As filed with the Securities and Exchange Commission on June 8, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TRANSACTION SYSTEMS ARCHITECTS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
7372
(Primary Standard Industrial Classification Code Number)
47-0772104
(I.R.S. Employer Identification No.)
224 South 108th Avenue
Omaha, Nebraska 68154
(402) 334-5101
(Address, including ZIP Code, and telephone number, including area code, of
registrant's principal executive offices)
William E. Fisher, President
Transaction Systems Architects, Inc.
224 South 108th Avenue
Omaha, Nebraska 68154
(402) 334-5101
(Name, address, including ZIP Code, and telephone number, including area code,
of agent for service)
It is requested that copies of communications be sent to:
Neal A. Klegerman
Baker & McKenzie
One Prudential Plaza
Chicago, Illinois 60601
Approximate date of commencement of proposed sale of the securities to the
public: From time to time after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) 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 this Form is a post-effective amendment filed pursuant to Rule 462(d) 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 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]
Calculation of Registration Fee
- --------------------------- ----------------------- ----------------------- ------------------------ -----------------------
Title of each class Proposed
of securities to be Amount to be maximum offering Proposed maximum Amount of
registered registered price per unit (1) aggregate offering registration fee
price (1)
- --------------------------- ----------------------- ----------------------- ------------------------ -----------------------
=========================== ======================= ======================= ======================== =======================
Class A Common Stock, par 2,500,000 shares $38.50 $96,250,000 $28,394
value $.005 per share
=========================== ======================= ======================= ======================== =======================
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) promulgated under the Securities Act of 1933, as
amended, based upon the average of the high and low prices of the Class A Common
Stock on June 5, 1998, as reported on The Nasdaq National Market.
_______________
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state
SUBJECT TO COMPLETION, DATED JUNE 8, 1998
PROSPECTUS
TRANSACTION SYSTEMS ARCHITECTS, INC.
2,500,000 SHARES OF CLASS A COMMON STOCK
_______________________
This Prospectus relates to 2,500,000 shares of Class A Common Stock, par
value $.005 per share (the "Class A Common Stock"), of Transaction Systems
Architects, Inc., a Delaware corporation ("TSA" or the "Company"), which may be
offered and issued or reserved for issuance by the Company from time to time in
connection with acquisitions by the Company, directly or indirectly, of other
businesses or properties, or interests therein. Class A Common Stock may be
issued in exchange for shares of capital stock, partnership interests, or other
assets representing an interest, direct or indirect, in other companies or
entities, or in exchange for assets used in or related to the business of such
other companies or entities. See "Securities Covered by This Prospectus."
The Class A Common Stock is subject to quotation on the Nasdaq National
Market under the symbol "TSAI."
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN THE CLASS A COMMON STOCK.
_______________________
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
DAVID P. STOKES, GENERAL COUNSEL AND SECRETARY, TRANSACTION SYSTEMS ARCHITECTS,
INC., 224 SOUTH 108TH AVENUE, OMAHA, NEBRASKA 68154, TELEPHONE NUMBER (402)
334-5101. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST
SHOULD BE MADE FIVE BUSINESS DAYS PRIOR TO THE DATE ON WHICH THE FINAL
INVESTMENT DECISION MUST BE MADE.
_______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
_______________________
The date of this Prospectus is _____, 1998.
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus or any Prospectus Supplement, and, if given or made, such information
or representations must not be relied upon as having been authorized. Neither
this Prospectus nor any Prospectus Supplement constitutes an offer to sell or a
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus nor any Prospectus Supplement nor any
offer or sale made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Company since
the date hereof.
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION.........................................................3
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE.............................4
RISK FACTORS..................................................................4
THE COMPANY...................................................................9
SECURITIES COVERED BY THIS PROSPECTUS........................................10
DESCRIPTION OF CAPITAL STOCK.................................................10
EXPERTS......................................................................14
LEGAL MATTERS................................................................15
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's Regional Offices at 14th Floor, Northwestern Atrium Center, 500
West Madison Street, Chicago, Illinois 60661 and 13th Floor, Seven World Trade
Center, New York, New York 10048. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants, including the Company, that file electronically with the
Commission, and the address of such site is http://www.sec.gov. In addition,
reports, proxy statements and other information can be inspected at the offices
of The Nasdaq Stock Market, Reports Section, 1735 K Street, N.W., Washington,
D.C. 20006.
