<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 23, 1999
REGISTRATION NO. 333-______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------
INVESTORS FINANCIAL SERVICES CORP.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 04-3279817
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
200 CLARENDON STREET, P.O. BOX 9130, BOSTON, MA 02117-9130, (617) 330-6700
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
JOHN E. HENRY
GENERAL COUNSEL AND SECRETARY
Investors Financial Services Corp.
200 Clarendon Street, P.O. Box 9130
Boston, MA 02117-9130
(617) 330-6700
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
----------
COPY TO:
Steven C. Browne, Esq. Jonathan Jeffrey
TESTA, HURWITZ & THIBEAULT, LLP HAZELNUT PARTNERS, L.P.
125 High Street c/o Oakmont Corporation
Boston, Massachusetts 02110 865 South Figueroa Street, Suite 700
(617) 248-7000 Los Angeles, California 90019
(213) 891-6322
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. /_/
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act 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 PROPOSED MAXIMUM PROPOSED MAXIMUM
SHARES AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION
FEE(2)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 900,000 shares $36.96875 $33,271,875.00 $9,249.58
- -------------------------------------------------------------------------------------------------------------------------------
Preferred Stock Purchase Rights(3) - - - -
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 under the Securities Act of 1933.
(2) Pursuant to Rule 457(c) of the Securities Act of 1933, the registration fee
has been calculated based upon the average of the high and low prices per
share of the Common Stock of Investors Financial Services Corp. (the
"Company") on the Nasdaq National Market on April 21, 1999.
(3) Pursuant to the Company's Rights Agreement, as amended, one-half of a right
to purchase a unit of preferred stock of the Company (each a "Preferred
Stock Purchase Right" or "Right") is deemed to be delivered with each share
of Common Stock issued by the Company. The Rights currently are not
separately transferable apart from the Common Stock, nor are they
exercisable until the occurrence of certain events. Accordingly, no
independent value has been attributed to the Rights.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
SUBJECT TO COMPLETION, DATED APRIL 23, 1999
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
900,000 SHARES
INVESTORS FINANCIAL SERVICES CORP.
COMMON STOCK
-----------------------
Hazelnut Partners, L.P., a California limited partnership, is offering
900,000 of our shares of common stock with this prospectus. We will receive no
proceeds from the sale of the shares. Hazelnut Partners may sell the shares at
any price it decides to.
Our shares are traded on the Nasdaq National Market under the symbol
"IFIN." On April 21, 1999, the last reported sale price of our common stock on
the Nasdaq National Market was $37.0625 per share.
---------------
INVESTING IN THE COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
---------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS
HAVE NOT APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. IT IS ILLEGAL FOR ANY PERSON TO TELL YOU
OTHERWISE.
---------------
The date of this Prospectus is ______________, 1999.
<PAGE>
AVAILABLE INFORMATION
Investors Financial is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
accordingly files reports, proxy statements and other information with the
Securities and Exchange Commission. Reports, proxy statements and other
information filed by Investors Financial may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Commission's regional offices located at
Seven World Trade Center, New York, New York 10048, and at Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies may
also be obtained from the Public Reference Room of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Information on the
operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330. The Common Stock of Investors Financial is traded on the Nasdaq
National Market. Reports, proxy statements and other information concerning
Investors Financial may be inspected at the offices of the National Association
of Securities Dealers, Inc. located at 1735 K Street, N.W., Washington, D.C.
20006.
Investors Financial has filed with the Securities and Exchange
Commission a Registration Statement on Form S-3 (including all amendments
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Common Stock offered hereby.
This Prospectus does not contain all information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Securities and Exchange Commission. For further information
regarding Investors Financial and the Common Stock offered hereby, we refer you
to the Registration Statement and to the exhibits and schedules filed with it.
