrants will not have any of
the rights of holders of the debt securities that may be purchased upon exercise
and will not be entitled to payments of principal of (or premium, if any) or
interest, if any, on the debt securities that may be purchased upon such
exercise.
EXERCISE OF WARRANTS
Each warrant will entitle the holder of warrants to purchase for cash
the principal amount of debt securities or shares of preferred stock or Class A
common stock at the exercise price as set forth in, or be determinable as set
forth in, the applicable prospectus supplement relating to the warrants offered
thereby. Warrants may be exercised at any time up to the close of business on
the expiration date set forth in the applicable prospectus supplement. After the
close of business on the expiration date, unexercised warrants will become void.
Warrants may be exercised as set forth in the applicable prospectus
supplement. Upon receipt of payment and the warrant certificate properly
completed and duly executed at the corporate trust office of the warrant agent
or any other office indicated in the applicable prospectus supplement, we will,
as soon as practicable, forward the debt securities, or shares of preferred
stock or Class A common stock purchasable upon exercise of the warrant. If less
than all of the warrants represented by a warrant certificate are exercised, a
new warrant certificate will be issued for the remaining warrants.
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DESCRIPTION OF CAPITAL SECURITIES OF THE TRUSTS
Each of the issuer trusts will issue only one series of capital
securities and one series of common securities. The trust agreement for each of
the trusts will be qualified as an indenture under the Trust Indenture Act of
1939. The capital securities will have terms and be subject to conditions
described in the trust agreement or made a part of that agreement by the Trust
Indenture Act. A prospectus supplement and possibly a supplemental indenture
relating to the series of capital securities will include the specific terms of
that series. You are encouraged to read the indenture.
GENERAL
The capital securities will represent preferred undivided beneficial
interests in the assets of the applicable trust. The only assets of a trust, and
its only source of revenues, will be the debt securities purchased by that trust
with the proceeds from the issuance of its capital securities and common
securities. Accordingly, distributions and other payment dates for the trust
securities will correspond with the interest and other payment dates for the
debt securities. See "Description of Debt Securities" in this prospectus and in
the applicable prospectus supplement for a description of the debt securities.
If we do not make payments on the debt securities owned by a trust in accordance
with their terms, that trust will not have funds available to pay distributions
or other amounts payable on the capital securities and common securities issued
by that trust in accordance with those securities' terms. The capital securities
issued by a trust will rank equally, and payments on those capital securities
will be made on a pro rata basis, with the common securities issued by the trust
except as described below and in the applicable prospectus supplement. We will
fully and unconditionally guarantee the capital securities to the extent
described in this prospectus and in the applicable prospectus supplement.
A prospectus supplement relating to any capital securities being
offered will include specific terms relating to the offering. These terms will
include some or all of the following:
o the specific designation, stated amount of each capital security,
number to be issued by the applicable trust and purchase price;
o the currency or units based on or relating to currencies in which
distributions and other payments on the capital security will or
may be payable;
o the distribution rate or rates, or the method by which that rate
or those rates will be determined, if any;
o the date or dates on which any distributions will be payable;
o any provisions relating to deferral of distribution payments;
o the place or places where distributions and other amounts payable
on the capital securities will be payable;
o any repayment, redemption, prepayment or sinking fund provisions;
o the voting rights, if any, of holders of the capital securities;
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o the terms and conditions, if any, upon which the assets of the
trust may be distributed to holders of the capital securities;
o any applicable United States federal income tax consequences; and
o any other specific terms of the capital securities.
DISTRIBUTIONS
Distributions on the capital securities will be cumulative.
Distributions will accumulate from the date of original issuance and will be
payable on the dates specified in the applicable prospectus supplement. The
amount of distributions payable for any period less than a full distribution
period will be computed on the basis of a 360-day year of twelve 30-day months
and the actual days elapsed in a partial month in that period, unless otherwise
specified in the applicable prospectus supplement. Distributions payable for
each full distribution period will be computed by dividing the annual rate by
four, unless otherwise specified in the applicable prospectus supplement.
SUBORDINATION OF COMMON SECURITIES
Payment of distributions on, and other amounts payable under the
capital securities and common securities issued by a trust will be made pro rata
based on the stated amount of each security of the capital securities and common
securities. However, unless otherwise provided in the applicable prospectus
supplement, if on any date on which distributions or other amounts are payable
with respect to any capital securities and common securities, an "event of
default" with respect to the debt securities owned by a trust has occurred and
is continuing as a result of our failure to pay any amounts in respect of those
debt securities when due, no payment of any distribution on or other amounts
payable under the common securities may be made unless payment in full in cash
of all accumulated amounts then due and payable with respect to all of a trust's
outstanding capital securities have been made or provided for, and all funds
immediately available to the property trustee will first be applied to the
payment in full in cash of all distributions on, and all other amounts with
respect to, capital securities then due and payable.
In the case of an "event of default" with respect to any capital
securities resulting from an "event of default" with respect to debt securities,
the holders of the applicable trust's common securities will be deemed to have
waived any right to act with respect to a capital securities "event of default"
under the applicable trust agreement until the effects of the debt securities
"event of default" that causes the capital securities "event of default" have
been cured, waived or otherwise eliminated. Until all the capital securities
"events of default" have been cured, waived or otherwise eliminated, the
property trustee will act solely on behalf of the holders of the capital
securities and not on behalf of the holders of the common securities, and only
the holders of the capital securities will have the right to direct the property
trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
The amount payable on capital securities in the event of any
liquidation of a trust will be the stated amount of each capital security or any
other amount specified in the applicable
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prospectus supplement plus accumulated and unpaid distributions, which, if
specified in the applicable prospectus supplement, may be in the form of a
distribution of the debt securities owned by the applicable trust.
The holders of all the outstanding common securities of a trust will
have the right at any time to dissolve that trust and, after satisfaction of
liabilities to the trust's creditors, as provided by applicable law, cause the
debt securities owned by that trust to be distributed to the holders of the
capital securities and common securities in liquidation of the trust as
described in the applicable prospectus supplement. Other terms for the
dissolution of a trust and the distribution or liquidation of its assets to
holders of securities issued by the trust will be described in the applicable
prospectus supplement.
CAPITAL SECURITIES EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "event of default"
under a trust agreement with respect to the capital securities issued under that
trust agreement:
o the occurrence of an "event of default" with respect to the debt
securities in which the proceeds of the capital securities have
been invested;
o default by the applicable trust or the property trustee in the
payment of any distribution on those capital securities when the
distribution becomes due and payable, and continuation of that
default for a period of 30 days;
o default by a trust or the property trustee in the payment of any
redemption price of any security issued under the trust agreement
when it becomes due and payable;
o default in the performance, or breach, in any material respect,
of any covenant or warranty of either of the applicable property
trustees or other trustees (other than a covenant or warranty, a
default in the performance of which or the breach of which is
dealt with above), and continuation of the default or breach for
a period of 60 days after we and the applicable property trustees
and other trustees have been given, by registered or certified
mail, by the holders of at least 25% in aggregate stated amount
of each outstanding capital security, a written notice specifying
the default or breach and requiring it to be remedied and stating
that the notice is a "notice of default" under the applicable
trust agreement; or
o the occurrence of some events of bankruptcy or insolvency with
respect to the property trustee or all or substantially all of
its property if a successor property trustee has not been
appointed within 90 days of these bankruptcy or insolvency
events.
Within ten business days after the occurrence of any "event of
default" actually known to the property trustee with respect to capital
securities, the property trustee will transmit notice of that "event of default"
to the holders of the applicable capital securities and common securities and
the administrators under the trust agreement, unless the "event of default" has
been cured or waived. We, as depositor, and the administrators under the trust
agreement are required to file annually with the property trustee a certificate
as to whether or not we and the administrators are
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in compliance with all the conditions and covenants applicable to us and them
under each trust agreement.
If an "event of default" with respect to debt securities has occurred
and is continuing as a result of our failure to pay any amounts in respect of
the debt securities owned by a trust when due, the capital securities issued by
that trust will have a preference over the common securities issued by that
trust with respect to payments of any amounts in respect of the capital
securities as described above.
REMOVAL OF ISSUER TRUSTEES; APPOINTMENT OF SUCCESSORS
The holders of at least a majority in aggregate stated amount of the
outstanding capital securities may remove a property or other trustee for cause
or, if an "event of default" with respect to debt securities has occurred and is
continuing, with or without cause. If a property or other trustee is removed by
the holders of the outstanding capital securities, the successor may be
appointed by the holders of at least 25% in aggregate stated amount of the
outstanding capital securities. If a property or other trustee resigns, that
trustee will appoint its successor. If a property or other trustee fails to
appoint a successor, the holders of at least 25% in aggregate stated amount of
the outstanding capital securities may appoint a successor. If a successor has
not been appointed by the holders, any holder of capital securities or common
securities or another property or other trustee under the same trust agreement
may petition a court of competent jurisdiction to appoint a successor. Any
Delaware trustee must meet the applicable requirements of Delaware law. Any
property trustee must be a national - or state-chartered bank, and at the time
of appointment have capital and surplus of at least $50,000,000. No resignation
or removal of a property or other trustee and no appointment of a successor
trustee will be effective until the acceptance of appointment by the successor
trustee in accordance with the provisions of the applicable trust agreement.
MERGER OF CONSOLIDATION OF A PROPERTY OR OTHER TRUSTEE
Any entity into which a property or other trustee may be merged or
converted or with which it may be consolidated, or any entity resulting from any
merger, conversion or consolidation to which that property or other trustee is a
party, or any entity succeeding to all or substantially all the corporate trust
business of that property or other trustee, will be the successor of that
property or other trustee under each trust agreement, provided that entity is
otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUSTS
A trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any entity, except as described below or as
otherwise specified in the applicable trust agreement. A trust may, at the
request of the holders of the common securities and with the consent of the
holders of at least a majority in aggregate stated amount of its outstanding
capital securities, merge with or into, consolidate, amalgamate, or be replaced
by or convey, transfer or lease its properties and assets substantially as an
entirety to a trust organized as such under the laws of any state, so long as:
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o that successor entity either expressly assumes all the
obligations of the trust with respect to the trust's capital
securities or substitutes for the trust's capital securities
other securities having substantially the same terms as the
trust's capital securities so long as these substituted capital
securities have the same priority as the trust's capital
securities with respect to distributions and payments upon
liquidation, redemption and otherwise;
o a trustee of a successor entity, possessing the same powers and
duties as the property trustee, is appointed to hold the
corresponding debt securities;
o the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the trust's capital securities,
including any securities substituted for the capital securities,
to be downgraded by any nationally recognized statistical rating
organization;
o the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not negatively impact the rights,
preferences and privileges of the holders of the trust's capital
securities, including any securities substituted for the capital
securities, in any material respect;
o the successor entity has a purpose substantially identical to
that of the trust;
o prior to the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the trust has received an opinion
from independent counsel experienced in such matters to the
effect that the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not negatively impact the
rights, preferences and privileges of the holders of the trust's
capital securities, including any securities substituted for the
capital securities, in any material respect and following the
merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the trust nor the successor entity
will be required to register as an investment company under the
Investment Company Act of 1940; and
o we or any permitted successor or assignee own, directly or
indirectly, all the common securities of the successor entity and
guarantee the obligations of the successor entity under the
securities substituted for the capital securities at least to the
extent provided by the related guarantee.
Notwithstanding the foregoing, a trust may not, except with the consent of
holders of 100% in aggregate stated amount of the trust's capital securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to, any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the trust or the successor entity to
be taxable as a corporation for United States federal income tax purposes.
VOTING RIGHTS, AMENDMENT OF TRUST AGREEMENTS
Except as provided below, the holders of the capital securities will
have no voting rights.
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Each trust agreement may be amended from time to time by the holders
of a majority in aggregate stated amount of the common securities and the
property trustee, without the consent of the holders of the capital securities:
o to cure any ambiguity, correct or supplement any provisions in
the trust agreement that may be inconsistent with any other
provision, or to make any other provisions with respect to
matters or questions arising under the trust agreement, provided
that any amendment does not have a significant negative impact on
the interests of any holder of the capital securities or common
securities issued by that trust; or
o to modify, eliminate or add to any provisions of the trust
agreement to the extent necessary to ensure that the trust will
not be taxable as a corporation for United States federal income
tax purposes at any time that any of the capital securities or
common securities issued by that trust are outstanding or to
ensure that the trust will not be required to register as an
"investment company" under the Investment Company Act.
Any of these amendments of the trust agreement will become effective when notice
of the amendment is given to the holders of the capital securities or common
securities issued by that trust.
Each trust agreement may be amended by the holders of a majority in
aggregate stated amount of the common securities and the property trustee with
the consent of holders representing not less than a majority in aggregate stated
amount of the outstanding capital securities and receipt by the property and
other trustees of an opinion of counsel to the effect that the amendment or the
exercise of any power granted to the property and other trustees in accordance
with the amendment will not cause the trust to be taxable as a corporation for
United States federal income tax purposes or affect the trust's exemption from
status as an "investment company" under the Investment Company Act. However,
without the consent of each holder of the capital securities or common
securities issued by that trust that are affected by the amendment, a trust
agreement may not be amended to change the amount or timing of any distribution
on the capital securities or common securities issued by that trust or otherwise
negatively impact the amount of any distribution required to be made in respect
of those capital securities and common securities as of a specified date or
restrict the right of a holder of the securities issued by that trust to
institute suit for the enforcement of any payment on or after that date.
So long as any debt securities are held by a trust, the property
trustee will not:
o direct the time, method and place of conducting any proceeding
for any remedy available to the debt securities trustee, or
execute any trust or power conferred on the property trustee with
respect to the debt securities;
o waive any past default that may be waived under the applicable
indenture;
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o exercise any right to rescind or annul a declaration that the
principal amount of those debt securities are due and payable; or
o consent to any amendment, modification or termination of the
applicable indenture or the debt securities, where the consent
will be required, without, in each case, obtaining the prior
approval of the holders of at least a majority in aggregate
stated amount of the outstanding capital securities, except that,
if a consent under the indenture would require the consent of
each holder of the debt securities affected by the amendment, no
consent will be given by the property trustee without the prior
consent of each holder of the capital securities. The property
trustee may not revoke any action previously authorized or
approved by a vote of the holders of the capital securities
except by subsequent vote of the holders of capital securities
issued by the applicable trust.
The property trustee will notify each holder of the capital securities of any
notice of default with respect to the applicable debt securities. In addition to
obtaining the foregoing approvals of the holders of the capital securities,
before taking any of the foregoing actions, the property trustee will obtain an
opinion of counsel experienced in those matters to the effect that the trust
will not be taxable as a corporation for United States federal income tax
purposes on account of that action.
Any required approval of holders of capital securities may be given at
a meeting of holders of capital securities convened for that purpose, or
pursuant to written consent. The property trustee will cause a notice of any
meeting at which holders of capital securities are entitled to vote, or of any
matter upon which action by written consent of those holders is to be taken, to
be given to each registered holder of capital securities in the manner set forth
in each trust agreement.
No vote or consent of the holders of capital securities will be
required to redeem and cancel capital securities in accordance with the
applicable trust agreement.
Notwithstanding that holders of capital securities are entitled to
vote or consent under any of the circumstances described above, any of the
capital securities that we own, the property or other trustees or any of our
affiliates or any of the property or other trustees' affiliates, will, for
purposes of that vote or consent, be treated as if they were not outstanding.
EXPENSES AND TAXES
In connection with the debt securities owned by a trust, we, as
borrower, will agree to pay all debts and other obligations (other than with
respect to the capital securities issued by the trust) and all costs and
expenses of that trust (including costs and expenses relating to the
organization of that trust, the fees and expenses of the property and other
trustees for that trust and the costs and expenses relating to the operation of
that trust) and to pay any and all taxes and all costs and expenses with respect
to that trust (other than United States withholding taxes) to which the trust
might become subject. Our foregoing obligations under the debt securities owned
by a trust are for the benefit of, and will be enforceable by, any person to
whom any of those debts, obligations, costs, expenses and taxes are owed whether
or not that creditor has
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received notice of those debts, obligations, costs, expenses and taxes. Any of
these creditors may enforce those obligations directly against us, and we will
irrevocably waive any right or remedy to require that any of these creditors
take any action against the applicable trust or any other person before
proceeding against us. We will also agree in the debt securities owned by a
trust to execute all additional agreements as may be necessary or desirable to
give full effect to the foregoing.
PAYMENT AND PAYING AGENCY
The applicable prospectus supplement will specify the manner in which
payments in respect of the capital securities will be made. The paying agent for
capital securities will initially be the property trustee and any copaying agent
chosen by the property trustee and acceptable to the administrators under the
trust agreement. The paying agent will be permitted to resign as paying agent
upon 30 days' written notice to the property trustee and the administrators. If
the property trustee is no longer the paying agent, the property trustee will
appoint a successor, which must be a bank or trust company reasonably acceptable
to the administrators, to act as paying agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable prospectus supplement,
the property trustee will act as registrar and transfer agent for the capital
securities.
Registration of transfers of capital securities will be effected
without charge by or on behalf of each trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The trusts will not be required to register or cause to be
registered the transfer of their capital securities after those capital
securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The property trustee, other than during the occurrence and continuance
of an "event of default" with respect to the capital securities, undertakes to
perform only those duties as are specifically stated in each trust agreement
and, after that capital securities "event of default", must exercise the same
degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the property
trustee is under no obligation to exercise any of the powers vested in it by the
applicable trust agreement at the request of any holder of capital securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby for exercising those powers.
MISCELLANEOUS
The administrators under the trust agreement and the property trustee
are authorized and directed to conduct the affairs of and to operate the trusts
in such a way that the trusts will not be deemed to be an "investment company"
required to be registered under the Investment Company Act of 1940 or taxable as
a corporation for United States federal income tax purposes and so that
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the debt securities owned by the trusts will be treated as our indebtedness for
United States federal income tax purposes. In this connection, the property
trustee and the holders of common securities are authorized to take any action,
not inconsistent with applicable law, the certificate of trust of each trust or
each trust agreement, that the property trustee and the holders of common
securities determine in their discretion to be necessary or desirable for those
purposes, as long as that action does not have a significant negative impact on
the interests of the holders of the related capital securities.
Holders of the capital securities have no preemptive or similar
rights.
The trusts may not borrow money or issue debt or mortgage or pledge
any of their assets.
GOVERNING LAW
Each trust agreement will be governed by and construed in accordance
with Delaware law.
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DESCRIPTION OF GUARANTEES
We will execute and deliver, concurrently with the issuance by each
trust of its capital securities, a guarantee for the benefit of the holders from
time to time of those capital securities. You are encouraged to read the
guarantee. A copy of the form of the guarantee is available upon request from
the guarantee trustee. The guarantee trustee will hold each guarantee for the
benefit of the holders of the related trust's capital securities.
GENERAL
Pursuant to a guarantee, we will irrevocably and unconditionally agree
to pay in full, to the extent described in the guarantee, guarantee payments to
the holders of the capital securities covered by that guarantee, as and when
due, regardless of any defense, right of setoff or counterclaim that the trust
that issued those capital securities may have or assert other than the defense
of payment. The following guarantee payments with respect to capital securities,
to the extent not paid by or on behalf of the trust that issued the capital
securities, will be subject to the guarantee:
o any accumulated and unpaid distributions required to be paid on
the capital securities, to the extent that the trust has funds on
hand available for the distribution at that time, if any;
o the redemption price with respect to any capital securities
called for redemption, including all accumulated and unpaid
distributions on those capital securities, to the extent that
trust has funds on hand available for the redemption price at
that time; and
o upon a voluntary or involuntary dissolution, winding up or
liquidation of the trust unless the debt securities owned by the
trust are distributed to holders of the capital securities in
accordance with the terms of the capital securities, the lesser
of the aggregate of the stated amount of all the outstanding
capital securities and all accumulated and unpaid distributions
to the date of payment, and the amount of assets of the trust
remaining available for distribution to holders of capital
securities on liquidation of the trust.
Our obligation to make a guarantee payment may be satisfied by our direct
payment of the required amounts to the holders of the capital securities or by
causing the applicable trust to pay those amounts to the holders.
Each guarantee will be an irrevocable guarantee of the related trust's
obligations under the capital securities covered by the guarantee, but will
apply only to the extent that the related trust has funds sufficient to make
those payments, and is not a guarantee of collection.
