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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2"><B>As filed with the Securities and
Exchange Commission on May 15, 2003</B>
</FONT>

<P align="right"><FONT size="2"><B>Registration No.&nbsp;333-______</B>
</FONT>

<P align="center"><FONT size="4"><B>SECURITIES AND EXCHANGE COMMISSION</B></FONT>

<DIV align="center"><FONT size="3"><B>Washington, D.C. 20549</B></FONT></DIV>

<P align="center"><HR align="center" size="1" width="26%" noshade>

<P align="center"><FONT size="5"><B>FORM S-8</B></FONT>

<P align="center"><FONT size="2"><B>Registration Statement<BR>
Under The Securities Act Of 1933</B>
</FONT>

<P align="center"><FONT size="2"><B><HR align="center" size="1" width="26%" noshade></B>
</FONT>

<P align="center"><FONT size="6"><B>AFFILIATED COMPUTER SERVICES, INC.</B></FONT>

<DIV align="center"><FONT size="2">(Exact name of registrant as specified in its charter)</FONT></DIV>

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    <TD width="10%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
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<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2"><B>Delaware</B><BR>
(State or other jurisdiction of incorporation or<BR>
organization)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
<B>51-0310342</B><BR>
(I.R.S. employer identification number)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2"><B>2828 North Haskell Avenue<BR>
Dallas, Texas 75201</B><BR>
(Address, including zip code, of principal executive offices)
</FONT>
<P align="center"><HR align="center" size="1" width="26%" noshade>
<P align="center"><FONT size="2"><B>Amended and Restated Affiliated Computer Services, Inc. Employee Stock Purchase Plan</B><BR>
(Full title of the Plan)
</FONT>
<P align="center"><HR align="center" size="1" width="26%" noshade>
<P align="center"><FONT size="2"><B>William L. Deckelman, Jr., Esq.<BR>
Executive Vice President, Secretary and<BR>
General Counsel<BR>
Affiliated Computer Services, Inc.<BR>
2828 North Haskell Avenue<BR>
Dallas, Texas 75201<BR>
(214)&nbsp;841-6111 (phone)</B>
</FONT>
<P align="center"><FONT size="2">(Name, address and telephone number, including area code, of agent for service)
</FONT>
<P align="center"><FONT size="2"><B>Copy to:<BR>
James S. Ryan, III<BR>
Jackson Walker L.L.P.<BR>
901 Main Street, Suite&nbsp;6000<BR>
Dallas, Texas 75202<BR>
(214)&nbsp;953-5801 (phone)</B>
</FONT>
<P align="center"><HR align="center" size="1" width="26%" noshade>
<P align="center"><FONT size="2"><B>CALCULATION OF REGISTRATION FEE</B>
</FONT>
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    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="17" nowrap align="center"><HR size="4" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Proposed Maximum</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Proposed Maximum</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Title of Securities to be</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Amount to be</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Offering Price per</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Aggregate Offering</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Amount of</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Registered</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Registered(1)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Share(2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Price(2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Registration Fee</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="17" nowrap align="center"><HR size="1" noshade></TD>
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<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Class&nbsp;A Common Stock, par<BR>
value $0.01 per share</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,000,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">51.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">103,300,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,356.97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="17" nowrap align="center"><HR size="1" noshade></TD>
</TR>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Pursuant to Rule&nbsp;416(a) under the Act, this Registration Statement also registers such indeterminate number of shares as may be issuable pursuant to the
antidilution provisions of the Plan.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Estimated solely for the purpose of calculating the registration fee. Pursuant to Rule&nbsp;457(c) and 457(h) under the Act, the offering price and
registration fee are based on a price of $51.65 per share, which price is an average of the high and low prices of the Class&nbsp;A Common Stock as reported by
the New York Stock Exchange on May 12, 2003.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">&nbsp;</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>EXPLANATORY NOTE</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Registration Statement covers 2,000,000 additional shares of the
Class&nbsp;A Common Stock, $0.01 par value (&#147;Common Stock&#148;) of Affiliated Computer
Services, Inc. (the &#147;Company&#148;) issuable pursuant to the Amended and Restated
Affiliated Computer Services, Inc. Employee Stock Purchase Plan (the &#147;Plan&#148;),
for which a previously filed Registration Statement on Form&nbsp;S-8 is effective
(the &#147;Prior Registration Statement&#148;). Pursuant to Instruction E of Form&nbsp;S-8,
the contents of the Company&#146;s Prior Registration Statement on Form&nbsp;S-8, File
No.&nbsp;33-80519, as filed with the Securities and Exchange Commission (the
&#147;Commission&#148;) on December&nbsp;18, 1995, are incorporated herein by reference.
</FONT>
<P align="center"><FONT size="2"><B>PART I</B>
</FONT>

<P align="center"><FONT size="2"><B>INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS</B>
</FONT>

<P align="left"><FONT size="2"><B>Item&nbsp;1. Plan Information</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This registration statement (this &#147;Registration Statement&#148;) includes two
forms of prospectus. The documents constituting the prospectus under Part I of
this Registration Statement (the &#147;Plan Prospectus&#148;) will be sent or given to
participants in the Plan as specified by Rule&nbsp;428(b)(1) under the Securities
Act of 1933 (the &#147;Act&#148;), as amended. The second prospectus (the &#147;Resale
Prospectus&#148;) may be used in connection with reoffers and resales of shares of
Common Stock of the Company acquired by Plan participants prior to the date of
this Registration Statement. The Plan Prospectus has been omitted from this
Registration Statement as permitted by Part I of Form&nbsp;S-8. The Resale
Prospectus is filed as part of this Registration Statement as required by Form
S-8.
</FONT>
<P align="left"><FONT size="2"><B>Item&nbsp;2. Registrant Information and Employee Plan Annual Information</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon written or oral request, the Company will provide, without charge,
the documents incorporated by reference in Item&nbsp;3 of Part II of this
Registration Statement. The documents are incorporated by reference in both
the Plan Prospectus and the Resale Prospectus. The Company will also provide,
without charge, upon written or oral request, other documents required to be
delivered to employees pursuant to Rule&nbsp;428(b) under the Act. Requests for the
above mentioned information, should be directed in writing or by telephone to
Affiliated Computer Services, Inc., Attention: William L. Deckelman, Jr.,
Executive Vice President, Secretary and General Counsel, 2828 North Haskell
Avenue, Dallas, Texas 75204; telephone: (214)&nbsp;841-6111.
</FONT>
<P align="center"><FONT size="2">&nbsp;</FONT>
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<P align="center"><FONT size="2"><B>PROSPECTUS</B>
</FONT>

<P align="center"><FONT size="2"><B>AFFILIATED COMPUTER SERVICES, INC.<BR>
2828 NORTH HASKELL AVENUE<BR>
DALLAS, TEXAS 75201<BR>
(214)&nbsp;841-6111</B>
</FONT>

<P align="center"><FONT size="2"><B>2,000,000 SHARES OF CLASS A COMMON STOCK</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus (this &#147;Prospectus&#148;) relates to the offer and sale of up to
2,000,000 shares of Class&nbsp;A common stock, par value $0.01 (the &#147;Common Stock&#148;)
of Affiliated Computer Services, Inc. (the &#147;Company&#148;) from time to time by the
stockholders of the Company identified on page 18 of this Prospectus (the
&#147;Selling Stockholders&#148;). The Common Stock is issuable to the Selling
Shareholders from time to time under the Amended and Restated Affiliated
Computer Services, Inc. Employee Stock Purchase Plan (the &#147;Plan&#148;).
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold from time to time by the Selling Stockholders
or by permitted transferees. The Common Stock is quoted on the New York Stock
Exchange (the &#147;NYSE&#148;) under the symbol &#147;ACS&#148; and may be sold from time to time
by the Selling Stockholders either directly in private transactions, or through
one or more brokers or dealers on the NYSE, or any other market or exchange on
which the Common Stock is quoted or listed for trading, at such prices and upon
such terms as may be obtainable.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon any sale of the Common Stock offered hereby, the Selling Stockholders
and participating agents, brokers, dealers or market makers may be deemed to be
underwriters as that term is defined in the Securities Act of 1933, as amended
(the &#147;Act&#148;), and commissions or discounts or any profit realized on the resale
of such securities purchased by them may be deemed to be underwriting
commissions or discounts under the Act. The Company will not receive any of
the proceeds from the sales by the Selling Stockholders.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No underwriter is being utilized in connection with this offering. The
Company will pay all expenses incurred in connection with this offering.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<HR align="center" size="1" width="26%" noshade>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. PLEASE SEE &#147;RISK FACTORS&#148;
BEGINNING ON PAGE 6.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
</FONT>
<P align="center"><FONT size="2">The date of this Prospectus is May 15, 2003
</FONT>
<P align="right"><FONT size="2">Page 2</FONT>
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<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
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	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">WHERE YOU CAN FIND MORE INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">INFORMATION INCORPORATED BY REFERENCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">AFFILIATED COMPUTER SERVICES, INC.</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">RISK FACTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">USE OF PROCEEDS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">SELLING STOCKHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">PLAN OF DISTRIBUTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">LEGAL MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">EXPERTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">INDEX TO EXHIBITS</A></TD></TR>
<TR><TD colspan="9"><A HREF="d05468exv4w4.txt">EX-4.4 Amended and Restated Employee Stock Plan</A></TD></TR>
<TR><TD colspan="9"><A HREF="d05468exv5.txt">EX-5 Opinion/Consent of Jackson Walker LLP</A></TD></TR>
<TR><TD colspan="9"><A HREF="d05468exv23w1.txt">EX-23.1 Consent of PricewaterhouseCoopers LLP</A></TD></TR>
</TABLE>
</CENTER>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<P align="center"><FONT size="2"><B>TABLE OF CONTENTS</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="92%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>WHERE YOU CAN FIND MORE INFORMATION</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>3</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>INFORMATION INCORPORATED BY REFERENCE</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>4</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>AFFILIATED COMPUTER SERVICES, INC</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>5</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>6</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>RISK FACTORS</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>6</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>USE OF PROCEEDS</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>18</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>SELLING STOCKHOLDERS</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>18</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>PLAN OF DISTRIBUTION</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>19</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>LEGAL MATTERS</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>20</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>EXPERTS</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>20</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR size="1" noshade>