The Company has filed with the Commission a registration statement on Form
S-4, including amendments thereto, if any (the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the shares of Class A Common Stock. This Prospectus and any accompanying
Prospectus Supplement, if any, do not contain all of the information set forth
in the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete; with respect to each such contract,
agreement or other document filed as an exhibit or schedule to the Registration
Statement, reference is made to the exhibit or schedule, as applicable, for a
more complete description of the matter involved, and each such statement shall
be deemed qualified in its entirety by such reference. For further information
pertaining to the Company and the shares of Class A Common Stock offered hereby,
reference is made to the Registration Statement and the exhibits and schedules
thereto which may be examined or copied at the locations described above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company hereby incorporates the following documents in this Prospectus
by reference: (a) the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1997; (b) the Company's Quarterly Reports on Form 10-Q for
the periods ended December 31, 1997 and March 31, 1998; and (c) the description
of the Company's Class A Common Stock included in the Company's Registration
Statement on Form 8-A filed with the Commission on January 11, 1995 under the
Exchange Act, including any amendment or reports filed for the purpose of
updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the shares of Class A Common Stock covered by
this Prospectus shall be deemed to be incorporated by reference into this
Prospectus and to be a part of this Prospectus from the respective dates of the
filing of such documents.
Any statement contained in a document incorporated herein by reference
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained in this Prospectus or in any other
subsequently filed document which also is or is deemed to be incorporated herein
by reference modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
DAVID P. STOKES, GENERAL COUNSEL AND SECRETARY, TRANSACTION SYSTEMS ARCHITECTS,
INC., 224 SOUTH 108TH AVENUE, OMAHA, NEBRASKA 68154, TELEPHONE NUMBER (402)
334-5101. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST
SHOULD BE MADE FIVE BUSINESS DAYS PRIOR TO THE DATE ON WHICH THE FINAL
INVESTMENT DECISION MUST BE MADE.
RISK FACTORS
In addition to the other information in this Prospectus and the Prospectus
Supplement, if any, and information incorporated herein by reference, the
following risk factors should be considered carefully in evaluating the Company
and its business before purchasing the Class A Common Stock offered by this
Prospectus. Unless the context requires otherwise, as used in this Prospectus,
"TSA" or the "Company" means Transaction Systems Architects, Inc. and all of its
subsidiaries.
Reliance on BASE24; Lack of Product Diversification
The Company has derived a substantial majority of its total revenues from
licensing its BASE24 family of software products and providing services and
maintenance related to those products. The BASE24 products and related services
and maintenance are expected to provide the substantial majority of the
Company's revenues in the foreseeable future. The Company's results will depend
upon continued market acceptance of its BASE24 products and related services as
well as the Company's ability to continue to adapt and modify them to meet the
changing needs of its customers. Any reduction in demand for, or increase in
competition with respect to, BASE24 products would have a material adverse
effect on the Company's financial condition and results of operations.
International Operations
The Company has derived a majority of its total revenues from sales to
customers outside the United States. International operations generally are
subject to certain risks, including difficulties in staffing and management,
reliance on independent distributors, fluctuations in foreign currency exchange
rates, compliance with foreign regulatory requirements, variability of foreign
economic conditions and changing restrictions imposed by U.S. export laws. There
can be no assurance that the Company will be able to manage the risks related to
selling its products and services in international markets.
Dependence on Banking Industry
The Company's business is concentrated in the banking industry, making the
Company susceptible to a downturn in that industry. For example, a decrease in
bank spending for software and related services could result in a smaller
overall market for electronic payment software. Furthermore, U.S. banks are
continuing to consolidate, decreasing the overall potential number of buyers for
the Company's products and services. These factors as well as others negatively
affecting the banking industry could have a material adverse effect on the
Company's financial condition and results of operations.
Relationship with Tandem
Historically, the Company has derived a substantial portion of its total
revenues from the licensing of software products that operate on Tandem
computers. The BASE24 product line runs exclusively on Tandem computers. These
products are expected to provide a substantial portion of the Company's revenues
in the foreseeable future. The Company's future results depend on market
acceptance of Tandem computers and the financial success of Tandem. Any
reduction in demand for these computers or in Tandem's ability to deliver
products on a timely basis could have a material adverse effect on the Company's
financial condition and results of operations.
Although the Company has several written agreements with Tandem, none of
those agreements governs the primary relationship between the Company and
Tandem, which is that the Company's major product line, BASE24, runs exclusively
on Tandem computers. While the cooperation and past affiliation between the
Company and Tandem have facilitated the Company's ability to develop and market
Tandem-compatible products, this cooperation is not mandated by contract, and
the cessation of such cooperation would adversely affect the Company's business.
None of the Company's agreements with Tandem would protect the Company if
Tandem's cooperation ceased or if Tandem were unable to deliver products on a
timely basis. The written agreements cover such discrete matters as funding of
market development efforts.