If we do not make payments on the debt securities owned by a trust,
that trust will not be able to pay any amounts payable in respect of its capital
securities and will not have funds
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legally available for those payments and, in such event, holders of the capital
securities would not be able to rely upon the guarantee for payment of those
amounts. Each guarantee will have the same ranking as the debt securities owned
by the trust that issues the capital securities covered by the guarantee. No
guarantee will limit our incurrence or issuance of other secured or unsecured
debt.
STATUS OF THE GUARANTEES
Each guarantee will constitute our unsecured obligation and will rank
equally in right of payment with the debt securities owned by the trust that
issues the capital securities covered by the guarantee.
Each guarantee will constitute a guarantee of payment and not of
collection. Each guarantee will be held by the guarantee trustee for the benefit
of the holders of the related capital securities. Each guarantee will not be
discharged except by payment of the guarantee payments in full to the extent not
paid by the trust or, if applicable, distribution to the holders of the capital
securities of the debt securities owned by the trust.
AMENDMENTS AND ASSIGNMENT
Changes to a guarantee which do not significantly and negatively
impact the rights of holders of the capital securities covered by that guarantee
will not require the consent or approval of any of the holders of those capital
securities. However, the changes to a guarantee which significantly and
negatively impact the rights of holders of the capital securities covered by
that guarantee may not be made without the prior approval of the holders of not
less than a majority of the aggregate stated amount of those capital securities
outstanding. The manner of obtaining that approval will be set forth in the
applicable prospectus supplement. All guarantees and agreements contained in
each guarantee will bind our successors, assigns, receivers, trustees and
representatives that are covered by a guarantee and will inure to the benefit of
the holders of the capital securities then outstanding.
EVENTS OF DEFAULT
An event of default under a guarantee will occur upon our failure to
perform any of our payment obligations under that guarantee, or to perform any
nonpayment obligation if that nonpayment default remains unremedied for 30 days.
The holders of not less than a majority in aggregate stated amount of the
outstanding capital securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the guarantee
trustee in respect of that guarantee or to direct the exercise of any trust or
power conferred upon the guarantee trustee under that guarantee.
Any registered holder of capital securities may institute a legal
proceeding directly against us to enforce its rights under the guarantee which
covers that holder's capital securities without first instituting a legal
proceeding against the trust, the guarantee trustee or any other person or
entity.
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We, as guarantor, are required to file annually with the guarantee
trustee a certificate as to whether or not we are in compliance with all the
conditions and covenants applicable to the guarantee trustee under the
guarantees.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guarantee trustee, other than during the occurrence and
continuance of our default in the performance of any guarantee, undertakes to
perform only those duties as are specifically set forth in the guarantee and,
after the occurrence of our default with respect to the guarantee, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the guarantee
trustee is under no obligation to exercise any of the powers vested in it by any
guarantee at the request of any holder of the capital securities covered by a
guarantee unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred in exercising the requested power.
TERMINATION OF THE GUARANTEE
Each guarantee will terminate and be of no further force and effect
upon full payment of the redemption price of the capital securities covered by
that guarantee, upon full payment of the amounts payable with respect to the
capital securities upon liquidation of the related trust or upon distribution of
the debt securities owned by the trust to the holders of the capital securities.
Each guarantee will continue to be effective or will be reinstated, as the case
may be, if at any time any holder of the capital securities must repay any sums
with respect to the capital securities or that guarantee.
GOVERNING LAW
Each guarantee will be governed by and construed in accordance with
New York law.
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PLAN OF DISTRIBUTION
We, the trusts and, with respect to his Class A common stock that
could be sold hereunder, Mr. Deason may sell the securities:
o through underwriters or dealers;
o directly to one or more purchasers;
o through agents; or
o through a combination of any of these methods.
BY AGENTS
We, the trusts and, with respect to his Class A common stock that
could be sold hereunder, Mr. Deason may use agents to sell the securities. The
agents will agree to use their reasonable best efforts to solicit purchases for
the period of their appointment.
BY UNDERWRITERS
We, the trusts and, with respect to his Class A common stock that
could be sold hereunder, Mr. Deason may sell the securities to underwriters. The
underwriters may resell the securities in one or more transactions, including:
o at a fixed public offering price;
o at varying prices determined at the time of sale; or
o negotiated transactions.
The obligations of the underwriters to purchase the securities will be subject
to conditions. Each underwriter will be obligated to purchase all the securities
allocated to it under the underwriting agreement. The underwriters may change
any initial public offering price and any discounts or concessions.
DIRECT SALES
We, the trusts and, with respect to his Class A common stock that
could be sold hereunder, Mr. Deason may sell the securities directly to you. In
this case, no underwriters or agents would be involved.
GENERAL INFORMATION
Underwriters, dealers and agents that participate in the distribution
of the securities may be underwriters as defined under the Securities Act of
1933, and any discounts or commissions received by them from us and any profit
on the resale of the offered securities by them may be treated as underwriting
discounts and commissions under the Securities Act.
We, the trusts and, with respect to his Class A common stock that
could be sold hereunder, Mr. Deason may have agreements with the underwriters,
dealers and agents to indemnify them against certain civil liabilities,
including liabilities under the Securities Act, or to contribute to payments
that they may be required to make.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, us or our subsidiaries in the ordinary course of their
business.
A supplement to this prospectus will set forth the terms of the
offering of the securities, including, where applicable:
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o the name or names of any underwriters or agents with whom we or
the trusts have entered into arrangements with respect to the
sale or issuance of the securities;
o the public offering price;
o any underwriting discounts, concessions or other items
constituting underwriters' compensation from us, the trusts
or, with respect to his Class A common stock that could be sold
hereunder, Mr. Deason and any other discounts, concessions or
commissions allowed or reallowed or paid by any underwriters to
other dealers;
o any bidding or auction process;
o any commissions paid to any agents; and
o the net proceeds to us, the trust or, with respect to his Class A
common stock that could be sold hereunder, Mr. Deason.
Unless otherwise set forth in the related prospectus supplement, each
series of securities will be a new issue with no established trading market,
other than the shares of Class A common stock, which will be listed on the NYSE.
Any shares of Class A common stock sold pursuant to a prospectus supplement will
be listed on the NYSE, subject to official notice of issuance. We may elect to
list any series of preferred stock or debt securities on an exchange, but we are
not obligated to do so. It is possible that one or more underwriters may make a
market in a series of securities, but they are not obligated to do so and any
underwriter may discontinue any market making at any time without notice.
Therefore, no assurance can be given as to the liquidity of, or the trading
market for, the securities.
In order to comply with the securities laws of some states, if
applicable, the securities offered hereby will be sold in those jurisdictions
only through registered or licensed brokers or dealers. In addition, in some
states securities may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
EXPERTS
The consolidated financial statements of ACS as of June 30, 1999 and
1998 and for each of the fiscal years in the three-year period ended June 30,
1999 have been incorporated in this prospectus by reference from the ACS Annual
Report on Form 10-K for the year ended June 30, 1999, except as they relate to
ACS Government Solutions, Inc. (formerly Computer DataSystems, Inc. (CDSI)) as
of June 30, 1997 and for the year ended June 30, 1997, and have been audited by
PricewaterhouseCoopers LLP, independent accountants, as set forth in their
report which is incorporated herein by reference. The consolidated financial
statements of CDSI as of June 30, 1997 and for the period ended June 30, 1997,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their respective report thereon included in the Company's Annual Report on Form
10-K for the year ended June 30, 1999, which is incorporated by reference
herein. ACS' consolidated financial statements are incorporated herein by
reference in reliance upon such reports given on the authority of such firms as
experts in accounting and auditing.
The consolidated financial statements of BRC as of December 31, 1997
and 1996 and for each of the three years in the period ended December 31, 1997
as included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, which is incorporated herein by reference, have been audited
by PricewaterhouseCoopers LLP, independent accountants, as set forth in their
report which appears in such Annual Report on Form 10-K. Such consolidated
financial statements are incorporated herein by reference upon such report given
on the authority of said firm as experts in accounting and auditing.
57
<PAGE> 62
LEGAL MATTERS
The validity of the securities offered by this prospectus has been
passed upon on behalf of ACS by Hughes & Luce, L.L.P., Dallas, Texas. Any
underwriters will be advised about other issues relating to any offering we do
under this prospectus by their own legal counsel.
58
<PAGE> 63
================================================================================
You should rely only on the information contained or incorporated by
reference in this prospectus or any accompanying prospectus supplement. We have
not authorized anyone else to provide you with different information. You must
not rely on any unauthorized information or representations. The securities are
not being offered in any jurisdiction where the offer is not permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of the
documents.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
About This Prospectus.......................................................................................... 1
Risk Factors................................................................................................... 1
Where You Can Get More Information............................................................................. 9
A Warning About Forward-Looking Statements.....................................................................11
Affiliated Computer Services, Inc..............................................................................13
The Issuer Trusts..............................................................................................15
Use of Proceeds................................................................................................16
Ratio of Earnings to Fixed Charges.............................................................................16
Recent Pro Forma Information...................................................................................17
Selling Stockholder............................................................................................21
Description of Our Debt Securities.............................................................................23
Description of Our Capital Stock...............................................................................31
Description of Our Depositary Shares...........................................................................37
Description of Our Warrants....................................................................................42
Description of Capital Securities of the Trusts................................................................44
Description of Guarantees......................................................................................53
Plan of Distribution...........................................................................................56
Experts........................................................................................................57
Legal Matters..................................................................................................58
</TABLE>
$500,000,000
AFFILIATED COMPUTER SERVICES, INC.
Debt Securities
Common Stock
Preferred Stock
Depositary Shares
Warrants
ACS CAPITAL TRUST I
ACS CAPITAL TRUST II
Capital Securities
Fully and Unconditionally Guaranteed,
To The Extent Described Herein, By
AFFILIATED COMPUTER SERVICES, INC.
PROSPECTUS
[ACS LOGO]
================================================================================
<PAGE> 64
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table indicates the estimated expenses to be incurred in
connection with the offering described in this registration statement, all of
which will be paid by us.
<TABLE>
<CAPTION>
<S> <C>
Registration fee....................................................................... $ 139,000
Printing fees.......................................................................... 50,000
Accounting fees and expenses........................................................... 50,000
Legal fees and expenses................................................................ 100,000
Blue Sky fees and expenses (including counsel fees).................................... 10,000
Rating Agency Fees..................................................................... 150,000
Miscellaneous expenses................................................................. 50,000
----------
Total:............................................................................ $ 549,000
----------
</TABLE>
If Mr. Deason sells any Class A common stock through this registration
statement, he will be responsible for any underwriting fees, discounts or
commissions attributable to the shares of Class A common stock sold.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our certificate of incorporation provides that no director of ACS will be
personally liable to ACS or any of its stockholders for monetary damages arising
from the director's breach of fiduciary duty as a director, with limited
exceptions. Under the provisions of Section 145 of the Delaware General
Corporation Law, every Delaware corporation has the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other than an
action by or in the right of the corporation) by reason of the fact that the
person is or was a director, officer, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, against any and all
expenses, judgments, fines and amounts paid in settlement and reasonably
incurred in connection with an action, suit or proceeding. The power to
indemnify applies only if the person acted in good faith and in a manner the
person reasonably believed to be in the best interests, or not opposed to the
best interests, of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The power to indemnify applies to actions brought by or in the right of the
corporation as well, but only to the extent of defense and settlement expenses
and not to any satisfaction of a judgment or settlement of the claim itself, and
with the further limitation that in these actions no indemnification shall be
made in the event of any adjudication of negligence or misconduct unless the
court, in its discretion, believes that in light of all the circumstances
indemnification should apply. Our certificate of incorporation contains
provisions requiring us to indemnify our officers and directors to the fullest
extent permitted by the Delaware General Corporation Law.
ITEM 16. EXHIBITS.
The Exhibits to this registration statement are listed in the Index to
Exhibits on page II-5 of this registration statement, which Index is
incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
(a) Insofar as indemnification by the registrants for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers,
and controlling persons of the registrants pursuant to the foregoing
provisions, or otherwise, the registrants have been advised that in the
opinion of
II-1
<PAGE> 65
the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of
expenses incurred or paid by a director, officer, or controlling person
of the registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person
in connection with the securities being registered, the registrants 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 of 1933 and will be governed by the final
adjudication of such issue.
(b) The undersigned registrants hereby undertake:
(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 acts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set
forth in "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (b)(1)(i) and (b)(1)(ii) do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrants pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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 offered
thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(c) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) and 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing
of an
II-2
<PAGE> 66
employee benefit plan's annual report pursuant to 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.
(d) The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(e) The undersigned registrants hereby undertake to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under section
305(b)(2) of the Trust Indenture Act.
II-3
<PAGE> 67
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
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas, State of Texas, on November 12, 1999.
AFFILIATED COMPUTER SERVICES, INC.
By: /s/ Mark A. King
----------------------------------------
Mark A. King
Director, Executive Vice President
and Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Jeffrey A. Rich and David W. Black his true and lawful attorney-in-fact
and agent with full power of substitution and resubstitution, for him and in his
name, place, and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and hereby
grants to such attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------- ------------------------------------- -----------------
<S> <C> <C>
/s/ Darwin Deason Chairman of the Board November 12, 1999
- -------------------------------------------
Darwin Deason
/s/ Jeffrey A. Rich Director, President and November 12, 1999
- ------------------------------------------- Chief Executive Officer
Jeffrey A. Rich
/s/ Mark A. King Director, Executive Vice President November 12, 1999
- ------------------------------------------- and Chief Financial Officer
Mark A. King
/s/ Henry G. Hortenstine Director and November 12, 1999
- ------------------------------------------- Executive Vice President
Henry G. Hortenstine
/s/ David W. Black Director, Executive Vice President, November 12, 1999
- ------------------------------------------- Secretary and General Counsel
David W. Black
</TABLE>
II-4
<PAGE> 68
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------- ------------------------------------- -----------------
<S> <C> <C>
/s/ Peter A. Bracken Director and Vice Chairman, November 12, 1999
- ------------------------------------------- ACS Government
Peter A. Bracken Solutions Group, Inc.
/s/ Joseph P. O'Neill Director November 12, 1999
- -------------------------------------------
Joseph P. O'Neill
/s/ Frank A. Rossi Director November 12, 1999
- -------------------------------------------
Frank A. Rossi
/s/ Clifford M. Kendall Director November 12, 1999
- -------------------------------------------
Clifford M. Kendall
</TABLE>
II-5
<PAGE> 69
Pursuant to the requirements of the Securities Act of 1933, ACS Capital
Trust I and ACS Capital Trust II each certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement on Form S-3 to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Dallas, State of
Texas, on November 12, 1999.
ACS CAPITAL TRUST I
By: Affiliated Computer Services, Inc.
By: /s/ Mark A. King
----------------------------------------
Mark A. King
Director, Executive Vice President
and Chief Financial Officer
ACS CAPITAL TRUST II
By: Affiliated Computer Services, Inc.
By: /s/ Mark A. King
----------------------------------------
Mark A. King
Director, Executive Vice President
and Chief Financial Officer
II-6
<PAGE> 70
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
<S> <C>
1.1** Form of Underwriting Agreement.
3.1* Certificate of Incorporation of ACS, as amended through October 26, 1999.
3.2* Bylaws of ACS, as amended through October 26, 1999.
4.1** Form of Senior Indenture.
4.2** Form of Subordinated Indenture.
4.3** Form of Warrant.
4.4** Form of Deposit Agreement
4.5** Form of Depositary Receipt
4.6 Form of New Class A Common Stock Certificate, filed as Exhibit 4.3 to the
Company's Form S-1 (Registration No. 333-79394) (the "Form S-1") and
incorporated herein by reference.
4.7 First Amended and Restated Rights Agreement, dated April 2, 1999,
between the Company and First City Transfer Company, as Rights Agent
filed as Exhibit 4.1 to the Company's Report on Form 8-K dated May 19, 1999
and incorporated herein by reference.
4.8 Indenture, dated as of March 20, 1998 between Affiliated Computer Services,
Inc., as issuer and U.S. Trust Company of Texas, N.A. as trustee, filed as
Exhibit 4.1 to the Company's Report on Form 8-K dated March 20, 1998 and
incorporated herein by reference.
4.9 Registration Rights Agreement, dated as of March 17, 1998 between Affiliated
Computer Services, Inc. and Goldman, Sachs & Co., Bear, Stearns & Co., Inc.,
Smith Barney Inc., Hambrecht & Quist LLC, Donaldson, Lufkin & Jenrette Securities
Corporation and Prudential Securities Incorporated, filed as Exhibit 4.2 to the
Company's Report on Form 8-K dated March 20, 1998 and incorporated herein by reference.
4.10* Certificate of Trust of ACS Capital Trust I.
4.11* Certificate of Trust of ACS Capital Trust II.
4.12* Trust Agreement of ACS Capital Trust I.
4.13* Trust Agreement of ACS Capital Trust II.
</TABLE>
II-7
<PAGE> 71
<TABLE>
<S> <C>
4.14** Form of Amended and Restated Trust Agreement to be used in connection
with the issuance of the Capital Securities
4.15** Form of Capital Security
4.16** Form of Capital Securities Guarantee
5.1* Opinion of Hughes & Luce, LLP, special counsel to Affiliated Computer
Services, Inc., as to the legality of the securities being registered
hereby.
12.1* Statement Regarding Computation of Ratios
23.1* Consent of Hughes & Luce, LLP (included in Exhibit 5.1).
23.2* Consent of PricewaterhouseCoopers LLP.
23.3* Consent of PricewaterhouseCoopers LLP.
23.4* Consent of Ernst & Young LLP.
24.1* Power of Attorney (included in Part II of the registration statement).
25.1** Statement of Eligibility on Form T-1
</TABLE>
- ------------------------
* Filed herewith.
** To be filed by a post-effective amendment or by a Current Report on Form 8-K
pursuant to the Securities Exchange Act of 1934, as appropriate.
II-8
<PAGE> 1
EXHIBIT 3.1
AFFILIATED COMPUTER SERVICES, INC.
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
Affiliated Computer Services, Inc., a corporation organized and
existing under the Delaware General Corporation Law (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: that the Board of Directors of the Corporation, at a duly
constituted meeting at which quorum was present and acting throughout, duly
adopted resolutions setting forth a proposed amendment to the Certificate of
Incorporation of the Corporation, declaring said amendment to be advisable, and
directing that said amendment be submitted to the stockholders of the
Corporation for their consideration. The resolution setting forth the proposed
amendment is as follows:
RESOLVED, that the Board of Directors of the Corporation
hereby adopts, approves and recommends a proposal to amend the
Certificate of Incorporation of the Corporation to amend Article
Seventh, Section 3 thereto, as follows:
"SEVENTH:
Section 3. Newly Created Directorships and Vacancies. Subject
to the rights, if any, of the holders of any series of Preferred Stock
to elect additional Directors under circumstances specified in a
Preferred Stock Designation, newly created directorships resulting from
any increase in the number of Directors will be filled by the
affirmative vote of the stockholders of the Corporation or the
affirmative vote of the remaining board members, not including those
filling the positions of the newly created directorships. Subject to
the rights, if any, of the holders of any series of Preferred Stock to
elect Directors to fill a vacancy, any vacancies on the Board of
Directors resulting from death, resignation, disqualification, removal,
or other cause will be filled for the remainder of the term of the
vacating director by the affirmative vote of the stockholders of the
Corporation, by the affirmative vote of the remaining board members or
by the Chairman of the Board of the Corporation, except that if the
vacancy is created with respect to a director who at such time was also
the Chief Executive Officer, President, Chief Financial Officer,
Executive Vice President, General Counsel, Secretary or Treasurer of
the Corporation, then that vacancy will be filled only by the Chairman
of the Board."
SECOND: that thereafter, the stockholders of the Corporation, which
hold the necessary number of shares as required by statute, duly adopted and
approved said amendment at the annual meeting pursuant to Section 222 of the
Delaware General Corporation Law.
THIRD: that said amendment was duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the Board of Directors of the Corporation has
caused this Certificate of Amendment to be signed by David W. Black, its
Secretary, as of October 26, 1999.
AFFILIATED COMPUTER SERVICES, INC.
By: /s/ David W. Black
--------------------------------
David W. Black, Secretary
77
<PAGE> 2
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
-------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "AFFILIATED COMPUTER SERVICES, INC.", FILED IN THIS OFFICE ON THE
EIGHTEENTH DAY OF DECEMBER, A.D. 1997, AT 10:00 O'CLOCK A.M.