<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should only rely on the information incorporated by reference or
provided in this Prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The Common Stock is not being
offered in any state where the offer is not permitted. You should not assume
that the information in this Prospectus or any supplement is accurate as of any
date other than the date on the front of this Prospectus.
</FONT>
<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->
<DIV align="left"><A NAME="000"></A></DIV>
<P align="center"><FONT size="2"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file reports, proxy statements, information statements and other
information with the Securities and Exchange Commission (the &#147;Commission&#148;). You
may read and copy this information, for a copying fee, at the Commission&#146;s
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the Commission at 1-800-SEC-0330 for more information on its public
reference rooms. Our Commission filings are also available to the public from
commercial document retrieval services and at the web site maintained by the
Commission at http://www.sec.gov.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Common Stock is traded on the New York Stock Exchange and, therefore,
the information we file with the Commission may also be inspected at the
offices of the New York Stock Exchange, located at 20 Broad Street, New York,
NY 10005.
</FONT>
<P align="right"><FONT size="2">Page 3 </FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed with the Commission a registration statement on Form&nbsp;S-8 to
register with the Commission the resale of the shares of the Common Stock
described in this Prospectus. This Prospectus is part of that registration
statement, and provides you with a general description of the shares of the
Common Stock being registered, but does not include all of the information you
can find in the registration statement or the exhibits. You should refer to the
registration statement and its exhibits for more information about us, and the
shares of Common Stock being registered.
</FONT>
<!-- link1 "INFORMATION INCORPORATED BY REFERENCE" -->
<DIV align="left"><A NAME="001"></A></DIV>
<P align="center"><FONT size="2"><B>INFORMATION INCORPORATED BY REFERENCE</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Commission allows us to &#147;incorporate by reference&#148; information into
this Prospectus, which means that we can disclose important information to you
by referring to another document filed separately with the Commission. The
information incorporated by reference is deemed to be part of this Prospectus,
except for information superseded by this Prospectus. The Prospectus
incorporates by reference the documents set forth below that we have previously
filed with the Commission. These documents contain important information about
the Company and its finances.
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">Annual Report on Form&nbsp;10-K for the year ended June&nbsp;30, 2002;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">Current Reports on Form&nbsp;8-K filed July&nbsp;8, 2002, July&nbsp;25,
2002, August&nbsp;21, 2002, September&nbsp;17, 2002, September&nbsp;18, 2002 (2
reports filed), November&nbsp;14, 2002, February&nbsp;4, 2003, February&nbsp;14,
2003; and April&nbsp;22, 2003;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">Quarterly Reports on Form&nbsp;10-Q for the quarters ended
September&nbsp;30, 2002, December&nbsp;31, 2002 and March 31, 2003; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">The description of the Common Stock, contained in the
Company&#146;s Registration Statement on Form&nbsp;8-A, dated September&nbsp;26,
1994, including any amendment or report filed for the purpose of
updating such description.</FONT></TD>
</TR>
</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are also incorporating by reference additional documents that we may
file with the Commission in the future under Section&nbsp;13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 prior to the termination of this
offering.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any statements contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or replaced for
purposes hereof to the extent that a statement contained herein (or any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein) modifies or replaces such statement. Any
statement so modified or replaced shall not be deemed, except as so modified or
replaced, to constitute a part hereof.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you are a stockholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through us or the
Commission. Documents incorporated
</FONT>
<P align="right"><FONT size="2">Page 4 </FONT>
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<P><FONT size="2">by reference are available from us without charge. Stockholders may obtain
documents incorporated by reference into this Prospectus by requesting them in
writing or by telephone from:
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Affiliated Computer Services, Inc.<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention:
William L. Deckelman, Jr.<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive
Vice President, Secretary and General Counsel<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2828
North Haskell Avenue<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dallas,
Texas 75204<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Telephone:
(214)&nbsp;841-6111
</FONT>
<!-- link1 "AFFILIATED COMPUTER SERVICES, INC." -->
<DIV align="left"><A NAME="002"></A></DIV>
<P align="center"><FONT size="2"><B>AFFILIATED COMPUTER SERVICES, INC.</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a global, Fortune 500 company delivering comprehensive business
process outsourcing and information technology outsourcing solutions, as well
as system integration services, to commercial clients, state and local
government clients, and federal government clients. We are based in Dallas,
Texas and have offices primarily in North America, as well as Central America,
Europe, Africa, and the Middle East. Our clients have time-critical,
transaction-intensive business and information processing needs, and we
typically service these needs through long-term contracts. Approximately 90%,
89% and 88% of our revenues for fiscal years 2002, 2001 and 2000, respectively,
were recurring, which are revenues derived from services that our clients use
each year in connection with their ongoing businesses.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our services enable businesses to focus on core operations, respond to
rapidly changing technologies and reduce expenses associated with business
processes and information processing. Our business strategy is to expand our
client base and enhance our service offerings through both internal marketing
and the acquisition of complementary companies. Our marketing efforts focus on
developing long-term relationships with clients that choose to outsource
mission critical business processes and information technology requirements.
Our business expansion has been accomplished both from internal growth as well
as through acquisition. Since inception through June&nbsp;30, 2002, we have
completed a number of acquisitions, which have resulted in geographic expansion,
growth and diversification of our client base, expansion of services and
products offered, and increased economies of scale. Our revenues have increased
from $534&nbsp;million in fiscal year 1995 to approximately $3.1&nbsp;billion in fiscal
year 2002, a compound annual growth rate of 28%. Of this growth, approximately
42% resulted from internal growth and 58% resulted from growth through
acquisitions.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We serve three primary markets, which include state and local governments,
commercial clients, and the federal government. We are a leading provider of
business process outsourcing and information technology services to state and
local governments. During fiscal year 2002, revenues from our state and local
government segment accounted for approximately $1.24&nbsp;billion, or 41% of our
revenues. Of this $1.24&nbsp;billion, approximately 58% is derived from services
provided to local municipalities, approximately 25% is derived from state
healthcare programs, and the remainder is derived from services provided to
states, primarily child support payment processing. We provide technology-based
services with a focus on transaction processing and program management services
such as child support payment processing, electronic toll collection, welfare
to workforce services, and traffic violations processing. We
also design, develop, implement, and operate large-scale health and human
services programs and the information technology solutions that support those
programs.
</FONT>
<P align="right"><FONT size="2">Page 5 </FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our commercial sector accounted for approximately $1.01&nbsp;billion, or 33% of
our fiscal year 2002 revenues. We provide business process outsourcing,
technology outsourcing, and systems integration services to our commercial
sector clients. These services are provided to a variety of clients nationwide,
including healthcare providers, retailers, wholesale distributors,
manufacturers, utilities, financial institutions, insurance and transportation
companies. Our business process outsourcing services include claims processing,
finance and accounting, loan processing and document processing. Our technology
outsourcing services include mainframe, midrange, desktop, network, and
web-hosting solutions. Our commercial systems integration services include
application development and implementation, applications outsourcing, technical
support and training, as well as network design and installation services.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also serve the federal government market, which during fiscal year 2002
accounted for approximately $811&nbsp;million, or 26% of our annual revenues. Our
services in this market are comprised of business process outsourcing services,
which consist primarily of loan processing services and human resources
services, and systems integration services, which include application
development and outsourcing, network implementation and maintenance, desktop
services, technical staff augmentation, and training under long-term contracts.
Approximately 55% of revenues within our federal government business are
derived from civilian agencies with the remaining 45% from Department of
Defense agencies.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our principal executive offices are located at 2828 North Haskell Avenue,
Dallas, Texas 75204. Our telephone number at that location is (214)&nbsp;841-6111.
</FONT>
<!-- link1 "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS" -->
<DIV align="left"><A NAME="003"></A></DIV>
<P align="center"><FONT size="2"><B>SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Prospectus contains &#147;forward looking statements&#148; within the meaning of the
Private Securities Litigation Reform Act of 1995 and the provisions of Section
27A of the Securities Act of 1933, as amended (which Section was adopted as
part of Private Securities Litigation Reform Act of 1995). While management has
based any forward-looking statements contained herein on its current
expectations, the information on which such expectations were based may change.
These forward-looking statements rely on a number of assumptions concerning
future events and are subject to a number of risks, uncertainties, and other
factors, many of which are outside of our control, that could cause actual
results to materially differ from such statements. Such risks, uncertainties,
and other factors include, but are not necessarily limited to, those set forth
under the caption &#147;Risks Factors.&#148; In addition, we operate in a highly and
rapidly changing environment, and new risks may arise. Accordingly, investors
should not place any reliance on forward-looking statements as a prediction of
actual results. We disclaim any intention to, and undertake no obligation to,
update or revise any forward-looking statement.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should not place undue reliance on these forward-looking statements,
which apply only as of the date of this Prospectus.
</FONT>
<!-- link1 "RISK FACTORS" -->
<DIV align="left"><A NAME="004"></A></DIV>
<P align="center"><FONT size="2"><B>RISK FACTORS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any investment in the Common Stock involves a high degree of risk. You
should carefully consider the following information about risks, together with
other information contained in this
</FONT>
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<P><FONT size="2">Prospectus, before making an investment
decision. Additional risks and uncertainties not known to us or that we now
believe to be unimportant could also impair our business. If any of the
following risks actually occur, our business, results of operations, financial
condition and liquidity could be adversely affected. As a result, the market
price of the Common Stock could decline, and you may lose all or a part of your
investment in the Common Stock. Some of the risks that could cause our results
to vary are discussed below.
</FONT>
<P><FONT size="2"><B>LOSS OF SIGNIFICANT CLIENTS, SUCH AS THE DEPARTMENT OF EDUCATION OR OTHER MAJOR
CLIENTS, COULD HURT OUR BUSINESS BY REDUCING OUR REVENUES AND PROFITABILITY.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our success depends substantially upon retaining our significant clients.
Generally, we may lose clients due to merger or acquisition, business failure,
contract expiration, conversion to a competing service provider or conversion
to an in-house data processing system. We cannot guarantee that we will be able
to retain long-term relationships or secure renewals of short-term
relationships with our significant clients in the future.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We incur a high level of fixed costs related to our technology outsourcing
and business process outsourcing clients. These fixed costs result from
significant investments in data processing centers, including computer hardware
platforms, computer software, facilities, and client service infrastructure.
The loss of any one of our significant clients could leave us with a
significantly higher level of fixed costs than is necessary to serve our
remaining clients, thereby reducing our revenues, profitability and cash flow.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also are vulnerable to reduced processing volumes from our clients,
which could occur due to business downturns, product liability issues, work
stoppages by organized labor, or other business reasons. Many of our clients
are in industries that are currently undergoing significant consolidation. In
the past, we have modified contracts on terms that have been both adverse and
beneficial, and it is possible that future adverse modifications may occur. Our
five largest clients accounted for approximately 14% of our revenue for the
fiscal year ended June&nbsp;30, 2002. In each of the fiscal years ended June&nbsp;30,
2001 and June&nbsp;30, 2000, our five largest clients accounted for approximately
18% of our revenue.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our largest contract is with the Department of Education (the &#147;Department&#148;),
for which we service student loans under the Department of Education&#146;s Direct
Student Loan program administered by its Office of Federal Student Aid (&#147;FSA&#148;).
Revenues from this contract represent approximately 4% of our consolidated
revenues. This contract was scheduled to run through September&nbsp;30, 2003. In
November 2001, the Department extended the contract term through September&nbsp;30,
2006, with an option for further extension through September&nbsp;30, 2007. In
December 2001, SLM Corporation (&#147;Sallie Mae&#148;) challenged the Department&#146;s
sole-source extension in a protest filed with the Department. The FSA
initially took the position that the Sallie Mae protest was without merit and
that the contract extension was lawful. In July 2002, the Department&#146;s
deciding official sustained the protest, concluding that further market
research was needed to support the sole-source extension of our contract.
However, the deciding official declined to rescind our contract extension and
directed the FSA to analyze its direct loan servicing needs and procure the
services in compliance with law.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;31, 2003 FSA officials notified us that they would conduct a
competitive procurement for Common Services for Borrowers which will be an
integrated solution for FSA for servicing, consolidation and collections
functions for federally insured student aid obligations and will absorb all
loan servicing requirements for the Department.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;24, 2003 the Department invited interested parties to participate in
phase one of a competitive procurement the Department is conducting for Common
Services for Borrowers which will be an integrated solution for FSA for
servicing, consolidation and collections functions for federally insured
student aid obligations. We believe this broader proposed scope of services
represents over $50&nbsp;million of revenue incremental to our annual revenue under
the current contract. The Department announced that the award will be a
fixed-price, performance-based incentive contract of up to ten years, including
option terms. The Department will conduct the procurement in two phases. In
phase one the Department has stated it will select those offerors who will be
eligible to participate in the second phase of the competition. The phase one
selection is expected to occur on or about May&nbsp;19, 2003 and will be based on
four evaluation factors: the offeror&#146;s conceptual approach, organizational
experience, rough order of magnitude of costs, and past performance. We
submitted our phase one proposal to the Department on May&nbsp;12, 2003 in
conformance with the Common Services for Borrowers requirements. The
Department has stated that it will issue a request for proposals to the
offerors selected in phase one on May&nbsp;19, 2003 and proposals are required to be
submitted by June&nbsp;19, 2003. The phase two selection process is expected to be
completed by September 2003. We believe we are positioned favorably for this
competitive procurement process because of our performance record with the
Department. However, there can be no assurance that we will be awarded the new
contract for Common Services to Borrowers.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the transition from the existing ACS contract to the
implementation of Common Services to Borrowers, on May&nbsp;8, 2003 the following
announcement was posted on the Department&#146;s web site: &#147;Single source
procurement for continued service and turnover. The Department of Education
has conducted extensive market research to fulfill its loan servicing needs
between December&nbsp;1, 2003 and September&nbsp;30, 2007. In performing this market
research, the Department has determined that the extension to the Direct Loan
Servicing System with &#091;the&#093; ACS contract is appropriate. The Department has
determined that a transition period of, at a minimum, 24 to 36&nbsp;months will be
necessary for any contractor to build out an infrastructure and begin
processing the more than seven million borrowers in the current Direct Loan
portfolio. The Department has completed market research for the procurement of
&#147;Common Services for Borrowers,&#148; which will absorb all loan servicing
requirements for the Department. Award of this contract is expected on or
about 9/30/03. The single source extension is required to allow for a
reasonable transition period from the current direct loan servicer to the
awardee of the &#147;Common Services for Borrower&#091;s&#093;&#148; acquisition.&#148;
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequently, on May&nbsp;13, 2003 the Department issued a &#147;Modification to a
Previous Presolicitation Notice&#148; for the purpose of clarifying its public
announcement of May&nbsp;8, 2003. In the Modification, the Department stated that
it intended to enter into negotiations with us to modify our existing contract.
Further, the Department stated that: &#147;The purpose of the negotiations would be
to revise the period of performance of the current contract for a period of up
to 36&nbsp;months, with the use of appropriate options, through September&nbsp;30, 2006.
This modification will allow the Department to accommodate a prompt and
successful transition to the Common Services For Borrowers (CSB)
vendor. ... this contract action is contemplated to be sole source based on
only one responsible source and no &#091;not&#093; other supplies or services will
satisfy agency requirements. No formal solicitation is available. The
Department &#091;Government&#093; anticipates a modification not later than 30 September
2003.&#148; Accordingly, we expect to enter into discussions with the Department to
finalize this modification before September&nbsp;30, 2003.
</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our government contracts allow for termination at any time without cause
and contain extensive audit rights, either of which could hurt our revenues and
profits. We cannot assure you that the governmental agencies with whom we
contract will not cancel or modify their contracts or that we will maintain our
historic level of revenue or profit from these relationships.
</FONT>
<P><FONT size="2"><B>WE MUST MAKE SIGNIFICANT CAPITAL INVESTMENTS IN ORDER TO ATTRACT AND RETAIN
LARGE OUTSOURCING AGREEMENTS. THESE INVESTMENTS MAY BECOME IMPAIRED IF OUR
CLIENTS&#146; FINANCIAL CONDITION DETERIORATES.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We must make significant capital investments in order to attract and
retain large outsourcing agreements. We sometimes must purchase assets such as
computing equipment and purchased software, assume financial obligations such
as computer lease and software maintenance obligations, make investments in
securities issued by clients, incur capital expenditures or incur expenses
necessary to provide outsourcing services to a client. We cannot guarantee that
we will be able to finance and properly evaluate these assets and investments.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We record these investments and asset purchases at fair value. We record
the remainder of the purchase amount as customer intangible assets, which are
then amortized over the term of each contract. The termination of a client
contract or the deterioration of the financial condition of a client has in the
past, and may in the future result, in an impairment of the net book value of
the assets recorded, including a portion of our intangible assets, and a reduction in our earnings and cash flow.
</FONT>
<P><FONT size="2"><B>COMPETITION IN OUR MARKETS COULD FORCE US TO LOWER PRICES OR CAUSE US TO LOSE
BUSINESS TO OUR COMPETITORS.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We cannot guarantee that we will be able to compete successfully in the
future. We expect to encounter additional competition as we address new markets
and as the computing and communications markets converge. If we are
forced to lower our pricing or if demand for our services decreases,
our business, financial condition, results of operations and cash
flow may be materially and adversely affected. Our markets are
intensely competitive and highly fragmented. This competition could force us to
lower our prices or lose business to our competitors. Our market share
represents a small percentage of the total technology services market. Our
clients&#146; requirements and the technology available to satisfy those
requirements continually change. Our principal competitors include Electronic
Data Systems Corporation, IBM Global Services, Computer Sciences
Corporation, Accenture, Tier Technologies, Citibank, Bank One, TransCore,
CGI, Perot Systems, Siemens, Exult,
Sallie Mae, Science Application International Corporation, Lockheed
Martin, Maximus, SourceCorp, and several other national, regional and local competitors. Many of our
competitors have greater financial, technical, and operating resources and a
larger client base than we do. They may be able to use their resources to adapt
more quickly to new or emerging technologies or to devote greater resources to
the promotion and sale of their products and services. Many of our largest
competitors have a greater international presence than us and offer a broader
range of services. In addition, we must frequently compete with a client&#146;s own
internal information technology capability, which may constitute a fixed cost
for the client.
</FONT>
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<P><FONT size="2"><B>WE MAY HAVE DIFFICULTIES EXECUTING OUR ACQUISITION STRATEGY, WHICH COULD HURT
OUR FUTURE GROWTH AND FINANCIAL CONDITION.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to continue to expand our business through acquisitions of
complementary companies. Through acquisitions, we intend to expand our geographic presence,
to expand the products and services we offer to existing clients and to enter
new markets. Since our inception in June 1988 through June&nbsp;30, 2002, we have
completed several acquisitions. Approximately 58% of our revenue growth from
fiscal 1995 to fiscal 2002 was due to acquisitions. We regularly evaluate
potential acquisition candidates. Risks that we may encounter in our
acquisitions include:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">higher acquisition prices due to increased competition for acquisitions;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">fewer suitable acquisition candidates at acceptable prices;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">insufficient capital resources for acquisitions;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">inability to successfully integrate or operate acquired companies;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">loss of key management and other employees of acquired companies; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">departure of key clients of acquired companies.</FONT></TD>
</TR>
</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we have not experienced the problem to date, governmental and
regulatory constraints could prevent some acquisitions in the future. We cannot, however, make any assurances that we will be able to identify any potential acquisition candidates or consummate any additional acquisitions or
that any future acquisitions will be successfully integrated or will
be advantageous to us. Without additional acquisitions, we are unlikely to
maintain historical total growth rates. If our acquisition strategy fails, our business, financial condition and results of operations could be materially and adversely affected.
</FONT>
<P><FONT size="2"><B>FAILURE TO PROPERLY MANAGE OUR OPERATIONS AND OUR GROWTH COULD HURT OUR ABILITY
TO SERVICE OUR EXISTING CLIENTS, AND COULD IMPEDE OUR ABILITY TO ATTRACT NEW
BUSINESS.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have rapidly expanded our operations in recent years. We intend to
continue expansion in the foreseeable future to pursue existing and potential
market opportunities. This rapid growth places a significant demand on our
management and operational resources. In order to manage growth effectively, we
must implement and improve our operational systems, procedures, and controls on
a timely basis. If we fail to implement these systems, procedures and controls
on a timely basis, we may not be able to service our clients&#146; needs, hire and
retain new employees, pursue new business, complete future acquisitions or
operate our businesses effectively. We could also trigger contractual credits
to clients. Failure to properly integrate acquired operations with vendors&#146;
systems could result in increased cost.
</FONT>