Management of Growth
The Company is experiencing a period of growth which is placing demands on
its managerial and operations resources. The Company's inability to manage its
growth effectively or to maintain its current level of growth could have a
material adverse effect on its financial condition and results of operations.
Attraction and Retention of Key Personnel
The Company's success depends on certain of its executive officers, the
loss of one or more of whom could have a material adverse effect on the
Company's financial condition and results of operations. None of the Company's
U.S.-based executive officers is a party to an employment agreement. The Company
believes that its future success also depends on its ability to attract and
retain highly-skilled technical, managerial and marketing personnel, including,
in particular, additional personnel in the areas of research and development and
technical support. Competition for personnel is intense. There can be no
assurance that the Company will be successful in attracting and retaining the
personnel it requires.
Competition
The market for electronic payment software is highly competitive. Many
applications software vendors offer products that are directly competitive with
BASE24 and other products of the Company. The Company also experiences
competition from software developed internally by potential customers and
experiences competition for its consulting services from professional services
organizations. In addition, processing companies provide services similar to
those made possible by the Company's products. Many of the Company's current and
potential competitors have significantly greater financial, marketing, technical
and other competitive resources than the Company. Current and potential
competitors, including providers of transaction-based software, processing, or
professional services, may establish cooperative relationships with one another
or with third parties to compete more effectively against the Company. It is
also possible that new competitors may emerge and acquire market share. In
either case, the Company's financial condition and results of operations could
be adversely affected.
New Products and Technological Change
The market for software in general is characterized by rapid change in
computer hardware and software technology and is highly competitive with respect
to the need for timely product innovation and new product introductions. The
Company believes that its future success depends upon its ability to enhance its
current applications and develop new products that address the increasingly
complex needs of customers. In particular, the Company believes that it must
continue to respond quickly to users' needs for additional functionality and
multi-platform support. The introduction and marketing of new or enhanced
products requires the Company to manage the transition from current products in
order to minimize disruption in customer purchasing patterns. There can be no
assurance that the Company will continue to be successful in the timely
development and marketing of product enhancements or new products that respond
to technological advances, that its new products will adequately address the
changing needs of the domestic and international markets or that it will
successfully manage the transition from current products.
The Company is continually developing new products, product versions and
individual features within a large, complex software system. Development
projects can be lengthy and are subject to changing requirements, programming
difficulties and unforeseen factors which can result in delays in the
introduction of new products and features. Delays could have a material adverse
effect on the Company's financial condition and results of operations.
In addition, new products, versions or features, when first released by the
Company, may contain undetected errors that, despite testing by the Company, are
discovered only after a product has been installed and used by customers. To
date, undetected errors have not caused significant delays in product
introduction and installation or required substantial design modifications.
However, there can be no assurance that the Company will avoid problems of this
type in the future.
A substantial majority of the Company's license fee revenue is generated by
licenses for software products designed to run on fault-tolerant or mainframe
computers. Industry sources indicate that sales of mainframe computers are
declining on a unit basis, and the Company expects this trend to continue. The
Company has developed, and continues to develop, certain products for other
platforms, but to date revenues from these products have not been significant.
There can be no assurance that the Company will be successful in selling these
software products or other products under development. The Company's failure in
this regard could have a material adverse effect on its financial condition and
results of operations.
Dependence On Proprietary Technology
The Company relies on a combination of trade secret and copyright laws,
nondisclosure and other contractual and technical measures to protect its
proprietary rights in its products. There can be no assurance that these
provisions will be adequate to protect its proprietary rights. In addition, the
laws of certain foreign countries do not protect intellectual property rights to
the same extent as the laws of the United States. Although the Company believes
that its intellectual property rights do not infringe upon the proprietary
rights of third parties, there can be no assurance that third parties will not
assert infringement claims against the Company.
Variability of Quarterly Operating Results
The Company's quarterly revenues and operating results may fluctuate
depending on the timing of executed contracts, license upgrades and the delivery
of contracted business during the quarter. In addition, quarterly operating
results may fluctuate due to the extent of commissions associated with third
party product sales, timing of the Company's hiring of additional staff, new
product development and other expenses. No assurance can be given that operating
results will not vary due to these factors. Fluctuations in quarterly operating
results may result in volatility in the Company's stock price.
Customer Cancellation of Contracts
The Company derives a substantial portion of its total revenues from
maintenance fees and monthly software license fees pursuant to contracts which
the customer has the right to cancel. A substantial number of cancellations of
these maintenance or monthly license fee contracts would have a material adverse
effect on the Company's financial condition and results of operations.