[SEAL]
/s/ EDWARD J. FREEL
[SEAL] -------------------------------------
Edward J. Freel, Secretary of State
2163155 8100 AUTHENTICATION: 8821604
971435724 DATE: 12-18-97
<PAGE> 3
CERTIFICATE OF AMENDMENT
TO
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
AFFILIATED COMPUTER SERVICES, INC.
AFFILIATED COMPUTER SERVICES, INC., a corporation organized and
existing under the Delaware General Corporation Law (the "Corporation"),
DOES HEREBY CERTIFY;
FIRST: that the Board of Directors of the Corporation at a meeting of
such board held on August 5, 1997, adopted resolutions setting forth a proposed
amendment to the Second Amended and Restated Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), declaring said amendment
to be advisable, and directing that said amendment be submitted to the
stockholders of the Corporation at the Annual Meeting of Stockholders of the
Corporation to be held on December 16, 1997 (the "Annual Meeting"). The
resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Board of Directors of the Corporation
hereby adopts, approves and recommends a proposal to amend ARTICLE
VII, SECTION 1 of the Certificate of Incorporation as follows:
ARTICLE VII SECTION 1
"SEVENTH: Section 1. Number, Election, and Terms of Directors. Subject
to the rights, if any, of the holders of any series of Preferred Stock
to elect additional Directors under circumstances specified in a
Preferred Stock designation, the number of the Directors of the
Company will not be less than three nor more than fifteen and will be
fixed from time to time in the manner described in the bylaws of the
Company. The directors will be divided into three classes designated
as Class I, Class II, and Class III. Each Class of directors will
stand for election at the 1997 annual stockholders' meeting for the
following terms: Class I directors will be elected for a three-year
term; Class II directors will be elected for a two-year term; and
Class III directors will be elected for a one-year term. At each
following annual stockholders' meeting, commencing with the 1998
annual stockholders' meeting, each of the successors to the directors
of the Class whose term will expire at such annual meeting will be
elected for a term running until the third annual; meeting succeeding
his or her election and until his or her successor has been duly
elected and qualified."
SECOND: that the Board of Directors of the Corporation at a meeting of
such board held on September 19, 1997, adopted resolutions setting forth a
proposed amendment to the Certificate of Incorporation, declaring said amendment
to be advisable, and directing that said amendment be submitted to the
stockholders of the Corporation at the Annual Meeting The resolution setting
forth the proposed amendments is as follows:
<PAGE> 4
RESOLVED, that the Board of Directors of the Corporation
hereby adopts, approves and recommends a proposal to amend ARTICLE IV,
SECTION 2 of the Certificate of Incorporation as follows:
ARTICLE IV SECTION 2
"The total number of shares of all classes of capital stock that the
Company shall have the authority to issue is 517,000,000 shares,
consisting of (a) 500,000,000 shares of Class A Common Stock, par value
$0.01 per share ("Class A Common Stock"), (b) 14,000,000 shares of ACS
Class B Common Stock, par value $0.01 per share ("ACS Class B Common
Stock", and together with Class A Common Stock, ("Common Stock"), and
(c) 3,000,000 shares of Preferred Stock, par value $1.00 per share
("Preferred Stock")."
THIRD: that the foregoing amendments have been duly approved by a
majority of stockholders of the Corporation in accordance with Section 242 of
the Delaware General Corporation Law.
FOURTH: that said amendments were duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the Board of Directors of the Company has caused
this Certificate of Amendment to be signed by Jeffrey A. Rich, its President,
as of December 17, 1997.
AFFILIATED COMPUTER SERVICES, INC.,
a Delaware corporation
By: /s/ JEFFREY A. RICH
-------------------------------
Jeffrey A. Rich,
Its: President and Chief Operating Officer
ATTESTED:
/s/ DAVID W. BLACK
- ------------------------------
David W. Black, Secretary
<PAGE> 5
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
-------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "AFFILIATED COMPUTER SERVICES, INC.", FILED IN THIS OFFICE ON THE
TWENTY-EIGHTH DAY OF OCTOBER, A.D. 1996, AT 4:30 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
[SEAL]
/s/ EDWARD J. FREEL
[SEAL] -------------------------------------
Edward J. Freel, Secretary of State
2163155 8100 AUTHENTICATION: 8166605
960313280 DATE: 10-28-96
<PAGE> 6
CERTIFICATE OF AMENDMENT
OF
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
AFFILIATED COMPUTER SERVICES, INC.
Pursuant to provisions of the General Corporation Laws of the State of
Delaware, the undersigned officers of the Affiliated Computer Services, Inc.
(the "Corporation") do hereby certify as follows:
FIRST: That the Board of Directors of the Corporation, by unanimous
written consent, adopted a resolution proposing and declaring advisable the
following amendment to the Second Amended and Restated Certificate of
Incorporation (the "Amendment").
SECOND: That Paragraph 1 of Section 2, Article FOURTH of the
Corporation's Second Amended and Restated Certificate of Incorporation which
pertains to Authorized Capital Stock is hereby amended to read as follows:
Section 2. Authorized Capital Stock. The total number of shares of all
classes of capital stock that the Company shall have the authority to
issue is 84,405,686 shares, consisting of (a) 75,000,000 shares of
Class A Common Stock, par value $0.01 per share ("Class A Common
Stock"), (b) 6,405,686 shares of Class B Common Stock, par value $0.01
per share ("Class B Common Stock" and, together with Class A Common
Stock, "Common Stock"), and (c) 3,000,000 shares of Preferred Stock,
par value $1.00 per share ("Preferred Stock").
THIRD: That the foregoing Amendment has been duly approved by the
Corporation's Board of Directors.
FOURTH: That the foregoing Amendment has been duly approved by a
majority of shareholders of the Corporation in accordance with Section 242 of
the General Corporation Laws of the State of Delaware.
FIFTH: That the foregoing Amendment has been duly adopted in
accordance with Section 242 of the General Corporation Laws of the State of
Delaware.
<PAGE> 7
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Jeffrey A. Rich its President and attested by David W. Black, its
Secretary, this 28th day of October, 1996.
AFFILIATED COMPUTER SERVICES, INC.
By: /s/ JEFFREY A. RICH
-------------------------------
Jeffrey A. Rich, President
ATTESTED:
/s/ DAVID W. BLACK
- ------------------------------
David W. Black, Secretary
<PAGE> 8
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
-------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE CERTIFICATE OF OWNERSHIP, WHICH MERGES:
"DATAPLEX ACQUISITION CORP.", A DELAWARE CORPORATION, WITH AND INTO "ACS
INVESTORS, INC." UNDER THE NAME OF "AFFILIATED COMPUTER SERVICES, INC.", A
CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, WAS
RECEIVED AND FILED IN THIS OFFICE THE FIFTH DAY OF JULY, A.D. 1994, AT 4:30
O'CLOCK P.M.
AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CORPORATION SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.
[SEAL]
/s/ EDWARD J. FREEL
[SEAL] -------------------------------------
Edward J. Freel, Secretary of State
2163155 8330 AUTHENTICATION: 7207042
944149048 DATE: 08-10-94
<PAGE> 9
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
-------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THAT THE SAID "ACS INVESTORS, INC.", FILED A CERTIFICATE OF OWNERSHIP,
CHANGING ITS NAME TO "AFFILIATED COMPUTER SERVICES, INC.", THE FIFTH DAY OF
JULY, A.D. 1994, AT 4:30 O'CLOCK P.M.
[SEAL]
/s/ EDWARD J. FREEL
[SEAL] -------------------------------------
Edward J. Freel, Secretary of State
2163155 8320 AUTHENTICATION: 7204391
944147085 DATE: 08-08-94
<PAGE> 10
EXHIBIT A
ACS INVESTORS, INC.
RESOLUTIONS OF MERGER
RESOLVED, that the Company merge, pursuant to Section 253 of the General
Corporation Law of the State of Delaware (the "DGCL"), Dataplex Acquisition
Corp. ("DAC") with and into the Company (the "DAC Merger") and assume all of
its obligations; and
FURTHER RESOLVED, that the terms and conditions of the DAC Merger are as
follows:
a. Effect on DAC Common Stock. At the Effective Time (as
hereinafter defined), each issued share of Class A Common Stock, par value
$0.0001 per share, of DAC ("DAC Class A Common Stock") and Class B Common
Stock, par value $.0001 per share, of DAC ("DAC Class B Common Stock"),
whether or not outstanding, immediately prior to the Effective Time and
held by the Company or DAC shall be cancelled and retired, and all rights
in respect thereof shall cease to exist, without any conversion thereof or
any payment with respect thereto or in exchange therefor. Each share of
DAC Class A Common Stock issued and outstanding immediately prior to the
Effective Time and held by any person other than the Company or DAC shall
be cancelled and retired and (other than shares of DAC Class A Common
Stock held by persons who properly perfect their appraisal rights pursuant
to Section 262 of the DGCL) shall be converted automatically into the right
to receive 0.67559224 shares of Class A Common Stock, par value $.01 per
share, of the Company. Thereafter, the holders of certificates
representing shares of DAC Class A Common Stock and DAC Class B Common
Stock shall cease to have any rights as stockholders of DAC (except such
rights, if any, as they may have pursuant to Section 262 of the DGCL).
b. Effect on DAC Preferred Stock. At the Effective Time, each
issued share of 10% Noncumulative Series B Preferred Stock, par value
$1.00 per share, of DAC ("DAC Preferred Stock"), whether or not
outstanding, immediately prior to the Effective Time and held by the
Company or DAC shall be cancelled and retired, and all rights in respect
thereof shall cease to exist, without any conversion thereof or any
payment with respect thereto or in exchange therefor. Each share of DAC
Preferred Stock issued and outstanding immediately prior to the Effective
Time and held by any person other than the Company or DAC shall be
cancelled and retired and (other than shares of DAC Preferred Stock held
by persons who properly perfect their appraisal rights pursuant to Section
262 of the DGCL) shall be converted automatically into the right to
receive $1.00 per share without interest thereon. Thereafter, the holders
of certificates representing shares of DAC Preferred Stock shall cease to
have any rights as stockholders of DAC (except such rights, if any, as
they may have pursuant to Section 262 of the DGCL).
c. Effect on Company Stock. At the Effective Time, each share of
capital stock of the Company issued and outstanding at such time shall
continue to be one identical share of capital stock of the Company.
FURTHER RESOLVED, that in connection with the DAC Merger, the Company
shall change its corporate name by amending Article First of the Second Amended
and Restated Certificate of Incorporation of the Company to read as follows:
"FIRST: The name of the corporation is: Affiliated Computer
Services, Inc. (the "Company")."
<PAGE> 11
FURTHER RESOLVED, that the DAC Merger shall become effective at the time
when a Certificate of Ownership and Merger setting forth a copy of these
resolutions and the date of adoption thereof (the "Certificate of Ownership and
Merger") is accepted for filing in the Office of the Secretary of State of the
State of Delaware (the "Effective Time"); and
FURTHER RESOLVED, that any executive officer of the Company be, and each
of them hereby is, authorized and directed, on behalf of the Company, within
such reasonable time after the contribution of the Funding Stock to Precept as
any such officer shall determine is appropriate, (a) to execute, attest and
file the Certificate of Ownership and Merger with the Office of the Secretary
of State of the State of Delaware and to record a certified copy thereof in the
Office of the Recorder of Deeds of New Castle County, State of Delaware, and
(b) to execute and deliver or file such other agreements, instruments or
documents, and to take such further actions, as any such officer of the Company
may deem necessary, desirable or appropriate in order to effect the DAC Merger.
<PAGE> 12
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
-------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
OWNERSHIP, WHICH MERGES:
"DATAPLEX ACQUISITION CORP.", A DELAWARE CORPORATION,
WITH AND INTO "ACS INVESTORS, INC." UNDER THE NAME OF "AFFILIATED COMPUTER
SERVICES, INC.", A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE
STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE FIFTH DAY OF JULY,
A.D. 1994, AT 4:30 O'CLOCK P.M.
[SEAL]
/s/ EDWARD J. FREEL
[SEAL] -------------------------------------
Edward J. Freel, Secretary of State
2163155 8100M AUTHENTICATION: 7884602
960089038 DATE: 03-27-96
<PAGE> 13
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
DATAPLEX ACQUISITION CORP.
WITH AND INTO
ACS INVESTORS, INC.
ACS INVESTORS, INC., a corporation organized and existing under the laws of
the State of Delaware (the "Company"), DOES HEREBY CERTIFY THAT:
1. The Company was incorporated on June 8, 1988 pursuant to the General
Corporation Law of the State of Delaware (the "DGCL").
2. The Company owns the following shares of the capital stock of
Dataplex Acquisition Corp., a corporation incorporated on August 10, 1989
pursuant to the DGCL ("DAC"), which constitute the only outstanding classes of
capital stock of DAC:
(a) 1,003,640 shares of Class A Common Stock, par value $.0001
per share ("DAC Class A Common Stock"), representing approximately 96% of
the outstanding shares of DAC Class A Common Stock;
(b) 188,400 shares of Class B Common Stock, par value $.0001
per share ("DAC Class B Common Stock"), representing 100% of the
outstanding shares of DAC Class B Common Stock; and
(c) 4,255,650 shares of 10% Noncumulative Series B Preferred Stock,
par value $1.00 per share ("DAC Preferred Stock"), representing
approximately 97% of the outstanding shares of DAC Preferred Stock.
3. The Board of Directors of the Company, by resolutions duly adopted on
May 24, 1994 (the "Resolutions of Merger"), has voted to merge, pursuant to
Section 253 of the DGCL, DAC with and into the Company (the "DAC Merger"). A
true and correct copy of the Resolutions of Merger, which set forth the terms
and conditions of the DAC Merger, including the securities of the Company to be
issued and delivered by the Company, as the surviving corporation of the DAC
Merger, upon surrender of the shares of DAC Class A Common Stock and DAC
Preferred Stock not owned by the Company, is attached hereto as Exhibit A and
incorporated herein by this reference. The Resolutions of Merger have not been
modified or rescinded and are in full force and effect on the date hereof.
4. The Resolutions of Merger provide that, in connection with the DAC
Merger, the Company shall change its corporate name by amending Article First
of the Second Amended and Restated Certificate of Incorporation of the Company
to read as follows:
"FIRST: The name of the corporation is: Affiliated Computer Services,
Inc. (the "Company)."
5. The DAC Merger shall become effective at the time when this
Certificate of Ownership and Merger is accepted for filing in the Office of the
Secretary of State of the State of Delaware.
<PAGE> 14
IN WITNESS WHEREOF, the Company has caused this Certificate of Ownership
and Merger to be signed by Jeffrey A. Rich, its Executive Vice-President and
attested by William L. Deckelman, Jr., its Secretary, as of July 5, 1994.
ACS INVESTORS, INC.
By: /s/ JEFFREY A. RICH
----------------------------------
Executive Vice-President
ATTEST:
By: /s/ WILLIAM L. DECKELMAN, JR.
---------------------------------
Secretary
-2-
<PAGE> 15
EXHIBIT A
ACS INVESTORS, INC.
RESOLUTIONS OF MERGER
RESOLVED, that the Company merge, pursuant to Section 253 of the General
Corporation Law of the State of Delaware (the "DGCL"), Dataplex Acquisition
Corp. ("DAC") with and into the Company (the "DAC Merger") and assume all of
its obligations; and
FURTHER RESOLVED, that the terms and conditions of the DAC Merger are as
follows:
a. Effect on DAC Common Stock. At the Effective Time (as hereinafter
defined), each issued share of Class A Common Stock, par value $.0001 per
share, of DAC ("DAC Class A Common Stock") and Class B Common Stock, par
value $.0001 per share of DAC ("DAC Class B Common Stock"), whether or not
outstanding, immediately prior to the Effective Time and held by the
Company or DAC shall be cancelled and retired, and all rights in respect
thereof shall cease to exist, without any conversion thereof or any payment
with respect thereto or in exchange therefor. Each share of DAC Class A
Common Stock issued and outstanding immediately prior to the Effective Time
and held by any person other than the Company or DAC shall be cancelled and
retired and (other than shares of DAC Class A Common Stock held by persons
who properly perfect their appraisal rights pursuant to Section 262 of the
DGCL) shall be converted automatically into the right to receive 0.67559224
shares of Class A Common Stock, par value $.01 per share, of the Company.
Thereafter, the holders of certificates representing shares of DAC Class A
Common Stock and DAC Class B Common Stock shall cease to have any rights as
stockholders of DAC (except such rights, if any, as they may have pursuant
to Section 262 of the DGCL).
b. Effect on DAC Preferred Stock. At the Effective Time, each issued
share of 10% Noncumulative Series B Preferred Stock, par value $1.00 per
share, of DAC ("DAC Preferred Stock"), whether or not outstanding,
immediately prior to the Effective Time and held by the Company or DAC
shall be cancelled and retired, and all rights in respect thereof shall
cease to exist, without any conversion thereof or any payment with respect
thereto or in exchange therefor. Each share of DAC Preferred Stock issued
and outstanding immediately prior to the Effective Time and held by any
person other than the Company or DAC shall be cancelled and retired and
(other than shares of DAC Preferred Stock held by persons who properly
perfect their appraisal rights pursuant to Section 262 of the DGCL) shall
be converted automatically into the right to receive $1.00 per share
without interest thereon. Thereafter, the holders of certificates
representing shares of DAC Preferred Stock shall cease to have any rights
as stockholders of DAC (except such rights, if any, as they may have
pursuant to Section 262 of the DGCL).
c. Effect on Company Stock. At the Effective Time, each share of
capital stock of the Company issued and outstanding at such time shall
continue to be one identical share of capital stock of the Company.
FURTHER RESOLVED, that in connection with the DAC Merger, the Company
shall change its corporate name by amending Article First of the Second Amended
and Restated Certificate of Incorporation of the Company to read as follows:
"FIRST: The name of the corporation is: Affiliated Computer Services,
Inc. (the "Company")."
<PAGE> 16
FURTHER RESOLVED, that the DAC Merger shall become effective at the time
when a Certificate of Ownership and Merger setting forth a copy of these
resolutions and the date of adoption thereof (the "Certificate of Ownership and
Merger") is accepted for filing in the Office of the Secretary of State of the
State of Delaware (the "Effective Time"); and
FURTHER RESOLVED, that any executive officer of the Company be, and each
of them hereby is, authorized and directed, on behalf of the Company, within
such reasonable time after the contribution of the Funding Stock to Precept as
any such officer shall determine is appropriate, (a) to execute, attest and
file the Certificate of Ownership and Merger with the Office of the Secretary
of State of the State of Delaware and to record a certified copy thereof in the
Office of the Recorder of Deeds of New Castle County, State of Delaware, and
(b) to execute and deliver or file such other agreements, instruments or
documents, and to take such further actions, as any such officer of the Company
may deem necessary, desirable or appropriate in order to effect the DAC Merger.
-2-
<PAGE> 17
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
-------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE CERTIFICATE OF MERGER, WHICH MERGES:
"AFFILIATED COMPUTER SERVICES, INC.", A DELAWARE CORPORATION,
WITH AND INTO "ACS INVESTORS, INC." UNDER THE NAME OF "ACS INVESTORS, INC.",
A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE,
WAS RECEIVED AND FILED IN THIS OFFICE THE THIRTIETH DAY OF JUNE, A.D. 1994, AT
12:32 O'CLOCK P.M.
AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CORPORATION SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.
[SEAL]
/s/ EDWARD J. FREEL
[SEAL] -------------------------------------
Edward J. Freel, Secretary of State
2163155 8330 AUTHENTICATION: 7207176
944149213 DATE: 08-10-94
<PAGE> 18
CERTIFICATE OF MERGER
MERGING
AFFILIATED COMPUTER SERVICES, INC.
WITH AND INTO
ACS INVESTORS, INC.
ACS INVESTORS, INC., a corporation organized and existing under the
laws of the State of Delaware (the "Company"), DOES HEREBY CERTIFY THAT.
1. The names of the constituent corporations are "ACS Investors,
Inc.", which was incorporated under the laws of the State of Delaware, and
"Affiliated Computer Services, Inc." ("Services"), which was incorporated under
the laws of the State of Delaware.
2. An Agreement of Merger, dated as of June 30, 1994 (the "Merger
Agreement"), relating to the merger of Services with and into the Company (the
"Services Merger") has been approved, adopted, certified, executed and
acknowledged by each of the Company and Services in accordance with Section 251
of the General Corporation Law of the State of Delaware.
