As filed with the Securities and Exchange Commission on June 10, 2004
Registration Statement No. 333-114079
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM F-3
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REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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AMDOCS LIMITED
(Exact name of registrant as specified in its charter)
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ISLAND OF GUERNSEY NOT APPLICABLE
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
SUITE 5, TOWER HILL HOUSE LE BORDAGE
ST. PETER PORT, ISLAND OF GUERNSEY, GY1 3QT CHANNEL ISLANDS
011-44-1481-728444
(Address and telephone number of registrant's principal executive offices)
AMDOCS, INC.
1390 TIMBERLAKE MANOR PARKWAY, CHESTERFIELD, MISSOURI 63017
ATTENTION: THOMAS G. O'BRIEN, TREASURER
(314) 212-8328
(Name, address and telephone number of agent for service)
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THE COMMISSION IS REQUESTED TO SEND COPIES OF ALL COMMUNICATIONS TO:
ROBERT A. SCHWED, ESQ.
WILMER CUTLER PICKERING HALE AND DORR LLP
300 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 937-7200
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING SECURITYHOLDERS NAMED IN THIS PROSPECTUS MAY NOT SELL THESE SECURITIES
UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND THE SELLING SECURITYHOLDERS NAMED IN THIS PROSPECTUS ARE NOT
SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JUNE 10, 2004
PROSPECTUS
AMDOCS LIMITED
560,777 ORDINARY SHARES
This prospectus relates to the resale from time to time of up to 560,777
ordinary shares previously issued by Amdocs Limited to former shareholders of
XACCT Technologies Ltd. in connection with our acquisition of that company.
We will not receive any proceeds from sales of the ordinary shares offered
by this prospectus.
The selling securityholders identified in this prospectus, or their
pledgees, donees, transferees or other successors-in-interest, may offer the
shares from time to time through public or private transactions at prevailing
market prices, at prices related to prevailing market prices or at privately
negotiated prices.
Our ordinary shares are traded on the New York Stock Exchange under the
symbol "DOX." On June 4, 2004, the closing sale price of our ordinary shares on
the New York Stock Exchange was $24.59 per share. You are urged to obtain
current market quotations for our ordinary shares.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 TO READ ABOUT FACTORS YOU SHOULD
CONSIDER BEFORE INVESTING IN OUR ORDINARY SHARES.
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 , 2004.
TABLE OF CONTENTS
PAGE
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PROSPECTUS SUMMARY.............................................................. 1
THE OFFERING.................................................................... 3
RISK FACTORS.................................................................... 4
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION.............................. 14
OFFERING STATISTICS AND TIMETABLE............................................... 15
REASONS FOR THE OFFER AND USE OF PROCEEDS....................................... 15
DIVIDEND POLICY................................................................. 15
MATERIAL CHANGES................................................................ 15
THE OFFER AND LISTING........................................................... 17
CAPITALIZATION.................................................................. 19
SELLING SECURITYHOLDERS......................................................... 20
DESCRIPTION OF SHARE CAPITAL.................................................... 24
COMPARISON OF UNITED STATES AND GUERNSEY CORPORATE LAW.......................... 26
PLAN OF DISTRIBUTION............................................................ 27
LEGAL MATTERS................................................................... 28
EXPERTS......................................................................... 28
ENFORCEABILITY OF CIVIL LIABILITIES............................................. 29
INCORPORATION OF DOCUMENTS BY REFERENCE......................................... 31
WHERE YOU CAN FIND MORE INFORMATION............................................. 31
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS................. 32
UNAUDITED FINANCIAL STATEMENTS OF CERTEN INC.................................... 36
We have not authorized anyone to provide you with information different
from that contained or incorporated by reference in this prospectus. The selling
securityholders are offering to sell, and seeking offers to buy, our ordinary
shares only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale
of ordinary shares.
ii
PROSPECTUS SUMMARY
This summary describes the most significant terms of this offering and the
information included or incorporated by reference in this prospectus. This
summary does not contain all of the information that you should consider before
investing in our ordinary shares. You should read the entire prospectus
carefully, especially the risks of investing in our ordinary shares discussed
under "Risk Factors."
AMDOCS LIMITED
Our market focus is primarily the communications industry, and we are a
leading provider of software products and services to major communications
companies in North America, Europe and the rest of the world. Our products and
services provide an integrated approach to customer management, which we refer
to as Integrated Customer Management. Our Integrated Customer Management product
offerings consist primarily of billing and customer relationship management
systems, which we refer to, collectively, as CC&B Systems. Our portfolio also
includes a full range of directory sales and publishing systems for publishers
of both traditional printed yellow page and white page directories and
electronic Internet directories.