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<P><FONT size="2"><B>OUR GOVERNMENT CONTRACTS ALLOW FOR TERMINATION AT ANY TIME WITHOUT CAUSE AND
CONTAIN EXTENSIVE AUDIT RIGHTS, EITHER OF WHICH COULD HURT OUR REVENUES AND
PROFITS.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss or termination of one or more large government contracts could have a
material adverse effect on our business, financial condition,
results of operations and cash flow. Approximately
26% of our revenue in fiscal 2002 was derived from contracts with the United
States government or its agencies. The largest of these contracts accounted
for approximately 5% of our revenue for fiscal 2002. Government contracts, by
their terms, generally can be terminated for convenience by the government.
This means that the government may terminate the contract at any time, without
cause. In some instances, we will receive compensation only for the services
provided or costs incurred at the time of termination. Many of our government
contracts contain base periods of one or more years, as well as one or more
option periods that may cover more than half of the potential contract
duration. The government generally has the right not to exercise the renewal
option periods. Its failure to exercise option periods could curtail the
contract term of some of our government contracts. The government&#146;s termination
of, or failure to exercise option periods for, significant government contracts
could have a material adverse effect on our business and financial results.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government contracts are generally subject to audits and investigations by
government agencies. These audits and investigations involve a review of the
contractor&#146;s performance on its contracts, as well as its pricing practices,
its cost structure, and its compliance with applicable laws, regulations and
standards. If the government finds that we improperly charged any costs to
a contract, the costs are not reimbursable. If already reimbursed, the
cost must be refunded to the government. If the government discovers improper
or illegal activities in the course of audits or investigations, the contractor
may be subject to various civil and criminal penalties and administrative
sanctions, which may include termination of contracts, forfeiture of profits,
suspension of payments, fines and suspensions or debarment from doing business
with the government. In recent years, the government has substantially
increased the personnel and resources it devotes to audits and investigations
and has encouraged auditors and investigators to emphasize the detection of
fraud or improper activities. We believe that this high level of industry
scrutiny will continue for the foreseeable future. The government could subject
us to similar scrutiny in the future. Any resulting penalties or sanctions
could have a material adverse effect on our business, financial
results and cash flow. One of our subsidiaries.</font>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; One of our
subsidiaries, ACS Defense, Inc.,
and other government contractors received a grand jury document
subpoena issued by the U.S. District Court for the District of
Massachusetts in October 2002. The subpoena was issued in connection
with an inquiry being conducted by the Antitrust Division of the U.S.
Department of Justice. The inquiry concerns certain IDIQ (Indefinite
Delivery&nbsp;&#151;&nbsp;Indefinite Quantity) procurements and their related task
orders which occurred in the late 1990&#146;s at Hanscom Air Force Base in
Massachusetts. Our revenue from the contracts that we believe to be
the focus of the Justice Department&#146;s inquiry is approximately $25
million per year representing approximately 0.6% of our annual
revenue. Due to the preliminary nature of the government&#146;s
inquiry, we are not able to assess the impact, if any, of this
inquiry on ACS. However, we have conducted and are continuing to
conduct an internal investigation of this matter through outside
legal counsel. We continue to cooperate with the Department of
Justice in producing documents in response to the subpoena and
arranging for Department of Justice interviews of employees and
former employees.
</FONT>



<P><FONT size="2"><B>OUR CONTRACTS CONTAIN TERMINATION PROVISIONS THAT COULD DECREASE OUR REVENUES AND PROFITABILITY.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most of our contracts with clients permit termination in the event our
performance is not consistent with service levels specified in those contracts or provide for credits to our clients for failure to meet service levels.
Some of our government clients can terminate their contracts for any reason or
no reason. If clients are not satisfied with our level of performance, our
reputation in the industry may suffer, which could materially and adversely affect our business, financial condition, results of operations and cash flow.
</FONT>
<P align="left"><FONT size="2"><b>OUR CONTRACTS CONTAIN PRICING RISKS THAT COULD DECREASE OUR REVENUES AND<BR>
PROFITABILITY</b>
</FONT>


<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some of our contracts contain provisions requiring that our services be priced
based on a pre-established standard or benchmark regardless of the costs we
incur in performing these services. Some of our contracts contain pricing
provisions that require the client to pay a set fee for our services regardless
of whether our costs to perform these services exceed the amount of the set
fee. Some of our contracts contain re-pricing provisions which can result in
reductions of our fees for performing our services. In such situations, we are
exposed to the risk that we may be unable to price our services to levels that
will permit recovery of our costs, and may adversely affect our operating
results and cash flow.
</FONT>


<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technology costs have been dropping for many years and are continuing to
do so due in large part to hardware technology advances. New contracts are
generally priced at lower unit rates than historical contracts. We sometimes
renegotiate client contracts in advance of the scheduled expiration date and
will lower our charges in return for other contractual considerations. We may
not be able to lower our technology costs to keep up with market rates.
</FONT>
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<P><FONT size="2"><B>OUR RELIANCE ON SIGNIFICANT SOFTWARE VENDOR RELATIONSHIPS COULD RESULT IN
SIGNIFICANT EXPENSE OR INABILITY TO SERVE OUR CLIENTS IF WE LOSE THESE
RELATIONSHIPS.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to service our clients depends to a large extent on our use of
various software programs that we license from a small number of primary
software vendors. We may not be able to replace them with alternative vendors.
If our significant software vendors assert claims against us for infringement
of intellectual property rights or other claims of breach of our contracts with
them, or if they attempt to re-price our licenses or require us to cure a
claimed breach under a license agreement, we could be required to expend
significant resources to resolve these matters. If our significant vendors were
to terminate or refuse to renew our contracts with them, we might not be able
to replace the related software programs and would be unable to serve our
clients, which could have a material adverse effect on our business, revenues, profitability and cash flow.
</FONT>
<P><FONT size="2"><B>RAPID TECHNOLOGICAL CHANGES REQUIRE US TO COMMIT SUBSTANTIAL RESOURCES AND
COULD AFFECT OUR ABILITY TO ATTRACT AND RETAIN CLIENTS.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The markets for our information technology services are subject to rapid
technological changes and rapid changes in client requirements. To compete, we
commit substantial resources to operating multiple hardware platforms, to
customizing third-party software programs and to training client personnel and
our personnel in the use of new technologies. Information processing is
shifting toward client-server and web-based systems, in which individual
computers or groups of personal computers and mid-range systems replace
mainframe systems.
Future hardware and software products may be able to process large amounts
of data more cost-effectively than existing mainframe platforms which we use in
much of our business.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have committed substantial resources to developing outsourcing
solutions for these distributed computing environments, but we cannot guarantee
that we will be successful in customizing products and services that
incorporate new technology on a timely basis. We also cannot guarantee that we
will continue to be able to deliver the services and products demanded by the
marketplace.
</FONT>

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<P><FONT size="2"><B>LEGAL PROCEEDINGS, INCLUDING A $17 MILLION JUDGMENT, COULD RESULT IN MATERIAL
CHARGES AGAINST EARNINGS.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;16, 1998, a state district court in Houston, Texas entered
final judgment against us in a lawsuit brought by 21 former employees of
Gibraltar Savings Association and/or First Texas Savings Association
(collectively, &#147;GSA/FTSA&#148;). The GSA/FTSA employees alleged that they were
entitled to the value of 803,082 shares of our stock (adjusted for February
2002 stock split) pursuant to options issued to the GSA/FTSA employees in 1988
in connection with a former technology outsourcing services agreement between
GSA/FTSA and us. The judgment against us was for approximately $17&nbsp;million,
which includes attorneys&#146; fees and pre-judgment interest, but excludes
additional attorneys&#146; fees of approximately $0.9&nbsp;million and post-judgment
interest at the statutorily mandated rate of 10% per annum, which could be
awarded in the event the plaintiffs are successful upon appeal and final
judgment. The judgment was appealed by the plaintiffs and us.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On August&nbsp;29, 2002, the Fourteenth Court of Appeals, Houston, Texas,
reversed the trial court&#146;s judgment and remanded the case to the trial court
for further proceedings. However, the court of appeals affirmed the trial court
judgment in part as to one of the plaintiffs. The court of appeals also held
that the trial court did not err in dismissing certain of our affirmative
defenses at a pretrial conference. We and the plaintiffs filed motions for
rehearing with the court of appeals. On January&nbsp;16, 2003, the court of appeals
denied both motions for rehearing (except the court reversed its previous
ruling that the trial court should have applied prejudgment interest at 6%
rather than 10%).</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;3, 2003 will filed a Petition for Review with the Texas Supreme Court requesting that the Court reverse the decision of the court of appeals and render judgement that the plaintiffs take nothing
or, alternatively, remand the case the trial court for further proceedings. The plaintiffs did not file a petition for review with the Texas Supreme Court. </font>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We continue to believe that we have a meritorious defense to all or a substantial portion of the plaintiffs' claims, and accordingly, have not accrued any amount on our balance sheet related to the lawsuit.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are also subject to certain other legal proceedings, claims and disputes
which arise in the ordinary course of business, the outcome of which
cannot be predicted.
</FONT>
<P><FONT size="2"><B>INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS COULD REQUIRE US TO INCUR SUBSTANTIAL
COSTS TO DEFEND THE CLAIMS, CHANGE OUR SERVICES, PURCHASE NEW LICENSES OR
REDESIGN OUR USE OF CHALLENGED TECHNOLOGY.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We and other companies in our industry rely heavily on the use of
intellectual property. We do not own the majority of the software that we use
to run our business; instead we license this software from a small number of
primary vendors. If these vendors assert claims that we or our clients are
infringing on their software or related intellectual property, we could incur
substantial costs to defend these claims.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, if any of our vendors&#146; infringement claims are ultimately
successful, our vendors could require us (1)&nbsp;to cease selling or using products
or services that incorporate the challenged software or technology, (2)&nbsp;to
obtain a license or additional licenses from our vendors, or (3)&nbsp;to redesign
our products and services which rely on the challenged software or technology.
We are not currently involved in any material intellectual property litigation,
but could be in the future to protect our trade secrets or know-how, or to
defend ourselves or our clients against alleged infringement claims.
</FONT>


<P><FONT size="2"><B>FEDERAL REGULATIONS RELATING TO CONFIDENTIALITY OF HEALTH DATA SUBJECT US TO
INCREASED COMPLIANCE RISKS.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 1996, Congress
passed the Health Insurance Portability and Accountability Act
(&#147;HIPAA&#148;) and as required therein, the Secretary of Health and Human
Services (&#147;HHS&#148;) has established standards for information sharing,
security and confidentiality with regard to health information of
individuals. We process individually identifiable health information
for many of our clients. We and our clients are required to comply
with HIPAA and we will be required to comply with HIPAA for
individually identifiable health information which we maintain for
our employees. Health information privacy regulations promulgated
under HIPAA took effect on April 14, 2003. On or prior to that date
we implemented procedures, training and security features designed to
protect the privacy and integrity of such health information. Other
regulations have been published under HIPAA, such as those related to
the standardization of information used in processing healthcare
transactions which require compliance by October 2003, and other
regulations required by HIPAA have yet to be published. In addition,
various states, including Texas, have passed legislation that
addresses medical record privacy and restricts the use and disclosure of individually identifiable health information, and other federal or state privacy legislation may be enacted at any
time. HIPAA subjects us, as a service provider and as an employer, to
liability and monetary penalties for failure to comply with HIPAA
regulations. If we fail to comply with HIPAA regulations and
applicable state laws, we could incur liability under these
provisions, which could have a material adverse effect on our
profitability and cash flow.
</FONT>

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<P><FONT size="2"><B>BUDGET DEFICITS AT STATE AND LOCAL GOVERNMENTS AND THEIR AGENCIES MAY HAVE AN
ADVERSE AFFECT ON OUR FUTURE BUSINESS, REVENUES, RESULTS OF OPERATIONS AND CASH
FLOW.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A substantial portion of our revenues are derived from contracts with
state and local governments and their agencies. Currently, many state and
local governments that we have contracts with are facing potential budget
deficits. While this has not had a material adverse impact on our results of
operations through the third quarter of fiscal year 2003, it is unclear what
impact, if any, these deficits may have on our future business, revenues,
results of operations and cash flow.
</FONT>
<P><FONT size="2"><B>WE MAY BECOME UNABLE TO PROVIDE OR OBTAIN CONTRACT PERFORMANCE GUARANTEES.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain of our state and local government contracts require we execute
surety bonds or letters of credit to ensure that the project is administered
and completed as provided for in the contract. Prior to September&nbsp;11 and the
well-documented bankruptcies of several large companies (e.g. Enron, Kmart, and
WorldCom), surety bonds were obtainable on relatively favorable terms at
minimal pricing. In late 2001, the market for surety bonds changed dramatically
with capacity tightening and prices increasing. In certain situations, we have
found it more economical to satisfy our obligations under certain state and
local contracts with letters of credit under our revolving credit facility. The
long-term outlook of the surety market, while improving, remains unclear. If
conditions require us to continue utilizing letters of our credit facility (in
lieu of bonds), our borrowing capacity under our revolving credit
facility will be reduced by the amount of such letters of credit outstanding.
</FONT>
<P><FONT size="2"><B>WE ARE EXPOSED TO RISKS RELATED TO INTERNATIONAL OPERATIONS WHICH COULD HURT
OUR BUSINESS, FINANCIAL CONDITION AND OPERATIONS RESULTS.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recently we have expanded our international operations. International
operations are subject to a number of risks which include:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">fluctuations in foreign exchange currency rates;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">licensing and labor counsel requirements;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">staffing key managerial positions;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Data privacy laws adopted by
various countries in which ACS does business, including but not limited to member states of the European Union.</FONT></TD>
</TR>

</TABLE>



<P align="right"><FONT size="2">Page 13 </FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">general economic conditions in foreign countries;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">additional expenses and risks inherent in conducting
operations in geographically distant locations;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">laws of those foreign countries;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">armed hostilities and political instability;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">trade restrictions such as tariffs and duties or other
controls affecting foreign operations;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">variations in the protection of intellectual property rights;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">restrictions on the ability to convert currency; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">additional expenses and risks inherent in conducting
operations in geographically distant locations.</FONT></TD>
</TR>
</TABLE>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The above factors, along with other factors, may adversely affect the Company's business, financial condition and operating results.</font>