3. The name of the surviving corporation will be "ACS Investors,
Inc."
4. The certificate of incorporation of the Company shall be the
certificate of incorporation of the surviving corporation, and the Merger
Agreement does not amend in any respect the certificate of incorporation of the
Company.
5. The executed Merger Agreement is on file at the principal
place of business of the Company at 2828 North Haskell Avenue, Dallas, Texas
75204.
6. A copy of the Merger Agreement will be furnished by the
Company, on request and without cost, to any stockholder of the Company or
Services.
IN WITNESS WHEREOF, the Company has caused this Certificate of Merger
to be signed by Jeffrey A. Rich, its Executive Vice-President and attested by
William L. Deckelman, Jr., its Secretary, as of June 30, 1994.
ACS INVESTORS, INC.
By: /s/ JEFFREY A. RICH
-------------------------------
Executive Vice-President
ATTEST:
By: /s/ WILLIAM L. DECKELMAN, JR.
-----------------------------
Secretary
<PAGE> 19
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
-------------------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED
CERTIFICATE OF "ACS INVESTORS, INC.", FILED IN THIS OFFICE ON THE THIRTIETH DAY
OF JUNE, A.D. 1994, AT 12:30 O'CLOCK P.M.
[SEAL]
/s/ WILLIAM T. QUILLEN
[SEAL] --------------------------------------
William T. Quillen, Secretary of State
2163155 8100 AUTHENTICATION: 7167750
944120785 DATE: 06-30-94
<PAGE> 20
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 12:30 PM 06/30/1994
944120680 - 2163155
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ACS INVESTORS, INC.
ACS INVESTORS, INC., a corporation organized and existing under the laws of
the State of Delaware (the "Company"), DOES HEREBY CERTIFY THAT:
1. The name of the Company is ACS Investors, Inc., the original
Certificate of Incorporation of the Company was filed with the office of the
Secretary of State of the State of Delaware on June 8, 1988, and the name under
which the Company was originally incorporated is Affiliated Computer Systems,
Inc.
2. An Amended and Restated Certificate of Incorporation of the Company
was filed with the Office of the Secretary of State of the State of Delaware on
August 30, 1991, which certificate was further amended by amendments filed with
the Office of the Secretary of State of the State of Delaware on November 27,
1991, December 17, 1991 and June 22, 1992.
3. This Second Amended and Restated Certificate of Incorporation of the
Company has been duly adopted and executed in accordance with the provisions of
Sections 103, 242 and 245 of the General Corporation Law of the State of
Delaware.
4. The certificate of incorporation of the Company is being amended
hereby to, among other things, reclassify the capital stock of the Company as
described below in Article Fourth.
5. The text of the certificate of incorporation of the Company is hereby
amended and restated in its entirety to read as follows:
"FIRST: The name of the corporation is ACS Investors, Inc. (the
"Company").
SECOND: The address of the Company's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington,
County of New Castle, Delaware 19801. The name of the Company's registered agent
at such address is The Corporation Trust Company.
THIRD: The purpose of the Company is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "DGCL").
FOURTH: Section 1. Reclassification. Upon the filing of this Second Amended
and Restated Certificate of Incorporation with the Office of the Secretary of
State of the State of Delaware (the "Effective Time"), (a) 81,720.9 shares of
the issued and outstanding Class A Common Stock, par value $.00029 per share, of
the Company ("Old Class A Common Stock") shall be reclassified, automatically
and without any action on the part of the respective holders thereof, into
1,201,090 shares of Class A Common Stock (as hereinafter defined), (b) 326,879.1
shares of the issued and outstanding Old Class A Common Stock shall be
reclassified, automatically and without any action on the part of the respective
holders thereof, into 4,804,258 shares of Class B Common Stock (as hereinafter
defined), (c) 89,984 shares of the issued and outstanding Class B Common Stock,
par value $.00016 per share, of the Company ("Old Class B Common Stock") shall
be reclassified, automatically and without any action on the part of the
respective holders thereof, into 1,322,534 shares of Class A Common Stock, (d)
206,963 shares of the issued and outstanding Class C Common Stock, par value
$.00029 per share, of the Company ("Old Class C Common Stock") shall be
reclassified, automatically and without any action on the part of the respective
holders thereof, into 3,041,808 shares of Class A Common Stock, and (e) 243,937
shares of the issued Old Class C Common Stock held in the Company's treasury
shall be reclassified, automatically, into 3,585,228 shares of Class A Common
Stock. The aforementioned (a) 81,720.9 and 326,879.1 shares of Old Class A
Common Stock, (b) 89,984 shares of Old Class B Common Stock and (c) 206,963 and
243,937 shares of Old Class C Common Stock constitute all
<PAGE> 21
of the shares of each such class of Common Stock of the Company issued and
outstanding, reserved for issuance or held in the Company's treasury at the
Effective Time.
Section 2. Authorized Capital Stock. The total number of shares of all
classes of capital stock that the Company shall have authority to issue is
25,000,000 shares, consisting of (a) 17,195,742 shares of Class A Common Stock,
par value $0.01 per share ("Class A Common Stock"), (b) 4,804,258 shares of
Class B Common Stock, par value $0.01 per share ("Class B Common Stock" and,
together with Class A Common Stock, "Common Stock"), and (c) 3,000,000 shares
of Preferred Stock, par value $1.00 per share ("Preferred Stock").
The number of authorized shares of any class or classes of capital
stock of the Company may be increased or decreased (but not below the number of
shares thereof then outstanding) by the affirmative vote of the holders of a
majority of the stock of the Company entitled to vote thereon. The Board of
Directors shall have the authority to fix or alter the powers, designations,
preferences and relative, participating, optional or other special rights of
all classes of the capital stock of the Company; provided, however, that in no
case shall the powers, preferences and rights of the Class A Common Stock be
greater than those provided herein. Except as otherwise required by law or
expressly provided for herein, the rights, powers, and preferences of the
shares of Common Stock and the qualifications, limitations, or restrictions
thereof, shall be in all respects identical.
Section 3. Common Stock. The relative rights, powers, preferences,
qualifications, limitations and restrictions of the Class A Common Stock and
Class B Common Stock from and after the Effective Time shall be as follows:
(a) Voting Rights. Each share of Class A Common Stock shall
be entitled to one vote, and each share of Class B Common Stock shall
be entitled to ten votes, on all matters submitted to a vote of the
stockholders. Except as otherwise provided herein or by law or in any
resolution or resolutions of the Board of Directors of the Company
providing for the issuance of Preferred Stock, all actions submitted
to a vote of the stockholders of the Company shall be voted on by the
holders of the Class A Common Stock and Class B Common Stock (as well
as the holders of any series of Preferred Stock, if any, entitled to
vote thereon), voting together as a single class.
(b) Conversion. The Class A Common Stock has no conversion
rights. Each share of Class B Common Stock is convertible at any time,
and from time to time, at the option of and without cost to the holder
thereof, into one fully paid and nonassessable share of Class A Common
Stock on and subject to the terms and conditions set forth herein;
provided, however, that for a period of one year from the Effective
Time shares of Class B Common Stock may only be converted into Class A
Common Stock 90 days after the delivery to the Company of a Conversion
Notice (as hereinafter defined); and provided further, however, that
shares of Class B Common Stock shall be automatically converted,
without any action on the part of the holder thereof, into shares of
Class A Common Stock on the occurrence of the events described in
subsection (c) of this Section 3.
If any record owner of any shares of Class B Common Stock (a
"Class B Holder") desires to convert any of such shares into shares of
Class A Common Stock, such Class B Holder shall present and surrender
the certificate or certificates representing such shares during usual
business hours at any office or agency of the Company maintained for
the transfer of Class B Common Stock and shall deliver a written
notice ("Conversion Notice") of the election of such Class B Holder
to convert the shares represented by such certificate or any portion
thereof as specified in the Conversion Notice. The Conversion Notice
shall state the name or names (with addresses) in which the
certificate or certificates representing shares of Class A Common
Stock issuable on such conversion shall be registered. If so required
by the Company, any certificate representing shares of Class B Common
Stock surrendered for conversion shall be accompanied by instruments
of transfer, in form satisfactory to the Company, duly executed by the
holder of such shares or his authorized representative. Each
conversion of shares of Class B Common Stock shall be deemed to have
been
-2-
<PAGE> 22
effected on the date (the "conversion date") on which the certificate or
certificates representing such shares shall have been surrendered and such
notice and any required instruments of transfer shall have been received as
aforesaid (or if the date of such surrender and receipt falls within the period
of one year from the Effective Time, then the conversion date shall be 90 days
after the date of such surrender and receipt). The person or persons in whose
name or names any certificate or certificates representing shares of Class A
Common Stock issuable upon such conversion shall be, for the purpose of
receiving dividends and for all other corporate purposes whatsoever, deemed to
have become the holder or holders of record of the shares of Class A Common
Stock represented thereby on the conversion date.
As promptly as practicable after the conversion date, the Company
shall issue and deliver at such office or agency, to or upon the written order
of the holder thereof, certificates for the number of shares of Class A Common
Stock issuable upon such conversion. Subject to the provisions of subsection
(c) of this Section 3, in the event any certificate representing shares of
Class B Common Stock shall be surrendered for conversion of a part only of the
shares represented thereby, the Company shall deliver at such office or
agency, to or upon the written order of the holder thereof, a certificate or
certificates for the number of shares of Class B Common Stock represented by
such surrendered certificate which are not being converted. The issuance of
certificates representing shares of Class A Common Stock issuable upon the
conversion of shares of Class B Common Stock by the registered holder thereof
shall be made without charge to the converting holder for any tax imposed on
the Company in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable with respect to any transfer
involved in the issue and delivery of any certificate in a name other than that
of the registered holder of the shares being converted, and the Company shall
not be required to issue or deliver any such certificate unless and until the
person requesting the issue thereof shall have paid to the Company the amount
of such tax or has established to the satisfaction of the Company that such tax
has been paid.
Upon any conversion of shares of Class B Common Stock into shares of
Class A Common Stock pursuant hereto, no adjustment with respect to dividends
shall be made; only those dividends shall be payable on the shares so converted
as may be declared and are payable to holders of record of shares of Class B
Common Stock on a date prior to the conversion date with respect to the shares
so converted; and only those dividends shall be payable on shares of Class A
Common Stock issued upon such conversion as may be declared and are payable to
holders of record of shares of Class A Common Stock on or after such conversion
date.
In case of any consolidation or merger of the Company as a result of
which the holders of Class A Common Stock shall be entitled to receive cash,
stock, other securities, or other property with respect to or in exchange for
Class A Common Stock or in case of any sale or conveyance of all or
substantially all of the property or business of the Company as an entirety,
each holder of any share of Class B Common Stock shall have the right
thereafter, so long as the conversion right hereunder shall exist, to convert
such share into the kind and amount of cash, shares of stock, and other
securities and properties as are receivable upon such consolidation, merger,
sale or conveyance by each holder of one share of Class A Common Stock and
shall have no other conversion rights with regard to such share. The provisions
of this paragraph shall similarly apply to successive consolidations, mergers,
sales or conveyances.
Shares of Class B Common Stock converted into Class A Common Stock as
provided in this subsection (b) shall be retired and shall resume the status of
authorized but unissued shares of Class B Common Stock.
Such number of shares of Class A Common Stock as may from time to time
be required for such purpose shall be reserved for issuance upon conversion of
outstanding shares of Class B Common Stock and for issuance upon exercise of
options, if any.
-3-
<PAGE> 23
(c) Restrictions on Transfer of Class B Common Stock. No Class B
Holder may transfer, and the Company shall not register the transfer of, any
shares of Class B Common Stock, whether by sale, assignment, gift, bequest,
appointment or otherwise, except to a Permitted Transferee (as hereinafter
defined).
In the case of a Class B Holder who is a natural person and the
beneficial owner of shares of Class B Common Stock proposed to be transferred,
a Permitted Transferee consists only of:
(i) such Class B Holder's spouse; provided, however, that
upon divorce any Class B Common Stock held by such spouse shall
immediately and automatically be converted into Class A Common Stock;
(ii) any lineal descendant of any great-grandparent of such
Class B Holder, including adopted children, and any such descendant's
spouse (such descendants and their spouses, together with such Class B
Holder's spouse, are referred to herein as "family members");
(iii) the trustee or trustees of a trust (including a voting
trust) for the sole benefit of such Class B Holder and/or any of such
Class B Holder's family members, except that such trust may also grant
a general or special power of appointment to one or more of such Class
B Holder's family members and may permit trust assets to be used to pay
taxes, legacies, and other obligations of the trust or the estates of
one or more of such Class B Holder's family members payable by reason
of the death of any of such family members; provided, however, that if
at any time such trust fails to meet the requirements of this
subparagraph (iii), all shares of Class B Common Stock then held by
such trustee or trustees shall immediately and automatically be
converted into Class A Common Stock on a share-for-share basis, and
stock certificates formerly representing such shares of Class B Common
Stock shall thereupon and thereafter be deemed to represent a like
number of shares of Class A Common Stock;
(iv) any organization established by a Class B Holder or any
of such Class B Holder's family members, contributions to which are
deductible for federal income, estate, or gift tax purposes (a
"charitable organization") and a majority of whose governing board at
all times consists of such Class B Holder and/or one or more of the
Permitted Transferees of such Class B Holder, or any successor to such
charitable organization meeting the requirements of this subparagraph
(iv); provided that, if there is any change in the composition of the
governing board of such charitable organization that would cause such
charitable organization no longer to qualify as a Permitted Transferee
of such Class B Holder, all shares of Class B Common Stock then held
by such charitable organization shall immediately and automatically be
converted into Class A Common Stock on a share-for-share basis, and
stock certificates formerly representing such shares of Class B Common
Stock shall thereupon and thereafter be deemed to represent a like
number of shares of Class A Common Stock; and
(v) any partnership in which all of the partners are, and all
of the partnership interests are owned by, such Class B Holder and/or
any of such Class B Holder's family members, or any corporation wholly
owned by such Class B Holder and/or any of such Class B Holder's
family members; provided that, if there is any change in the partners
of or owners of partnership interests in such partnership or in the
stockholders of such corporation that would cause such partnership or
corporation no longer to qualify as a Permitted Transferee of such
Class B Holder, any Class B Common Stock then held by such partnership
or corporation shall immediately and automatically be converted into
Class A Common Stock on a share-for-share basis, and stock
certificates formerly representing such
-4-
<PAGE> 24
shares of Class B Common Stock shall thereupon and thereafter be
deemed to represent a like number of shares of Class A Common Stock.
In the case of a Class B Holder that is a partnership or a corporation
and the beneficial owner of the shares of Class B Common Stock proposed to be
transferred, a Permitted Transferee consists only of:
(i) any partner of such partnership who was a partner thereof
on the record date of the initial distribution of Class B Common
Stock;
(ii) any stockholder of such corporation who held any share
thereof on the record date of the initial distribution of Class B
Common Stock and who receives shares of Class B Common Stock pro rata
to his stock ownership in such corporation through a dividend or
through a distribution made upon liquidation of such corporation;
(iii) any person transferring shares of Class B Common Stock
to such partnership or corporation after the record date of the
initial distribution of Class B Common Stock; provided, however, that
such transferor may not receive shares of Class B Common Stock in
excess of the shares of Class B Common Stock transferred by the
transferor to such partnership or corporation;
(iv) any Permitted Transferee of any person meeting the
requirements set forth in subparagraph (i), (ii) or (iii) of this
paragraph, but not in excess of the number of shares such stockholder
or person is entitled to receive pursuant to this paragraph; and
(v) the survivor of a merger or consolidation of such
corporation if those persons who owned beneficially sufficient shares
entitled to elect at least a majority of the entire board of directors
of such constituent corporation immediately prior to the merger or
consolidation own beneficially sufficient shares entitled to elect at
least a majority of the entire board of directors of the surviving
corporation, provided that if by reason of any change in the ownership
of such stock of the surviving corporation such surviving corporation
would no longer qualify as a Permitted Transferee of such Class B
Holder, all shares of Class B Common Stock then held by such surviving
corporation shall immediately and automatically be converted into
Class A Common Stock on a share-for-share basis, and stock
certificates formerly representing such shares of Class B Common Stock
shall thereupon and thereafter be deemed to represent a like number of
shares of Class A Common Stock.
In the case of a Class B Holder holding such shares of Class B Common
Stock as trustee pursuant to a trust that is an irrevocable trust on the record
date of the initial distribution of Class B Common Stock, a Permitted
Transferee consists only of
(i) any successor trustee of such trust who meets the
requirements set forth in subsection (ii) or (iii) of this paragraph;
(ii) any person to whom or for whose benefit the principal or
income may be distributed under the terms of such trust or any person
to whom such trust may be obligated to make future transfers, provided
such obligation exists prior to the date such trust becomes a holder
of Class B Common Stock; and
(iii) any family member of the creator of such trust.
In the case of a Class B Holder holding such shares of Class B Common
Stock as trustee pursuant to a trust that is any trust other than an
irrevocable trust described in the immediately
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<PAGE> 25
preceding paragraph on-the date of the initial distribution of Class B Common
Stock, a Permitted Transferee consists only of:
(i) any successor trustee of such trust who meets the
requirements set forth in subsection (ii) of this paragraph; and
(ii) the person who established such trust and any Permitted
Transferee of such person.
In the case of a record (but not beneficial) owner of Class B Common
Stock as nominee for the person who is the beneficial owner thereof on the
record date of the initial distribution of Class B Common Stock, a Permitted
Transferee consists only of such beneficial owner and any Permitted Transferee
of such beneficial owner.
Upon the death or permanent incapacity of any Class B Holder, such
Class B Holder's Class B Common Stock shall immediately and automatically be
converted into Class A Common Stock on a share-for-share basis, and stock
certificates formerly representing such shares of Class B Common Stock shall
thereupon and thereafter be deemed to represent a like number of shares of Class
A Common Stock.
Upon the expiration of 90 days after the death or permanent incapacity
of Darwin Deason or upon the conversion by The Deason International Trust of
all of the shares of Class B Common Stock beneficially owned by Mr. Deason into
shares of Class A Common Stock, any and all shares of Class B Common Stock
shall immediately and automatically be converted into Class A Common Stock on a
share-for-share basis, and stock certificates formerly representing such shares
of Class B Common Stock shall thereupon and thereafter be deemed to represent a
like number of shares of Class A Common Stock.
Shares of Class B Common Stock are freely transferrable among
Permitted Transferees, but any other transfer of any share of Class B Common
Stock will result in the automatic conversion of such share into Class A Common
Stock.
(d) Dividends and Liquidation Rights. After dividends have been
declared and set aside for payment or paid on any series of Preferred Stock
having a preference over the Common Stock with respect to payment of such
dividends, the holders of Common Stock shall be entitled to receive and to
share equally in, when, as and if declared by the Board of Directors of the
Company (the "Board of Directors"), dividends per share, out of the funds
legally available therefor, in such amounts as the Board of Directors may from
time to time fix and determine, in its sole and absolute discretion. Upon the
liquidation, dissolution or winding up of the affairs of the Company, whether
voluntary or involuntary, after there have been paid or set apart for the
holders of any series of Preferred Stock having a preference over the Common
Stock with respect to distributions upon liquidation the full amount to which
they are entitled, the holders of Common Stock are entitled to receive and
to share equally in all assets of the Company available for distribution to
stockholders.
(e) Other Rights. The holders of Common Stock are not entitled to any
preemptive right to subscribe for, purchase or receive any part of any new or
additional issue of stock of any class, whether now or hereafter authorized, or
of bonds, debentures or other securities convertible into or exchangeable for
stock, and all such additional shares of stock of any class, or bonds,
debentures or other securities convertible into or exchangeable for stock, may
be issued and disposed of by the Company on such terms and for such
consideration, so far as may be permitted by law, and to such persons as the
Board of Directors in its sole and absolute discretion may deem advisable.