Our Integrated Customer Management systems are designed to meet the
mission-critical needs of leading communications service providers, which
include customer relationship management, order management, call rating, invoice
calculation and preparation, bill formatting, collections, partner relationship
management and directory publishing services. We support a wide range of
communications services, including wireline, wireless, voice, data, broadband,
content, electronic and mobile commerce and Internet Protocol based services. We
also support companies that offer multiple service packages, commonly referred
to as bundled or convergent services. Due to the complexity of our customers'
projects and the expertise required for system support, we also provide
extensive system implementation, integration, modification, ongoing support,
enhancement and maintenance services. In addition, we offer Managed Services,
which include a combination of services, such as system modernization and
consolidation, management and operation of data centers, purchase and management
of related hardware assets, billing operations and application support.
Since the inception of our business in 1982, we have concentrated on
providing software products and services to major communications companies. By
focusing on this market, we believe that we have been able to develop the
innovative products and the industry expertise, project management skills and
technological competencies required for the advanced, large-scale,
specifications-intensive system projects typical of leading communications
providers. Our customer base includes major North American, European and other
communications companies, including major wireline companies and wireless
companies.
Our goal is to provide advanced information technology software products
and related customer service and support to the world's leading communications
companies. We seek to accomplish our goal by pursuing the strategies described
below.
- Continued Focus on the Communications Industry. We intend to
continue to concentrate our main resources and efforts on providing
strategic information systems to the communications industry. This
strategy has enabled us to develop the specialized industry know-how
and capability necessary to deliver the technologically advanced,
large-scale, specifications-intensive information systems solutions
required by the leading communications companies in the wireless,
wireline and convergent service sectors.
- Target Industry Leaders. We intend to continue to direct our
marketing efforts principally towards the major communications
companies. We derive a significant portion of our revenues from our
customer base of major communications companies in North America,
Europe and the Asia-Pacific region. We believe that the development
of this premier customer base has helped position us as a market
leader, while contributing to the core
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strength of our business. By targeting industry leaders that require
the most sophisticated information systems solutions, we believe
that we are best able to ensure that we remain at the forefront of
developments in the industry.
- Deliver Integrated Products and Services Solutions. Our strategy is
to provide customers with total systems solutions consisting of our
Integrated Customer Management products and our specialized
services. By leveraging our product and industry knowledge, we
believe that we can provide effective system integration and
implementation services as well as Managed Services to our
customers.
- Provide Customers with a Broad, Integrated Suite of Products. We
seek to provide our customers with a broad suite of products to meet
all their Integrated Customer Management needs. For communications
service providers, we seek to provide CC&B Systems across all lines
of their business, such as wireline, mobile and data. This approach
also means that we can support global communications service
providers throughout their various international operations. We
believe that our ability to provide a broad suite of products helps
establish us as a strategic partner for our customers, and also
provides us with multiple avenues for strengthening and expanding
our ongoing customer relationships.
- Maintain and Develop Long-Term Customer Relationships. We seek to
maintain and develop long-term, mutually beneficial relationships
with our customers. These relationships generally involve additional
product sales, as well as ongoing support, system enhancement and
maintenance services. We believe that such relationships are
facilitated in many cases by the mission-critical strategic nature
of the systems provided by us and by the added value we provide
through our specialized skills and knowledge. In addition, our
strategy is to solidify our existing customer relationships by means
of long-term support and maintenance contracts.
On February 19, 2004, we acquired XACCT Technologies Ltd., or XACCT, a
privately-held company organized under the laws of the State of Israel and a
provider of mediation software to communications service providers. We acquired
the outstanding capital stock of XACCT for a combination of cash and our
ordinary shares. All of the ordinary shares covered by this prospectus were
issued to shareholders of XACCT in connection with the acquisition.
We were organized under the laws of the Island of Guernsey in 1988. Since
1995, Amdocs Limited has been a holding company for the various subsidiaries
that conduct our business on a worldwide basis. Our registered office is located
in Suite 5, Tower Hill House Le Bordage, St. Peter Port, Island of Guernsey, GY1
3QT Channel Islands, and the telephone number at that location is
011-44-1481-728444. The executive offices of our principal subsidiary in the
United States are located at 1390 Timberlake Manor Parkway, Chesterfield,
Missouri 63017, and the telephone number at that location is (314) 212-8328. We
maintain a website at www.amdocs.com. We are not incorporating the information
contained in our website as part of, or incorporating it by reference into, this
prospectus.
RECENT DEVELOPMENTS
On May 3, 2004, we announced a cash offer for our 2% Convertible Notes Due
June 1, 2008, which we refer to as the 2% Notes. Pursuant to the indenture for
the 2% Notes, each holder of the 2% Notes has the right to require us to
repurchase on June 1, 2004 all or any part of such holder's 2% Notes at a price
equal to 100% of the principal amount plus accrued and unpaid interest. Under
the terms of the 2% Notes, we had the option to pay for the 2% Notes with cash,
ordinary shares, or a combination of cash and
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ordinary shares, and we have elected to pay for the 2% Notes solely with cash.