<P align="right"><FONT size="2">Page 14 </FONT>
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<P><FONT size="2"><B>ARMED HOSTILITIES AND TERRORIST ATTACKS AND FURTHER ACTS OF VIOLENCE AND WAR MAY CAUSE INSTABILITY IN
THE U.S. AND FINANCIAL MARKETS IN WHICH WE OPERATE.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Armed hostilities and terrorist attacks and further acts of violence could have a significant
impact on our business. In addition, armed hostilities, acts of
terrorism and acts of violence may directly impact our physical facilities and operations, which are
located in North America, Central America, South
America, Europe, Africa, Australia, Asia and the Middle East, or those of
our clients. These developments subject our worldwide operations to increased
risks and depending on their magnitude could have a material adverse effect on our business.
</FONT>
<P><FONT size="2"><B>OUR NEED FOR TECHNICALLY SKILLED EMPLOYEES REQUIRES THAT WE DEVOTE
SUBSTANTIAL RESOURCES TO ATTRACT AND RETAIN THEM. THE FAILURE TO ATTRACT AND
RETAIN TECHNICAL PERSONNEL AND SKILLED MANAGEMENT COULD HURT OUR ABILITY TO
GROW AND MANAGE OUR BUSINESS.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our success depends to a significant extent upon our ability to attract,
retain and motivate highly skilled and qualified personnel. If we fail to
attract, train, and retain sufficient numbers of these technically-skilled
people, our business, financial condition, and results of operations will be
materially and adversely affected. Competition for personnel is intense in the
information technology services industry, and recruiting and training personnel
requires substantial resources.
We must continue to grow internally by hiring and training
technically-skilled people in order to perform services under our existing
contracts and new contracts that we will enter into. The people capable of
filling these positions are in great demand and recruiting and training these
personnel require substantial resources. Our success also depends on the skills, experience, and
performance of key members of our management team. The loss of any key employee
could have an adverse effect on our business, financial condition, cash flow and results
of operations and prospects. Other than with Darwin Deason, our Chairman of the
Board, we have not entered into employment agreements with any of our key
personnel, although we have entered into severance
agreements with certain of
our executive officers and we may in the future enter into employment
agreements with our key personnel.
</FONT>
<P><FONT size="2"><B>DARWIN DEASON HAS SUBSTANTIAL CONTROL OVER OUR COMPANY AND CAN AFFECT VIRTUALLY
ALL DECISIONS MADE BY OUR STOCKHOLDERS.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Darwin Deason beneficially owns 6,599,372 shares of Class&nbsp;B Common Stock
and 2,675,408 shares of the Common Stock as of May&nbsp;6, 2003. Mr.&nbsp;Deason
controls approximately 35.72% of the total voting power of the Company (based
on total shares of Common Stock outstanding as of May&nbsp;6, 2003). As a
result, Mr.&nbsp;Deason has the requisite voting power to significantly affect
virtually all decisions made by the Company and our stockholders, including the
power to block corporate actions such as an amendment to most provisions of our
certificate of incorporation. In addition, Mr.&nbsp;Deason may significantly
influence the election of directors and any other action requiring shareholder
approval. Mr.&nbsp;Deason serves as the one-person nominations committee to our
Board of Directors and thus recommends management&#146;s slate of directors to be
proposed by the Board to our shareholders. Mr.&nbsp;Deason has a supplemental
executive retirement agreement and an employment contract, which has a term
that currently ends on May&nbsp;18, 2007, provided that such term shall
automatically be extended for one-year periods on May&nbsp;18 of each year, unless
thirty days prior to May&nbsp;18 of any year, Mr.&nbsp;Deason gives notice to ACS that he
does not wish to extend the term or the Board of Directors of ACS (upon a
unanimous vote of the directors, except for Mr.&nbsp;Deason) gives notice to Mr.
Deason that it does not wish to extend the term.
</FONT>


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<P><FONT size="2"><B>PROVISIONS OF OUR CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW COULD
DETER TAKEOVER ATTEMPTS THAT STOCKHOLDERS MAY THINK ARE IN THEIR BEST
INTERESTS.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some provisions in our certificate of incorporation and bylaws could
delay, defer, prevent or make more difficult a merger, tender offer, or proxy
contest involving our capital stock. Our stockholders might view transactions
such as these as being in their best interests because, for example, a change
of control might result in a price higher than the market price for shares of
the Common Stock. Among other things, these provisions:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">require an 80% vote of the stockholders to amend some
provisions of our certificate of incorporation;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">require an 80% vote of the stockholders to amend some
provisions of our bylaws;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">permit only our Chairman, President or a majority of the
Board of Directors to call stockholder meetings;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">authorize our Board of Directors to issue up to 3,000,000
shares of preferred stock in series with the terms of each series to
be fixed by our Board of Directors;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">authorize our Board of Directors to issue Class&nbsp;B Common
Stock, which shares are entitled to ten votes per share;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">permit directors to be removed, with or without cause, only
by a vote of at least 80% of the combined voting power; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">specify advance notice requirements for stockholder proposals
and director nominations to be considered at a meeting of
stockholders.</FONT></TD>
</TR>
</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, with some exceptions, Section&nbsp;203 of the Delaware General
Corporation Law restricts mergers and other business combinations between us
and any holder of 15% or more of our voting stock.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also have a stockholder rights plan. Under this plan, after the
occurrence of specified events, our stockholders will be able to buy stock from
us or our successor at reduced prices. These rights will not extend, however,
to persons participating in takeover attempts without the consent of our Board
of Directors. Accordingly, this plan could delay, defer or prevent a change of
control of our company.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Further, we have entered into severance agreements with certain of our
executive officers, which may have the effect of discouraging an unsolicited
takeover proposal. Finally, Mr.&nbsp;Deason&#146;s ownership of approximately 35.72% of
the voting power of our capital stock could have the effect of delaying,
deterring or preventing a takeover of our company. See &#147;Darwin Deason has
substantial control over our company and can affect virtually all decisions
made by our stockholders&#148; for additional information about Mr.&nbsp;Deason&#146;s
ownership.
</FONT>

<P align="right"><FONT size="2">Page 16 </FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P><FONT size="2"><B>AVAILABILITY OF SIGNIFICANT AMOUNTS OF THE COMMON STOCK FOR SALE COULD CAUSE
THE MARKET PRICE OF THE COMMON STOCK TO DROP.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is a substantial number of shares of the Common Stock that may be
issued and subsequently sold under the Plan, upon exercise of employee stock
options, and upon conversion of our Class&nbsp;B Common Stock and our 3.5%
convertible subordinated notes. The sale or issuance of additional shares of
the Common Stock could adversely affect the prevailing market price of the
Common Stock.
</FONT>
<P><FONT size="2"><B>THE PRICE OF OUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY, WHICH MAY RESULT IN
LOSSES FOR INVESTORS.</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market price for the Common Stock has been and may continue to be
volatile. For example, during the 52-week period ended May 12, 2003, the
closing prices of the Common Stock as reported on the New York Stock Exchange
ranged from a high of 56.36 to a low of 33.88. We expect our stock price to
be subject to fluctuations as a result of a variety of factors, including
factors beyond our control. These factors include and are not necessarily
limited to:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">actual or anticipated variations in operating results from
guidance provided by us;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">announcements of technological innovations or new products or
services by us or our competitors;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">announcements relating to strategic relationships or acquisitions;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">changes in financial estimates or other statements by securities analysts;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">changes in general economic conditions;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">conditions or trends affecting the outsourcing industry; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">changes in the economic performance and/or market valuations
of other information technology companies.</FONT></TD>
</TR>
</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because of this volatility, we may fail to meet the expectations of our
stockholders or of securities analysts at some time in the future, and our
stock price could decline as a result.
</FONT>


<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the stock market has experienced significant price and volume
fluctuations that have particularly affected the trading prices of equity
securities of many high technology companies. These fluctuations have often
been unrelated or disproportionate to changes in the operating performance of
these companies. Any negative change in the public&#146;s perception of information
technology companies could depress our stock price regardless of our operating
results.
</FONT>

<P><FONT size="2"><B>OTHER RISKS, UNKNOWN OR IMMATERIAL TODAY, MAY BECOME KNOWN OR MATERIAL IN THE
FUTURE.</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have attempted to identify material risk factors currently affecting
our business and company. However, additional risks that we do not yet know of,
or that we currently think are immaterial, may occur or become material. These
risks could impair our business operations or adversely affect revenues or
profitability.
</FONT>
<P align="right"><FONT size="2">Page 17 </FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link1 "USE OF PROCEEDS" -->
<DIV align="left"><A NAME="005"></A></DIV>
<P align="center"><FONT size="2"><B>USE OF PROCEEDS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will not receive any of the proceeds from the sale of the
Common Stock by the Selling Stockholders to the public pursuant to this
Prospectus. All proceeds from the sale of the Common Stock by the Selling
Stockholders will be for the account of the Selling Stockholders.
</FONT>
<!-- link1 "SELLING STOCKHOLDERS" -->
<DIV align="left"><A NAME="006"></A></DIV>
<P align="center"><FONT size="2"><B>SELLING STOCKHOLDERS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table lists the names of certain Selling Stockholders and
the number of shares of the Common Stock that could be sold by them pursuant to this
Prospectus.</font>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned after the</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Percentage owned</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Selling Stockholder*</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Position in Company</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned(1)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Offered(2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Offering(2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>after
offering(7)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Darwin Deason</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman of the
Board
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2,675,408</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">5,214</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2,670,194</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2.1</FONT></TD>
    <TD nowrap valign="top"><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Jeffrey A. Rich</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chief Executive
Officer and
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">154,425</FONT></TD>
    <TD nowrap valign="top"><FONT size="2">(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">992</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">153,433</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">**</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Mark A. King</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
President, Chief
Operating Officer
and Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">239,066</FONT></TD>
    <TD nowrap valign="top"><FONT size="2">(4)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">5,986</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">233,080</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">**</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Henry Hortenstine</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Executive Vice
President, Global
Business
Development and
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">84,060</FONT></TD>
    <TD valign="top"><FONT size="2">(5)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">3,766</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">80,294</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">**</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Harvey V. Braswell</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Executive Vice
President and Group
President State
Healthcare
Solutions
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">3,035</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1,896</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1,139</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">**</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">John H. Rexford</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Executive Vice<BR>
President, Corporate Development
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">6,251</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">3,811</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2,440</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">**</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Warren D. Edwards</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Executive Vice
President and Chief
Financial Officer
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">55,132</FONT></TD>
    <TD valign="top"><FONT size="2">(6)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2,874</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">52,258</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">**</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="right"><FONT size="2">Page 18 </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned after the</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Percentage owned</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Selling Stockholder*</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Position in Company</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned(1)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Offered(2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Offering(2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>after offering(7)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Donald G. Liedtke</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Executive Vice
President and Group
President &#151; IT
Solutions Group
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;819</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;648</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;171</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">**</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">John Brophy</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Executive Vice
President and
Group President -
State and Local
Solutions
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">858</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">740</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">118</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">**</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">*</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">All Selling Stockholders (other than Darwin Deason) will own less than 1% of
the outstanding shares of the Class&nbsp;A Common Stock after the offering.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">**</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Indicates shares held are less than 1% of a class A Common Stock.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Represents shares of the Common Stock beneficially owned by the named
individual as of May&nbsp;6, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Does not constitute a commitment to sell any or all of the stated number of
shares of the Common Stock. The number of shares of the Common Stock offered
shall be determined from time to time by each Selling Stockholder in his or her
sole discretion.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Includes 76,100 shares of Common Stock, which are not outstanding, but are
subject to options exercisable within sixty (60)&nbsp;days of May&nbsp;6, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Includes 138,000 shares of Common Stock, which are not outstanding, but are
subject to options exercisable within sixty (60)&nbsp;days of May&nbsp;6, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(5)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Includes 80,000 shares of Common Stock, which are not outstanding, but are subject to options exercisable within sixty (60) days of May&nbsp;6, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(6)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Includes 50,000 shares of Common
Stock, which are not outstanding, but are subject to options
exercisable within sixty (60) days of May&nbsp;6, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>











<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(7)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Represents percentages owned as of May&nbsp;6, 2003 including shares owned
after the offering.</FONT></TD>
</TR>
</TABLE>
<!-- link1 "PLAN OF DISTRIBUTION" -->
<DIV align="left"><A NAME="007"></A></DIV>
<P align="center"><FONT size="2"><B>PLAN OF DISTRIBUTION</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Selling Stockholders may sell all or a portion of the shares of the
Common Stock from time to time under this Prospectus in one or more
transactions on the New York Stock Exchange, or other exchange, in a negotiated
transaction or in a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at prices otherwise negotiated. The Selling Stockholders may effect
such transactions by selling the shares of the Common Stock to or through
broker-dealers, and such broker-dealers
may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
of the shares of the Common Stock for whom such broker-dealers may act as agent
(which compensation may be less than or in excess of customary commissions).
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Selling Stockholders and any broker-dealers that participate in the
distribution of the shares of the Common Stock may be deemed to be
&#147;underwriters&#148; within the meaning of Section&nbsp;2(11) of the Act, and any
commissions received by them and any profit on the resale of the shares of the
Common Stock sold by them may be deemed be underwriting discounts and
commissions under the Act. All selling and other expenses incurred by the
Selling Stockholders will be borne by the Selling Stockholders.
</FONT>
<P align="right"><FONT size="2">Page 19 </FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to any shares of the Common Stock sold hereunder, the Selling
Stockholders may, at the same time, sell any other shares of the Common Stock,
owned by them in compliance with all of the requirements of Rule&nbsp;144,
regardless of whether such shares of the Common Stock are covered by this
Prospectus.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no assurance that the Selling Stockholders will sell all or any
portion of the shares of the Common Stock covered by this Prospectus.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will pay all expenses related to registering the shares of the
Common Stock covered by this Prospectus and will not receive any proceeds from
sales of any such shares of the Common Stock by the Selling Stockholders to the
public.
</FONT>
<!-- link1 "LEGAL MATTERS" -->
<DIV align="left"><A NAME="008"></A></DIV>
<P align="center"><FONT size="2"><B>LEGAL MATTERS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the Common Stock issuable under the Plan has been passed
upon for us by Jackson Walker L.L.P., Dallas, Texas.
</FONT>
<!-- link1 "EXPERTS" -->
<DIV align="left"><A NAME="009"></A></DIV>
<P align="center"><FONT size="2"><B>EXPERTS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements incorporated in this registration statement by
reference to the Annual Report on Form&nbsp;10-K for the year ended June&nbsp;30, 2002,
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
</FONT>
<P align="center"><FONT size="2"><B>PART II</B>
</FONT>

<P align="center"><FONT size="2"><B>INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B>
</FONT>