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<PAGE> 26
Section 4. Preferred Stock. Preferred Stock may be issued in one or
more series. The Board of Directors is hereby authorized to issue the shares of
Preferred Stock in such series and to fix from time to time before issuance the
number of shares to be included in any such series and the designation,
relative powers, preferences, and rights and qualifications, limitations, or
restrictions of all shares of such series. The authority of the Board of
Directors with respect to each such series will include, without limiting the
generality of the foregoing, the determination of any or all of the following:
(a) the number of shares of any series and the designation to
distinguish the shares of such series from the shares of all other
series;
(b) the voting powers, if any, and whether such voting powers
are full or limited in such series;
(c) the redemption provisions, if any, applicable to such
series, including the redemption price or prices to be paid;
(d) whether dividends, if any, will be cumulative or
noncumulative, the dividend rate of such series, and the dates and
preferences of dividends on such series;
(c) the rights of such series upon the voluntary or
involuntary dissolution of, or upon any distribution of the assets of,
the Company;
(f) the provisions, if any, pursuant to which the shares of
such series are convertible into, or exchangeable for, shares of any
other class or classes or of any other series of the same or any other
class or classes of stock, or any other security, of the Company or
any other corporation or other entity, and the price or prices or the
rates of exchange applicable thereto;
(g) the right, if any, to subscribe for or to purchase any
securities of the Company or any other corporation or other entity,
(h) the provisions, if any, of a sinking fund applicable to
such series; and
(i) any other relative, participating, optional, or other
special powers, preferences, rights, qualifications, limitations, or
restrictions thereof,
all as may be determined from time to time by the Board of Directors and stated
in the resolution or resolutions providing for the issuance of such Preferred
Stock (collectively, a "Preferred Stock Designation").
Section 5. Restrictions on Transfer of Restricted Stock. In the event
the Company makes a distribution (a "Spin-Off") of all of the outstanding stock
held by it in Precept Business Products, Inc., a wholly owned subsidiary of the
Company (a "Subsidiary"), to the Company's stockholders, which Spin-Off is
intended to qualify pursuant to Section 355 of the Internal Revenue Code of
1986, as amended (the "Code"), then for a period commencing on the date
established by the Board of Directors of the Company for such distribution of
stock of a Subsidiary in a Spin-Off (the "Distribution Date") and ending on the
second anniversary thereof, (a) no Transfer of Restricted Stock (as hereinafter
defined) may be effected unless the Company has first received (i) a counterpart
of the proposed instrument of Transfer of Restricted Stock and any proposed
instrument of Transfer of stock of the Subsidiary, if any, executed and
acknowledged by the parties thereto, and (ii) all other information reasonably
requested by the Company with respect to the proposed Transfer and (b) any
Transfer of Restricted Stock shall be null and void from its inception unless
the Company approves such Transfer based upon the findings of a Tax Opinion (as
hereinafter defined) that the Transfer Conditions (as hereinafter defined) have
been satisfied with respect to such Transfer. Moreover, for a period commencing
on the record date for distribution of stock of a Subsidiary in a Spin-Off (the
"Record Date") and ending on the Distribution Date, any Transfer of Restricted
Stock shall be null and
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<PAGE> 27
void from its inception unless such Transfer of Restricted Stock shall include
the right to receive the distribution of the stock of the Subsidiary in the
Spin-Off.
Promptly after the receipt of a request for a Transfer of Restricted
Stock, the Company shall, at the Company's expense, seek to obtain a Tax
Opinion with respect to such Transfer; provided, however, that if the Company
is advised that the opining party is unable to render a Tax Opinion (and the
reasons therefor), the Company shall be under no further obligation to
determine that the Transfer Conditions have been satisfied or seek a Tax
Opinion with respect to such Transfer.
For purposes of this Section 5 the following terms shall have the
following meanings:
(a) "Purported Owner" shall mean any Person who would, but
for the provisions of this Section 5, acquire Restricted Stock
pursuant to a Transfer prohibited pursuant hereto.
(b) "Restricted Stock" shall mean any shares of stock of the
Company outstanding as of the Record Date of the Spin-Off the holder
of which is entitled to receive stock of the Subsidiary in the
Spin-Off and, as to shares of stock held prior to the Effective Time,
the holder of which consented to the restrictions on transfer imposed
by this Section 5, any shares of stock into which shares of Restricted
Stock may be converted, any shares of stock which may be issued as
dividends with respect to shares of Restricted Stock and any shares of
stock which are otherwise derived from shares of Restricted Stock.
(c) "Tax Opinion" shall mean an opinion from a nationally
recognized tax counsel or "Big 6" accounting firm satisfactory to the
Company stating that the Transfer Conditions have been satisfied. The
Tax Opinion may be based upon and assume the correctness of factual
representations of the Company or the Subsidiary.
(d) "Transfer" shall mean the taking of action that, but for
the provisions of this Section 5, would be effective to sell, transfer
or otherwise dispose of stock of either the Company or the Subsidiary
(either directly or indirectly and whether voluntarily or
involuntarily), and also means any transaction pursuant to which stock
of either the Company or the Subsidiary would be Transferred,
including, without limitation, any mortgage, pledge, hypothecation,
transfer, redemption, sale, assignment, gift or other disposition of
any part or all of the stock of either the Company or the Subsidiary
(either directly or indirectly and whether voluntarily or
involuntarily).
(e) "Transfer Conditions" shall mean (i) the Linked Sale
Requirements described below, in the event that the Transfer of
Restricted Stock constitutes a "sale or exchange" for purposes of the
Code other than a "sale or exchange" to a person (a "Related Party")
having a relationship to the stockholder desiring to make a Transfer
of Restricted Stock (the "Transferor") described in Sections 267 or
707(b) of the Code, or (ii) the Other Requirements described below, in
the event that the Transfer of Restricted Stock does not constitute a
"sale or exchange" or the Transfer of Restricted Stock constitutes a
"sale or exchange" to a Related Party for purposes of the Code.
For purposes of rendering a Tax Opinion as to whether the Transfer
Conditions have been satisfied, the Linked Sale Requirements shall be deemed to
be satisfied if the following requirements are satisfied:
(a) Within five business days before or after the proposed
Transfer of Restricted Stock, the Transferor Transfers an amount of
stock of the Subsidiary (the "Linked Sale") that constitutes the same
percentage of the Transferor's interest in the Subsidiary as the
proposed Transfer of Restricted Stock constitutes of the Transferor's
interest in the Company, where both such interests are determined as
of the Record Date (after giving effect to the Spin-Off);
(b) The Linked Sale constitutes a "sale or exchange" for
purposes of the Code; and
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<PAGE> 28
(c) The Transferor represents in writing to the Company that
(i) there is no plan or intention to reacquire any of the shares
subject to the proposed Transfer of Restricted Stock or the Linked
Sale, and (ii) the Transferor will not acquire any stock of the Company
or the Subsidiary within the 30-day period that commences on the day
after the later to occur of the effectiveness for purposes of the Code
of the proposed Transfer of Restricted Stock and the Linked Sale.
For purposes of determining whether a Linked Sale constitutes a "sale
or exchange" for purposes of the Code, (a) a redemption by the Subsidiary will
not constitute a "sale or exchange" unless (i) Section 302(b)(2) of the Code
would be satisfied if the stock of the Transferor were treated as "voting
stock," and (ii) the Tax Opinion concludes that the redemption is "not
essentially equivalent to a dividend" within the meaning of Section 302(b)(1)
of the Code, (b) a redemption by the Subsidiary will not constitute a "sale or
exchange" if any obligation provided by the Subsidiary in consideration for the
stock does not qualify as "debt" for purposes of the Code, and (c) in no case
will any redemption by the Subsidiary of stock held by any Person who, directly
or indirectly, controls in the aggregate 50% or more of the voting power of
the stock of the Subsidiary constitute a "sale or exchange".
For purposes of rendering a Tax Opinion as to whether the Transfer
Conditions have been satisfied the Other Requirements shall be deemed to be
satisfied if the following requirements are satisfied:
(a) Within five business days before or after the proposed
Transfer of Restricted Stock, the Transferor Transfers an amount of
stock of the Subsidiary (the "Other Transfer") that constitutes the
same percentage of the Transferor's interest in the Subsidiary as the
proposed Transfer of the Restricted Stock constitutes of the
Transferor's interest in the Company, where both such interests are
determined as of the Record Date (after giving effect to the
Spin-Off);
(b) The Other Transfer does not constitute a "sale or
"exchange" or the Other Transfer constitutes a "sale or exchange" to a
Related Party for purposes of the Code;
(c) The Other Transfer and the proposed Transfer of
Restricted Stock are made to the same Person; and
(d) The Transferor represents in writing to the Company that
the proposed Transfer of Restricted Stock and the Other Transfer are
not being made for the purpose of facilitating a "sale or exchange" of
the stock of the Company or the Subsidiary without a corresponding
"sale or exchange" of the stock of the other.
If a Person shall (either directly or indirectly and whether
voluntarily or involuntarily) become a Purported Owner of Restricted Stock
pursuant to a Transfer that is null and void pursuant to this Section 5, then
the purported Owner shall not obtain any rights in and to any such Restricted
Stock, the Transfer to the Purported Owner shall not be recognized by the
Company and the party making the purported Transfer of the Restricted Stock
shall continue to own such Restricted Stock and have all rights, including all
voting rights and all rights to any dividends or other distributions,
liquidating or otherwise, incident to ownership of the Restricted Stock, which
shall continue to be validly issued and outstanding.
Upon a determination by the Company that a Transfer of Restricted
Stock has purportedly been made or is anticipated to be made in violation of
this Section 5, the Company may take such action as it deems advisable to
prevent any such Transfer of Restricted Stock, including, without limitation,
refuse to give effect to such Transfer on the books and records of the Company,
refuse to record the Purported Owner as the record owner of such Restricted
Stock, and institute proceedings to enjoin any such Transfer of Restricted
Stock.
If any provision of this Section 5 or any application of any such
provision is determined to be invalid by any federal or state court having
jurisdiction over the issues, the remaining provisions shall remain valid and
other applications of such provision shall be affected only to the extent
necessary to comply with the
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<PAGE> 29
determination of such court, and this Section 5 shall be construed, in the
absence of such provision, to give effect to the purpose of this Section 5 to
the maximum extent possible.
This Section 5 shall terminate with respect to any Spin-Off as of the
second anniversary of the Distribution Date of such Spin-Off or such earlier
date as the Board of Directors may by resolution determine if the Board of
Directors receives an opinion from a nationally recognized tax counsel or "Big
6" accounting firm that the removal of the restrictions set forth in this
Section 5 will not have any material adverse consequences to the Company, the
Subsidiary, or the stockholders of either, and the Board of Directors
determines that such acceleration is in the best interests of the Company, the
Subsidiary, or the stockholders of either. Notwithstanding the provisions of
this Section 5, if an initial public offering of shares of New Class A Common
Stock is not completed within 180 days after the Distribution Date, the Board
of Directors may by resolution accelerate the termination date of this Section
5 to December 31, 1994. In the event the Board of Directors accelerates the
termination of this Section 5, the Company shall so notify all registered
stockholders.
All certificates evidencing ownership of shares of Restricted Stock
shall be submitted to the Company prior to the Distribution Date to be
imprinted with a conspicuous legend on the front of the certificate as follows:
"THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS ON
TRANSFER PURSUANT TO SECTION 5 OF ARTICLE FOURTH OF THE CERTIFICATE OF
INCORPORATION OF THE COMPANY, WHICH PROHIBIT, WITH CERTAIN
EXCEPTIONS, ANY TRANSFERS OF THE SHARES REPRESENTED HEREBY WITHOUT THE
PRIOR APPROVAL OF THE COMPANY.
ANY TRANSFER OR PURPORTED OR ATTEMPTED TRANSFER OF ANY OF THE SHARES
OF STOCK REPRESENTED HEREBY IN VIOLATION OF SUCH RESTRICTIONS SHALL BE
NULL AND VOID FROM ITS INCEPTION."
All certificates evidencing ownership of shares of Restricted Stock shall be
returned, bearing the legend set forth above, in connection with the
distribution of the stock of the Subsidiary in the Spin-off. After the
termination of this Section 5, holders of Restricted Stock may submit their
certificates to the Company for removal of such legend. Upon such submission of
certificates for removal of the legend, the Company shall promptly issue
certificates representing equivalent replacement shares of stock that do not
bear such legend.
FIFTH: The Board of Directors may make, amend, and repeal the Bylaws
of the Company (the "Bylaws"). Any Bylaw made by the Board of Directors under
the powers conferred hereby may be amended or repealed by the Board of
Directors (except as specified in any such Bylaw so made or amended) or by the
stockholders in the manner provided in the Bylaws of the Company.
Notwithstanding the foregoing and anything contained in this Certificate of
Incorporation to the contrary, Bylaws 1, 3, 8, 10, 11, 12, 13, 33 and 39 may
not be amended or repealed by the stockholders, and no provision inconsistent
therewith may be adopted by the stockholders, without the affirmative vote of
the holders of at least 80% of the Voting Stock, voting together as a single
class. For the purposes of this Certificate of Incorporation, "Voting Stock"
means stock of the Company of any class or series entitled to vote generally in
the election of Directors. Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, the affirmative vote of the
holders of at least 80% of the Voting Stock, voting together as a single class,
is required to amend or repeal, or to adopt any provisions inconsistent with,
this Article Fifth.
SIXTH: Subject to the rights of the holders of any series of Preferred
Stock, special meetings of the stockholders of the Company may be called only
by (i) the Chairman of the Board of Directors of the Company (the "Chairman of
the Board of Directors"), (ii) the President of the Company (the "President"),
(iii) the Secretary of the Company (the "Secretary") within 10 calendar days
after receipt of the written
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<PAGE> 30
request of a majority of the total number of Directors that the Company
would have if there were no vacancies (the "Whole Board of Directors"), and
(iv) as provided in Bylaw 3.
At any annual meeting or special meeting of stockholders of the Company, only
such business will be conducted or considered as has been brought before such
meeting in the manner provided in the Bylaws of the Company. Notwithstanding
anything contained in this Certificate of Incorporation to the contrary, the
affirmative vote of at least 80% of the Voting Stock, voting together as a
single class, will be required to amend or repeal, or adopt any provision
inconsistent with, this Article Sixth.
SEVENTH: Section 1. Number, Election, and Terms of Directors. Subject
to the rights, if any, of the holders of any series of Preferred Stock to
elect additional Directors under circumstances specified in a Preferred Stock
Designation, the number of the Directors of the Company will not be less than
three nor more than 15 and will be fixed from time to time in the manner
described in the Bylaws of the Company. Election of Directors of the Company
need not be by written ballot unless requested by the Chairman of the Board of
Directors, the President, or the holders of a majority of the Voting Stock
present in person or represented by proxy at a meeting of the stockholders at
which Directors are to be elected.
Section 2. Nomination of Director Candidates. Advance notice of
stockholder nominations for the election of Directors must be given in the
manner provided in the Bylaws of the Company.
Section 3. Newly Created Directorships and Vacancies. Subject to the
rights, if any, of the holders of any series of Preferred Stock to elect
additional Directors under circumstances specified in a Preferred Stock
Designation, newly created directorships resulting from any increase in the
number of Directors and any vacancies on the Board of Directors resulting from
death, resignation, disqualification, removal, or other cause will be filled
solely by the affirmative vote of a majority of the remaining Directors then in
office, even though less than a quorum of the Board of Directors, or by a sole
remaining Director. No decrease in the number of Directors constituting the
Board of Directors may shorten the term of any incumbent Director.
Section 4. Removal. Subject to the rights, if any, of the holders of
any series of Preferred Stock to elect additional Directors under circumstances
specified in a Preferred Stock Designation, any Director may be removed from
office by the stockholders in the manner provided in this Section 4. At any
annual meeting or special meeting of the stockholders, the notice of which
states that the removal of a Director or Directors is among the purposes of the
meeting, the affirmative vote of the holders of at least 80% of the Voting
Stock, voting together as a single class, may remove such Director or Directors
with or without cause.
Section 5. Amendment, Repeal, Etc. Notwithstanding anything contained
in this Certificate of Incorporation to the contrary, the affirmative vote of
at least 80% of the Voting Stock, voting together as a single class, is
required to amend or repeal, or adopt any provision inconsistent with, this
Article Seventh.
EIGHTH: To the full extent permitted by the DGCL or any other
applicable law currently or hereafter in effect, no Director of the Company
will be personally liable to the Company or its stockholders for or with
respect to any acts or omissions in the performance of his or her duties as a
Director of the Company. Any repeal or modification of this Article Eighth will
not adversely affect any right or protection of a Director of the Company
existing prior to such repeal or modification.
NINTH: Each person who is or was or had agreed to become a Director or
officer of the Company, and each such person who is or was serving or who had
agreed to serve at the request of the Board of Directors or an officer of the
Company as an employee or agent of the Company or as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other entity, whether for profit or not for profit (including the heirs,
executors, administrators or estate of such person), will be indemnified by the
Company to the full extent permitted by the DGCL or any other applicable law as
currently or hereafter in effect. The right of indemnification provided in this
Article Ninth (a) will not be exclusive of any other rights to which any person
seeking indemnification may otherwise be entitled, including without limitation
pursuant to any contract approved by a majority of the Whole Board of Directors
(whether
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<PAGE> 31
or not the Directors approving such contract are or are to be parties to such
contract or similar contracts), and (b) will be applicable to matters otherwise
within its scope whether or not such matters arose or arise before or after the
adoption of this Article Ninth. Without limiting the generality or the effect of
the foregoing, the Company may adopt Bylaws, or enter into one or more
agreements with any person, which provide for indemnification greater or
different than that provided in this Article Ninth or the DGCL. Any amendment or
repeal of or adoption of any provision inconsistent with, this Article Ninth
will not adversely affect any right or protection existing hereunder, or arising
out of facts occurring, prior to such amendment, repeal or adoption and no such
amendment, repeal or adoption will affect the legality, validity or
enforceability of any contract entered into or right granted prior to the
effective date of such amendment, repeal or adoption.
IN WITNESS WHEREOF, the Company has caused this Second Amended and
Restated Certificate of Incorporation to be signed by Jeffrey A. Rich, its
Executive Vice-President, and attested by William L. Deckelman, Jr., its
Secretary, as of June 30, 1994.
ACS INVESTORS, INC.
By: /s/ JEFFREY A. RICH
-----------------------------------
Executive Vice-President
ATTEST:
By: /s/ WILLIAM L. DECKELMAN, JR.
-------------------------------
Secretary
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<PAGE> 32
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
-------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "ACS INVESTORS, INC.", FILED IN THIS OFFICE ON THE THIRTIETH DAY
OF JUNE, A.D. 1994, AT 12:31 O'CLOCK P.M.
[SEAL]
/s/ EDWARD J. FREEL
[SEAL] -------------------------------------
Edward J. Freel, Secretary of State
2163155 8100 AUTHENTICATION: 7884601
960089038 DATE: 03-27-96
<PAGE> 33
CERTIFICATE OF DESIGNATIONS
OF
ACS INVESTORS, INC.
ESTABLISHING
SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
ACS INVESTORS, INC., a corporation organized and existing under the laws
of the State of Delaware (the "Company"), DOES HEREBY CERTIFY THAT:
1. The Company was incorporated on June 8, 1988 pursuant to the General
Corporation Law of the State of Delaware (the "DGCL").
2. Pursuant to Section 151(g) of the DGCL and authority expressly vested
in the Board of Directors of the Company by the certificate of incorporation of
the Company, the Board of Directors of the Company, by resolutions duly adopted
as of June 30, 1994 (the "Resolutions"), has voted to establish the series of
Preferred Stock, par value $1.00 per share, of the Company ("Preferred Stock")
with the powers, designations, preferences and relative, participating,
optional or other rights set forth in the Resolutions. A true and correct copy
of the Resolutions is attached hereto as Exhibit 1 and incorporated herein by
this reference. The Resolutions have not been modified or rescinded and are in
full force and effect on the date hereof.
3. The number of shares of Preferred Stock as to which the Resolutions
apply is 1,000.
IN WITNESS WHEREOF, the Company has caused this Certificate of
Designations to be signed by Jeffrey A. Rich, its Executive Vice President, and
attested by William L. Deckelman, Jr., its Secretary, as of June 30, 1994.
ACS INVESTORS, INC.
By: JEFFREY A. RICH
-----------------------------------
Executive Vice-President
ATTEST:
By: /s/ WILLIAM L. DECKELMAN
-------------------------------
Secretary
<PAGE> 34
EXHIBIT 1
ACS INVESTORS, INC.
RESOLUTIONS
WHEREAS, the Board of Directors on May 24, 1994 approved, among other
things, (i) the merger of Affiliated Computer Services, Inc. with and into the
Company (the "Services Merger") on the terms set forth in the Company's
Information Statement to Stockholders, dated May 31, 1994 (the "Information
Statement"), (ii) the issuance of the Company's preferred stock to Mutual
Security Life Insurance Company in Liquidation on the terms set forth in the
Information Statement, and (iii) the adoption of a Second Amended and Restated
Certificate of Incorporation of the Company (the "Restated Certificate"),
subject to the approval and adoption of the Restated Certificate by the
stockholders of the Company entitled to vote thereon.