Possible Volatility of Stock Price
The stock market has from time to time experienced extreme price and volume
fluctuations, particularly in the high technology sector, which have often been
unrelated to the operating performance of particular companies. Any announcement
with respect to any variance in revenue or earnings from levels generally
expected by securities analysts for a given period could have an immediate and
significant effect on the trading price of the Class A Common Stock. In
addition, factors such as announcements of technological innovations or new
products by the Company, its competitors or other third parties, as well as
changing market conditions in the computer software or hardware industries, may
have a significant impact on the market price of the Class A Common Stock.
Antitakeover Measures
The Company's Certificate of Incorporation contains provisions that may
discourage acquisition bids for the Company. The effect of such provisions may
be to limit the price that investors might be willing to pay in the future for
shares of the Class A Common Stock.
Year 2000
Management has initiated a Company-wide program to prepare the Company's
computer systems and applications as well as the Company's product offerings for
the year 2000. The Company expects to incur internal staff costs as well as
consulting and other expenses related to system enhancements and product
modifications for the year 2000. The majority of the Company's product offerings
are currently year 2000 compliant. The total cost to be incurred by the Company
for all year 2000 related projects is not expected to have a material impact on
the future results of operations. However there could be a material adverse
effect on the results of operations of the Company if the system enhancements
and product modifications for the year 2000 prove not to be effective.
THE COMPANY
The Company develops, markets and supports a broad line of software
products and services primarily focused on facilitating electronic payments and
electronic commerce. The Company's software products are used to process
transactions involving credit cards, debit cards, smart cards, checks, automated
teller machines (ATM), point-of-sale (POS) terminals, manned teller devices,
remote banking, wire transfers and automated clearing house (ACH) functions. The
Company's products and services assist customers in operating large, complex
networks performing such functions as transaction authorization, transaction
routing, debit and credit card management, transaction settlement and reporting.
The Company was formed for the purpose of acquiring Applied Communications,
Inc. and Applied Communications Inc. Limited, which were acquired on December
31, 1993. On January 3, 1994, the Company acquired U.S. Software, Inc. Since
that time, the Company has completed several acquisitions complementary to its
business. The principal executive offices of the Company are located at 224
South 108th Avenue, Omaha, Nebraska 68154, and its telephone number is (402)
334-5101.
SECURITIES COVERED BY THIS PROSPECTUS
This Prospectus relates to 2,500,000 shares of Class A Common Stock which
may be offered and issued or reserved for issuance by the Company from time to
time in connection with the acquisition by the Company, directly or indirectly,
of other businesses or properties, or interests therein. It is expected that the
terms of acquisitions involving the issuance of Class A Common Stock covered by
this Prospectus will be determined by direct negotiations with the owners or
controlling persons of the businesses or properties, or interest therein, to be
acquired by the Company, or, in the case of entities that are more widely held,
through exchange offers to stockholders or documents soliciting stockholder
approval of mergers, consolidations, plans of share exchange, or sales of
assets. It is also expected that the shares of Class A Common Stock issued will
be valued at prices reasonably related to quoted market prices either at the
time the terms of an acquisition are agreed upon or at or about the time of
delivery of such shares.
DESCRIPTION OF CAPITAL STOCK
The Company's Amended and Restated Certificate of Incorporation provides
that authorized capital stock of the Company consists of 50,000,000 shares of
Class A Common Stock, par value $0.005 per share, 5,000,000 shares of Class B
Common Stock, par value $0.005 per share, and 5,450,000 shares of redeemable
convertible preferred stock, par value of $0.01 per share. Unless otherwise
indicated, references in this Prospectus to "Common Stock" refer to both the
Company's Class A Common Stock and Class B Common Stock.
Common Stock
The Class A Common Stock and Class B Common Stock have the same rights
except that holders of Class B Common Stock are not entitled to vote except as
provided by law. Holders of Class A Common Stock are entitled to one vote per
share on all matters to be voted on by the stockholders. Subject to preferences
that may be applicable to any preferred stock outstanding at the time, holders
of Common Stock are entitled to receive ratably such dividends, if any, as may
be declared from time to time by the Board of Directors out of funds legally
available therefor. In the event of a liquidation, dissolution or winding up of
the Company, holders of all Common Stock are entitled to share ratably in all
assets remaining after payment of the Company's liabilities and the liquidation
preference, if any, of any outstanding preferred stock. Holders of Common Stock
have no preemptive rights and no rights to convert their Class A Common Stock
into any other securities, and there are no redemption provisions with respect
to shares of Common Stock. All of the outstanding shares of Common Stock are
fully paid and non-assessable. The rights, preferences and privileges of holders
of Common Stock are subject to, and may be adversely affected by, the rights of
the holders of shares of any series of preferred stock which the Company may
designate and issue in the future.