Statements contained in this Prospectus regarding the contents of any agreement
or other document filed as an exhibit to the Registration Statement are
necessarily summaries of those documents, and in each instance we refer you to
the copy of that document filed as an exhibit to the Registration Statement for
a more complete description of the matters involved. The Registration Statement,
including the exhibits and schedules thereto, may be inspected at the public
reference facilities maintained by the Securities and Exchange Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and copies of all or any part thereof
may be obtained from that office upon payment of the prescribed fees. In
addition, the Securities and Exchange Commission maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Securities and Exchange Commission.
Investors Financial will provide without charge to each person who is
delivered a Prospectus, on written or oral request, a copy of any or all of the
documents incorporated by reference herein (other than exhibits to those
documents unless those exhibits are specifically incorporated by reference into
those documents). Requests for copies should be directed to Investor Relations,
Investors Financial Services Corp., P.O. Box 9130, Boston, Massachusetts
02117-9130 (telephone: (617) 330-6700).
2
<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by Investors Financial with the
Securities and Exchange Commission pursuant to the Exchange Act are incorporated
in this Prospectus by reference (File No. 0-26996):
1. Investors Financial's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998.
2. The description of Investors Financial's Common Stock, $.01
par value per share, contained in the section entitled
"Description of Registrant's Securities to be Registered"
contained in Investors Financial's Registration Statement on
Form 8-A filed under the Exchange Act with the Securities and
Exchange Commission on October 14, 1995, and incorporating by
reference the information contained in Investors Financial's
Registration Statement on Form S-1 (File No. 33-95980),
including any amendment or report filed for the purpose of
updating that description.
3. The description of the Preferred Stock Purchase Rights which
accompany each share of Investors Financial's Common Stock
contained in Investors Financial's Registration Statement on
Form 8-A filed under the Exchange Act with the Securities and
Exchange Commission on October 14, 1995, and incorporating by
reference the information contained in Investors Financial's
Registration Statement on Form S-1 (File No. 33-95980),
including any amendment or report filed for the purpose of
updating that description.
All documents subsequently filed by Investors Financial pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the end of the
offering of the Shares, shall be deemed incorporated by reference in this
Prospectus and made a part hereof from the date of filing of those documents.
Any statement contained in a document incorporated or deemed incorporated by
reference in this Prospectus shall be deemed modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed incorporated by
reference herein or in any Prospectus Supplement modifies or supersedes that
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
3
<PAGE>
INVESTORS FINANCIAL
Investors Financial, based in Boston, Massachusetts, provides a broad
range of asset administration services for the financial services industry
through its wholly-owned subsidiaries, Investors Bank & Trust Company(R) and
Investors Capital Services, Inc. Investors Financial provides global custody,
multicurrency accounting, institutional transfer agency, performance
measurement, foreign exchange, securities lending, mutual fund administration
and investment advisory services to a variety of financial asset managers,
including 65 mutual fund complexes, investment advisors, banks and insurance
companies. Investors Financial provides financial asset administration services
for net assets that totaled approximately $245 billion at December 31, 1998,
including approximately $14 billion of foreign net assets. Investors Financial
also engages in private banking transactions, including secured lending and
deposit accounts.
Our principal offices are located at 200 Clarendon Street, Boston,
Massachusetts 02117-9130, and the our telephone number is (617) 330-6700.
RECENT DEVELOPMENTS
STOCK SPLIT
On February 16, 1999, the Board of Directors of Investors Financial
declared a two-for-one stock split in the form of a 100% stock dividend which
was paid on March 17, 1999 to stockholders of record on March 1, 1999. As a
result of the stock split, on March 17, 1999 the total number of outstanding
shares of Investors Financial's common stock increased by 100 percent.
PRIVATE PLACEMENT
On March 19, 1999, Investors Financial entered into a stock purchase
agreement with Oakmont Corporation pursuant to which Investors Financial agreed
to sell to Oakmont Corporation or an assignee of Oakmont Corporation 900,000
shares of Investors Financial's Common Stock, at a price of $29.00 per share,
for an aggregate purchase price of $26,100,000. On March 26, 1999, Oakmont
Corporation assigned its rights and liabilities under the Stock Purchase
Agreement to Hazelnut Partners, L.P. On March 26, 1999, the transactions
contemplated by the stock purchase agreement were consummated, 900,000 shares of
Common Stock were issued to Hazelnut Partners, and Hazelnut Partners paid
Investors Financial $26,100,000.