<P align="left"><FONT size="2"><B>Item&nbsp;3. Incorporation of Documents by Reference.</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The contents of the Prior Registration Statement, including the documents
incorporated by reference therein, are incorporated by reference into this
Registration Statement.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents filed by the Registrant with the Securities and Exchange
Commission pursuant to Sections&nbsp;13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, subsequent to the date of this Registration
Statement and prior to the termination of the
offering to which it relates shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the
date of filing of such documents.
</FONT>
<P align="left"><FONT size="2"><B>Item&nbsp;5. Interests of Named Experts and Counsel.</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not Applicable.
</FONT>
<P align="left"><FONT size="2"><B>Item&nbsp;6. Indemnification of Directors and Officers.</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article&nbsp;9 of the Registrant&#146;s Second Amended and Restated Certificate of
Incorporation provides for indemnification of directors and officers to the
full extent permitted under Delaware law.
</FONT>
<P align="right"><FONT size="2">Page 20 </FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee
or agent of the corporation, partnership, joint venture, trust or other
enterprise, against expenses, judgments, fines and amounts paid in settlement
and reasonably incurred in connection with such action, suit or proceeding. The
power to indemnify applies only if such person acted in good faith and in a
manner such person reasonably believed to be in the best interests, or not
opposed to the best interests, of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The power to indemnify applies to actions brought by or in the right of
the corporation as well, but only to the extent of defense and settlement
expenses and not to any satisfaction of a judgment or settlement of the claim
itself, and with the further limitation that in such actions no indemnification
shall be made in the event of any adjudication of liability unless the court,
in its discretion, believes that in light of all the circumstances
indemnification should apply.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant has directors and officers liability insurance for the
benefit of its directors and officers.
</FONT>
<P align="left"><FONT size="2"><B>Item&nbsp;8. Exhibits.</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the exhibits filed or incorporated by reference into the
Prior Registration Statement, the following documents are filed as exhibits to
the Registration Statement:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="80%">
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit No.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Certificate of Incorporation of the Company, filed as Exhibit&nbsp;3.1 to the
Company&#146;s Registration Statement on Form&nbsp;S-3 dated March&nbsp;30, 2001
(Registration No.&nbsp;333-58038) (&#147;Form&nbsp;S-3&#148;) and incorporated herein by
reference.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Bylaws of the Company, as amended and in effect on May&nbsp;3, 2000, filed as
Exhibit&nbsp;3.2 to the Company&#146;s Annual Report on Form&nbsp;10-K for the year ended
June&nbsp;30, 2000 and incorporated herein by reference.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Form of New Class&nbsp;A Common Stock Certificate, filed as Exhibit&nbsp;4.3 to the
Company&#146;s Form&nbsp;S-1 (Registration No.&nbsp;333-79394) (&#147;Form&nbsp;S-1&#148;) and
incorporated herein by reference.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amended and Restated Affiliated Computer Services, Inc. Employee Stock
Purchase Plan (a)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Opinion of Jackson Walker L.L.P. (a)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">23.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of PricewaterhouseCoopers LLP (a)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">23.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Jackson Walker L.L.P. (included in opinion filed as Exhibit&nbsp;5)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Power of Attorney (included on signature page of this Registration Statement)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(a)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Filed herewith.</FONT></TD>
</TR>
</TABLE>
<P align="right"><FONT size="2">Page 21 </FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>



<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="010"></A></DIV>
<P align="center"><FONT size="2"><B>SIGNATURES</B>
</FONT>

<P><FONT size="2">Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form&nbsp;S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on
May 15, 2003.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top"><FONT size="2">
AFFILIATED COMPUTER SERVICES, INC.</FONT></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">By:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
/s/ Warren D. Edwards<br></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
<HR size="1" noshade></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Warren D. Edwards<br>
Executive Vice President and Chief Financial Officer</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2"><B>POWER OF ATTORNEY</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each person whose signature appears below authorizes William L. Deckelman,
Jr., to execute in the name of each such person who is then an officer or
director of the Registrant, and to file any amendments to this Registration
Statement necessary or advisable to enable the Registrant to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Commission, in respect thereof, in connection with the registration of
the securities which are the subject of this Registration Statement, which
amendments may make such changes in such Registration Statement as such
attorney may deem appropriate.
</FONT>
<P align="right"><FONT size="2">Page 22 </FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Title</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Date</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Darwin Deason<BR>
</FONT><HR size="1" noshade><FONT size="2">
Darwin Deason</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman of the Board and<BR>
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">May 15, 2003</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/Jeffrey A. Rich<BR>
</FONT><HR size="1" noshade><FONT size="2">
Jeffrey A. Rich</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chief Executive Officer and<BR>
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">May 15, 2003</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Mark A. King<BR>
</FONT><HR size="1" noshade><FONT size="2">
Mark A. King</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
President, Chief Operating<BR>
Officer and Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">May 15, 2003</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Warren D. Edwards
</FONT><HR size="1" noshade><FONT size="2">
Warren D. Edwards</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Executive Vice President<BR>
and Chief Financial Officer
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">May 15, 2003</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Henry G. Hortenstine
</FONT><HR size="1" noshade><FONT size="2">
Henry G. Hortenstine</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Executive Vice President<BR>
and Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">May 15, 2003</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ William L. Deckelman, Jr.<BR>
</FONT><HR size="1" noshade><FONT size="2">
William L. Deckelman, Jr.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Attorney-in-fact, Executive<BR>
Vice President, Secretary<BR>
and General Counsel
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">May 15, 2003</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Frank A. Rossi<BR>
</FONT><HR size="1" noshade><FONT size="2">
Frank A. Rossi</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">May 15, 2003</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Joseph P. O&#146;Neill<BR>
</FONT><HR size="1" noshade><FONT size="2">
Joseph P. O&#146;Neill</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">May 15, 2003</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Clifford M. Kendall
</FONT><HR size="1" noshade><FONT size="2">
Clifford M. Kendall</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">May 15, 2003</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Peter A. Bracken<BR>
</FONT><HR size="1" noshade><FONT size="2">
Peter A. Bracken</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">May 15, 2003</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="right"><FONT size="2">Page 23 </FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link1 "INDEX TO EXHIBITS" -->
<DIV align="left"><A NAME="011"></A></DIV>
<P align="center"><FONT size="2"><B>EXHIBITS<BR>
INDEX TO EXHIBITS</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit No.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Certificate of Incorporation of the Company, filed as Exhibit&nbsp;3.1 to the
Company&#146;s Registration Statement on Form&nbsp;S-3 dated March&nbsp;30, 2001
(Registration No.&nbsp;333-58038) (&#147;Form&nbsp;S-3&#148;) and incorporated herein by
reference.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Bylaws of the Company, as amended and in effect on May&nbsp;3, 2000, filed as
Exhibit&nbsp;3.2 to the Company&#146;s Annual Report on Form&nbsp;10-K for the year ended
June&nbsp;30, 2000 and incorporated herein by reference.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Form of New Class&nbsp;A Common Stock Certificate, filed as Exhibit&nbsp;4.3 to the
Company&#146;s Form&nbsp;S-1 (Registration No.&nbsp;333-79394) (&#147;Form&nbsp;S-1&#148;) and
incorporated herein by reference.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amended and Restated Affiliated Computer Services, Inc. Employee Stock
Purchase Plan (a)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Opinion of Jackson Walker L.L.P. (a)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">23.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of PricewaterhouseCoopers LLP (a)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">23.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Jackson Walker L.L.P. (included in opinion filed as Exhibit&nbsp;5)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Power of Attorney (included on signature page of this Registration Statement)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(a)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Filed herewith.</FONT></TD>
</TR>
</TABLE>