WHEREAS, the Restated Certificate has been approved and adopted by the
stockholders of the Company entitled to vote thereon and has been filed with the
Office of the Secretary of State of the State of Delaware.
THEREFORE, BE IT RESOLVED, that, in connection with the Services
Merger, pursuant to the authority expressly granted to and vested in the Board
by Section 4 of Article Fourth of the Restated Certificate, the Board hereby
establishes a series of the Preferred Stock, par value $1.00 per share, of the
Company with the powers, designations, preferences and relative, participating,
optional or other rights set forth on Exhibit A attached hereto (the "New
Preferred Stock"); and
FURTHER RESOLVED, that any executive officer of the Company be, and
each of them hereby is, authorized and directed, on behalf of the Company, (a)
to execute, attest and file a Certificate of Designations relating to the New
Preferred Stock (the "Certificate of Designations") with the Office of the
Secretary of State of the State of Delaware and to record a certified copy
thereof in the Office of the Recorder of Deeds of New Castle County, State of
Delaware, and (b) to execute and deliver or file such other agreements,
instruments or documents, and to take such further actions, as any such officer
of the Company may deem necessary, desirable or appropriate in order to effect
the establishment of the New Preferred Stock.
<PAGE> 35
EXHIBIT A
SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
1. DESIGNATION. The New Preferred Stock shall be designated "Series A
Cumulative Redeemable Preferred Stock" (the "Series A Preferred Stock").
2. CERTAIN DEFINITIONS. Unless the context otherwise requires, the terms
defined in this paragraph 2 shall have, for all purposes of these resolutions,
the meaning herein specified.
"Common Stock" shall mean all shares now or hereafter authorized of any
class of Common Stock of the Company and any other stock of the Company,
howsoever designated, authorized after the Issue Date, which has the right
(subject always to prior rights of any class or series of Preferred Stock of
the Company) to participate in the distribution of the assets and earnings of
the Company without limit as to per share amount.
"Dividend Payment Date" shall have the meaning set forth in paragraph
3(a) below.
"Dividend Period" shall have the meaning set forth in paragraph 3(a) below.
"Final Redemption Date" shall have the meaning set forth in paragraph 5(c)
below.
"Issue Date" shall mean the date on which the first share of Series A
Preferred Stock is issued by the Company.
"Junior Stock" shall mean, for purposes of paragraph 3 below, Common Stock
and any other class or series of stock of the Company issued after the Issue
Date the holders of which are not entitled to receive any dividends in any
Dividend Period unless all dividends to which the holders of Series A
Preferred Stock are entitled to receive have been paid or declared and set
apart for payment and, for purposes of paragraph 4 below, any class or series
of stock of the Company issued after the Issue Date the holders of which are
not entitled to receive any assets upon the liquidation, dissolution or winding
up of the affairs of the Company until the holders of Series A Preferred Stock
shall have received the entire amount to which such holders are entitled upon
such liquidation, dissolution or winding up.
"Parity Stock" shall mean, for purposes of paragraph 3 below, any other
class or series of stock of the Company issued after the Issue Date entitled to
receive payment of dividends on a parity with the holders of Series A Preferred
Stock and, for purposes of paragraph 4 below, any other class or series of
stock of the Company issued after the Issue Date the holders of which are
entitled to receive assets upon the liquidation, dissolution or winding up of
the affairs of the Company on a parity with the holders of Series A Preferred
Stock.
"Redemption Date" shall have the meaning set forth in paragraph 5(a)
below.
"Redemption Price" shall mean the price to be paid upon redemption of the
Series A Preferred Stock, as determined in accordance with paragraph 5(a)
below.
"Senior Stock" shall mean, for purposes of paragraph 3 below, any class
or series of stock of the Company issued after the Issue Date ranking senior to
the Series A Preferred Stock in respect of the right to receive dividends, and,
for the purposes of paragraph 4 below, any class or series of stock of the
Company issued after the Issue Date ranking senior to the Series A Preferred
Stock in respect of the right to receive assets upon the liquidation,
dissolution or winding up of the affairs of the Company.
"Subscription Price" shall mean $1,100.00 per share.
<PAGE> 36
"Subsidiary" shall mean any corporation of which shares of stock
possessing at least a majority of the general voting power in electing the
board of directors are, at the time as of which any determination is being
made, owned by the Company, whether directly or indirectly through one or
more Subsidiaries.
3. Dividends. (a) Subject to the prior preferences and other rights of
any Senior Stock, the holders of Series A Preferred Stock shall be entitled to
receive, out of funds legally available therefor, cash dividends per share at
the rate of 9% of the Subscription Price per share, per annum, and no more,
accruing from and after July 1, 1994. Such dividends shall be cumulative from
and after July 1, 1994 and shall be payable in arrears, when and as declared by
the board of Directors, on March 31, June 30, September 30 and December 31 of
each year (each such date being herein referred to as a "Dividend Payment
Date"), commencing on September 30, 1994. The quarterly period between
consecutive Dividend Payment Dates shall hereinafter be referred to as a
"Dividend Period." Each such dividend shall be paid to the holders of record of
the Series A Preferred Stock as their names appear on the share register of the
Company on the corresponding Record Date. As used above, the term "Record Date"
means, with respect to the Dividend payable on March 31, June 30, September 30
and December 31, respectively, of each year, the preceding March 15, June 15,
September 15 and December 15, or such other record date designated by the Board
of Directors of the Company with respect to the dividend payable on such
respective Dividend Payment Date. Dividends on account of arrears for any past
Dividend Periods may be declared and paid at any time, without reference to any
Dividend Payment Date, to holders of record on such date, not exceeding 50
days preceding the payment date thereof, as may be fixed by the Board of
Directors.
(b) In the event that full cash dividends are not paid or made available
to the holders of all outstanding shares of Series A Preferred Stock and of any
Parity Stock, and funds available shall be insufficient to permit payment in
full in cash to all such holders of the preferential amounts to which they are
then entitled, the entire amount available for payment of cash dividends shall
be distributed among the holders of the Series A Preferred Stock and of any
Parity Stock ratably in proportion to the full amount to which they would
otherwise be respectively entitled, and any remainder not paid in cash to the
holders of the Series A Preferred Stock shall cumulate as provided in paragraph
3(c) below.
(c) If, on any Dividend Payment Date, the holders of the Series A
Preferred Stock shall not have received the full dividends provided for in the
other provisions of this paragraph 3, then such dividends shall cumulate,
whether or not earned or declared, with additional dividends thereon for such
succeeding full Dividend Period during which such dividends shall remain
unpaid. Unpaid dividends for any period less than a full Dividend Period shall
cumulate on a day-to-day basis and shall be computed on the basis of a 360 day
year.
(d) So long as any shares of Series A Preferred Stock shall be
outstanding, the Company shall not declare or pay on any Junior Stock any
dividend whatsoever, whether in cash, property or otherwise (other than
dividends payable in shares of the class or series upon which such dividends
are declared or paid, or payable in shares of Common Stock with respect to
Junior Stock other than Common Stock, together with cash in lieu of fractional
shares), nor shall the Company make any distributions on any Junior Stock, nor
shall any Junior Stock be purchased or redeemed by the Company or any
Subsidiary, nor shall any monies be paid or made available for a sinking fund
for the purchase or redemption of any Junior Stock, unless all dividends to
which the holders of Series A Preferred Stock shall have been entitled for all
previous Dividend Periods shall have been paid or declared and a sum of money
sufficient for the payment thereof set apart.
4. Distributions Upon Liquidation, Dissolution or Winding Up. In the
event of any voluntary or involuntary liquidation, dissolution or other winding
up of the affairs of the Company, subject to the prior preferences and other
rights of any Senior Stock, but before any distribution or payment shall be
made to the holders of Junior Stock, the holders of the Series A Preferred
Stock shall be entitled to be paid the Subscription Price of all outstanding
shares of Series A Preferred Stock as of the date of such liquidation or
dissolution or such other winding up, plus any accrued and unpaid dividends
thereon to such date, and no more, in cash or in property taken at its fair
value as determined by the Board of Directors, or both, at the
-2-
<PAGE> 37
election of the Board of Directors. If such payment shall have been made in
full to the holders of any Series A Preferred Stock, and if payment shall have
been made in full to the holders of any Senior Stock and Parity Stock of all
amounts to which such holders shall be entitled, the remaining assets and funds
of the Company shall be distributed among the holders of Junior Stock, according
to their respective shares and priorities. If, upon any such liquidation,
dissolution or winding up of the affairs of the Company, the net assets of the
Company distributable among the holders of all outstanding shares of the Series
A Preferred Stock and of any Parity Stock shall be insufficient to permit the
payment in full to such holders of the preferential amounts to which they are
entitled, then the entire net assets of the Company remaining after the
distributions to holders of any Senior Stock of the full amount to which they
may be entitled shall be distributed among the holders of the Series A Preferred
Stock and of any Parity Stock ratably in proportion to the full amounts to
which they would otherwise be respectively entitled. Neither the consolidation
or merger of the Company into or with another corporation or corporations, nor
the sale of all or substantially all of the assets of the Company to another
corporation or corporations shall be deemed a liquidation, dissolution or
winding up of the affairs of the Company within the meaning of this paragraph 4.
5. Redemption by the Company. (a) The Series A Preferred Stock shall be
redeemable at the option of the Company in whole or in part at any time prior
to July 15, 1999 out of funds legally available therefor, at a redemption price
per share equal to $1,100.00 plus any accrued but unpaid dividends on the
shares to be so redeemed. To the extent not previously redeemed, the Series A
Preferred Stock shall be redeemed on the tenth business day following July 15,
1999 at a redemption price equal to $1,100.00 per share plus any accrued but
unpaid dividends on shares not previously redeemed.
(b) Notice of every proposed redemption of Series A Preferred Stock shall
be sent by or on behalf of the Company, by first class mail, postage prepaid,
to the holders of record of the shares to be redeemed at their respective
addresses as they shall appear on the records of the Company, not less than 30
days nor more than 60 days prior to the applicable date fixed for redemption
set forth in Section 5(a) (the "Redemption Date") (i) stating the place or
places at which the shares called for redemption shall, upon presentation and
surrender of the certificates evidencing such shares, be redeemed, and the
Redemption Price therefor, and (ii) stating the name and address of any
Redemption Agent if other than the Company, and the name and address of the
Company's transfer agent for the Series A Preferred Stock. The Company may act
as the transfer agent for the Series A Preferred Stock.
(c) If notice of redemption shall have been given as hereinbefore
provided, and the Company shall not default in the payment of the Redemption
Price, then each holder of shares called for redemption shall be entitled to all
preferences and relative and other rights accorded by this resolution until and
including the date prior to the Redemption Date. If the Company shall default in
making payment or delivery as aforesaid on the Redemption Date, then each holder
of the shares called for redemption shall be entitled to all preferences and
relative and other rights accorded by this resolution until and including the
date prior to the date (the "Final Redemption Date") when the Company makes
payment or delivery as aforesaid to the holders of the Series A Preferred Stock.
From and after the Redemption Date or, if the Company shall default in making
payment or delivery as aforesaid, the Final Redemption Date, the shares called
for redemption shall no longer be deemed to be outstanding, and all rights of
the holders of such shares shall cease and terminate, except the right of the
holders of such shares, upon surrender of certificates therefor, to receive
amounts to be paid hereunder.
6. Voting Rights. The holders of the issued and outstanding shares of
Series A Preferred Stock shall have no voting rights except as set forth herein
and as required by law.
7. Issuance of Senior Stock or Parity Stock. Without the written consent
of the holders of the Series A Preferred Stock, the Company will not issue any
Senior Stock or Parity Stock while any Series A Preferred Stock is outstanding,
if as the result thereof, the net capital of the Company available for
distribution upon liquidation (determined by the application of generally
accepted accounting principles, consistently applied) will be less than the sum
of the liquidation value of the outstanding Senior Stock and the outstanding
Parity Stock and 150% of the Redemption Price of the outstanding Series A
Preferred Stock.
-3-
<PAGE> 38
8. Capital. On any redemption of Series A Preferred Stock, the Company's
capital shall be reduced by an amount equal to the Subscription Price multiplied
by the number of shares of Series A Preferred Stock redeemable on such date. The
provisions of this paragraph 8 shall apply to all certificates representing the
Series A Preferred Stock whether or not all such certificates have been
surrendered to the Company.
9. Deposits by the Company. The Company shall make quarterly cash
deposits, out of funds legally available therefor, into a segregated account
established by the Company at a federally insured financial institution
designated by the holder of the Series A Preferred Shares (the "Special
Account") on September 30, December 31, March 31 and June 30 (or the next
business day following any such date, if such is not a business day) during each
period set forth below in the amounts set forth below opposite such period.
<TABLE>
<CAPTION>
Dates Quarterly Deposit Amount
<S> <C>
September 30, 1994 - June 30, 1995 $68,750
September 30, 1995 - June 30, 1998 $55,000
September 30, 1998 - June 30, 1999 $41,250
</TABLE>
Such amounts shall be maintained for payment of the Redemption Price in
accordance with the terms hereof unless and until any holder of the Series A
Preferred Shares converts such shares into the Company's Class A Common Stock
pursuant to paragraph 10 below. The Company shall at all times retain the right
to direct the investment of all funds in the Special Account and shall be
entitled to all interest, dividends or other proceeds earned on or paid with
respect to such funds.
10. Conversion Rights. At any time after July 1, 1996, provided that the
Company is then a reporting company under the Securities Exchange Act of 1934,
the holders of the Series A Preferred Stock may send notice, by first class
mail, postage prepaid ("Conversion Notice"), to the Company stating that any
such holder is electing to convert all but not less than all shares of the
Series A Preferred Stock held by such holder into a number of shares of the
Company's Class A Common Stock, $.01 par value per share ("Class A Shares")
determined by (a) multiplying the number of shares of Series A Preferred Stock
held by such holder by $1,100, (b) multiplying the result by a fraction, the
numerator of which is the number of shares of Series A Preferred Stock to be
converted and the denominator of which is the number of shares of Series A
Preferred Stock held by such holder, (c) dividing the result by the price per
share of the Class A Shares as determined on the next business day occurring on
or after 10 days following the date of the Company's receipt of the Conversion
Notice based on the average of the bid and asked prices for the Class A Shares
on such date on the exchange on which the Class A Shares are then listed (or, if
applicable the NASDAQ National Market System), and (d) rounding the result to
the nearest whole number. The Company will, at its expense, register the Class A
Shares issuable upon exercise of the foregoing conversion rights for public sale
under the Securities Act of 1933, as amended, and under any applicable state
securities laws, such that the Class A Shares issuable upon exercise of the
foregoing conversion rights will be immediately saleable and will remain
saleable through September 1, 1996. On the date of conversion, the Company shall
pay to the holders of the Series A Preferred Stock any and all accrued but
unpaid dividends on such shares. After June 1, 1996 and on or before July 1,
1996, the Company shall notify the holders of the Series A Preferred Stock that
(i) such shares of Series A Preferred Stock are convertible pursuant to this
paragraph 10, and (ii) the registration rights described herein with respect to
the Class A Shares (hereinafter defined) issuable upon such conversion will
expire on September 1, 1996. Upon any sale of the Class A Shares issuable upon
exercise of the foregoing conversion rights the Company shall pay on behalf of
the holders of the Series A Preferred Stock any sales commissions payable to a
securities broker in connection with such transaction to the extent the sales
proceeds from such sale, net of applicable commissions, would be less than the
equivalent of $1,100 per share of Series A Preferred Stock.
11. Exclusion of Other Rights. Except as may otherwise be required by law,
the shares of Series A Preferred Stock shall not have any preferences or
relative, participating, optional or other special
-4-
<PAGE> 39
rights, other than those specifically set forth in this resolution (as such
resolution may be amended from time to time) and in the certificate of
incorporation of the Company. The shares of Series A Preferred Stock shall have
no preemptive or subscription rights.
12. Heading of Subdivisions. The headings of the various
subdivisions hereof are for convenience of reference only and shall not affect
the interpretation of any of the provisions hereof.
13. Severability of Provisions. If any right, preference or
limitation of the Series A Preferred Stock set forth in this resolution (as
such resolution may be amended from time to time) is invalid, unlawful or
incapable of being enforced by reason of any rule of law or public policy, all
other rights, preferences and limitations set forth in this resolution (as so
amended) which can be given effect within the invalid, unlawful or
unenforceable right, preference or limitation shall, nevertheless, remain in
full force and effect, and no right, preference or limitation herein set forth
shall be deemed dependent upon any other such right, preference or limitation
unless so expressed herein.
14. Status of Reacquired Shares. Shares of Series A Preferred
Stock which have been issued and reacquired by the Company in any manner shall
(upon compliance with any applicable provisions of the laws of the State of
Delaware) have the status of authorized and unissued shares of Series A
Preferred Stock issuable in series or undesignated as to series and may be
redesignated and reissued.
-5-
<PAGE> 1
EXHIBIT 3.2
BYLAWS
OF
AFFILIATED COMPUTER SERVICES, INC.
As Amended and in Effect on
October 26, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
STOCKHOLDERS' MEETINGS....................................................1
1. Time and Place of Meetings...........................................1
2. Annual Meeting.......................................................1
3. Special Meetings.....................................................1
4. Notice of Meetings...................................................1
5. Inspectors...........................................................1
6. Quorum...............................................................1
7. Voting...............................................................2
8. Order of Business....................................................2
DIRECTORS.................................................................4
9. Function.............................................................4
10. Number, Election, and Terms..........................................4
11. Vacancies and Newly Created Directorships............................4
12. Removal..............................................................4
13. Nominations of Directors: Election...................................5
14. Resignation..........................................................6
15. Regular Meeting......................................................6
16. Special Meetings.....................................................6
17. Quorum...............................................................6
18. Participation in Meetings by Telephone Conference....................6
19. Committees...........................................................6
20. Compensation.........................................................7
21. Rules................................................................7
NOTICES...................................................................7
22. Generally............................................................7
23. Waivers..............................................................8
OFFICERS..................................................................8
24. Generally............................................................8
25. Compensation.........................................................8
26. Succession...........................................................8
27. Authority and Duties.................................................9
STOCK.....................................................................9
28. Certificates.........................................................9
29. Classes of Stock.....................................................9
30. Transfers............................................................9
31. Lost, Stolen, or Destroyed Certificates..............................9
32. Record Dates.........................................................9
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
INDEMNIFICATION..........................................................10
33. Damages and Expenses................................................10
34. Insurance, Contracts and Funding....................................11
GENERAL..................................................................11
35. Fiscal Year.........................................................11
36. Seal................................................................11
37. Reliance upon Books, Reports, and Records...........................11
38. Time Periods........................................................11
39. Amendments..........................................................11
40. Certain Defined Terms...............................................12
</TABLE>
<PAGE> 4
STOCKHOLDERS' MEETINGS
1. Time and Place of Meetings. All meetings of the stockholders for the election
of Directors or for any other purpose will be held at such time and place,
within or without the State of Delaware, as may be designated by the Board of
Directors or, in the absence of a designation by the Board of Directors, the
Chairman of the Board of Directors, the President, or the Secretary, and stated
in the notice of meeting. The Board of Directors may postpone and reschedule any
previously scheduled annual or special meeting of the stockholders.
2. Annual Meeting. An annual meeting of the stockholders will be held at such
date and time as may be designated from time to time by the Board of Directors,
at which meeting the stockholders will elect by a plurality vote the Directors
to succeed those whose terms expire at such meeting and will transact such other
business as may properly be brought before the meeting in accordance with Bylaw
8.
3. Special Meetings. Special meetings of the stockholders may be called only by
(a) the Chairman of the Board of Directors, and (b) the Secretary within 10
calendar days after receipt of the written request of a majority of the Whole
Board of Directors. Any such request by a majority of the Whole Board of
Directors must be sent to the Chairman of the Board of Directors and the
Secretary and must state the purpose or purposes of the proposed meeting.
Special meetings of holders of the outstanding Preferred Stock, if any, may be
called in the manner and for the purposes provided in the applicable Preferred
Stock Designation.