4
<PAGE>
RISK FACTORS
You should carefully consider the following risks before investing in
our Common Stock. These are not the only risks facing our company. Additional
risks may also impair our business operations. If any of the following risks
come to fruition, our business, results of operations or financial condition
could be materially adversely affected. In that case, the trading price of our
common stock could decline, and you may lose all or part of your investment. You
should also refer to the other information set forth in this prospectus,
including our financial statements and the accompanying notes.
This prospectus contains certain "forward-looking statements" based on
our current expectations, assumptions, estimates and projections about our
company and our industry. These forward-looking statements involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in those forward-looking statements as a result of many factors, as more fully
described in this section and elsewhere in the prospectus.
THE FAILURE TO PROPERLY MANAGE OUR GROWTH COULD ADVERSELY AFFECT OUR BUSINESS
We have been experiencing a period of rapid growth that has been
placing a strain on all our resources, including our management. Additional
growth may further strain our management, financial and other resources. To
manage future growth effectively, we must continue to improve our operational,
financial and other internal systems, and to train, motivate and manage our
employees. If we fail to do so, our future growth could have a negative effect
on the quality of our services, could result in our loss of key personnel and
could cause our business and results of operations to suffer significantly.
OUR FUTURE SUCCESS DEPENDS ON SUCCESSFUL INTEGRATION OF PAST AND POSSIBLE FUTURE
ACQUISITIONS
Our future success depends significantly on our ability to integrate
into our operations the acquisitions we have completed within the prior twelve
months and any possible future acquisitions we may make. The acquisition of AMT
Capital Advisors, Inc. in May of 1998 and the acquisition of the institutional
trust and custody business of BankBoston, N.A. in October of 1998 present us
with significant challenges because we have limited experience in integrating
acquired businesses into our operations. Integrating acquired businesses demands
significant management attention which has to be diverted from other matters.
Any future businesses we acquire will present similar challenges. Our business
and operating results could suffer significantly if we are unable to integrate
these businesses successfully into our operations.
WE MUST HIRE AND RETAIN SKILLED PERSONNEL IN A TIGHT LABOR MARKET
Qualified personnel, and in particular client managers and other senior
personnel, are in great demand throughout the financial services industry. Our
success depends greatly upon our ability to attract, train, motivate and retain
these highly skilled employees. As competition for skilled personnel increases,
we will find it increasingly difficult to continue to attract and retain
sufficient numbers of these highly skilled employees. If we fail to attract and
retain these employees, our business and operating results could be seriously
negatively effected.
5
<PAGE>
OUR OPERATING RESULTS ARE SUBJECT TO FLUCTUATIONS IN INTEREST RATES AND THE
STOCK MARKET
We base some of our fees on the market value of the assets we process.
Accordingly, our operating results, and in particular our operating results from
interest-related services, are subject to fluctuations in interest rates and
declines in stock market values as these fluctuations affect the market value of
assets processed. Interest rate and stock market fluctuations can also lead to
investors seeking alternatives to the investment offerings of our clients, which
results in a lower amount of the assets we process and, correspondingly, lower
fees. In addition, many of our client engagements are, and in the future will
likely continue to be, terminable upon 60 days notice. Accordingly, our
operating results may fluctuate significantly and may be materially negatively
affected by unanticipated client terminations and by fluctuations in interest
rates and the stock market.
WE FACE SIGNIFICANT COMPETITION FROM OTHER FINANCIAL SERVICES COMPANIES
We are part of an extremely competitive financial services industry.
Many of our current and potential competitors have longer operating histories,
greater name recognition and substantially greater financial, marketing and
other resources than we do. Therefore, they may be able to respond more quickly
than we can to new or changing opportunities, technologies, standards or
customer requirements. In addition, we face the risk that as the large mutual
fund complexes continue to grow and build in-house asset administration
capabilities, they may no longer need to outsource these services to us. These
factors create the possibility that we may not be able to compete effectively
with current or future competitors. If we fail to compete successfully, our
business and results of operations will be materially adversely affected.