As of April 30, 2004, there was $395.5 million aggregate principal amount of
notes outstanding.
On June 1, 2004, we announced that the offer had expired and that we had
accepted for purchase $395,110,000 in aggregate principal amount of the 2%
Notes, which constituted all of the 2% Notes validly tendered and not withdrawn,
at a purchase price of $1,000 per $1,000 of principal amount of the 2% Notes.
Payment for the 2% Notes was made with available cash. The untendered $344,000
principal amount of 2% Notes remain as obligations of the Company, due June 1,
2008, in accordance with their terms.
Unless the context otherwise requires, references in this prospectus to
"Amdocs," "we," "us," and "our" refer to Amdocs Limited and its subsidiaries.
THE OFFERING
Ordinary shares offered by selling securityholders...... 560,777 ordinary shares
Use of proceeds......................................... We will not receive any proceeds from the sale of
shares in this offering
New York Stock Exchange symbol.......................... DOX
3
RISK FACTORS
Investing in our ordinary shares involves a high degree of risk. You
should carefully consider the following discussion of the most significant
factors that make this offering risky, in addition to the other information
presented in this prospectus and the documents incorporated by reference in this
prospectus, in evaluating our business and an investment in our ordinary shares.
Any of the following risks, as well as other risks and uncertainties, could
seriously harm our business and financial results and cause the value of our
ordinary shares to decline, which in turn could cause you to lose all or part of
your investment.
RISKS RELATED TO OUR BUSINESS
WE ARE EXPOSED TO GENERAL GLOBAL ECONOMIC AND MARKET CONDITIONS,
PARTICULARLY THOSE IMPACTING THE COMMUNICATIONS INDUSTRY.
Developments in the communications industry, such as the impact of general
global economic conditions, continued industry consolidation, the formation of
alliances among network operators and service providers, and changes in the
regulatory environment have had, and could continue to have, a material adverse
effect on our existing or potential customers. These conditions have reduced the
high growth rates that the communications industry had previously experienced,
and have caused the market value, financial results and prospects, and capital
spending levels of many communications companies to decline or degrade. In
recent years, the communications industry has been faced with numerous
restructurings, financial pressures and bankruptcies, which have caused many in
the industry to cut expenses and limit investment in capital intensive projects.
The need for communications providers to control operating expenses and
capital investment budgets has resulted in slowed customer buying decisions, as
well as price pressures. Due to adverse conditions in the business environment
for communications companies, our revenues declined in the second half of fiscal
2002 and continued to decline in the first quarter of fiscal 2003. As a result,
we undertook restructurings in fiscal 2002 and fiscal 2003 to reduce costs.
Adverse market conditions could continue to have a negative impact on our
business by reducing the number of new contracts we are able to sign and the
size of initial spending commitments, as well as decreasing the level of
discretionary spending under contracts with existing customers. In addition, a
further slowdown in the buying decisions of communications providers could
extend our sales cycle period and limit our ability to forecast our flow of new
contracts.
IF WE CANNOT COMPETE SUCCESSFULLY WITH EXISTING OR NEW COMPETITORS, OUR
BUSINESS COULD BE HARMED.
We may be unable to compete successfully with existing or new competitors.
If we fail to adapt to changing market conditions and to compete successfully
with established or new competitors, it could have a material adverse effect on
our results of operations and financial condition. We face intense competition
for the software products and services that we sell, including competition for
Managed Services we provide to customers under long-term service agreements.
The market for communications information systems is highly competitive
and fragmented, and we expect competition to increase. We compete with
independent providers of information systems and services and with the in-house
software departments of communications companies. Our competitors include firms
that provide comprehensive information systems and Managed Services solutions,
software vendors that sell products for particular aspects of a total
information system, software vendors that specialize in systems for particular
communications services such as Internet and wireless services, systems
integrators, service bureaus and companies that offer software systems in
combination with the sale of network equipment.
We believe that our ability to compete depends on a number of factors,
including:
- the development by others of software that is competitive with our
products and services,
4
- the price at which others offer competitive software and services,
- the responsiveness of our competitors to customer needs, and
- the ability of our competitors to hire, retain and motivate key
personnel.
We compete with a number of companies that have long operating histories,
large customer bases, substantial financial, technical, sales, marketing and
other resources, and strong name recognition. Current and potential competitors
have established, and may establish in the future, cooperative relationships
among themselves or with third parties to increase their ability to address the
needs of our prospective customers. In addition, our competitors have acquired,
and may continue to acquire in the future, companies that may enhance their
market offerings. Accordingly, new competitors or alliances among competitors
may emerge and rapidly acquire significant market share. As a result, our
competitors may be able to adapt more quickly than us to new or emerging
technologies and changes in customer requirements, and may be able to devote
greater resources to the promotion and sale of their products. We cannot assure
you that we will be able to compete successfully with existing or new
competitors. Failure by us to adapt to changing market conditions and to compete
successfully with established or new competitors may have a material adverse
effect on our results of operations and financial condition.