4. Notice of Meetings. Written notice of every meeting of the stockholders,
stating the place, date, and hour of the meeting and, in the case of a special
meeting, the purpose or purposes for which the meeting is called, will be given
not less than 10 nor more than 60 calendar days before the date of the meeting
to each stockholder of record entitled to vote at such meeting, except as
otherwise provided herein or by law. When a meeting is adjourned to another
place, date, or time, written notice need not be given of the adjourned meeting
if the place, date, and time thereof are announced at the meeting at which the
adjournment is taken; provided however, that if the adjournment is for more than
30 calendar days, or if after the adjournment a new record date is fixed for the
adjourned meeting, written notice of the place, date, and time of the adjourned
meeting must be given in conformity herewith. At any adjourned meeting, any
business may be transacted which properly could have been transacted at the
original meeting.
5. Inspectors. The Board of Directors may appoint one or more inspectors of
election to act as judges of the voting and to determine those entitled to vote
at any meeting of the stockholders, or any adjournment thereof, in advance of
such meeting. The Board of Directors may designate one or more persons as
alternate inspectors to replace any inspector who fails to act. If no inspector
or alternate is able to act at a meeting of stockholders, the presiding officer
of the meeting may appoint one or more substitute inspectors.
6. Quorum. Except as otherwise provided by law or in a Preferred Stock
Designation, the holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, will
constitute a quorum at all meetings of the stockholders for
1
<PAGE> 5
the transaction of business thereat. If, however, such quorum is not present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, will have the power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum is present or represented.
7. Voting. Except as otherwise provided by law, by the Certificate of
Incorporation, or in a Preferred Stock Designation, each stockholder will be
entitled at every meeting of the stockholders to one vote for each share of
stock having voting power standing in the name of such stockholder on the books
of the Company on the record date for the meeting and such votes may be cast
either in person or by written proxy. Every proxy must be duly executed and
filed with the Secretary. A stockholder may revoke any proxy that is not
irrevocable by attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy or another duly executed proxy bearing
a later date with the Secretary. The vote upon any question brought before a
meeting of the stockholders may be by voice vote, unless otherwise required by
the Certificate of Incorporation or these Bylaws or unless the Chairman of the
Board of Directors or the holders of a majority of the outstanding shares of all
classes of stock entitled to vote thereon present in person or by proxy at such
meeting otherwise determine. Every vote taken by written ballot will be counted
by the inspectors of election. When a quorum is present at any meeting, the
affirmative vote of the holders of a majority of the stock present in person or
represented by proxy at the meeting and entitled to vote on the subject matter
and which has actually been voted will be the act of the stockholders, except in
the election of Directors or as otherwise provided in these Bylaws, the
Certificate of Incorporation, a Preferred Stock Designation, or by law.
8. Order of Business. (a) The Chairman of the Board of Directors, or such other
officer of the Company designated by a majority of the Whole Board of Directors,
will call meetings of the stockholders to order and will act as presiding
officer thereof. Unless otherwise determined by the Board of Directors prior to
the meeting, the presiding officer of the meeting of the stockholders will also
determine the order of business and have the authority in his or her sole
discretion to regulate the conduct of any such meeting, including, without
limitation, by imposing restrictions on the persons (other than stockholders of
the Company or their duly appointed proxies) who may attend any such
stockholders' meeting, by ascertaining whether any stockholder or his proxy may
be excluded from any meeting of the stockholders based upon any determination by
the presiding officer, in his sole discretion, that any such person has unduly
disrupted or is likely to disrupt the proceedings thereat, and by determining
the circumstances in which any person may make a statement or ask questions at
any meeting of the stockholders.
(b) At an annual meeting of the stockholders, only such business will be
conducted or considered as is properly brought before the meeting. To be
properly brought before an annual meeting, business must be (i) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors in accordance with Bylaw 4, (ii) otherwise properly
brought before the meeting by the presiding officer or by or at the direction of
a majority of the Whole Board of Directors, or (iii) otherwise properly
requested to be brought before the meeting by a stockholder in accordance with
Bylaw 8(c).
2
<PAGE> 6
(c) In order to properly submit any business to an annual meeting of
stockholders, a stockholder must give timely notice in writing to the Secretary
of the Company. To be considered timely, a stockholder's notice must be
delivered either in person or by United States certified mail, postage prepaid,
and received at the principal executive offices of the Company (a) not less than
120 days nor more than 150 days before the first anniversary date of the
Company's proxy statement in connection with the last annual meeting of
stockholders or (b) if no annual meeting has been called after the expiration of
more than 30 days from the date for such meeting contemplated at the time of the
previous year's proxy statement, not less than a reasonable time, as determined
by the Board of Directors, prior to the date of the applicable annual meeting.
The Secretary of the Company will deliver any stockholder proposals and
nominations received in a timely manner for review by the Board of Directors or
a committee designated by the Board of Directors.
A stockholder's notice to submit business to an annual meeting of stockholders
will set forth (i) the name and address of the stockholder, (ii) the class and
number of shares of stock beneficially owned by such stockholder, (iii) the name
in which such shares are registered on the stock transfer books of the Company,
(iv) a representation that the stockholder intends to appear at the meeting in
person or by proxy to submit the business specified in such notice, (v) any
material interest of the stockholder in the business to be submitted, and (vi) a
brief description of the business desired to be submitted to the annual meeting,
including the complete text of any resolutions to be presented at the annual
meeting, and the reasons for conducting such business at the annual meeting. In
addition, the stockholder making such proposal will promptly provide any other
information reasonably requested by the Company.
Notwithstanding the foregoing provisions of this Bylaw 8(c), a stockholder who
seeks to have any proposal included in the Company's proxy statement will comply
with the requirements of Regulation 14A under the Securities Exchange Act of
1934, as amended.
(d) At a special meeting of stockholders, only such business may be conducted or
considered as is properly brought before the meeting. To be properly brought
before a special meeting, business must be (i) specified in the notice of the
meeting (or any supplement thereto) given by or at the direction of the Chairman
of the Board of Directors or a majority of the Whole Board of Directors in
accordance with Bylaw 4, or (ii) otherwise properly brought before the meeting
by the presiding officer or by or at the direction of a majority of the Whole
Board of Directors.
(e) The determination of whether any business sought to be brought before any
annual or special meeting of the stockholders is properly brought before such
meeting in accordance with this Bylaw will be made by the presiding officer of
such meeting. If the presiding officer determines that any business is not
properly brought before such meeting, he or she will so declare to the meeting
and any such business will not be conducted or considered.
3
<PAGE> 7
DIRECTORS
9. Function. The business and affairs of the Company will be managed under the
direction of its Board of Directors.
10. Number, Election, and Terms. (a) Subject to the rights, if any, of any
series of Preferred Stock to elect additional Directors under circumstances
specified in a Preferred Stock Designation and to the minimum and maximum number
of authorized Directors provided in the Certificate of Incorporation, the
authorized number of Directors may be determined from time to time only by a
vote of a majority of the Whole Board of Directors. The Directors, other than
those who may be elected by the holders of any series of the Preferred Stock,
will be classified with respect to the time for which they severally hold office
in accordance with the Certificate of Incorporation.
(b) Notwithstanding anything contained in the Certificate of Incorporation or
these Bylaws to the contrary, the term of any Director who is also an officer of
the Company will terminate automatically, without any further action on the part
of the Board of Directors or such Director, upon the termination for any reason
of such Director in his or her capacity as an officer of the Company.
Notwithstanding anything contained in the Certificate of Incorporation or these
Bylaws to the contrary, the affirmative vote of at least 80% of the Directors
then in office will be required to amend, repeal, or adopt any provision
inconsistent with this Bylaw 10(b).
11. Vacancies and Newly Created Directorships. Subject to the rights, if any, of
the holders of any series of Preferred Stock to elect additional Directors under
circumstances specified in a Preferred Stock Designation, newly created
directorships resulting from any increase in the number of Directors will be
filled by the affirmative vote of the stockholders of the Company or the
affirmative vote of the remaining board members, not including those filling the
positions of the newly created directorships. Subject to the rights, if any, of
the holders of any series of Preferred Stock to elect Directors to fill a
vacancy, any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal, or other cause will be filled for the
remainder of the term of the vacating director by the affirmative vote of the
stockholders of the Company, by the affirmative vote of the remaining board
members (even though less than a quorum of the Board of Directors or by a sole
remaining Director) or by the Chairman of the Board of the Corporation, except
that if the vacancy is created with respect to a Director who at such time was
also the Chief Executive Officer, President, Chief Financial Officer, Executive
Vice President, General Counsel, Secretary or Treasurer of the Company, then
that vacancy will be filled only by the Chairman of the Board. Any Director
elected in accordance with the preceding two sentences will hold office for the
remainder of the full term of the class of Directors in which the new
directorship was created or the vacancy occurred and until such Director's
successor is elected and qualified. No decrease in the number of Directors
constituting the Board of Directors will shorten the term of an incumbent
Director.
12. Removal. Subject to the rights, if any, of the holders of any series of
Preferred Stock to elect additional Directors under circumstances specified in a
Preferred Stock Designation, any
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Director may be removed from office by the stockholders only for cause and only
in the manner provided in the Certificate of Incorporation.
13. Nominations of Directors; Election. (a) Subject to the rights, if any, of
the holders of any series of Preferred Stock to elect additional Directors under
circumstances specified in a Preferred Stock Designation, only persons who are
nominated in accordance with the following procedures will be eligible for
election at a meeting of stockholders as Directors of the Company.
(b) Nominations of persons for election as Directors of the Company may be made
at an annual meeting of stockholders only (i) by or at the direction of the
Board of Directors or (ii) by any stockholder who is a stockholder of record at
the time of giving of notice provided for in this Bylaw 13, who is entitled to
vote for the election of Directors at such meeting, and who complies with the
procedures set forth in this Bylaw 13. All nominations by stockholders must be
made pursuant to timely notice in proper written form to the Secretary.
(c) Nominations by stockholders, if made, must be made pursuant to timely notice
in writing to the Secretary of the Company. To be timely, a stockholder's notice
will be delivered to or mailed and received at the principal executive offices
of the Company (a) with respect to an election to be held at the annual meeting
of the stockholders of the Company, not less than 120 nor more than 150 days
prior to the anniversary date of the immediately preceding annual meeting of
stockholders of the Company, and (b) with respect to an election to be held at a
special meeting of stockholders of the Company for the election of Directors,
not later than the close of business on the tenth day following the date on
which notice of the date of the special meeting was mailed to stockholders of
the Company or public disclosure of the date of the special meeting was made,
whichever first occurs.
Such stockholder's notice to the Secretary will set forth (a) as to each person
whom the stockholder proposes to nominate for election or re-election as a
Director, all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is otherwise
required, pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (including such person's written consent to being named in the proxy
statement as a nominee and to serve as a Director if elected), and (b) as to the
stockholder giving the notice (i) the name and address, as they appear on the
Company's books, of such stockholder and (ii) the class and number of shares of
voting stock of the Company which are beneficially owned by such stockholder. At
the request of the Board of Directors, any person nominated by the Board of
Directors for election as a Director will furnish to the Secretary of the
Company that information required to be set forth in a stockholder's notice of
nomination which pertains to the nominee. In the event that a person is validly
designated as a nominee to the Board of Directors in accordance with the
procedures set forth in this Bylaw 13(c) and thereafter becomes unable or
unwilling to stand for election to the Board of Directors, the Board of
Directors or the stockholder who proposed such nominee, as the case may be, may
designate a substitute nominee.
The presiding officer of the meeting of stockholders will, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the procedures
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prescribed by these bylaws, and if he should so determine, he will so declare to
the meeting and the defective nomination will be disregarded.
Notwithstanding the foregoing provisions of this Bylaw 13(c), a stockholder will
also comply with all applicable requirements of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder with respect to the
matters set forth in this Bylaw 13(c).
14. Resignation. Any Director may resign at any time by giving written notice of
his resignation to the Chairman of the Board of Directors or the Secretary. Any
resignation will be effective upon actual receipt by any such person or, if
later, as of the date and time specified in such written notice.
15. Regular Meetings. Regular meetings of the Board of Directors may be held
immediately after the annual meeting of the stockholders and at such other time
and place either within or without the State of Delaware as may from time to
time be determined by the Board of Directors. Notice of regular meetings of the
Board of Directors need not be given.
16. Special Meetings. Special meetings of the Board of Directors may be called
by the Chairman of the Board of Directors or the President on one day's notice
to each Director by whom such notice is not waived, given either personally or
by mail, telephone, telegram, telex, facsimile, or similar medium of
communication, and will be called by the Chairman of the Board of Directors or
the President in like manner and on like notice on the written request of five
or more Directors. Special meetings of the Board of Directors may be held at
such time and place either within or without the State of Delaware as is
determined by the Board of Directors or specified in the notice of any such
meeting.
17. Quorum. At all meetings of the Board of Directors, a majority of the total
number of Directors then in office will constitute a quorum for the transaction
of business. Except for the designation of committees as hereinafter provided
and except for actions required by these Bylaws or the Certificate of
Incorporation to be taken by a majority of the Whole Board of Directors, the act
of a majority of the Directors present at any meeting at which there is a quorum
will be the act of the Board of Directors. If a quorum is not present at any
meeting of the Board of Directors, the Directors present thereat may adjourn the
meeting from time to time to another place, time, or date, without notice other
than announcement at the meeting, until a quorum is present.
18. Participation in Meetings by Telephone Conference. Members of the Board of
Directors or any committee designated by the Board of Directors may participate
in a meeting of the Board of Directors or any such committee, as the case may
be, by means of telephone conference or similar means by which all persons
participating in the meeting can hear other, and such participation in a meeting
will constitute presence in person at the meeting.
19. Committees. (a) The Board of Directors, by resolution passed by a majority
of the Whole Board of Directors, may designate one or more directorate
committees, each such committee to
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consist of one or more Directors and each to have such lawfully delegable powers
and duties as the Board of Directors may confer.
(b) Each committee of the Board of Directors will serve at the pleasure of the
Board of Directors or as may be specified in any resolution from time to time
adopted by the Board of Directors. The Board of Directors may designate one or
more Directors as alternate members of any such committee, who may replace any
absent or disqualified member at any meeting of such committee. In lieu of such
action by the Board of Directors, in the absence or disqualification of any
member of a committee of the Board of Directors, the members thereof present at
any such meeting of such committee and not disqualified from voting, whether or
not they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
(c) Except as otherwise provided in these Bylaws or by law, any committee of the
Board of Directors, to the extent provided in the resolution of the Board of
Directors, will have and may exercise all the powers and authority of the Board
of Directors in the direction of the management of the business and affairs of
the Company. Any such committee designated by the Board of Directors will have
such name as may be determined from time to time by resolution adopted by the
Board of Directors. Unless otherwise prescribed by the Board of Directors, a
majority of the members of any committee of the Board of Directors will
constitute a quorum for the transaction of business, and the act of a majority
of the members present at a meeting at which there is a quorum will be the act
of such committee. Each committee of the Board of Directors may prescribe its
own rules for calling and holding meetings and its method of procedure, subject
to any rules prescribed by the Board of Directors, and will keep a written
record of all actions taken by it.
20. Compensation. The Board of Directors may establish the compensation for, and
reimbursement of the expenses of, Directors for membership on the Board of
Directors and on committees of the Board of Directors, attendance at meetings of
the Board of Directors or committees of the Board of Directors, and for other
services by Directors of the Company or any of its majority-owned subsidiaries.
21. Rules. The Board of Directors may adopt rules and regulations for the
conduct of meetings and the oversight of the management of the affairs of the
Company.
NOTICES
22. Generally. Except as otherwise provided by law, these Bylaws, or the
Certificate of Incorporation, whenever by law or under the provisions of the
Certificate of Incorporation or these Bylaws notice is required to be given to
any Director or stockholder, it will not be construed to require personal
notice, but such notice may be given in writing, by mail, addressed to such
Director or stockholder, at the address of such Director or stockholder as it
appears on the records of the Company, with postage thereon prepaid, and such
notice will be deemed to be given at the time when the same is deposited in the
United States mail. Notice to Directors may
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also be given by telephone, telegram, telex, facsimile, or similar medium of
communication or as otherwise may be permitted by these Bylaws.
23. Waivers. Whenever any notice is required to be given by law or under the
provisions of the Certificate of Incorporation or these Bylaws, a waiver thereof
in writing, signed by the person or persons entitled to such notice, whether
before or after the time of the event for which notice is to be given, will be
deemed equivalent to such notice. Attendance of a person at a meeting will
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting at the beginning of the meeting to
the transaction of any business because the meeting is not lawfully called or
convened.
OFFICERS
24. Generally. The officers of the Company will be elected by the Board of
Directors and will consist of a Chairman of the Board of Directors (who, if the
Board of Directors so specifies, may but will not be required to be also the
Chief Executive Officer), a President (who may also be the Chief Executive
Officer), a Secretary, and a Treasurer. The Board of Directors may also choose
any or all of the following: one or more Vice Chairmen of the Board of
Directors, one or more Assistants to the Chairman of the Board of Directors, one
or more Vice Presidents (who may be given particular designations with respect
to authority, function, or seniority), and such other officers as the Board of
Directors may from time to time determine. Notwithstanding the foregoing, by
specific action the Board of Directors may authorize the Chairman of the Board
of Directors to appoint any person to any office other than Chairman and may
authorize the President to appoint any person to any office other than Chairman,
President, Secretary or Treasurer. Any number of offices may be held by the same
person. Any of the offices may be left vacant from time to time as the Board of
Directors may determine. In the case of the absence or disability of any officer
of the Company or for any other reason deemed sufficient by a majority of the
Board of Directors, the Board of Directors may delegate the absent or disabled
officer's powers or duties to any other officer or to any Director.
25. Compensation. The compensation of all officers and agents of the Company who
are also Directors of the Company will be fixed by the Board of Directors or by
a committee of the Board of Directors. The Board of Directors may fix, or
delegate the power to fix, the compensation of other officers and agents of the
Company to an officer of the Company.
26. Succession. The officers of the Company will hold office until their
successors are elected and qualified. The Chief Executive Officer, President,
Chief Financial Officer, any Executive Vice President, General Counsel,
Secretary and Treasurer may be removed from office at any time by the Chairman
and any other officers may be removed at any time by the President or Chief
Executive Officer. Any vacancy occurring in any office of the Company may be
filled by the Board of Directors or by the Chairman of the Board of Directors as
provided in Bylaw 24.
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27. Authority and Duties. Each of the officers of the Company will have such
authority and will perform all duties as are customarily incident to their
respective offices or as may be specified from time to time by the Board of
Directors.
STOCK
28. Certificates. Certificates representing shares of stock of the Company will
be in such form as from time to time may be determined by the Board of
Directors, subject to applicable legal requirements. Each such certificate will
be numbered and its issuance recorded in the books of the Company, and such
certificate will exhibit the holder's name and the number of shares and will be
signed by, or in the name of, the Company by the Chairman of the Board of
Directors and the Secretary or an Assistant Secretary, or the Treasurer or an
Assistant Treasurer, and will also be signed by, or bear the facsimile signature
of, a duly authorized officer or agent of any properly designated transfer agent
of the Company. Any or all of the signatures and the seal of the Company, if
any, upon such certificates may be facsimiles, engraved, or printed. Such
certificates may be issued and delivered notwithstanding that the person whose
facsimile signature appears thereon may have ceased to be such officer at the
time the certificates are issued and delivered.
29. Classes of Stock. The designations, preferences, and relative participating,
optional, or other special rights of the various classes of stock or series
thereof, and the qualifications, limitations, or restrictions thereof, will be
set forth in full or summarized on the face or back of the certificates which
the Company issues to represent its stock or, in lieu thereof, such certificates
will set forth the office of the Company from which the holders of certificates
may obtain a copy of such information.
30. Transfers. Upon surrender to the Company or the transfer agent of the
Company of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment, or authority to transfer, it will be the
duty of the Company to issue, or to cause its transfer agent to issue, a new
certificate to the person entitled thereto, cancel the old certificate, and
record the transaction upon its books.
31. Lost, Stolen or Destroyed Certificates. The Secretary may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Company alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact, satisfactory
to the Secretary, by the person claiming the certificate of stock to be lost,
stolen, or destroyed. As a condition precedent to the issuance of a new
certificate or certificates, the Secretary may require the owners of such lost,
stolen, or destroyed certificate or certificates to give the Company a bond in
such sum and with such surety or sureties as the Secretary may direct as
indemnity against any claims that may be made against the Company with respect
to the certificate alleged to have been lost, stolen, or destroyed or the
issuance of the new certificate.