OUR IMPORTANT PROPRIETARY RIGHTS MAY BE SUBJECT TO INFRINGEMENT CLAIMS OR BE
INFRINGED UPON
Our intellectual property rights are very important to our business. We
rely on trade secret, copyright and trademark laws and confidentiality
agreements with employees and third parties to protect our intellectual
property, all of which offer only limited protection. If we resort to legal
proceedings to enforce or protect our intellectual property rights, the
proceedings could be burdensome and expensive, could divert management's
attention and could have a material adverse effect on the Company. Also, any
invalidation of our intellectual property rights could have a significant
negative impact on our business.
OUR QUARTERLY AND ANNUAL OPERATING RESULTS MAY FLUCTUATE
Our quarterly and annual operating results are difficult to predict and
may fluctuate from quarter to quarter and annually for several reasons,
including:
- the timing and commencement or termination of client engagements;
- the rate of net inflows and outflows of investor funds in the
debt and equity-based investment vehicles offered by our clients;
- our introduction and acceptance of new services; and
6
<PAGE>
- changes or anticipated changes in economic conditions, including
fluctuations in interest rates and declines in stock market
values.
Most of our expenses, like employee compensation and rent, are relatively fixed.
As a result, any shortfall in revenue in relation to our expectations could
cause significant changes in our operating results from quarter to quarter and
could result in material fluctuations in future operating results on a quarterly
or annual basis, all of which could materially and adversely affect our
business, operating results and stock price.
WE MAY BE AFFECTED BY YEAR 2000 TECHNOLOGY PROBLEMS
Many existing computer systems and software products do not properly
recognize dates after December 31, 1999. Any of our computer systems or programs
that are date-sensitive may recognize a date using `00' as the Year 1900 rather
than the Year 2000. This "Year 2000" problem could result in miscalculations,
data corruption, system failures or disruptions of operations, including an
inability to process transactions, track and account for assets, or engage in
similar normal business activities. We are subject to potential Year 2000
problems affecting our internal systems and the computer systems and software on
which our internal systems rely. We have determined that we will need to modify
or upgrade portions of our software so that our computer systems properly
utilize dates beyond December 31, 1999. We believe that through a timely
modification to or upgrades of software that we currently use, the impact of the
Year 2000 issue on our business operations may be mitigated. However, we
continue to face risk from the Year 2000 issue, as there can be no guarantee
that:
- we are able to act in a timely manner to modify or upgrade
software that we currently use;
- our suppliers and customers will timely remedy any Year 2000
issues they may face; and
- the renovation of the systems of the companies on which our
systems rely will be done in a manner that would not have a
material adverse effect on our operations.
Accordingly, the Year 2000 problem could have a material adverse effect on our
business, operating results and financial condition.
USE OF PROCEEDS
Investors Financial will not receive any proceeds from the sale of shares by
Hazelnut Partners. See "Hazelnut Partners" and "Plan of Distribution."
7
<PAGE>
HAZELNUT PARTNERS
The following table sets forth the number and percentage of shares of
our Common Stock beneficially owned by Hazelnut Partners prior to this offering
and the maximum number of shares that Hazelnut Partners, its transferees,
distributees, pledgees, donees or other successors in interest may offer and
sell pursuant to this Prospectus. Since Hazelnut Partners may sell all, some or
none of its shares, we cannot estimate the actual number of shares of Common
Stock that will be sold by Hazelnut Partners or the aggregate number or
percentage of shares of Investors Financial Common Stock that Hazelnut Partners
will own upon completion of this offering. See "Plan of Distribution."
The shares of our Common Stock offered under this Prospectus may be
offered from time to time by and for the account of Hazelnut Partners.