Preferred Stock
The Board of Directors has the authority, without any further vote or
action by the stockholders, to provide for the issuance of up to 5,450,000
shares of redeemable convertible preferred stock from time to time in one or
more series with such designations, rights, preferences and limitations as the
Board of Directors may determine, including the consideration received therefor,
the number of shares comprising each series, dividend rates, redemption
provisions, liquidation preferences, sinking fund provisions, conversion rights
and voting rights, all without approval by the holders of Common Stock. Although
it is not possible to state the effect that any issuance of preferred stock
might have on the rights of holders of Common Stock, the issuance of preferred
stock may have one or more of the following effects (i) restrict Common Stock
dividends if preferred stock dividends have not been paid, (ii) dilute the
voting power and equity interest of holders of Common Stock, or (iii) prevent
current holders of Common Stock from participating in the Company's assets upon
liquidation until any liquidation preferences granted to holders of preferred
stock are satisfied. In addition, the issuance of preferred stock may, under
certain circumstances, have the effect of discouraging a change in control of
the Company by, for example, granting voting rights to holders of preferred
stock that require approval by the separate vote of the holders of preferred
stock for any amendment to the Company's Amended and Restated Certificate of
Incorporation or any reorganization, consolidation, merger (or other similar
transaction involving the Company). As a result, the issuance of such preferred
stock may discourage bids for the Company's Common Stock at a premium over the
market price therefor and could have a material adverse effect on the market
value of the Common Stock. No shares of preferred stock are currently
outstanding.
Registration Rights
Certain rights with respect to registration of their stock under the
Securities Act exist for holders of shares of Common Stock issued upon
conversion of the Company's Senior Convertible Preferred Stock ("Senior
Conversion Shares"), holders of shares of Common Stock issued upon exercise of
certain stock purchase warrants ("Warrant Exercise Shares"), and holders of
shares of Common Stock issued upon conversion of the Company's Junior
Convertible Preferred Stock, shares of Class A Common Stock issuable upon
exercise of stock options issuable to employees of the Company pursuant to the
Company's Incentive Stock Option Plan and certain other shares of Class A Common
Stock (collectively "Junior Restricted Stock"). The Senior Conversion Shares,
Warrant Exercise Shares, and Junior Restricted Stock are hereafter collectively
referred to as the "Restricted Stock." The registration rights arise pursuant to
an agreement entered into at the time of the sale of underlying shares of
Preferred Stock and warrants. Holders of not less than 30% of the outstanding
Senior Conversion Shares may demand that the Company register for sale all or a
portion of their shares. With certain exceptions, the Company is not generally
required to effect more than two such registrations. In the event that the
holders making the demand request registration of less than all their Senior
Conversion Shares, the Company is required to effect a registration only if the
demand covers at least 20% of the total number of Senior Conversion Shares
originally issued (or a lesser percentage if the reasonably anticipated
aggregate public offering price would exceed $5,000,000). Subject to certain
limitations, at such time as the Company is eligible to register its shares on
Form S-3, holders of the Warrant Exercise Shares may demand, on one occasion,
that the Company register Warrant Exercise Shares on that form, provided that
the reasonably anticipated aggregate offering price would exceed $4,000,000.
Furthermore, if the Company proposes to register any of its securities, either
for its own account or that of selling security holders, the Company is required
to notify holders of Restricted Stock, and subject to certain limitations, to
include in such registration all the shares requested to be included by such
holders. The Company is generally obligated to bear the expenses, other than
underwriting discounts and sale commissions, of all of these registrations and
to indemnify the sellers against certain liabilities, including liabilities
under the Securities Act.
Limitation of Liability
The Company's Amended and Restated Certificate of Incorporation limits the
liability of directors to the maximum extent permitted by Delaware law. Delaware
law provides that directors of a corporation will not be personally liable for
monetary damages for breach of their fiduciary duties as directors, including
gross negligence, except liability for (i) breach of the directors' duty of
loyalty, (ii) acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law, (iii) the unlawful payment of a
dividend or unlawful stock purchase or redemption and (iv) any transaction from
which the director derives an improper personal benefit. Delaware law does not
permit a corporation to eliminate a director's duty of care, and this provision
of the Company's revised Restated Certificate of Incorporation has no effect on
the availability of equitable remedies, such as injunction or rescission, based
upon a directo''s breach of the duty of care.
The Company's Amended and Restated Certificate of Incorporation authorizes
the Company to purchase and maintain insurance for the purpose of
indemnification.