WE MUST CONTINUALLY ENHANCE OUR PRODUCTS TO REMAIN COMPETITIVE.
We believe that our future success will depend, to a significant
extent, upon our ability to enhance our existing products and to introduce new
products and features to meet the requirements of our customers in a rapidly
developing and evolving market. We are currently devoting significant resources
to refining and expanding our base software modules and to developing Integrated
Customer Management products that operate in state-of-the-art computing
environments. Our present or future products may not satisfy the evolving needs
of the communications industry. If we are unable to anticipate or respond
adequately to such needs, due to resource, technological or other constraints,
our business and results of operations could be harmed.
WE MAY SEEK TO ACQUIRE COMPANIES OR TECHNOLOGIES, WHICH COULD DISRUPT OUR
ONGOING BUSINESS, DISTRACT OUR MANAGEMENT AND EMPLOYEES AND ADVERSELY AFFECT
OUR RESULTS OF OPERATIONS.
We may acquire companies where we believe we can acquire new products or
services or otherwise enhance our market position or strategic strengths. We
cannot assure you that suitable acquisition candidates can be found, that
acquisitions can be consummated on favorable terms or that we will be able to
complete otherwise favorable acquisitions because of antitrust or other
regulatory concerns. If we do complete acquisitions, we cannot assure you that
they will ultimately enhance our products or strengthen our competitive
position. In addition, any acquisitions that we make could lead to difficulties
in integrating personnel and operations from the acquired businesses and in
retaining and motivating key personnel from these businesses. Acquisitions may
disrupt our ongoing operations, divert management from day-to-day
responsibilities, increase our expenses and harm our results of operations or
financial condition.
OUR BUSINESS IS DEPENDENT ON A LIMITED NUMBER OF SIGNIFICANT CUSTOMERS AND
THE LOSS OF ANY ONE OF OUR SIGNIFICANT CUSTOMERS COULD HARM OUR RESULTS OF
OPERATIONS.
Our business is dependent on a limited number of significant customers.
Our three largest groups of customers are comprised of Bell Canada, Nextel
Communications ("Nextel") and SBC Communications Inc. ("SBC") and certain of
their subsidiaries, each of which accounted for more than 10% of our revenue in
fiscal 2003. Aggregate revenue derived from the multiple business arrangements
we have with our five largest customer groups accounted for approximately 55% of
our revenue in fiscal 2003. SBC has historically been one of our largest
shareholders, and, as of May 31, 2004, it beneficially owned approximately
9.8% of our outstanding ordinary shares. The loss of any significant customer
or a significant decrease in business from any such customer could harm our
results of operations and financial condition.
5
Although we have received a substantial portion of our revenue from
recurring business with established customers, most of our major customers do
not have any obligation to purchase additional products or services from us and
generally have already acquired fully paid licenses to their installed systems.
Therefore, our customers may not continue to purchase new systems, system
enhancements or services in amounts similar to previous years or may delay
implementation of committed projects, each of which could reduce our revenues
and profits.
OUR FUTURE SUCCESS WILL DEPEND ON OUR ABILITY TO DEVELOP LONG-TERM
RELATIONSHIPS WITH OUR CUSTOMERS.
We believe that our future success will depend to a significant extent on
our ability to develop long-term relationships with successful network operators
and service providers with the financial and other resources required to invest
in significant ongoing Integrated Customer Management systems. If we are unable
to develop new customer relationships, our business will be harmed. In addition,
our business and results of operations depend in part on our ability to provide
high quality services to customers that have already implemented our products.
If we are unable to meet customers' expectations in providing products or
performing services, our business and results of operations could be harmed.
WE MAY BE EXPOSED TO THE CREDIT RISK OF CUSTOMERS THAT HAVE BEEN ADVERSELY
AFFECTED BY WEAKENED MARKETS.
We typically sell our software and related services as part of long-term
projects. During the life of a project, a customer's budgeting constraints can
impact the scope of a project and the customer's ability to make required
payments. In addition, the creditworthiness of our customers may deteriorate
over time, and we can be adversely affected by bankruptcies or other business
failures.
THE SKILLED AND HIGHLY QUALIFIED EMPLOYEES THAT WE NEED MAY BE DIFFICULT TO
HIRE AND RETAIN.