<TABLE>
<CAPTION>
Number and Percentage Number of Shares
of Shares Beneficially Offered Pursuant
Selling Stockholder Owned Prior to Offering(1) to This Prospectus
------------------- -------------------------- ------------------
Number Percent(2)
------ ----------
<S> <C> <C> <C>
Hazelnut Partners, L.P. 900,000 6.2% 900,000
</TABLE>
- ----------------
(1) Hazelnut Partners has sole voting and investment power with respect to all
shares shown. Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission, and includes voting and
investment power with respect to shares.
(2) Based upon 14,505,431 shares of Common Stock outstanding as of April 21,
1999.
Hazelnut Partners acquired its shares in connection with the private
placement described under "Recent Developments." Hazelnut Partners has not had
any material relationship with Investors Financial or any of its affiliates
within the past three years except as described under "Recent Developments" and
this Section.
Hazelnut Partners represented to us that it was acquiring its shares in
the private placement without any present intention of effecting a distribution
of those shares. In recognition of the fact, however, that Hazelnut Partners may
desire the ability to sell its shares when it considers it appropriate, in
connection with the private placement Investors Financial agreed to file the
Registration Statement with the Securities and Exchange Commission to permit the
public sale of its shares and to use its reasonable efforts to keep the
Registration Statement effective until the earlier March 26, 2001 or the sale of
all of its shares pursuant to the Registration Statement or Rule 144 under the
Securities Act. Investors Financial will prepare and file such amendments and
supplements to the Registration Statement as may be necessary to keep it
effective during such period.
8
<PAGE>
PLAN OF DISTRIBUTION
The shares of our Common Stock offered hereby may be sold from time to
time by Hazelnut Partners for its own account. Investors Financial is
responsible for the expenses incurred in the registration of the shares, other
than the fees and disbursements of legal counsel to Hazelnut Partners. Investors
Financial will receive no proceeds from this offering. Hazelnut Partners will
pay or assume brokerage commissions or other charges and expenses incurred in
the sale of the Shares. In addition, Investors Financial has agreed to indemnify
Hazelnut Partners against certain liabilities, including liabilities under the
Securities Act, and Hazelnut Partners has agreed to indemnify Investors
Financial against certain liabilities, including liabilities under the
Securities Act.
Hazelnut Partners' sale of the shares is not currently subject to any
underwriting agreement. The shares covered by this Prospectus may be sold by
Hazelnut Partners or by pledgees, donees, transferees, distributees or other
successors in interest of Hazelnut Partners from time to time. Hazelnut Partners
may sell the shares from time to time at fixed prices that may be changed, at
market prices prevailing at the time of sale, at prices related to prevailing
market prices or at negotiated prices. Sales may be effected in the
over-the-counter market, on the National Association of Securities Dealers
Automated Quotation System, on the Nasdaq National Market, or on any exchange on
which the shares may then be listed. Hazelnut Partners may sell the shares by
one or more of the following: (a) in one or more block trades in which a broker
or dealer so engaged will attempt to sell all or a portion of the shares held by
Hazelnut Partners as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) through purchases by a broker or
dealer as principal and resale by such broker or dealer for its account pursuant
to this Prospectus; (c) in ordinary brokerage transactions and transactions in
which the broker solicits purchasers; (d) in negotiated transactions; and (e)
through other means.
Hazelnut Partners may effect these transactions by selling shares to or
through broker-dealers, and those broker-dealers may receive compensation in the
form of underwriting discounts, concessions, commissions, or fees from Hazelnut
Partners and/or purchasers of the shares for whom such broker-dealers may act as
agent or to whom they may sell as principal, or both (which compensation to a
particular broker-dealer might be in excess of customary commissions). These
broker-dealers and Hazelnut Partners may be deemed to be "underwriters" within
the meaning of the Securities Act, in connection with those sales, and any
commissions received by them and any profit on the resale of shares placed by
them might be deemed to be underwriting compensation.
We have informed Hazelnut Partners that the anti-manipulation rules
under the Exchange Act (including, without limitation, Rule 10b-5 and Regulation
M - Rule 102) may apply to sales in the market and we will furnish Hazelnut
Partners upon request with a copy of these Rules. We will also inform Hazelnut
Partners of the need for delivery of copies of this Prospectus.