Delaware Law
Under Section 203 of the Delaware General Corporation Law ("Section 203"),
certain "business combinations" between a Delaware corporation whose stock
generally is publicly traded or held of record by more than 2,000 stockholders
and an "interested stockholder" are prohibited for a three-year period following
the date that such stockholder became an interested stockholder, unless (i) the
corporation has elected in its original certificate of incorporation not to be
governed by Section 203 (the Company did not make such an election), (ii) the
business combination was approved by the board of directors of the corporation
before the other party to the business combination became an interested
stockholder, (iii) upon consummation of the transaction that made it an
interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the commencement of the
transaction (excluding voting stock owned by directors who are also officers or
held in employee benefit plans in which the employees do not have a confidential
right to tender or vote stock held by the plan) or (iv) the business combination
was approved by the board of directors of the corporation and ratified by
two-thirds of the voting stock which the interested stockholder did not own. The
three-year prohibition also does not apply to certain business combinations
proposed by an interested stockholder following the announcement or notification
of certain extraordinary transactions involving the corporation and a person who
had not been an interested stockholder during the previous three years or who
became an interested stockholder with the approval of the majority of the
corporation's directors. The term "business combination" is defined generally to
include mergers or consolidations between a Delaware corporation and an
"interested stockholder," transactions with an "interested stockholder"
involving the assets or stock of the corporation or its majority-owned
subsidiaries and transactions which increase an interested stockholder's
percentage ownership of stock. The term "interested stockholder" is defined
generally as a stockholder who, together with affiliates and associates, owns
(or, within three years prior, did own) 15% or more of a Delaware corporation's
voting stock. Section 203 could prohibit or delay a merger, takeover or other
change in control of the Company and therefore could discourage attempts to
acquire the Company.
Transfer Agent and Registrar
The transfer agent and registrar of the Class A Common Stock is Norwest
Bank Minnesota, N.A.
EXPERTS
The financial statements and schedules incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and have been
so incorporated in reliance upon the authority of said firm as experts in giving
said reports.
Future financial statements and schedules of the Company and the reports
thereon of the Company's independent public accountants also will be
incorporated by reference in this Prospectus in reliance upon the authority of
those accountants as experts in giving those reports to the extent those
accountants have audited those financial statements and consented to the use of
their reports thereon.
LEGAL MATTERS
The validity of the Class A Common Stock offered pursuant to this
Prospectus will be passed upon for the Company by Baker & McKenzie, Chicago,
Illinois.
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware permits
indemnification by a corporation of certain officers, directors, employees and
agents. Consistent therewith, Article Tenth of the Company's Amended and
Restated Certificate of Incorporation provides that the Company, to the fullest
extent authorized by the General Corporation Law of the State of Delaware, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Company to provide
broader indemnification rights than such law permitted the Company to provide
prior to such amendment), to indemnify a director or officer of the Company or a
person who is or was serving at the request of the Company as director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to an employee benefit
plan, who was or is made (or threatened to be made) a party to a civil,
criminal, administrative or investigative proceeding (an "indemnified person").
Article Tenth also provides that expenses incurred by an indemnified person will
be paid in advance by the Company; provided, however, that, if the General
Corporation Law of the State of Delaware requires, an advancement of expenses
incurred by an indemnified person incurred in his or her capacity as a director
or officer shall be made only if the Company receives an undertaking by or on
behalf of the indemnified person to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal that such indemnified person is not entitled to be
indemnified for such expenses.
Under a registration rights agreement between the Company and certain of
its stockholders, the Company agreed to indemnify each stockholder selling his
or her shares thereunder in connection with any losses, claims, damages or
liabilities arising out of certain acts or omissions of the Company. Under an
agreement with the purchasers of the Company's Senior Convertible Preferred
Stock and warrants, the Company indemnified the purchasers with respect to any
misrepresentation or breach of any representation or warranty or noncompliance
with any conditions or other agreements given or made in connection with the
agreement or the transactions contemplated therein.