Our business operations depend in large part on our ability to attract,
train, motivate and retain highly skilled information technology professionals,
software programmers and communications engineers. In addition, our competitive
success will depend on our ability to attract and retain other outstanding,
highly qualified employees. Although we made reductions in our workforce in
fiscal 2002 and in the first quarter of fiscal 2003, we continually need to hire
sales, support, technical and other personnel. Because our software products are
highly complex, and because our products are generally used by our customers to
perform critical business functions, we depend heavily on skilled technology
professionals. Skilled technology professionals are often in high demand and
short supply. If we are unable to hire or retain qualified technology
professionals to develop, implement and modify our solutions, we may be unable
to meet the needs of our customers. In addition, if we were to obtain several
new customers or implement several new large-scale projects in a short period of
time, we may need to attract and train additional employees at a rapid rate. We
may face difficulties identifying and hiring qualified personnel. Our inability
to hire and retain the appropriate personnel could increase our costs of
retaining skilled employees and make it difficult for us to manage our
operations, to meet our commitments and to compete for new customer contracts.
Our success will also depend, to a certain extent, upon the continued
active participation of a relatively small group of senior management personnel.
The loss of the services of all or some of these executives could harm our
operations and impair our efforts to expand our business.
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE, AND A DECLINE IN REVENUE IN
ANY QUARTER COULD RESULT IN LOWER PROFITABILITY FOR THAT QUARTER AND
FLUCTUATIONS IN THE MARKET PRICE OF OUR ORDINARY SHARES.
We have experienced fluctuations in our quarterly operating results and
anticipate that such movement may continue and could intensify. Fluctuations may
result from many factors, including:
- the size and timing of significant customer projects and license
fees,
- delays in or cancellations of significant projects by customers,
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- changes in operating expenses,
- increased competition,
- changes in our strategy,
- personnel changes,
- foreign currency exchange rate fluctuations, and
- general economic and political conditions.
Generally, our license fee revenue and our service fee revenue relating to
customization and modification are recognized as work is performed, using
percentage of completion accounting. Given our reliance on a limited number of
significant customers, our quarterly results may be significantly affected by
the size and timing of customer projects and our progress in completing such
projects.
We believe that the placement of customer orders may be concentrated in
specific quarterly periods due to the time requirements and budgetary
constraints of our customers. Although we recognize revenue as projects
progress, progress may vary significantly from project to project, and we
believe that variations in quarterly revenue are sometimes attributable to the
timing of initial order placements. Due to the relatively fixed nature of
certain of our costs, a decline of revenue in any quarter could result in lower
profitability for that quarter. In addition, fluctuations in our quarterly
operating results could cause significant fluctuations in the market price of
our ordinary shares.
OUR REVENUE, EARNINGS AND PROFITABILITY ARE IMPACTED BY THE LENGTH OF OUR
SALES CYCLE AND A LONGER SALES CYCLE COULD ADVERSELY AFFECT OUR RESULTS OF
OPERATIONS AND FINANCIAL CONDITION.
Our business is directly affected by the length of our sales cycle.
Information systems for communications companies are relatively complex and
their purchase generally involves a significant commitment of capital, with
attendant delays frequently associated with large capital expenditures and
procurement procedures within an organization. The purchase of these types of
products typically also requires coordination and agreement across many
departments within a potential customer's organization. Delays associated with
such timing factors could have a material adverse effect on our results of
operations and financial condition. In periods of economic slowdown in the
communications industry, our typical sales cycle lengthens, which means that the
average time between our initial contact with a prospective customer and the
signing of a sales contract increases. Beginning in the second half of fiscal
2002, buying decisions of communications providers lengthened due to adverse
conditions in the business environment, and our sales cycle period lengthened as
a result. The lengthening of our sales cycle could reduce growth in our revenue
in the future. In addition, the lengthening of our sales cycle contributes to an
increased cost of sales, thereby reducing our profitability.
IF THE MARKET FOR OUR PRODUCTS DETERIORATES, WE MAY INCUR ADDITIONAL
RESTRUCTURING CHARGES.
In an effort to implement long-term cost reduction measures, we reduced
our workforce in the fourth quarter of fiscal 2002 and in the first quarter of
fiscal 2003 and reallocated certain personnel among different areas of our
operations. A reduction in personnel can result in significant severance,
administrative and legal expenses and may also adversely affect or delay various
sales, marketing and product development programs and activities. Depending on
market conditions in the communications industry and our business and financial
needs, we may be forced to implement additional restructuring plans to further
reduce our costs, which could result in additional restructuring charges.
Additional restructuring charges could have a material adverse effect on our
financial results.
IF WE FAIL TO SUCCESSFULLY PLAN AND MANAGE CHANGES IN THE SIZE OF OUR
OPERATIONS OUR BUSINESS WILL SUFFER.
Over the last several years, we have both grown and contracted our
operations in order to profitably offer our products and services in a rapidly
changing market. If we are unable to manage these
7
changes and plan and manage any future changes in the size and scope of our
operations, our business will suffer.