9
<PAGE>
Any shares of our Common Stock covered by this Prospectus that qualify
for sale pursuant to Rule 144 under the Securities Act may be sold under Rule
144 rather than pursuant to this Prospectus.
Pursuant to the stock purchase agreement described above under "Recent
Developments", we agreed to file the Registration Statement with the Securities
and Exchange Commission to permit the public sale of Hazelnut Partners' shares
and to use our reasonable efforts to keep the Registration Statement effective
until the earlier of March 26, 2001 or the sale of all of the shares pursuant to
the Registration Statement or Rule 144 under the Securities Act. Hazelnut
Partners is not restricted as to the price or prices at which it may sell its
shares. Sales of shares of Common Stock at less than the market prices may
depress the market price of our Common Stock. During the effective time of this
Prospectus, Hazelnut Partners has agreed to potential restrictions on resale if
notified by us that there exists material non-public information relating to
Investors Financial which, in the good faith opinion of Investors Financial,
should not be disclosed. Nonetheless, we have agreed that we will not exercise
this right to restrict Hazelnut Partners' right to resell the shares as
described in the preceding sentence more than twice. Hazelnut Partners is not
restricted as to the number of shares which may be sold at any one time, and it
is possible that a significant number of shares could be sold at the same time.
Hazelnut Partners may decide to sell all, none or a portion of the shares.
First Chicago Trust Company of New York, 525 Washington Boulevard,
Jersey City, NJ 07303 is the transfer agent for our Common Stock.
LEGAL MATTERS
Certain legal matters with respect to the issuance of the shares of
Common Stock offered hereby will be passed upon for Investors Financial by
Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts. As of the date of this
Prospectus, certain attorneys with the firm of Testa, Hurwitz & Thibeault, LLP
beneficially own an aggregate of 4,000 shares of our Common Stock.
EXPERTS
The consolidated financial statements incorporated in this
Prospectus by reference from Investors Financial's Annual Report on Form 10-K
for the year ended December 31, 1998 have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their reports, which are incorporated
herein by reference, and have been so incorporated in reliance upon the
reports of Deloitte & Touche LLP given upon their authority as experts in
accounting and auditing.
10
<PAGE>
- -------------------------------------------------------
You should rely only on the information
contained in this prospectus. We have not authorized
anyone to provide you with information different from
that contained in this prospectus. Hazelnut Partners
is offering to sell, and seeking offers to buy,
shares of Common Stock only in jurisdictions where
offers and sales are permitted. The information
contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time
of delivery of this prospectus or of any sale of the
Common Stock. In this prospectus, references to
"Investors Financial," "we," "our" and "us" refer to
Investors Financial Services Corp.
-----------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information 2
Incorporation of Certain Information
by Reference 3
Investors Financial 4
Recent Developments 4
Risk Factors 5
Use of Proceeds 7
Hazelnut Partners 8
Plan of Distribution 9
Legal Matters 10
Experts 10
</TABLE>
- -------------------------------------------------------
- -------------------------------------------------------
900,000 SHARES
INVESTORS FINANCIAL SERVICES CORP.
COMMON STOCK
----------
PROSPECTUS
----------
APRIL 23, 1999
- -------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses (other than underwriting discounts and commissions)
payable in connection with the sale of the Common Stock offered hereby are as
follows:
<TABLE>
<S> <C>
SEC Registration Fee.................... $ 9,249.58
Nasdaq Filing Fees...................... 17,500.00
Legal fees and expenses................. 20,000.00
Accounting fees and expenses............ 1,000.00
-------------
TOTAL................................... $ 47,749.58
-------------
-------------
</TABLE>
Investors Financial will bear all expenses shown above. Hazelnut
Partners will bear all fees and disbursements of its legal counsel and all
underwriting discounts and commissions, if any.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law and Investors Financial's
Certificate of Incorporation provide for indemnification of Investors
Financial's directors and officers for liabilities and expenses that they may
incur in those capacities. In general, directors and officers are indemnified
with respect to actions taken in good faith in a manner reasonably believed to
be in, or not opposed to, the best interests of Investors Financial, and with
respect to any criminal action or proceeding, actions that the indemnitee had no
reasonable cause to believe were unlawful. We refer you to Investors Financial's
Certificate of Incorporation and By-laws filed as Exhibits 3.1 and 3.2,
respectively, to Investors Financial's Registration Statement on Form S-1 (File
No. 33-95980).