32. Record Dates. (a) In order that the Company may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix a record date, which will
not be more than 60 nor less than 10 calendar days
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before the date of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders will be at the close of
business on the calendar day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the calendar day next
preceding the day on which the meeting is held. A determination of stockholders
of record entitled to notice of or to vote at a meeting of the stockholders will
apply to any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
(b) In order that the Company may determine the stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion, or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date will not be more
than 60 calendar days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose will be at the
close of business on the calendar day on which the Board of Directors adopts the
resolution relating thereto.
(c) The Company will be entitled to treat the person in whose name any share of
its stock is registered as the owner thereof for all purposes, and will not be
bound to recognize any equitable or other claim to, or interest in, such share
on the part of any other person, whether or not the Company has notice thereof,
except as expressly provided by applicable law.
INDEMNIFICATION
33. Damages and Expenses. (a) Without limiting the generality or effect of
Article Ninth of the Certificate of Incorporation, the Company will to the
fullest extent permitted by applicable law as then in effect indemnify any
person (an "Indemnitee") who is or was involved in any manner (including,
without limitation, as a party or a witness) or is threatened to be made so
involved in any threatened, pending, or completed investigation, claim, action,
suit or proceeding, whether civil, criminal, administrative, or investigative
(including, without limitation, any action, suit, or proceeding by or in the
right of the Company to procure a judgment in its favor) (a "Proceeding") by
reason of the fact that such person is or was or had agreed to become a
Director, officer, employee, or agent of the Company, or is or was serving at
the request of the Board of Directors or an officer of the Company as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, whether for profit or not for profit, or
anything done or not by such person in any such capacity, against all expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by such person in connection with such
Proceeding. Such indemnification will be a contract right and will include the
right to receive payment in advance of any expenses incurred by an Indemnitee in
connection with such Proceeding upon receipt of an undertaking by or on behalf
of such person to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the Company as authorized by this Bylaw 33
or otherwise.
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(b) The right of indemnification provided in this Bylaw 33 will not be exclusive
of any other rights to which any person seeking indemnification may otherwise be
entitled, and will be applicable to Proceedings commenced or continuing after
the adoption of this Bylaw 33, whether arising from acts or omissions occurring
before or after such adoption.
(c) The indemnification and advancement of expenses provided by, or granted
pursuant to, this Bylaw 33 shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors, and
administrators of such person.
34. Insurance, Contracts, and Funding. The Company may purchase and maintain
insurance to protect itself and any Indemnitee against any expenses, judgments,
fines, and amounts paid in settlement or incurred by any Indemnitee in
connection with any Proceeding referred to in Bylaw 33 or otherwise, to the
fullest extent permitted by applicable law as then in effect. The Company may
enter into contracts with any person entitled to indemnification under Bylaw 33
or otherwise, and may create a trust fund, grant a security interest, or use
other means (including, without limitation, a letter of credit) to ensure the
payment of such amounts as may be necessary to effect indemnification as
provided in Bylaw 33.
GENERAL
35. Fiscal Year. The fiscal year of the Company will end on June 30 of each year
or such other date as may be fixed from time to time by the Board of Directors.
36. Seal. The Board of Directors may adopt a corporate seal and use the same by
causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.
37. Reliance upon Books, Reports and Records. Each Director, each member of a
committee designated by the Board of Directors, and each officer of the Company
will, in the performance of his or her duties, be fully protected in relying in
good faith upon the records of the Company and upon such information, opinions,
reports, or statements presented to the Company by any of the Company's officers
or employees, or committees of the Board of Directors, or by any other person or
entity as to matters the Director, committee member, or officer believes are
within such other person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Company.
38. Time Periods. In applying any provision of these Bylaws that requires that
an act be done or not be done a specified number of days prior to an event or
that an act be done during a period of a specified number of days prior to an
event, calendar days will be used unless otherwise specified, the day of the
doing of the fact will be excluded, and the day of the event will be included.
39. Amendments. Except as otherwise provided by law or by the Certificate of
Incorporation or these Bylaws, these Bylaws or any of them may be amended in any
respect or repealed at any time, either (a) at any meeting of stockholders,
provided that any amendment or supplement proposed to be acted upon at any such
meeting has been described or referred to in the notice of
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such meeting, or (b) at any meeting of the Board of Directors, provided that no
amendment adopted by the Board of Directors may vary or conflict with any
amendment properly adopted by the stockholders.
40. Certain Defined Terms. Terms used herein with initial capital letters that
are not otherwise defined are used herein as defined in the Certificate of
Incorporation.
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EXHIBIT 4.10
CERTIFICATE OF TRUST
OF ACS CAPITAL TRUST I
This Certificate of Trust of ACS Capital Trust I (the "Trust") is being
duly executed and filed on behalf of the Trust by the undersigned, as trustee,
to form a business trust under the Delaware Business Trust Act (12 Del.C.
Sec.3801 et seq.) (the "Act").
1. Name. The name of the business trust formed by this Certificate of
Trust is ACS Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware are Wilmington Trust Company, 1100 North
Market Street, Wilmington, Delaware 19890, Attention: Corporate Trustee
Administration.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
of Trust in accordance with Section 3811(a)(1) of the Act.
WILMINGTON TRUST COMPANY, not
in its individual capacity but
solely as Delaware Trustee
By: /s/ James P. Lawler
---------------------------
Name: James P. Lawler
-------------------------
Title: Vice President
------------------------
<PAGE> 1
EXHIBIT 4.11
CERTIFICATE OF TRUST
OF ACS CAPITAL TRUST II
This Certificate of Trust of ACS Capital Trust II (the "Trust") is
being duly executed and filed on behalf of the Trust by the undersigned, as
trustee, to form a business trust under the Delaware Business Trust Act (12
Del.C. Sec.3801 et seq.) (the "Act").
1. Name. The name of the business trust formed by this Certificate of
Trust is ACS Capital Trust II.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware are Wilmington Trust Company, 1100 North
Market Street, Wilmington, Delaware 19890, Attention: Corporate Trustee
Administration.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
of Trust in accordance with Section 3811(a)(1) of the Act.
WILMINGTON TRUST COMPANY, not
in its individual capacity but solely as
Delaware Trustee
By: /s/ James P. Lawler
--------------------------------
Name: James P. Lawler
Title: Vice President
<PAGE> 1
EXHIBIT 4.12
ACS CAPITAL TRUST I
TRUST AGREEMENT
TRUST AGREEMENT, dated as of November 12, 1999 (the "Trust
Agreement"), between Affiliated Computer Services, Inc., a Delaware corporation
(the "Depositor"), and Wilmington Trust Company, a Delaware banking corporation,
as Delaware Trustee (the "Delaware Trustee"). The Depositor and the Delaware
Trustee hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as "ACS
Capital Trust I" in which name the Delaware Trustee, or the Depositor to the
extent provided herein, may engage in the transactions contemplated hereby, make
and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to
the Delaware Trustee the sum of $10. The Delaware Trustee hereby acknowledges
receipt of such amount in trust from the Depositor, which amount shall
constitute the initial trust estate. The Delaware Trustee hereby declares that
it will hold the trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a business trust
under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Sec 3801, et seq.
(the "Business Trust Act"), and that this document constitutes the governing
instrument of the Trust. The Delaware Trustee is hereby authorized and directed
to execute and file a certificate of trust in the form of Exhibit A attached
hereto with the Delaware Secretary of State in accordance with the provisions of
the Business Trust Act.
3. The Depositor and the Delaware Trustee will enter into an amended
and restated Trust Agreement, satisfactory to each such party and substantially
in the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Capital Securities and Common Securities referred
to therein. Prior to the execution and delivery of such amended and restated
Trust Agreement, the Delaware Trustee shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain prior to such execution and
delivery and licenses, consents or approvals required by applicable law or
otherwise.
4. The Depositor and the Delaware Trustee hereby authorize and
direct the Depositor, as the sponsor of the Trust, (i) to file with the
Securities and Exchange Commission (the "Commission") and execute, in each case
on behalf of the Trust, (a) the Registration Statement on Form S-3 (the "1933
Act Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to the registration
under the Securities Act of 1933, as amended, of the Capital Securities of the
Trust and possibly certain other securities and (b) a Registration Statement on
Form 8-A (the "1934 Act Registration Statement") (including all pre-effective
and post-effective amendments thereto) relating to the registration of the
Capital Securities of the Trust under the Securities Exchange Act of 1934, as
amended; (ii) to file and execute on behalf of the Trust such applications,
reports,
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surety bonds, irrevocable consents, appointments of attorney for service of
process and other papers and documents as shall be necessary or desirable to
register the Capital Securities under the securities or blue sky laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem necessary or
desirable and (iii) to execute on behalf of the Trust that certain Underwriting
Agreement relating to the Capital Securities, among the Trust, the Depositor and
the several Underwriters named therein, in the form to be included as an exhibit
to the 1934 Act Registration Statement. In the event that any filing referred to
in clauses (i), (ii) and (iii) above is required by the rules and regulations of
the Commission, an Exchange or state securities or blue sky laws, to be executed
on behalf of the Trust by the Delaware Trustee, the Delaware Trustee, in its
capacity as a Trustee of the Trust, is hereby authorized and, to the extent so
required, directed to join in any such filing and to execute on behalf of the
Trust any and all of the foregoing, it being understood that the Delaware
Trustee, in its capacity as a Trustee of the Trust, shall not be required to
join in any such filing or execute on behalf of the Trust any such document
unless required by the rules and regulations of the Commission, the Exchange or
state securities or blue sky laws. In connection with the filings referred to
above, the Depositor, hereby constitutes and appoints each of Jeffrey A. Rich,
Mark A. King and David W. Black, individually, as its true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for the Depositor or in the Depositor's name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to the 1933 Act Registration Statement and the 1934 Act Registration Statement
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Commission, the Exchange and administrators of
state securities or blue sky laws, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as the Depositor might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or respective
substitute or substitutes, shall do or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be one (1) and thereafter
the number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Depositor which may increase or decrease
the number of Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable Delaware law. Subject to the foregoing, the
Depositor is entitled to appoint or remove without cause any Trustee at any
time. The Delaware Trustee may resign upon thirty (30) days prior notice to the
Depositor.
7. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws of principles).
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
AFFILIATED COMPUTER SERVICES, INC.,
as Depositor
By: /s/ David W. Black
------------------------------------
Name: David W. Black
---------------------------------
Title: Executive Vice President
and General Counsel
---------------------------------
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ James P. Lawler
------------------------------------
Name: James P. Lawler
---------------------------------
Title: Vice President
---------------------------------
3
<PAGE> 1
EXHIBIT 4.13
ACS CAPITAL TRUST II
TRUST AGREEMENT
TRUST AGREEMENT, dated as of November 12, 1999 (the "Trust
Agreement"), between Affiliated Computer Services, Inc., a Delaware corporation
(the "Depositor"), and Wilmington Trust Company, a Delaware banking corporation,
as Delaware Trustee (the "Delaware Trustee"). The Depositor and the Delaware
Trustee hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as "ACS
Capital Trust II" in which name the Delaware Trustee, or the Depositor to the
extent provided herein, may engage in the transactions contemplated hereby, make
and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to
the Delaware Trustee the sum of $10. The Delaware Trustee hereby acknowledges
receipt of such amount in trust from the Depositor, which amount shall
constitute the initial trust estate. The Delaware Trustee hereby declares that
it will hold the trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a business trust
under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Sec 3801, et seq.
(the "Business Trust Act"), and that this document constitutes the governing
instrument of the Trust. The Delaware Trustee is hereby authorized and directed
to execute and file a certificate of trust in the form of Exhibit A attached
hereto with the Delaware Secretary of State in accordance with the provisions of
the Business Trust Act.
3. The Depositor and the Delaware Trustee will enter into an amended
and restated Trust Agreement, satisfactory to each such party and substantially
in the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Capital Securities and Common Securities referred
to therein. Prior to the execution and delivery of such amended and restated
Trust Agreement, the Delaware Trustee shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain prior to such execution and
delivery and licenses, consents or approvals required by applicable law or
otherwise.
4. The Depositor and the Delaware Trustee hereby authorize and
direct the Depositor, as the sponsor of the Trust, (i) to file with the
Securities and Exchange Commission (the "Commission") and execute, in each case
on behalf of the Trust, (a) the Registration Statement on Form S-3 (the "1933
Act Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to the registration
under the Securities Act of 1933, as amended, of the Capital Securities of the
Trust and possibly certain other securities and (b) a Registration Statement on
Form 8-A (the "1934 Act Registration Statement") (including all pre-effective
and post-effective amendments thereto) relating to the registration of the
Capital Securities of the Trust under the Securities Exchange Act of 1934, as
amended; (ii) to file and execute on behalf of the Trust such applications,
reports,
1
<PAGE> 2
surety bonds, irrevocable consents, appointments of attorney for service of
process and other papers and documents as shall be necessary or desirable to
register the Capital Securities under the securities or blue sky laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem necessary or
desirable and (iii) to execute on behalf of the Trust that certain Underwriting
Agreement relating to the Capital Securities, among the Trust, the Depositor and
the several Underwriters named therein, in the form to be included as an exhibit
to the 1934 Act Registration Statement. In the event that any filing referred to
in clauses (i), (ii) and (iii) above is required by the rules and regulations of
the Commission, an Exchange or state securities or blue sky laws, to be executed
on behalf of the Trust by the Delaware Trustee, the Delaware Trustee, in its
capacity as a Trustee of the Trust, is hereby authorized and, to the extent so
required, directed to join in any such filing and to execute on behalf of the
Trust any and all of the foregoing, it being understood that the Delaware
Trustee, in its capacity as a Trustee of the Trust, shall not be required to
join in any such filing or execute on behalf of the Trust any such document
unless required by the rules and regulations of the Commission, the Exchange or
state securities or blue sky laws. In connection with the filings referred to
above, the Depositor, hereby constitutes and appoints each of Jeffrey A. Rich,
Mark A. King and David W. Black, individually, as its true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for the Depositor or in the Depositor's name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to the 1933 Act Registration Statement and the 1934 Act Registration Statement
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Commission, the Exchange and administrators of
state securities or blue sky laws, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as the Depositor might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or respective
substitute or substitutes, shall do or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be one (1) and thereafter
the number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Depositor which may increase or decrease
the number of Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable Delaware law. Subject to the foregoing, the
Depositor is entitled to appoint or remove without cause any Trustee at any
time. The Delaware Trustee may resign upon thirty (30) days prior notice to the
Depositor.
7. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws of principles).
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
AFFILIATED COMPUTER SERVICES, INC.,
as Depositor
By: /s/ David W. Black
-----------------------------------------
Name: David W. Black
--------------------------------------
Title: Executive Vice President
--------------------------------------
and General Counsel
--------------------------------------
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ James P. Lawler
-----------------------------------------
Name: James P. Lawler
--------------------------------------
Title: Vice President
--------------------------------------
3
<PAGE> 1
EXHIBIT 5.1
[Hughes & Luce, LLP Letterhead]
November 15, 1999
Affiliated Computer Systems, Inc.
2828 North Haskell
Dallas, Texas 75204
Ladies and Gentlemen:
We have acted as counsel to Affiliated Computer Systems, Inc., a
Delaware corporation (the "Company"), and to ACS Capital Trust I and ACS Capital
Trust II, each a Delaware trust (the "Trusts"), in connection with the proposed
issuance and sale by the Company of up to $500,000,000 aggregate principal
amount of by the Company of (a) various series of debt securities, which may be
senior debt securities or subordinated debt securities (collectively, the "Debt
Securities"), (b) Class A common stock, par value $0.01 per share (the "Common
Stock"), (c) preferred stock, par value $1.00 per share (the "Preferred Stock")
and (d) warrants (the "Warrants"), and by the Trusts of capital securities (the
"Capital Securities"), and by Darwin Deason as a selling stockholder up to
2,574,772 shares of Class A common stock, in each case on a continuous or
delayed basis pursuant to the provisions of Section 415 of the Act. The Debt
Securities, Common Stock, Preferred Stock, Warrants and Capital Securities are
referred to collectively herein as the "Securities."
In rendering this opinion, we have (without independent verification)
examined and relied upon executed originals, counterparts or copies of such
documents, records and certificates (including certificates of public officials
and officers of the Company) as we considered necessary or appropriate for
enabling us to express the opinions set forth herein. In all such examinations,
we have (without independent verification) assumed the authenticity and
completeness of all documents submitted to us as originals and the conformity to
originals and completeness of all documents submitted to us as photostatic,
conformed, notarized or certified copies. We are familiar with the additional
proceedings proposed to be taken by the Company in connection with the
authorization, registration, issuance and sale of the Securities.
Based on the foregoing, we are of the opinion that the Securities have
been duly authorized and, when the Registration Statement has become effective,
the specific terms of a particular Security have been established and such
Security has been duly executed, authenticated, issued and delivered, such
Security will be duly authorized, validly issued, fully paid and nonassessable.
This opinion may be filed as an exhibit to the Registration Statement.
We also consent to the reference to this firm as having passed on the validity
of the Securities under the caption "Legal Matters" in the Prospectus. In giving
this consent, we do not admit that we are included in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
/s/ Hughes & Luce, L.L.P.
--------------------------
Hughes & Luce, L.L.P.
<PAGE> 1
EXHIBIT 12.1
AFFILIATED COMPUTER SERVICES, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Three months ended
September 30,
1995 1996 1997 1998 1999 1999
---------- ---------- ---------- --------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Income before income taxes $ 42,970 $ 55,917 $ 83,570 $ 94,092 $ 145,537 $ 41,990
Less: Minority interest expense -- -- -- 882 360 96
Less: Capitalized interest -- (313) (300) (33) (225) --
Interest and related charges on debt (a) 4,729 3,417 7,121 12,059 17,594 4,828
Portion of rentals representative of interest (b) 17,200 14,279 21,497 23,271 27,383 7,275
--------- --------- --------- --------- --------- ---------
Total fixed charges included in net income 21,929 17,696 28,618 35,330 44,977 12,103
--------- --------- --------- --------- --------- ---------
Earnings available for fixed charges 64,899 73,300 111,888 130,271 190,649 54,189
========= ========= ========= ========= ========== =========
Fixed charges:
Fixed charges included in net income 21,929 17,696 28,618 35,330 44,977 12,103
Interest capitalized in the period -- 313 300 33 225 --
--------- --------- --------- --------- --------- ---------
Total fixed charges 21,929 18,009 28,918 35,363 45,202 12,103
========= ========= ========= ========= ========== =========
Ratio of earnings to fixed charges 3.0 4.1 3.9 3.7(c) 4.2 4.5
========= ========= ========= ========= ========== =========
</TABLE>
(a) Interest and related charges on debt consists of interest expense,
capitalized interest and amortization of debt issuance costs.
(b) Portion of rentals representative of interest is estimated to be one-third
of rental expense.
(c) Excluding the $13.0 million charge for merger related costs, the ratio of
earnings to fixed charges was 4.0.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 (No. 333- ) of our report dated July 27, 1999 relating
to the financial statements and financial statement schedule, which are
incorporated by reference and included, respectively, in Affiliated Computer
Services, Inc.'s Annual Report on Form 10-K for the year ended June 30, 1999. We
also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Dallas, Texas
November 12, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 (No. 333-______) of Affiliated Computer Services, Inc. of
our report dated March 16, 1998 relating to the financial statements and
financial statement schedule of BRC Holdings, Inc., which appears in BRC
Holdings, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1997. We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Dallas, Texas
November 12, 1999
<PAGE> 1
EXHIBIT 23.4
CONSENT OF ERNST & YOUNG LLP,INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 33-XXXXX) and related Prospectus of
Affiliated Computer Services, Inc., ACS Capital Trust I and ACS Capital Trust II
for the registration of $500,000,000 of Affiliated Computer Services, Inc.'s
debt securities, common stock, preferred stock, depositary shares and warrants
and, ACS Capital Trust I Capital Securities, ACS Capital Trust II Capital
Securities, and Guarantees of Affiliated Computer Services, Inc. with respect to
Capital Securities and to the incorporation by reference therein of our report
dated July 28, 1997, with respect to the consolidated financial statements of
ACS Government Solutions, Inc. (formerly Computer Data Systems, Inc.) included
in the Annual Report (Form 10-K) of Affiliated Computer Services, Inc. for the
year ended June 30, 1999, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Ernst & Young, LLP
Washington, D.C.
November 12, 1999