Our restructurings and cost reduction measures reduced the size of our
operations. On February 29, 2004, we employed approximately 9,000 individuals in
software and information technology positions, compared to approximately 7,800
on January 31, 2003 and 9,100 on November 30, 2001. Our software and information
technology workforce increased in the fourth quarter of fiscal 2003 and first
quarter of fiscal 2004, primarily as a result of the Certen acquisition in July
2003 and a Managed Services agreement signed in January 2003. During periods of
contraction, we disposed of office space and related obligations in an effort to
keep pace with the changing size of our operations. Our recent cost reduction
measures included consolidating and/or relocating certain of our operations to
different geographic locations. These activities could lead to difficulties and
significant expenses related to subleasing or assigning any surplus space. We
have accrued the estimated expenses that will result from our restructuring
efforts. However, if it is determined that the amount accrued is insufficient,
an additional charge could have an unfavorable impact on our consolidated
financial statements in the period this was determined.
OUR INTERNATIONAL PRESENCE CREATES SPECIAL RISKS.
We are affected by risks associated with conducting business
internationally. We maintain development facilities in Israel, the United
States, Cyprus, Ireland and Canada, operate a support center in Brazil and have
operations in North America, Europe, Latin America and the Asia-Pacific region.
Although a majority of our revenue is derived from customers in North America
and Europe, we obtain significant revenue from customers in the Asia-Pacific
region and Latin America. Our strategy is to continue to broaden our North
American and European customer base and to expand into new international
markets. Conducting business internationally exposes us to certain risks
inherent in doing business in international markets, including:
- lack of acceptance of non-localized products,
- legal and cultural differences in the conduct of business,
- difficulties in staffing and managing foreign operations,
- longer payment cycles,
- difficulties in collecting accounts receivable and withholding taxes
that limit the repatriation of earnings,
- trade barriers,
- immigration regulations that limit our ability to deploy our
employees,
- political instability, and
- variations in effective income tax rates among countries where we
conduct business.
One or more of these factors could have a material adverse effect on our
international operations, which could harm our results of operations and
financial condition.
POLITICAL AND ECONOMIC CONDITIONS IN THE MIDDLE EAST MAY ADVERSELY AFFECT
OUR BUSINESS.
Of the five development centers we maintain worldwide, our largest
development center is located in five different sites throughout Israel.
Approximately half of our employees are located in Israel. As a result, we are
directly influenced by the political, economic and military conditions affecting
Israel and its neighboring region. Any major hostilities involving Israel could
have a material adverse effect on our business. We have developed contingency
plans to provide ongoing services to our customers in the event political or
military conditions disrupt our normal operations. These plans include the
transfer of some development operations within Israel to various of our other
sites both within and
8
outside of Israel. If we have to implement these plans, our operations would be
disrupted and we would incur significant additional expenditures, which would
adversely affect our business and results of operations.
While Israel has entered into peace agreements with both Egypt and Jordan,
Israel has not entered into peace arrangements with any other neighboring
countries. Over the past three years there has been a significant deterioration
in Israel's relationship with the Palestinian Authority and a related increase
in violence. Efforts to resolve the problem have failed to result in an
agreeable solution. Continued violence between the Palestinian community and
Israel may have a material adverse effect on our business. Further deterioration
of relations with the Palestinian Authority might require more military reserve
service by some of our employees, which may have a material adverse effect on
our business.
In addition, our development facility in Cyprus may be adversely affected
by political conditions in that country. As a result of intercommunal strife
between the Greek and Turkish communities, Turkish troops invaded Cyprus in 1974
and continue to occupy approximately 40% of the island. Although Cyprus recently
joined the European Union, intensive discussions facilitated by the United
Nations, the European Union and the United States have not resulted in an
agreed-upon plan of reunification for Cyprus. Any major hostilities between
Cyprus and Turkey or the failure of the parties to finalize a peaceful
resolution may have a material adverse effect on our development facility in
Cyprus.
FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE RATES COULD ADVERSELY AFFECT OUR
BUSINESS.
A significant portion of our operating costs is incurred outside the
United States. Therefore, fluctuations in exchange rates between the currencies
in which such costs are incurred and the dollar may have a material adverse
effect on our results of operations and financial condition. The cost of our
operations outside of the United States, as expressed in dollars, could be
adversely affected by the extent to which any increase in the rate of inflation
in a particular country is not offset (or is offset with a time delay) by a
devaluation of the local currency in relation to the dollar. As a result of this
differential, from time to time we may experience increases in the costs of our
operations outside the United States, as expressed in dollars, which could have
a material adverse effect on our results of operations and financial condition.
In addition, a portion of our revenue (approximately 20% in fiscal 2003
and 30% in the first quarter of fiscal 2004) is not earned in dollars or linked
to the dollar, and, therefore, fluctuations in exchange rates between the
currencies in which such revenue is earned and the dollar may have a material
effect on our results of operations and financial condition. If more of our
customers seek contracts that are denominated in currencies such as the euro and
not the dollar, our exposure to fluctuations in currency exchange rates could
increase.