<P align="right"><FONT size="2">&nbsp;</FONT>


</BODY>
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sv8
Table of Contents
As filed with the Securities and
Exchange Commission on May 15, 2003
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Registration Statement
Under The Securities Act Of 1933
AFFILIATED COMPUTER SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or
organization)
51-0310342
(I.R.S. employer identification number)
2828 North Haskell Avenue
Dallas, Texas 75201
(Address, including zip code, of principal executive offices)
Amended and Restated Affiliated Computer Services, Inc. Employee Stock Purchase Plan
(Full title of the Plan)
William L. Deckelman, Jr., Esq.
Executive Vice President, Secretary and
General Counsel
Affiliated Computer Services, Inc.
2828 North Haskell Avenue
Dallas, Texas 75201
(214) 841-6111 (phone)
(Name, address and telephone number, including area code, of agent for service)
Copy to:
James S. Ryan, III
Jackson Walker L.L.P.
901 Main Street, Suite 6000
Dallas, Texas 75202
(214) 953-5801 (phone)
CALCULATION OF REGISTRATION FEE
Proposed Maximum
Proposed Maximum
Title of Securities to be
Amount to be
Offering Price per
Aggregate Offering
Amount of
Registered
Registered(1)
Share(2)
Price(2)
Registration Fee
Class A Common Stock, par
value $0.01 per share
2,000,000
$
51.65
$
103,300,000
$
8,356.97
(1)
Pursuant to Rule 416(a) under the Act, this Registration Statement also registers such indeterminate number of shares as may be issuable pursuant to the
antidilution provisions of the Plan.
(2)
Estimated solely for the purpose of calculating the registration fee. Pursuant to Rule 457(c) and 457(h) under the Act, the offering price and
registration fee are based on a price of $51.65 per share, which price is an average of the high and low prices of the Class A Common Stock as reported by
the New York Stock Exchange on May 12, 2003.
Table of Contents
EXPLANATORY NOTE
This Registration Statement covers 2,000,000 additional shares of the
Class A Common Stock, $0.01 par value ("Common Stock") of Affiliated Computer
Services, Inc. (the "Company") issuable pursuant to the Amended and Restated
Affiliated Computer Services, Inc. Employee Stock Purchase Plan (the "Plan"),
for which a previously filed Registration Statement on Form S-8 is effective
(the "Prior Registration Statement"). Pursuant to Instruction E of Form S-8,
the contents of the Company's Prior Registration Statement on Form S-8, File
No. 33-80519, as filed with the Securities and Exchange Commission (the
"Commission") on December 18, 1995, are incorporated herein by reference.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. Plan Information
This registration statement (this "Registration Statement") includes two
forms of prospectus. The documents constituting the prospectus under Part I of
this Registration Statement (the "Plan Prospectus") will be sent or given to
participants in the Plan as specified by Rule 428(b)(1) under the Securities
Act of 1933 (the "Act"), as amended. The second prospectus (the "Resale
Prospectus") may be used in connection with reoffers and resales of shares of
Common Stock of the Company acquired by Plan participants prior to the date of
this Registration Statement. The Plan Prospectus has been omitted from this
Registration Statement as permitted by Part I of Form S-8. The Resale
Prospectus is filed as part of this Registration Statement as required by Form
S-8.
Item 2. Registrant Information and Employee Plan Annual Information
Upon written or oral request, the Company will provide, without charge,
the documents incorporated by reference in Item 3 of Part II of this
Registration Statement. The documents are incorporated by reference in both
the Plan Prospectus and the Resale Prospectus. The Company will also provide,
without charge, upon written or oral request, other documents required to be
delivered to employees pursuant to Rule 428(b) under the Act. Requests for the
above mentioned information, should be directed in writing or by telephone to
Affiliated Computer Services, Inc., Attention: William L. Deckelman, Jr.,
Executive Vice President, Secretary and General Counsel, 2828 North Haskell
Avenue, Dallas, Texas 75204; telephone: (214) 841-6111.
Table of Contents
PROSPECTUS
AFFILIATED COMPUTER SERVICES, INC.
2828 NORTH HASKELL AVENUE
DALLAS, TEXAS 75201
(214) 841-6111
2,000,000 SHARES OF CLASS A COMMON STOCK
This prospectus (this "Prospectus") relates to the offer and sale of up to
2,000,000 shares of Class A common stock, par value $0.01 (the "Common Stock")
of Affiliated Computer Services, Inc. (the "Company") from time to time by the
stockholders of the Company identified on page 18 of this Prospectus (the
"Selling Stockholders"). The Common Stock is issuable to the Selling
Shareholders from time to time under the Amended and Restated Affiliated
Computer Services, Inc. Employee Stock Purchase Plan (the "Plan").
The Common Stock may be sold from time to time by the Selling Stockholders
or by permitted transferees. The Common Stock is quoted on the New York Stock
Exchange (the "NYSE") under the symbol "ACS" and may be sold from time to time
by the Selling Stockholders either directly in private transactions, or through
one or more brokers or dealers on the NYSE, or any other market or exchange on
which the Common Stock is quoted or listed for trading, at such prices and upon
such terms as may be obtainable.
Upon any sale of the Common Stock offered hereby, the Selling Stockholders
and participating agents, brokers, dealers or market makers may be deemed to be
underwriters as that term is defined in the Securities Act of 1933, as amended
(the "Act"), and commissions or discounts or any profit realized on the resale
of such securities purchased by them may be deemed to be underwriting
commissions or discounts under the Act. The Company will not receive any of
the proceeds from the sales by the Selling Stockholders.
No underwriter is being utilized in connection with this offering. The
Company will pay all expenses incurred in connection with this offering.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. PLEASE SEE "RISK FACTORS"
BEGINNING ON PAGE 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is May 15, 2003
Page 2
TABLE OF CONTENTS
WHERE YOU CAN FIND MORE INFORMATION
INFORMATION INCORPORATED BY REFERENCE
AFFILIATED COMPUTER SERVICES, INC.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
RISK FACTORS
USE OF PROCEEDS
SELLING STOCKHOLDERS
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
SIGNATURES
INDEX TO EXHIBITS
EX-4.4 Amended and Restated Employee Stock Plan
EX-5 Opinion/Consent of Jackson Walker LLP
EX-23.1 Consent of PricewaterhouseCoopers LLP
Table of Contents
TABLE OF CONTENTS
WHERE YOU CAN FIND MORE INFORMATION
3
INFORMATION INCORPORATED BY REFERENCE
4
AFFILIATED COMPUTER SERVICES, INC
5
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
6
RISK FACTORS
6
USE OF PROCEEDS
18
SELLING STOCKHOLDERS
18
PLAN OF DISTRIBUTION
19
LEGAL MATTERS
20
EXPERTS
20
You should only rely on the information incorporated by reference or
provided in this Prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The Common Stock is not being
offered in any state where the offer is not permitted. You should not assume
that the information in this Prospectus or any supplement is accurate as of any
date other than the date on the front of this Prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements, information statements and other
information with the Securities and Exchange Commission (the "Commission"). You
may read and copy this information, for a copying fee, at the Commission's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the Commission at 1-800-SEC-0330 for more information on its public
reference rooms. Our Commission filings are also available to the public from
commercial document retrieval services and at the web site maintained by the
Commission at http://www.sec.gov.
Our Common Stock is traded on the New York Stock Exchange and, therefore,
the information we file with the Commission may also be inspected at the
offices of the New York Stock Exchange, located at 20 Broad Street, New York,
NY 10005.
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We have filed with the Commission a registration statement on Form S-8 to
register with the Commission the resale of the shares of the Common Stock
described in this Prospectus. This Prospectus is part of that registration
statement, and provides you with a general description of the shares of the
Common Stock being registered, but does not include all of the information you
can find in the registration statement or the exhibits. You should refer to the
registration statement and its exhibits for more information about us, and the
shares of Common Stock being registered.
INFORMATION INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" information into
this Prospectus, which means that we can disclose important information to you
by referring to another document filed separately with the Commission. The
information incorporated by reference is deemed to be part of this Prospectus,
except for information superseded by this Prospectus. The Prospectus
incorporates by reference the documents set forth below that we have previously
filed with the Commission. These documents contain important information about
the Company and its finances.
(1)
Annual Report on Form 10-K for the year ended June 30, 2002;
(2)
Current Reports on Form 8-K filed July 8, 2002, July 25,
2002, August 21, 2002, September 17, 2002, September 18, 2002 (2
reports filed), November 14, 2002, February 4, 2003, February 14,
2003; and April 22, 2003;
(3)
Quarterly Reports on Form 10-Q for the quarters ended
September 30, 2002, December 31, 2002 and March 31, 2003; and
(4)
The description of the Common Stock, contained in the
Company's Registration Statement on Form 8-A, dated September 26,
1994, including any amendment or report filed for the purpose of
updating such description.
We are also incorporating by reference additional documents that we may
file with the Commission in the future under Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 prior to the termination of this
offering.
Any statements contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or replaced for
purposes hereof to the extent that a statement contained herein (or any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein) modifies or replaces such statement. Any
statement so modified or replaced shall not be deemed, except as so modified or
replaced, to constitute a part hereof.
If you are a stockholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through us or the
Commission. Documents incorporated
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by reference are available from us without charge. Stockholders may obtain
documents incorporated by reference into this Prospectus by requesting them in
writing or by telephone from:
Affiliated Computer Services, Inc.
Attention:
William L. Deckelman, Jr.
Executive
Vice President, Secretary and General Counsel
2828
North Haskell Avenue
Dallas,
Texas 75204
Telephone:
(214) 841-6111
AFFILIATED COMPUTER SERVICES, INC.
We are a global, Fortune 500 company delivering comprehensive business
process outsourcing and information technology outsourcing solutions, as well
as system integration services, to commercial clients, state and local
government clients, and federal government clients. We are based in Dallas,
Texas and have offices primarily in North America, as well as Central America,
Europe, Africa, and the Middle East. Our clients have time-critical,
transaction-intensive business and information processing needs, and we
typically service these needs through long-term contracts. Approximately 90%,
89% and 88% of our revenues for fiscal years 2002, 2001 and 2000, respectively,
were recurring, which are revenues derived from services that our clients use
each year in connection with their ongoing businesses.
Our services enable businesses to focus on core operations, respond to
rapidly changing technologies and reduce expenses associated with business
processes and information processing. Our business strategy is to expand our
client base and enhance our service offerings through both internal marketing
and the acquisition of complementary companies. Our marketing efforts focus on
developing long-term relationships with clients that choose to outsource
mission critical business processes and information technology requirements.
Our business expansion has been accomplished both from internal growth as well
as through acquisition. Since inception through June 30, 2002, we have
completed a number of acquisitions, which have resulted in geographic expansion,
growth and diversification of our client base, expansion of services and
products offered, and increased economies of scale. Our revenues have increased
from $534 million in fiscal year 1995 to approximately $3.1 billion in fiscal
year 2002, a compound annual growth rate of 28%. Of this growth, approximately
42% resulted from internal growth and 58% resulted from growth through
acquisitions.
We serve three primary markets, which include state and local governments,
commercial clients, and the federal government. We are a leading provider of
business process outsourcing and information technology services to state and
local governments. During fiscal year 2002, revenues from our state and local
government segment accounted for approximately $1.24 billion, or 41% of our
revenues. Of this $1.24 billion, approximately 58% is derived from services
provided to local municipalities, approximately 25% is derived from state
healthcare programs, and the remainder is derived from services provided to
states, primarily child support payment processing. We provide technology-based
services with a focus on transaction processing and program management services
such as child support payment processing, electronic toll collection, welfare
to workforce services, and traffic violations processing. We
also design, develop, implement, and operate large-scale health and human
services programs and the information technology solutions that support those
programs.
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Our commercial sector accounted for approximately $1.01 billion, or 33% of
our fiscal year 2002 revenues. We provide business process outsourcing,
technology outsourcing, and systems integration services to our commercial
sector clients. These services are provided to a variety of clients nationwide,
including healthcare providers, retailers, wholesale distributors,
manufacturers, utilities, financial institutions, insurance and transportation
companies. Our business process outsourcing services include claims processing,
finance and accounting, loan processing and document processing. Our technology
outsourcing services include mainframe, midrange, desktop, network, and
web-hosting solutions. Our commercial systems integration services include
application development and implementation, applications outsourcing, technical
support and training, as well as network design and installation services.
We also serve the federal government market, which during fiscal year 2002
accounted for approximately $811 million, or 26% of our annual revenues. Our
services in this market are comprised of business process outsourcing services,
which consist primarily of loan processing services and human resources
services, and systems integration services, which include application
development and outsourcing, network implementation and maintenance, desktop
services, technical staff augmentation, and training under long-term contracts.
Approximately 55% of revenues within our federal government business are
derived from civilian agencies with the remaining 45% from Department of
Defense agencies.
Our principal executive offices are located at 2828 North Haskell Avenue,
Dallas, Texas 75204. Our telephone number at that location is (214) 841-6111.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains "forward looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and the provisions of Section
27A of the Securities Act of 1933, as amended (which Section was adopted as
part of Private Securities Litigation Reform Act of 1995). While management has
based any forward-looking statements contained herein on its current
expectations, the information on which such expectations were based may change.
These forward-looking statements rely on a number of assumptions concerning
future events and are subject to a number of risks, uncertainties, and other
factors, many of which are outside of our control, that could cause actual
results to materially differ from such statements. Such risks, uncertainties,
and other factors include, but are not necessarily limited to, those set forth
under the caption "Risks Factors." In addition, we operate in a highly and
rapidly changing environment, and new risks may arise. Accordingly, investors
should not place any reliance on forward-looking statements as a prediction of
actual results. We disclaim any intention to, and undertake no obligation to,
update or revise any forward-looking statement.
You should not place undue reliance on these forward-looking statements,
which apply only as of the date of this Prospectus.
RISK FACTORS
Any investment in the Common Stock involves a high degree of risk. You
should carefully consider the following information about risks, together with
other information contained in this
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Prospectus, before making an investment
decision. Additional risks and uncertainties not known to us or that we now
believe to be unimportant could also impair our business. If any of the
following risks actually occur, our business, results of operations, financial
condition and liquidity could be adversely affected. As a result, the market
price of the Common Stock could decline, and you may lose all or a part of your
investment in the Common Stock. Some of the risks that could cause our results
to vary are discussed below.
LOSS OF SIGNIFICANT CLIENTS, SUCH AS THE DEPARTMENT OF EDUCATION OR OTHER MAJOR
CLIENTS, COULD HURT OUR BUSINESS BY REDUCING OUR REVENUES AND PROFITABILITY.
Our success depends substantially upon retaining our significant clients.
Generally, we may lose clients due to merger or acquisition, business failure,
contract expiration, conversion to a competing service provider or conversion
to an in-house data processing system. We cannot guarantee that we will be able
to retain long-term relationships or secure renewals of short-term
relationships with our significant clients in the future.
We incur a high level of fixed costs related to our technology outsourcing
and business process outsourcing clients. These fixed costs result from
significant investments in data processing centers, including computer hardware
platforms, computer software, facilities, and client service infrastructure.
The loss of any one of our significant clients could leave us with a
significantly higher level of fixed costs than is necessary to serve our
remaining clients, thereby reducing our revenues, profitability and cash flow.
We also are vulnerable to reduced processing volumes from our clients,
which could occur due to business downturns, product liability issues, work
stoppages by organized labor, or other business reasons. Many of our clients
are in industries that are currently undergoing significant consolidation. In
the past, we have modified contracts on terms that have been both adverse and
beneficial, and it is possible that future adverse modifications may occur. Our
five largest clients accounted for approximately 14% of our revenue for the
fiscal year ended June 30, 2002. In each of the fiscal years ended June 30,
2001 and June 30, 2000, our five largest clients accounted for approximately
18% of our revenue.
Our largest contract is with the Department of Education (the "Department"),
for which we service student loans under the Department of Education's Direct
Student Loan program administered by its Office of Federal Student Aid ("FSA").
Revenues from this contract represent approximately 4% of our consolidated
revenues. This contract was scheduled to run through September 30, 2003. In
November 2001, the Department extended the contract term through September 30,
2006, with an option for further extension through September 30, 2007. In
December 2001, SLM Corporation ("Sallie Mae") challenged the Department's
sole-source extension in a protest filed with the Department. The FSA
initially took the position that the Sallie Mae protest was without merit and
that the contract extension was lawful. In July 2002, the Department's
deciding official sustained the protest, concluding that further market
research was needed to support the sole-source extension of our contract.
However, the deciding official declined to rescind our contract extension and
directed the FSA to analyze its direct loan servicing needs and procure the
services in compliance with law.
On January 31, 2003 FSA officials notified us that they would conduct a
competitive procurement for Common Services for Borrowers which will be an
integrated solution for FSA for servicing, consolidation and collections
functions for federally insured student aid obligations and will absorb all
loan servicing requirements for the Department.
On April 24, 2003 the Department invited interested parties to participate in
phase one of a competitive procurement the Department is conducting for Common
Services for Borrowers which will be an integrated solution for FSA for
servicing, consolidation and collections functions for federally insured
student aid obligations. We believe this broader proposed scope of services
represents over $50 million of revenue incremental to our annual revenue under
the current contract. The Department announced that the award will be a
fixed-price, performance-based incentive contract of up to ten years, including
option terms. The Department will conduct the procurement in two phases. In
phase one the Department has stated it will select those offerors who will be
eligible to participate in the second phase of the competition. The phase one
selection is expected to occur on or about May 19, 2003 and will be based on
four evaluation factors: the offeror's conceptual approach, organizational
experience, rough order of magnitude of costs, and past performance. We
submitted our phase one proposal to the Department on May 12, 2003 in
conformance with the Common Services for Borrowers requirements. The
Department has stated that it will issue a request for proposals to the
offerors selected in phase one on May 19, 2003 and proposals are required to be
submitted by June 19, 2003. The phase two selection process is expected to be
completed by September 2003. We believe we are positioned favorably for this