Item 21. Exhibits and Financial Statement Schedules
A. Exhibits
Exhibit
Number Description
- ------- ----------------------------------------------------------------------
2.01(1) Senior Convertible Preferred Stock and Warrant Purchase Agreement
among ACI Holdings, Inc. and the Several Named Purchasers Named
therein, dated as of December 31, 1993
2.02(1) Stock Purchase Agreement between and among Tandem Computers
Incorporated, Tandem Computers Limited, Applied Communications, Inc.,
Applied Communications Inc. Limited and ACI Holding, Inc., dated
November 8, 1993, and amendments thereto
2.03(1) Stock Purchase Agreement between and among U S Software Holding,
Inc., Michael J. Scheier, Trustee, Michael J. Scheier and ACI Holding,
Inc., dated December 13, 1993, and amendments thereto
2.04(1) Stock and Warrant Holders Agreement, dated as of December 30, 1993
2.05(1) Credit Agreement among ACI Transub, Inc., ACI Holding, Inc.,
certain lenders and Continental Bank N.A., as Agent, dated December
31, 1993, including Amendment No. 1 to Credit Agreement and Amendment
No. 2 to Credit Agreement and Consent
2.06(1) Letter Agreement among ACI Holding, Inc., Alex. Brown and Sons,
Incorporated and Kirkpatrick Pettis Smith Polian, Inc., and amendment
thereto
2.07(1) ACI Management Group Investor Subscription Agreement, dated as of
December 30, 1993
2.08(2) Asset Purchase Agreement Between 1176484 Ontario Inc. and TXN
Solution Integrators Dated June 3, 1996
2.09(3) Stock Exchange Agreement by and among the Company, Grapevine
Systems, Inc. and certain principal shareholders of Grapevine Systems,
Inc., dated as of June 15, 1996
2.10(4) Stock Exchange Agreement dated April 17, 1997 by and among the
Company and Regency Voice Systems, Inc. and related entities
4.01(1) Form of Common Stock Certificate
5.01 Opinion of Baker & McKenzie
23.01 Consent of Independent Public Accountants
23.02 Consent of Baker & McKenzie (included in opinion filed as Exhibit
5.01)
24.01 Power of Attorney (contained in Signature Page)
_____________
(1) Incorporated by reference to the exhibit of the same number to the
Registrant's Registration Statement No. 33-88292 on Form S-1.
(2) Incorporated by reference to the exhibit of the same number to the
Registrant's Current Report on Form 8-K dated June 3, 1996 filed on
June 17, 1996, as amended by the Registrant's Current Report on Form
8-K(A) filed on July 15, 1996.
(3) Incorporated by reference to the exhibit of the same number to the
Registrant's Registration Statement No.333-09811 on Form S-4.
(4) Incorporated by reference to the exhibit of the same number to the
Registrant's Current Report on Form 8-K dated May 13, 1997.
Item 22. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
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 the volume
of securities offered (if the total value of securities
offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee' table in the
effective Registration Statement; 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 (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in
a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished
to the Commission by the registrant 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 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.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, 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.
(c) The undersigned registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other Items of
the applicable form.
(d) The registrant undertakes that every prospectus: (i) that is
filed pursuant to paragraph (c) immediately preceding, or (ii)
that purports to meet the requirements of Section 10(a)(3) of the
Act and is used in connection with an offering of securities
subject to Rule 415, will be filed as a part of an amendment to
the registration statement and will not be used until such
amendment is effective, and that, for purposes 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.
(e) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into
the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form
S-4, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the
Registration Statement through the date of responding to the
request.
(f) The undersigned registrant hereby undertakes to supply by means
of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration
Statement when it became effective.
(g) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the 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 Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Omaha, State of
Nebraska, on June 8, 1998.
TRANSACTION SYSTEMS ARCHITECTS, INC.
By: /s/ William E. Fisher
-------------------------------
William E. Fisher
President
POWER Of ATTORNEY
We, the undersigned officers and directors of Transaction Systems
Architects, Inc., hereby severally and individually constitute and appoint
William E. Fisher, Gregory J. Duman, David P. Stokes and Dwight G. Hanson,
and each of them, the true and lawful attorneys and agents of each of us to
execute in the name, place and stead of each of us (individually and in any
capacity stated below) any and all amendments to this Registration
Statement on Form S-4, including any post-effective amendments, and any
additional Registration Statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and all instruments necessary or advisable in
connection therewith and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, each of said attorneys and agents to have power to act with or
without the other and to have full power and authority to do and perform in
the name and on behalf of each of the undersigned every act whatsoever
necessary or advisable to be done in the premises as fully and to all
intents and purposes as any of the undersigned might or could do in person,
and we hereby ratify and confirm other signatures as they may be signed by
our said attorneys and agents and each of them to any and all such
amendment and amendments.
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.