Investors Financial maintains directors' and officers' liability
insurance to insure our directors and certain officers against certain
liabilities and expenses which arise out of or in connection with their
capacities as directors and officers.
In addition, the stock purchase agreement executed in connection with
the private placement provides that Hazelnut Partners is obligated, under
certain circumstances, to indemnify Investors Financial and its directors and
officers against certain liabilities, including liabilities under the Securities
Act. Reference is made to the Stock Purchase Agreement filed as Exhibit 10.1 to
this Registration Statement on Form S-3.
<PAGE>
ITEM 16. EXHIBITS.
4.1 Certificate of Incorporation of Investors Financial (filed as
Exhibit 3.1 to Investors Financial's Registration Statement on
Form S-1 (File No. 33-95980) and incorporated herein by
reference)
4.2 By-laws of Investors Financial (filed as Exhibit 3.2 to
Investors Financial's Registration Statement on Form S-1 (File
No. 33-95980) and incorporated herein by reference)
4.3 Rights Agreement, dated as of September 25, 1995, as amended,
by and between Investors Financial and First Chicago Trust
Company of New York (filed as Exhibit 4.2 to Investors
Financial's Registration Statement on Form S-1 (File No.
33-95980) and incorporated herein by reference)
5.1* Opinion of Testa, Hurwitz & Thibeault, LLP
10.1 Stock Purchase Agreement, dated as of March 19, 1999, by and
between Investors Financial and Oakmont Corporation (filed as
Exhibit 2.1 to Investor Financial's Form 8-K, dated as of
March 31, 1999 (File No.
000-26996) and incorporated herein by reference)
10.2 Assignment and Assumption Agreement, dated as of March 26,
1999, by and among Investors Financial, Oakmont Corporation
and Hazelnut Partners (filed as Exhibit 2.2 to Investors
Financial's Form 8-K, dated as of March 31, 1999 (File No.
000-26996) and incorporated herein by reference)
23.1* Consent of Deloitte & Touche LLP
23.2* Consent of Testa, Hurwitz & Thibeault, LLP (included in
Exhibit 5.1)
24.1* Power of attorney (included on signature page)
- ------------------------
*Filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a
<PAGE>
fundamental change in the information set forth in
this 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 this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The registrant hereby undertakes 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) or 15(d) of the Securities Exchange Act
of 1934 (and, where appropriate, each filing of an 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
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
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Boston, Massachusetts on April 23, 1999.
INVESTORS FINANCIAL SERVICES CORP.
By: /S/ Kevin J. Sheehan
-------------------------------------
Kevin J. Sheehan
President, Chief Executive Officer
and Chairman of the Board
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Investors Financial
Services Corp., hereby severally constitute and appoint Kevin J. Sheehan and
Karen C. Keenan, and each of them singly, our true and lawful attorneys, with
full power to them and each of them singly, to sign for us in our names in the
capacities indicated below, all pre-effective and post-effective amendments to
this registration statement, and generally do all things in our names and on our
behalf in such capacities to enable Investors Financial Services Corp. to comply
with the provisions of the Securities Act of 1933 and all requirements of the
Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title(s) Date
- --------- -------- ----
<S> <C> <C>
/s/ Kevin J. Sheehan President, Chief Executive Officer and Chairman April 23, 1999
- ---------------------------------------- (Principal Executive Officer)
Kevin J. Sheehan
/s/ Karen C. Keenan Senior Vice President, Chief Financial Officer April 23, 1999
- ---------------------------------------- and Treasurer (Principal Financial Officer and
Karen C. Keenan Principal Accounting Officer)
/s/ James M. Oates Director April 23, 1999
- ----------------------------------------
James M. Oates
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Thomas P. McDermott Director April 23, 1999
- ----------------------------------------
Thomas P. McDermott
/s/ Robert B. Fraser Director April 23, 1999
- ----------------------------------------
Robert B. Fraser
/s/ Frank B. Condon, Jr. Director April 23, 1999
- ----------------------------------------
Frank B. Condon, Jr.