Generally, the effects of fluctuations in foreign currency exchange rates
are mitigated by the fact that the majority of our revenue and operating costs
is in dollars or linked to the dollar and we generally hedge our currency
exposure on both a short-term and long-term basis with respect to expected
revenue and operating costs. However, we cannot assure you that we will be able
to effectively limit all of our exposure to currency exchange rate fluctuations.
The imposition of exchange or price controls or other restrictions on the
conversion of foreign currencies could also have a material adverse effect on
our business, results of operations and financial condition.
WE MAY BE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY.
Any misappropriation of our technology or the development of competitive
technology could seriously harm our business. We regard a substantial portion of
our software products and systems as proprietary and rely on a combination of
statutory and common law copyright, trademark, trade secret laws, customer
licensing agreements, employee and third party non-disclosure agreements and
other methods to protect our proprietary rights. We do not include in our
software any mechanisms to prevent
9
or inhibit unauthorized use, but we generally enter into confidentiality
agreements with our employees, consultants, subcontractors, customers and
potential customers and limit access to, and distribution of, our proprietary
information.
The steps we have taken to protect our proprietary rights may be
inadequate. If so, we might not be able to prevent others from using what we
regard as our technology to compete with us. Existing trade secret, copyright
and trademark laws offer only limited protection. In addition, the laws of some
foreign countries do not protect our proprietary technology or allow enforcement
of confidentiality covenants to the same extent as the laws of the United
States. There is also the risk that other companies could independently develop
similar or superior technology without violating our proprietary rights.
If we have to resort to legal proceedings to enforce our intellectual
property rights, the proceedings could be burdensome, protracted and expensive
and could involve a high degree of risk.
CLAIMS BY OTHERS THAT WE INFRINGE THEIR PROPRIETARY TECHNOLOGY COULD HARM
OUR BUSINESS.
Although we have not received any complaints from third parties alleging
infringement claims, third parties could claim that our current or future
products or technology infringe their proprietary rights. We expect that
software developers will increasingly be subject to infringement claims as the
number of products and competitors providing software and services to the
communications industry increases and overlaps occur. Any claim of infringement
by a third party could cause us to incur substantial costs defending against the
claim, and could distract our management from our business. Furthermore, a party
making such a claim, if successful, could secure a judgment that requires us to
pay substantial damages. A judgment could also include an injunction or other
court order that could prevent us from selling our products or offering our
services, or prevent a customer from continuing to use our products. Any of
these events could seriously harm our business.
If anyone asserts a claim against us relating to proprietary technology or
information, while we might seek to license their intellectual property, we
might not be able to obtain a license on commercially reasonable terms or on any
terms. In addition, any efforts to develop non-infringing technology could be
unsuccessful. Our failure to obtain the necessary licenses or other rights or to
develop non-infringing technology could prevent us from selling our products and
could therefore seriously harm our business.
PRODUCT DEFECTS OR SOFTWARE ERRORS COULD ADVERSELY AFFECT OUR BUSINESS.
Design defects or software errors may cause delays in product
introductions or damage customer satisfaction and may have a material adverse
effect on our business, results of operations and financial condition. Our
software products are highly complex and may, from time to time, contain design
defects or software errors that may be difficult to detect and correct.
Because our products are generally used by our customers to perform
critical business functions, design defects, software errors, misuse of our
products, incorrect data from external sources or other potential problems
within or out of our control may arise from the use of our products, and may
result in financial or other damages to our customers, for which we may be held
responsible. Although we have license agreements with our customers that contain
provisions designed to limit our exposure to potential claims and liabilities
arising from customer problems, these provisions may not effectively protect us
against such claims in all cases and in all jurisdictions. In addition, as a
result of business and other considerations, we may undertake to compensate our
customers for damages caused to them arising from the use of our products, even
if our liability is limited by a license or other agreement. Claims and
liabilities arising from customer problems could also damage our reputation,
adversely affecting our business, results of operations and financial condition
and the ability to obtain "Errors and Omissions" insurance.
10
SYSTEM DISRUPTIONS AND FAILURES MAY RESULT IN CUSTOMER DISSATISFACTION,
CUSTOMER LOSS OR BOTH, WHICH COULD MATERIALLY AND ADVERSELY AFFECT OUR
REPUTATION AND BUSINESS.
Our Integrated Customer Management systems are an integral part of our
customers' business operations. The continued and uninterrupted performance of
these systems is critical to our success. Customers may become dissatisfied by
any system failure that interrupts our ability to provide services to them.
Sustained or repeated system failures would reduce the attractiveness of our
services significantly, and could result in decreased demand for our products
and services.
Our Managed Services include a combination of services, such as system
modernization and consolidation, management and operation of data centers,
purchase and management of related hardware assets, billing operations and
application support. Our ability to perform Managed Services depends on our
ability to protect our computer systems against damage from fire, power loss,
water damage, telecommunications failures, earthquake, terrorism attack,
vandalism and similar unexpected adverse events. Despite our efforts to
implement network security measures, our systems are also vulnerable to computer
viruses, break-ins and similar disruptions from unauthorized tampering. We do
not carry enough business interruption insurance to compensate for any
significant losses that may occur as a result of any of these events.