Name Title Date
-------- --------- --------
/s/ William E. Fisher Director and President June 8, 1998
- --------------------- (Principal Executive Officer)
William E. Fisher
/s/ Gregory J. Duman Chief Financial Officer June 8, 1998
- --------------------- (Principal Financial Officer)
Gregory J. Duman
/s/ Dwight G. Hanson Vice President (Principal June 8, 1998
- --------------------- Accounting Officer)
Dwight G. Hanson
/s/ David C. Russell Director June 8, 1998
- ---------------------
David C. Russell
/s/ Jim D. Kever Director June 8, 1998
- ---------------------
Jim D. Kever
/s/ Promod Haque Director June 8, 1998
- ---------------------
Promod Haque
/s/ Charles E. Noell, III Director June 8, 1998
- ---------------------
Charles E. Noell, III
/s/ Larry G. Fendley Director June 8, 1998
- ---------------------
Larry G. Fendley
Exhibit Index
Exhibit
Number Description
- ------- ----------------------------------------------------------------------
2.01(1) Senior Convertible Preferred Stock and Warrant Purchase Agreement
among ACI Holdings, Inc. and the Several Named Purchasers Named
therein, dated as of December 31, 1993
2.02(1) Stock Purchase Agreement between and among Tandem Computers
Incorporated, Tandem Computers Limited, Applied Communications, Inc.,
Applied Communications Inc. Limited and ACI Holding, Inc., dated
November 8, 1993, and amendments thereto
2.03(1) Stock Purchase Agreement between and among U S Software Holding,
Inc., Michael J. Scheier, Trustee, Michael J. Scheier and ACI Holding,
Inc., dated December 13, 1993, and amendments thereto
2.04(1) Stock and Warrant Holders Agreement, dated as of December 30, 1993
2.05(1) Credit Agreement among ACI Transub, Inc., ACI Holding, Inc.,
certain lenders and Continental Bank N.A., as Agent, dated December
31, 1993, including Amendment No. 1 to Credit Agreement and Amendment
No. 2 to Credit Agreement and Consent
2.06(1) Letter Agreement among ACI Holding, Inc., Alex. Brown and Sons,
Incorporated and Kirkpatrick Pettis Smith Polian, Inc., and amendment
thereto
2.07(1) ACI Management Group Investor Subscription Agreement, dated as of
December 30, 1993
2.08(2) Asset Purchase Agreement Between 1176484 Ontario Inc. and TXN
Solution Integrators Dated June 3, 1996
2.09(3) Stock Exchange Agreement by and among the Company, Grapevine
Systems, Inc. and certain principal shareholders of Grapevine Systems,
Inc., dated as of June 15, 1996
2.10(4) Stock Exchange Agreement dated April 17, 1997 by and among the
Company and Regency Voice Systems, Inc. and related entities
4.01(1) Form of Common Stock Certificate
5.01 Opinion of Baker & McKenzie
23.01 Consent of Independent Public Accountants
23.02 Consent of Baker & McKenzie (included in opinion filed as Exhibit
5.01)
24.01 Power of Attorney (contained in Signature Page)
_____________
(1) Incorporated by reference to the exhibit of the same number to the
Registrant's Registration Statement No. 33-88292 on Form S-1.
(2) Incorporated by reference to the exhibit of the same number to the
Registrant's Current Report on Form 8-K dated June 3, 1996 filed on
June 17, 1996, as amended by the Registrant's Current Report on Form
8-K(A) filed on July 15, 1996.
(3) Incorporated by reference to the exhibit of the same number to the
Registrant's Registration Statement No.333-09811 on Form S-4.
(4) Incorporated by reference to the exhibit of the same number to the
Registrant's Current Report on Form 8-K dated May 13, 1997.
BAKER & McKENZIE
Attorneys at Law
One Prudential Plaza
130 East Randolph Drive
Chicago, Illinois 60601
June 8, 1998
Board of Directors
Transaction Systems Architects, Inc.
224 South 108th Avenue
Omaha, Nebraska 68154
Re: Transaction Systems Architects, Inc. (the "Company")
Gentlemen:
We have acted as your counsel in connection with the registration, on a
Registration Statement on Form S-4 (the "Registration Statement") under the
Securities Act of 1933, as amended, of 2,500,000 shares of the Company's Class A
Common Stock, $.005 par value per share (the "Stock"), to be issued by the
Company from time to time in connection with acquisitions by the Company,
directly or indirectly, of other businesses or properties, or interests therein.
We have reviewed the Registration Statement, the charter and by-laws of the
Company, corporate proceedings of the Board of Directors relating to the
issuance of the shares of Stock, and such other documents, corporate records and
questions of law as we have deemed necessary to the rendering of the opinions
expressed below.
Based upon the foregoing, we are of the opinion that the 2,500,000 shares
of Stock to be issued by the Company as described in the Registration Statement
are duly authorized and , when issued and paid for in the manner contemplated in
the Registration Statement and upon approval by the Board of Directors of the
acquistion in which shares of Stock will be issued, will be legally issued,
fully paid and non-assessable shares of Class A Common Stock of the Company.
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the prospectus included in the Registration Statement and to the
filing of this opinion as an exhibit thereto.
Very truly yours,
BAKER & McKENZIE
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-4 Registration Statement of our reports dated October
30, 1997, included in Transaction Systems Architects, Inc.'s Annual Report on
Form 10-K for the fiscal year ended September 30, 1997, and to all references to
our firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Omaha, Nebraska,
June 5, 1998