competitive procurement process because of our performance record with the
Department. However, there can be no assurance that we will be awarded the new
contract for Common Services to Borrowers.
In connection with the transition from the existing ACS contract to the
implementation of Common Services to Borrowers, on May 8, 2003 the following
announcement was posted on the Department's web site: "Single source
procurement for continued service and turnover. The Department of Education
has conducted extensive market research to fulfill its loan servicing needs
between December 1, 2003 and September 30, 2007. In performing this market
research, the Department has determined that the extension to the Direct Loan
Servicing System with [the] ACS contract is appropriate. The Department has
determined that a transition period of, at a minimum, 24 to 36 months will be
necessary for any contractor to build out an infrastructure and begin
processing the more than seven million borrowers in the current Direct Loan
portfolio. The Department has completed market research for the procurement of
"Common Services for Borrowers," which will absorb all loan servicing
requirements for the Department. Award of this contract is expected on or
about 9/30/03. The single source extension is required to allow for a
reasonable transition period from the current direct loan servicer to the
awardee of the "Common Services for Borrower[s]" acquisition."
Subsequently, on May 13, 2003 the Department issued a "Modification to a
Previous Presolicitation Notice" for the purpose of clarifying its public
announcement of May 8, 2003. In the Modification, the Department stated that
it intended to enter into negotiations with us to modify our existing contract.
Further, the Department stated that: "The purpose of the negotiations would be
to revise the period of performance of the current contract for a period of up
to 36 months, with the use of appropriate options, through September 30, 2006.
This modification will allow the Department to accommodate a prompt and
successful transition to the Common Services For Borrowers (CSB)
vendor. ... this contract action is contemplated to be sole source based on
only one responsible source and no [not] other supplies or services will
satisfy agency requirements. No formal solicitation is available. The
Department [Government] anticipates a modification not later than 30 September
2003." Accordingly, we expect to enter into discussions with the Department to
finalize this modification before September 30, 2003.
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Our government contracts allow for termination at any time without cause
and contain extensive audit rights, either of which could hurt our revenues and
profits. We cannot assure you that the governmental agencies with whom we
contract will not cancel or modify their contracts or that we will maintain our
historic level of revenue or profit from these relationships.
WE MUST MAKE SIGNIFICANT CAPITAL INVESTMENTS IN ORDER TO ATTRACT AND RETAIN
LARGE OUTSOURCING AGREEMENTS. THESE INVESTMENTS MAY BECOME IMPAIRED IF OUR
CLIENTS' FINANCIAL CONDITION DETERIORATES.
We must make significant capital investments in order to attract and
retain large outsourcing agreements. We sometimes must purchase assets such as
computing equipment and purchased software, assume financial obligations such
as computer lease and software maintenance obligations, make investments in
securities issued by clients, incur capital expenditures or incur expenses
necessary to provide outsourcing services to a client. We cannot guarantee that
we will be able to finance and properly evaluate these assets and investments.
We record these investments and asset purchases at fair value. We record
the remainder of the purchase amount as customer intangible assets, which are
then amortized over the term of each contract. The termination of a client
contract or the deterioration of the financial condition of a client has in the
past, and may in the future result, in an impairment of the net book value of
the assets recorded, including a portion of our intangible assets, and a reduction in our earnings and cash flow.
COMPETITION IN OUR MARKETS COULD FORCE US TO LOWER PRICES OR CAUSE US TO LOSE
BUSINESS TO OUR COMPETITORS.
We cannot guarantee that we will be able to compete successfully in the
future. We expect to encounter additional competition as we address new markets
and as the computing and communications markets converge. If we are
forced to lower our pricing or if demand for our services decreases,
our business, financial condition, results of operations and cash
flow may be materially and adversely affected. Our markets are
intensely competitive and highly fragmented. This competition could force us to
lower our prices or lose business to our competitors. Our market share
represents a small percentage of the total technology services market. Our
clients' requirements and the technology available to satisfy those
requirements continually change. Our principal competitors include Electronic
Data Systems Corporation, IBM Global Services, Computer Sciences
Corporation, Accenture, Tier Technologies, Citibank, Bank One, TransCore,
CGI, Perot Systems, Siemens, Exult,
Sallie Mae, Science Application International Corporation, Lockheed
Martin, Maximus, SourceCorp, and several other national, regional and local competitors. Many of our
competitors have greater financial, technical, and operating resources and a
larger client base than we do. They may be able to use their resources to adapt
more quickly to new or emerging technologies or to devote greater resources to
the promotion and sale of their products and services. Many of our largest
competitors have a greater international presence than us and offer a broader
range of services. In addition, we must frequently compete with a client's own
internal information technology capability, which may constitute a fixed cost
for the client.
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WE MAY HAVE DIFFICULTIES EXECUTING OUR ACQUISITION STRATEGY, WHICH COULD HURT
OUR FUTURE GROWTH AND FINANCIAL CONDITION.
We intend to continue to expand our business through acquisitions of
complementary companies. Through acquisitions, we intend to expand our geographic presence,
to expand the products and services we offer to existing clients and to enter
new markets. Since our inception in June 1988 through June 30, 2002, we have
completed several acquisitions. Approximately 58% of our revenue growth from
fiscal 1995 to fiscal 2002 was due to acquisitions. We regularly evaluate
potential acquisition candidates. Risks that we may encounter in our
acquisitions include:
•
higher acquisition prices due to increased competition for acquisitions;
•
fewer suitable acquisition candidates at acceptable prices;
•
insufficient capital resources for acquisitions;
•
inability to successfully integrate or operate acquired companies;
•
loss of key management and other employees of acquired companies; and
•
departure of key clients of acquired companies.
Although we have not experienced the problem to date, governmental and
regulatory constraints could prevent some acquisitions in the future. We cannot, however, make any assurances that we will be able to identify any potential acquisition candidates or consummate any additional acquisitions or
that any future acquisitions will be successfully integrated or will
be advantageous to us. Without additional acquisitions, we are unlikely to
maintain historical total growth rates. If our acquisition strategy fails, our business, financial condition and results of operations could be materially and adversely affected.
FAILURE TO PROPERLY MANAGE OUR OPERATIONS AND OUR GROWTH COULD HURT OUR ABILITY
TO SERVICE OUR EXISTING CLIENTS, AND COULD IMPEDE OUR ABILITY TO ATTRACT NEW
BUSINESS.
We have rapidly expanded our operations in recent years. We intend to
continue expansion in the foreseeable future to pursue existing and potential
market opportunities. This rapid growth places a significant demand on our
management and operational resources. In order to manage growth effectively, we
must implement and improve our operational systems, procedures, and controls on
a timely basis. If we fail to implement these systems, procedures and controls
on a timely basis, we may not be able to service our clients' needs, hire and
retain new employees, pursue new business, complete future acquisitions or
operate our businesses effectively. We could also trigger contractual credits
to clients. Failure to properly integrate acquired operations with vendors'
systems could result in increased cost.
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OUR GOVERNMENT CONTRACTS ALLOW FOR TERMINATION AT ANY TIME WITHOUT CAUSE AND
CONTAIN EXTENSIVE AUDIT RIGHTS, EITHER OF WHICH COULD HURT OUR REVENUES AND
PROFITS.
Loss or termination of one or more large government contracts could have a
material adverse effect on our business, financial condition,
results of operations and cash flow. Approximately
26% of our revenue in fiscal 2002 was derived from contracts with the United
States government or its agencies. The largest of these contracts accounted
for approximately 5% of our revenue for fiscal 2002. Government contracts, by
their terms, generally can be terminated for convenience by the government.
This means that the government may terminate the contract at any time, without
cause. In some instances, we will receive compensation only for the services
provided or costs incurred at the time of termination. Many of our government
contracts contain base periods of one or more years, as well as one or more
option periods that may cover more than half of the potential contract
duration. The government generally has the right not to exercise the renewal
option periods. Its failure to exercise option periods could curtail the
contract term of some of our government contracts. The government's termination
of, or failure to exercise option periods for, significant government contracts
could have a material adverse effect on our business and financial results.
Government contracts are generally subject to audits and investigations by
government agencies. These audits and investigations involve a review of the
contractor's performance on its contracts, as well as its pricing practices,
its cost structure, and its compliance with applicable laws, regulations and
standards. If the government finds that we improperly charged any costs to
a contract, the costs are not reimbursable. If already reimbursed, the
cost must be refunded to the government. If the government discovers improper
or illegal activities in the course of audits or investigations, the contractor
may be subject to various civil and criminal penalties and administrative
sanctions, which may include termination of contracts, forfeiture of profits,
suspension of payments, fines and suspensions or debarment from doing business
with the government. In recent years, the government has substantially
increased the personnel and resources it devotes to audits and investigations
and has encouraged auditors and investigators to emphasize the detection of
fraud or improper activities. We believe that this high level of industry
scrutiny will continue for the foreseeable future. The government could subject
us to similar scrutiny in the future. Any resulting penalties or sanctions
could have a material adverse effect on our business, financial
results and cash flow. One of our subsidiaries.
One of our
subsidiaries, ACS Defense, Inc.,
and other government contractors received a grand jury document
subpoena issued by the U.S. District Court for the District of
Massachusetts in October 2002. The subpoena was issued in connection
with an inquiry being conducted by the Antitrust Division of the U.S.
Department of Justice. The inquiry concerns certain IDIQ (Indefinite
Delivery — Indefinite Quantity) procurements and their related task
orders which occurred in the late 1990's at Hanscom Air Force Base in
Massachusetts. Our revenue from the contracts that we believe to be
the focus of the Justice Department's inquiry is approximately $25
million per year representing approximately 0.6% of our annual
revenue. Due to the preliminary nature of the government's
inquiry, we are not able to assess the impact, if any, of this
inquiry on ACS. However, we have conducted and are continuing to
conduct an internal investigation of this matter through outside
legal counsel. We continue to cooperate with the Department of
Justice in producing documents in response to the subpoena and
arranging for Department of Justice interviews of employees and
former employees.
OUR CONTRACTS CONTAIN TERMINATION PROVISIONS THAT COULD DECREASE OUR REVENUES AND PROFITABILITY.
Most of our contracts with clients permit termination in the event our
performance is not consistent with service levels specified in those contracts or provide for credits to our clients for failure to meet service levels.
Some of our government clients can terminate their contracts for any reason or
no reason. If clients are not satisfied with our level of performance, our
reputation in the industry may suffer, which could materially and adversely affect our business, financial condition, results of operations and cash flow.
OUR CONTRACTS CONTAIN PRICING RISKS THAT COULD DECREASE OUR REVENUES AND
PROFITABILITY
Some of our contracts contain provisions requiring that our services be priced
based on a pre-established standard or benchmark regardless of the costs we
incur in performing these services. Some of our contracts contain pricing
provisions that require the client to pay a set fee for our services regardless
of whether our costs to perform these services exceed the amount of the set
fee. Some of our contracts contain re-pricing provisions which can result in
reductions of our fees for performing our services. In such situations, we are
exposed to the risk that we may be unable to price our services to levels that
will permit recovery of our costs, and may adversely affect our operating
results and cash flow.
Technology costs have been dropping for many years and are continuing to
do so due in large part to hardware technology advances. New contracts are
generally priced at lower unit rates than historical contracts. We sometimes
renegotiate client contracts in advance of the scheduled expiration date and
will lower our charges in return for other contractual considerations. We may
not be able to lower our technology costs to keep up with market rates.
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OUR RELIANCE ON SIGNIFICANT SOFTWARE VENDOR RELATIONSHIPS COULD RESULT IN
SIGNIFICANT EXPENSE OR INABILITY TO SERVE OUR CLIENTS IF WE LOSE THESE
RELATIONSHIPS.
Our ability to service our clients depends to a large extent on our use of
various software programs that we license from a small number of primary
software vendors. We may not be able to replace them with alternative vendors.
If our significant software vendors assert claims against us for infringement
of intellectual property rights or other claims of breach of our contracts with
them, or if they attempt to re-price our licenses or require us to cure a
claimed breach under a license agreement, we could be required to expend
significant resources to resolve these matters. If our significant vendors were
to terminate or refuse to renew our contracts with them, we might not be able
to replace the related software programs and would be unable to serve our
clients, which could have a material adverse effect on our business, revenues, profitability and cash flow.
RAPID TECHNOLOGICAL CHANGES REQUIRE US TO COMMIT SUBSTANTIAL RESOURCES AND
COULD AFFECT OUR ABILITY TO ATTRACT AND RETAIN CLIENTS.
The markets for our information technology services are subject to rapid
technological changes and rapid changes in client requirements. To compete, we
commit substantial resources to operating multiple hardware platforms, to
customizing third-party software programs and to training client personnel and
our personnel in the use of new technologies. Information processing is
shifting toward client-server and web-based systems, in which individual
computers or groups of personal computers and mid-range systems replace
mainframe systems.
Future hardware and software products may be able to process large amounts
of data more cost-effectively than existing mainframe platforms which we use in
much of our business.
We have committed substantial resources to developing outsourcing
solutions for these distributed computing environments, but we cannot guarantee
that we will be successful in customizing products and services that
incorporate new technology on a timely basis. We also cannot guarantee that we
will continue to be able to deliver the services and products demanded by the
marketplace.
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LEGAL PROCEEDINGS, INCLUDING A $17 MILLION JUDGMENT, COULD RESULT IN MATERIAL
CHARGES AGAINST EARNINGS.
On December 16, 1998, a state district court in Houston, Texas entered
final judgment against us in a lawsuit brought by 21 former employees of
Gibraltar Savings Association and/or First Texas Savings Association
(collectively, "GSA/FTSA"). The GSA/FTSA employees alleged that they were
entitled to the value of 803,082 shares of our stock (adjusted for February
2002 stock split) pursuant to options issued to the GSA/FTSA employees in 1988
in connection with a former technology outsourcing services agreement between
GSA/FTSA and us. The judgment against us was for approximately $17 million,
which includes attorneys' fees and pre-judgment interest, but excludes
additional attorneys' fees of approximately $0.9 million and post-judgment
interest at the statutorily mandated rate of 10% per annum, which could be
awarded in the event the plaintiffs are successful upon appeal and final
judgment. The judgment was appealed by the plaintiffs and us.
On August 29, 2002, the Fourteenth Court of Appeals, Houston, Texas,
reversed the trial court's judgment and remanded the case to the trial court
for further proceedings. However, the court of appeals affirmed the trial court
judgment in part as to one of the plaintiffs. The court of appeals also held
that the trial court did not err in dismissing certain of our affirmative
defenses at a pretrial conference. We and the plaintiffs filed motions for
rehearing with the court of appeals. On January 16, 2003, the court of appeals
denied both motions for rehearing (except the court reversed its previous
ruling that the trial court should have applied prejudgment interest at 6%
rather than 10%).
On March 3, 2003 will filed a Petition for Review with the Texas Supreme Court requesting that the Court reverse the decision of the court of appeals and render judgement that the plaintiffs take nothing
or, alternatively, remand the case the trial court for further proceedings. The plaintiffs did not file a petition for review with the Texas Supreme Court.
We continue to believe that we have a meritorious defense to all or a substantial portion of the plaintiffs' claims, and accordingly, have not accrued any amount on our balance sheet related to the lawsuit.
We are also subject to certain other legal proceedings, claims and disputes
which arise in the ordinary course of business, the outcome of which
cannot be predicted.
INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS COULD REQUIRE US TO INCUR SUBSTANTIAL
COSTS TO DEFEND THE CLAIMS, CHANGE OUR SERVICES, PURCHASE NEW LICENSES OR
REDESIGN OUR USE OF CHALLENGED TECHNOLOGY.
We and other companies in our industry rely heavily on the use of
intellectual property. We do not own the majority of the software that we use
to run our business; instead we license this software from a small number of
primary vendors. If these vendors assert claims that we or our clients are
infringing on their software or related intellectual property, we could incur
substantial costs to defend these claims.
In addition, if any of our vendors' infringement claims are ultimately
successful, our vendors could require us (1) to cease selling or using products
or services that incorporate the challenged software or technology, (2) to
obtain a license or additional licenses from our vendors, or (3) to redesign
our products and services which rely on the challenged software or technology.
We are not currently involved in any material intellectual property litigation,
but could be in the future to protect our trade secrets or know-how, or to
defend ourselves or our clients against alleged infringement claims.
FEDERAL REGULATIONS RELATING TO CONFIDENTIALITY OF HEALTH DATA SUBJECT US TO
INCREASED COMPLIANCE RISKS.
In 1996, Congress
passed the Health Insurance Portability and Accountability Act
("HIPAA") and as required therein, the Secretary of Health and Human
Services ("HHS") has established standards for information sharing,
security and confidentiality with regard to health information of
individuals. We process individually identifiable health information
for many of our clients. We and our clients are required to comply
with HIPAA and we will be required to comply with HIPAA for
individually identifiable health information which we maintain for
our employees. Health information privacy regulations promulgated
under HIPAA took effect on April 14, 2003. On or prior to that date
we implemented procedures, training and security features designed to
protect the privacy and integrity of such health information. Other
regulations have been published under HIPAA, such as those related to
the standardization of information used in processing healthcare
transactions which require compliance by October 2003, and other
regulations required by HIPAA have yet to be published. In addition,
various states, including Texas, have passed legislation that
addresses medical record privacy and restricts the use and disclosure of individually identifiable health information, and other federal or state privacy legislation may be enacted at any
time. HIPAA subjects us, as a service provider and as an employer, to
liability and monetary penalties for failure to comply with HIPAA
regulations. If we fail to comply with HIPAA regulations and
applicable state laws, we could incur liability under these
provisions, which could have a material adverse effect on our
profitability and cash flow.
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BUDGET DEFICITS AT STATE AND LOCAL GOVERNMENTS AND THEIR AGENCIES MAY HAVE AN
ADVERSE AFFECT ON OUR FUTURE BUSINESS, REVENUES, RESULTS OF OPERATIONS AND CASH
FLOW.
A substantial portion of our revenues are derived from contracts with
state and local governments and their agencies. Currently, many state and
local governments that we have contracts with are facing potential budget
deficits. While this has not had a material adverse impact on our results of