/s/ Donald G. Friedl Director April 23, 1999
- ----------------------------------------
Donald G. Friedl
/s/ Phyllis S. Swersky Director April 23, 1999
- ----------------------------------------
Phyllis S. Swersky
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
----------- ----------------------
<S> <C>
4.1 Certificate of Incorporation of Investors Financial (filed as
Exhibit 3.1 to Investors Financial's Registration Statement on
Form S-1 (File No. 33-95980) and incorporated herein by
reference)
4.2 By-laws of Investors Financial (filed as Exhibit 3.2 to
Investors Financial's Registration Statement on Form S-1 (File
No. 33-95980) and incorporated herein by reference)
4.3 Rights Agreement, dated as of September 25, 1995, as amended,
by and between Investors Financial and First Chicago Trust
Company of New York (filed as Exhibit 4.2 to Investors
Financial's Registration Statement on Form S-1 (File No.
33-95980) and incorporated herein by reference)
5.1* Opinion of Testa, Hurwitz & Thibeault, LLP
10.1 Stock Purchase Agreement, dated as of March 19, 1999, by and
between Investors Financial and Oakmont Corporation (filed as
Exhibit 2.1 to Investor Financial's Form 8-K, dated as of
March 31, 1999 (File No. 000-26996) and incorporated herein
by reference)
10.2 Assignment and Assumption Agreement, dated as of March 26,
1999, by and among Investors Financial, Oakmont Corporation
and Hazelnut Partners (filed as Exhibit 2.2 to Investors
Financial's Form 8-K, dated as of March 31, 1999 (File No.
000-26996) and incorporated herein by reference)
23.1* Consent of Deloitte & Touche LLP
23.2* Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5.1)
24.1* Power of attorney (included on signature page)
</TABLE>
- ------------------------
*Filed herewith.
<PAGE>
Exhibit 5.1
April 23, 1999
Investors Financial Services Corp.
200 Clarendon Street
Boston, Massachusetts 02117-9130
Re: S-3 REGISTRATION STATEMENT
Ladies and Gentlemen:
We are counsel to Investors Financial Services Corp., a Delaware
corporation (the "Company"), and have represented the Company in connection with
the preparation and filing of the Company's Registration Statement on Form S-3
(the "Registration Statement") under the Securities Act of 1933, as amended,
covering the sale to the public of up to an aggregate of 900,000 outstanding
shares of the Company's Common Stock, $.01 par value per share (the "Shares"),
being sold by a stockholder of the Company.
We have reviewed the corporate proceedings taken by the Board of
Directors of the Company with respect to the authorization and issuance of the
Shares. We have also examined and relied upon originals or copies, certified or
otherwise authenticated to our satisfaction, of all corporate records,
documents, agreements or other instruments of the Company and have made all
investigations of law and have discussed with the Company's officers all
questions of fact that we have deemed necessary or appropriate.
Based upon and subject to the foregoing, we are of the opinion that the
Shares are legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm in the Prospectus
contained in the Registration Statement under the caption "Legal Matters."
Very truly yours,
/s/ Testa, Hurwitz & Thibeault, LLP
TESTA, HURWITZ & THIBEAULT, LLP
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS CONSENT
We consent to the incorporation by reference in this Registration Statement
of Investors Financial Services Corp. (the "Company") on Form S-3 of our
reports dated February 16, 1999, appearing in the Annual Report on Form 10-K
of the Company for the year ended December 31, 1998 and to the reference to
us under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
Deloitte & Touche LLP
Boston, Massachusetts
April 23, 1999