operations through the third quarter of fiscal year 2003, it is unclear what
impact, if any, these deficits may have on our future business, revenues,
results of operations and cash flow.
WE MAY BECOME UNABLE TO PROVIDE OR OBTAIN CONTRACT PERFORMANCE GUARANTEES.
Certain of our state and local government contracts require we execute
surety bonds or letters of credit to ensure that the project is administered
and completed as provided for in the contract. Prior to September 11 and the
well-documented bankruptcies of several large companies (e.g. Enron, Kmart, and
WorldCom), surety bonds were obtainable on relatively favorable terms at
minimal pricing. In late 2001, the market for surety bonds changed dramatically
with capacity tightening and prices increasing. In certain situations, we have
found it more economical to satisfy our obligations under certain state and
local contracts with letters of credit under our revolving credit facility. The
long-term outlook of the surety market, while improving, remains unclear. If
conditions require us to continue utilizing letters of our credit facility (in
lieu of bonds), our borrowing capacity under our revolving credit
facility will be reduced by the amount of such letters of credit outstanding.
WE ARE EXPOSED TO RISKS RELATED TO INTERNATIONAL OPERATIONS WHICH COULD HURT
OUR BUSINESS, FINANCIAL CONDITION AND OPERATIONS RESULTS.
Recently we have expanded our international operations. International
operations are subject to a number of risks which include:
•
fluctuations in foreign exchange currency rates;
•
licensing and labor counsel requirements;
•
staffing key managerial positions;
•
Data privacy laws adopted by
various countries in which ACS does business, including but not limited to member states of the European Union.
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•
general economic conditions in foreign countries;
•
additional expenses and risks inherent in conducting
operations in geographically distant locations;
•
laws of those foreign countries;
•
armed hostilities and political instability;
•
trade restrictions such as tariffs and duties or other
controls affecting foreign operations;
•
variations in the protection of intellectual property rights;
•
restrictions on the ability to convert currency; and
•
additional expenses and risks inherent in conducting
operations in geographically distant locations.
The above factors, along with other factors, may adversely affect the Company's business, financial condition and operating results.
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ARMED HOSTILITIES AND TERRORIST ATTACKS AND FURTHER ACTS OF VIOLENCE AND WAR MAY CAUSE INSTABILITY IN
THE U.S. AND FINANCIAL MARKETS IN WHICH WE OPERATE.
Armed hostilities and terrorist attacks and further acts of violence could have a significant
impact on our business. In addition, armed hostilities, acts of
terrorism and acts of violence may directly impact our physical facilities and operations, which are
located in North America, Central America, South
America, Europe, Africa, Australia, Asia and the Middle East, or those of
our clients. These developments subject our worldwide operations to increased
risks and depending on their magnitude could have a material adverse effect on our business.
OUR NEED FOR TECHNICALLY SKILLED EMPLOYEES REQUIRES THAT WE DEVOTE
SUBSTANTIAL RESOURCES TO ATTRACT AND RETAIN THEM. THE FAILURE TO ATTRACT AND
RETAIN TECHNICAL PERSONNEL AND SKILLED MANAGEMENT COULD HURT OUR ABILITY TO
GROW AND MANAGE OUR BUSINESS.
Our success depends to a significant extent upon our ability to attract,
retain and motivate highly skilled and qualified personnel. If we fail to
attract, train, and retain sufficient numbers of these technically-skilled
people, our business, financial condition, and results of operations will be
materially and adversely affected. Competition for personnel is intense in the
information technology services industry, and recruiting and training personnel
requires substantial resources.
We must continue to grow internally by hiring and training
technically-skilled people in order to perform services under our existing
contracts and new contracts that we will enter into. The people capable of
filling these positions are in great demand and recruiting and training these
personnel require substantial resources. Our success also depends on the skills, experience, and
performance of key members of our management team. The loss of any key employee
could have an adverse effect on our business, financial condition, cash flow and results
of operations and prospects. Other than with Darwin Deason, our Chairman of the
Board, we have not entered into employment agreements with any of our key
personnel, although we have entered into severance
agreements with certain of
our executive officers and we may in the future enter into employment
agreements with our key personnel.
DARWIN DEASON HAS SUBSTANTIAL CONTROL OVER OUR COMPANY AND CAN AFFECT VIRTUALLY
ALL DECISIONS MADE BY OUR STOCKHOLDERS.
Darwin Deason beneficially owns 6,599,372 shares of Class B Common Stock
and 2,675,408 shares of the Common Stock as of May 6, 2003. Mr. Deason
controls approximately 35.72% of the total voting power of the Company (based
on total shares of Common Stock outstanding as of May 6, 2003). As a
result, Mr. Deason has the requisite voting power to significantly affect
virtually all decisions made by the Company and our stockholders, including the
power to block corporate actions such as an amendment to most provisions of our
certificate of incorporation. In addition, Mr. Deason may significantly
influence the election of directors and any other action requiring shareholder
approval. Mr. Deason serves as the one-person nominations committee to our
Board of Directors and thus recommends management's slate of directors to be
proposed by the Board to our shareholders. Mr. Deason has a supplemental
executive retirement agreement and an employment contract, which has a term
that currently ends on May 18, 2007, provided that such term shall
automatically be extended for one-year periods on May 18 of each year, unless
thirty days prior to May 18 of any year, Mr. Deason gives notice to ACS that he
does not wish to extend the term or the Board of Directors of ACS (upon a
unanimous vote of the directors, except for Mr. Deason) gives notice to Mr.
Deason that it does not wish to extend the term.
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PROVISIONS OF OUR CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW COULD
DETER TAKEOVER ATTEMPTS THAT STOCKHOLDERS MAY THINK ARE IN THEIR BEST
INTERESTS.
Some provisions in our certificate of incorporation and bylaws could
delay, defer, prevent or make more difficult a merger, tender offer, or proxy
contest involving our capital stock. Our stockholders might view transactions
such as these as being in their best interests because, for example, a change
of control might result in a price higher than the market price for shares of
the Common Stock. Among other things, these provisions:
•
require an 80% vote of the stockholders to amend some
provisions of our certificate of incorporation;
•
require an 80% vote of the stockholders to amend some
provisions of our bylaws;
•
permit only our Chairman, President or a majority of the
Board of Directors to call stockholder meetings;
•
authorize our Board of Directors to issue up to 3,000,000
shares of preferred stock in series with the terms of each series to
be fixed by our Board of Directors;
•
authorize our Board of Directors to issue Class B Common
Stock, which shares are entitled to ten votes per share;
•
permit directors to be removed, with or without cause, only
by a vote of at least 80% of the combined voting power; and
•
specify advance notice requirements for stockholder proposals
and director nominations to be considered at a meeting of
stockholders.
In addition, with some exceptions, Section 203 of the Delaware General
Corporation Law restricts mergers and other business combinations between us
and any holder of 15% or more of our voting stock.
We also have a stockholder rights plan. Under this plan, after the
occurrence of specified events, our stockholders will be able to buy stock from
us or our successor at reduced prices. These rights will not extend, however,
to persons participating in takeover attempts without the consent of our Board
of Directors. Accordingly, this plan could delay, defer or prevent a change of
control of our company.
Further, we have entered into severance agreements with certain of our
executive officers, which may have the effect of discouraging an unsolicited
takeover proposal. Finally, Mr. Deason's ownership of approximately 35.72% of
the voting power of our capital stock could have the effect of delaying,
deterring or preventing a takeover of our company. See "Darwin Deason has
substantial control over our company and can affect virtually all decisions
made by our stockholders" for additional information about Mr. Deason's
ownership.
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AVAILABILITY OF SIGNIFICANT AMOUNTS OF THE COMMON STOCK FOR SALE COULD CAUSE
THE MARKET PRICE OF THE COMMON STOCK TO DROP.
There is a substantial number of shares of the Common Stock that may be
issued and subsequently sold under the Plan, upon exercise of employee stock
options, and upon conversion of our Class B Common Stock and our 3.5%
convertible subordinated notes. The sale or issuance of additional shares of
the Common Stock could adversely affect the prevailing market price of the
Common Stock.
THE PRICE OF OUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY, WHICH MAY RESULT IN
LOSSES FOR INVESTORS.
The market price for the Common Stock has been and may continue to be
volatile. For example, during the 52-week period ended May 12, 2003, the
closing prices of the Common Stock as reported on the New York Stock Exchange
ranged from a high of 56.36 to a low of 33.88. We expect our stock price to
be subject to fluctuations as a result of a variety of factors, including
factors beyond our control. These factors include and are not necessarily
limited to:
•
actual or anticipated variations in operating results from
guidance provided by us;
•
announcements of technological innovations or new products or
services by us or our competitors;
•
announcements relating to strategic relationships or acquisitions;
•
changes in financial estimates or other statements by securities analysts;
•
changes in general economic conditions;
•
conditions or trends affecting the outsourcing industry; and
•
changes in the economic performance and/or market valuations
of other information technology companies.
Because of this volatility, we may fail to meet the expectations of our
stockholders or of securities analysts at some time in the future, and our
stock price could decline as a result.
In addition, the stock market has experienced significant price and volume
fluctuations that have particularly affected the trading prices of equity
securities of many high technology companies. These fluctuations have often
been unrelated or disproportionate to changes in the operating performance of
these companies. Any negative change in the public's perception of information
technology companies could depress our stock price regardless of our operating
results.
OTHER RISKS, UNKNOWN OR IMMATERIAL TODAY, MAY BECOME KNOWN OR MATERIAL IN THE
FUTURE.
We have attempted to identify material risk factors currently affecting
our business and company. However, additional risks that we do not yet know of,
or that we currently think are immaterial, may occur or become material. These
risks could impair our business operations or adversely affect revenues or
profitability.
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USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Common Stock by the Selling Stockholders to the public pursuant to this
Prospectus. All proceeds from the sale of the Common Stock by the Selling
Stockholders will be for the account of the Selling Stockholders.
SELLING STOCKHOLDERS
The following table lists the names of certain Selling Stockholders and
the number of shares of the Common Stock that could be sold by them pursuant to this
Prospectus.
Number of Shares
Number of Shares
Number of Shares
Owned after the
Percentage owned
Selling Stockholder*
Position in Company
Owned(1)
Offered(2)
Offering(2)
after
offering(7)
Darwin Deason
Chairman of the
Board
2,675,408
5,214
2,670,194
2.1
%
Jeffrey A. Rich
Chief Executive
Officer and
Director
154,425
(3)
992
153,433
**
Mark A. King
President, Chief
Operating Officer
and Director
239,066
(4)
5,986
233,080
**
Henry Hortenstine
Executive Vice
President, Global
Business
Development and
Director
84,060
(5)
3,766
80,294
**
Harvey V. Braswell
Executive Vice
President and Group
President State
Healthcare
Solutions
3,035
1,896
1,139
**
John H. Rexford
Executive Vice
President, Corporate Development
6,251
3,811
2,440
**
Warren D. Edwards
Executive Vice
President and Chief
Financial Officer
55,132
(6)
2,874
52,258
**
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Number of Shares
Number of Shares
Number of Shares
Owned after the
Percentage owned
Selling Stockholder*
Position in Company
Owned(1)
Offered(2)
Offering(2)
after offering(7)
Donald G. Liedtke
Executive Vice
President and Group
President — IT
Solutions Group
819
648
171
**
John Brophy
Executive Vice
President and
Group President -
State and Local
Solutions
858
740
118
**
*
All Selling Stockholders (other than Darwin Deason) will own less than 1% of
the outstanding shares of the Class A Common Stock after the offering.
**
Indicates shares held are less than 1% of a class A Common Stock.
(1)
Represents shares of the Common Stock beneficially owned by the named
individual as of May 6, 2003.
(2)
Does not constitute a commitment to sell any or all of the stated number of
shares of the Common Stock. The number of shares of the Common Stock offered
shall be determined from time to time by each Selling Stockholder in his or her
sole discretion.
(3)
Includes 76,100 shares of Common Stock, which are not outstanding, but are
subject to options exercisable within sixty (60) days of May 6, 2003.
(4)
Includes 138,000 shares of Common Stock, which are not outstanding, but are
subject to options exercisable within sixty (60) days of May 6, 2003.
(5)
Includes 80,000 shares of Common Stock, which are not outstanding, but are subject to options exercisable within sixty (60) days of May 6, 2003.
(6)
Includes 50,000 shares of Common
Stock, which are not outstanding, but are subject to options
exercisable within sixty (60) days of May 6, 2003.
(7)
Represents percentages owned as of May 6, 2003 including shares owned
after the offering.
PLAN OF DISTRIBUTION
The Selling Stockholders may sell all or a portion of the shares of the
Common Stock from time to time under this Prospectus in one or more
transactions on the New York Stock Exchange, or other exchange, in a negotiated
transaction or in a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at prices otherwise negotiated. The Selling Stockholders may effect
such transactions by selling the shares of the Common Stock to or through
broker-dealers, and such broker-dealers
may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
of the shares of the Common Stock for whom such broker-dealers may act as agent
(which compensation may be less than or in excess of customary commissions).
The Selling Stockholders and any broker-dealers that participate in the
distribution of the shares of the Common Stock may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Act, and any
commissions received by them and any profit on the resale of the shares of the
Common Stock sold by them may be deemed be underwriting discounts and
commissions under the Act. All selling and other expenses incurred by the
Selling Stockholders will be borne by the Selling Stockholders.
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In addition to any shares of the Common Stock sold hereunder, the Selling
Stockholders may, at the same time, sell any other shares of the Common Stock,
owned by them in compliance with all of the requirements of Rule 144,
regardless of whether such shares of the Common Stock are covered by this
Prospectus.
There is no assurance that the Selling Stockholders will sell all or any
portion of the shares of the Common Stock covered by this Prospectus.
The Company will pay all expenses related to registering the shares of the
Common Stock covered by this Prospectus and will not receive any proceeds from
sales of any such shares of the Common Stock by the Selling Stockholders to the
public.
LEGAL MATTERS
The validity of the Common Stock issuable under the Plan has been passed
upon for us by Jackson Walker L.L.P., Dallas, Texas.
EXPERTS
The financial statements incorporated in this registration statement by
reference to the Annual Report on Form 10-K for the year ended June 30, 2002,
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The contents of the Prior Registration Statement, including the documents
incorporated by reference therein, are incorporated by reference into this
Registration Statement.
All documents filed by the Registrant with the Securities and Exchange
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, subsequent to the date of this Registration
Statement and prior to the termination of the
offering to which it relates shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the
date of filing of such documents.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Article 9 of the Registrant's Second Amended and Restated Certificate of
Incorporation provides for indemnification of directors and officers to the
full extent permitted under Delaware law.
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Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee
or agent of the corporation, partnership, joint venture, trust or other
enterprise, against expenses, judgments, fines and amounts paid in settlement
and reasonably incurred in connection with such action, suit or proceeding. The
power to indemnify applies only if such person acted in good faith and in a
manner such person reasonably believed to be in the best interests, or not
opposed to the best interests, of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
The power to indemnify applies to actions brought by or in the right of
the corporation as well, but only to the extent of defense and settlement
expenses and not to any satisfaction of a judgment or settlement of the claim
itself, and with the further limitation that in such actions no indemnification
shall be made in the event of any adjudication of liability unless the court,
in its discretion, believes that in light of all the circumstances
indemnification should apply.
The Registrant has directors and officers liability insurance for the
benefit of its directors and officers.
Item 8. Exhibits.
In addition to the exhibits filed or incorporated by reference into the
Prior Registration Statement, the following documents are filed as exhibits to
the Registration Statement:
Exhibit No.
Exhibit
4.1
Certificate of Incorporation of the Company, filed as Exhibit 3.1 to the
Company's Registration Statement on Form S-3 dated March 30, 2001
(Registration No. 333-58038) ("Form S-3") and incorporated herein by
reference.
4.2
Bylaws of the Company, as amended and in effect on May 3, 2000, filed as
Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended
June 30, 2000 and incorporated herein by reference.
4.3
Form of New Class A Common Stock Certificate, filed as Exhibit 4.3 to the
Company's Form S-1 (Registration No. 333-79394) ("Form S-1") and
incorporated herein by reference.
4.4
Amended and Restated Affiliated Computer Services, Inc. Employee Stock
Purchase Plan (a)
5
Opinion of Jackson Walker L.L.P. (a)
23.1
Consent of PricewaterhouseCoopers LLP (a)
23.2
Consent of Jackson Walker L.L.P. (included in opinion filed as Exhibit 5)
24
Power of Attorney (included on signature page of this Registration Statement)
(a)
Filed herewith.
Page 21
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on
May 15, 2003.
AFFILIATED COMPUTER SERVICES, INC.
By:
/s/ Warren D. Edwards
Warren D. Edwards
Executive Vice President and Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below authorizes William L. Deckelman,
Jr., to execute in the name of each such person who is then an officer or
director of the Registrant, and to file any amendments to this Registration
Statement necessary or advisable to enable the Registrant to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Commission, in respect thereof, in connection with the registration of
the securities which are the subject of this Registration Statement, which
amendments may make such changes in such Registration Statement as such
attorney may deem appropriate.
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Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Name
Title
Date
/s/ Darwin Deason
Darwin Deason
Chairman of the Board and
Director
May 15, 2003
/s/Jeffrey A. Rich
Jeffrey A. Rich
Chief Executive Officer and
Director
May 15, 2003
/s/ Mark A. King
Mark A. King
President, Chief Operating
Officer and Director
May 15, 2003
/s/ Warren D. Edwards
Warren D. Edwards
Executive Vice President
and Chief Financial Officer
May 15, 2003
/s/ Henry G. Hortenstine
Henry G. Hortenstine
Executive Vice President
and Director
May 15, 2003
/s/ William L. Deckelman, Jr.
William L. Deckelman, Jr.
Attorney-in-fact, Executive
Vice President, Secretary
and General Counsel
May 15, 2003
/s/ Frank A. Rossi
Frank A. Rossi
Director
May 15, 2003
/s/ Joseph P. O'Neill
Joseph P. O'Neill
Director
May 15, 2003
/s/ Clifford M. Kendall
Clifford M. Kendall
Director
May 15, 2003
/s/ Peter A. Bracken
Peter A. Bracken
Director
May 15, 2003
Page 23
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EXHIBITS
INDEX TO EXHIBITS
Exhibit No.
Exhibit
4.1
Certificate of Incorporation of the Company, filed as Exhibit 3.1 to the
Company's Registration Statement on Form S-3 dated March 30, 2001
(Registration No. 333-58038) ("Form S-3") and incorporated herein by
reference.
4.2
Bylaws of the Company, as amended and in effect on May 3, 2000, filed as
Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended
June 30, 2000 and incorporated herein by reference.
4.3
Form of New Class A Common Stock Certificate, filed as Exhibit 4.3 to the
Company's Form S-1 (Registration No. 333-79394) ("Form S-1") and
incorporated herein by reference.
4.4
Amended and Restated Affiliated Computer Services, Inc. Employee Stock
Purchase Plan (a)
5
Opinion of Jackson Walker L.L.P. (a)
23.1
Consent of PricewaterhouseCoopers LLP (a)
23.2
Consent of Jackson Walker L.L.P. (included in opinion filed as Exhibit 5)
24
Power of Attorney (included on signature page of this Registration Statement)
(a)
Filed herewith.