We have experienced systems outages and service interruptions in the past.
We expect to experience additional outages in the future. To date, these outages
have not had a material adverse effect on us. However, in the future, a
prolonged system-wide outage or frequent outages could cause harm to our
reputation and could cause our customers to make claims against us for damages
allegedly resulting from an outage or interruption. Any damage or failure that
interrupts or delays our operations could result in material harm to our
business and expose us to material liabilities.
THE TERMINATION OR REDUCTION OF CERTAIN GOVERNMENT PROGRAMS AND TAX BENEFITS
COULD ADVERSELY AFFECT OUR OVERALL EFFECTIVE TAX RATE.
We have benefited or currently benefit from a variety of government
programs and tax benefits, including programs and benefits in Israel, Cyprus and
Ireland. Generally, these programs contain conditions that we must meet in order
to be eligible to obtain any benefit. If we fail to meet these conditions, we
could be required to refund tax benefits already received. Additionally, some of
these programs and the related tax benefits are available to us for a limited
number of years, and these benefits expire from time to time.
Any of the following could have a material effect on our overall effective
tax rate:
- some programs may be discontinued,
- we may be unable to meet the requirements for continuing to qualify
for some programs,
- these programs and tax benefits may be unavailable at their current
levels,
- upon expiration of a particular benefit, we may not be eligible to
participate in a new program or qualify for a new tax benefit that
would offset the loss of the expiring tax benefit, or
- we may be required to refund previously recognized tax benefits if
we are found to be in violation of the stipulated conditions.
WE ARE CURRENTLY A PARTY TO SECURITIES LITIGATION CLASS ACTION LAWSUITS AND
A SECURITIES EXCHANGE COMMISSION INVESTIGATION, WHICH COULD NEGATIVELY
AFFECT OUR BUSINESS AND RESULTS OF OPERATIONS.
Beginning in June 2002, a number of complaints were filed by holders of
our ordinary shares against Amdocs and certain of our officers and directors in
the United States District Court for the Eastern District of Missouri and the
Southern District of New York. The cases were transferred to and consolidated in
the Eastern District of Missouri. The consolidated amended complaint filed in
the action alleged that Amdocs and the individual defendants had made false or
misleading statements about our
11
business and future prospects during a putative class period between July 18,
2000 and June 20, 2002. On December 1, 2003, the court issued an order granting
our motion to dismiss the securities class action lawsuits and directing that
judgment be entered in favor of the defendants. On December 29, 2003, the lead
plaintiffs appealed to the United States Court of Appeals for the Eighth Circuit
from the final judgment entered on December 1, 2003. The litigation has been,
and may continue to be, time-consuming and costly and could divert the attention
of our management personnel. These lawsuits or any future lawsuits filed against
us could harm our business.
In addition, we have been informed that the Midwest Regional Office of the
SEC is conducting a private investigation into the events leading up to our
announcement in June 2002 of revised projected revenue for the third and fourth
quarters of fiscal 2002. The investigation appears to be focused on, but is not
explicitly limited to, our forecasting beginning with our April 23, 2002 press
release. Although we believe that we will be able to satisfy any concerns the
SEC staff may have in this regard, we are unable to predict the duration, scope
or outcome of the investigation. We are cooperating fully with the SEC staff. At
a minimum, this investigation may divert the attention of our management and
other resources that would otherwise be engaged in operating our business.
IT MAY BE DIFFICULT FOR OUR SHAREHOLDERS TO ENFORCE ANY JUDGMENT OBTAINED IN
THE UNITED STATES AGAINST US, THE SELLING SECURITYHOLDERS OR OUR AFFILIATES.
We are incorporated under the laws of the Island of Guernsey and several
of our directors and executive officers are not residents of the United States.
A significant portion of our assets and the assets of those persons are located
outside the United States. Additionally, we believe that many of the selling
securityholders who are participating in this offering reside outside the United
States. As a result, it may not be possible for investors to effect service of
process upon us within the United States or upon such persons outside their
jurisdiction of residence. Also, we have been advised that there is doubt as to
the enforceability in Guernsey of judgments of the U.S. courts of civil
liabilities predicated solely upon the laws of the United States, including the
federal securities laws. See the "Enforceability of Civil Liabilities" section
of this prospectus.
RISKS RELATED TO OUR CAPITAL STRUCTURE
THE MARKET PRICE OF OUR ORDINARY SHARES HAS AND MAY CONTINUE TO FLUCTUATE
WIDELY.
The market price of our ordinary shares has fluctuated widely and may
continue to do so. During fiscal year 2003, our ordinary shares traded as high
as $27.25 per share and as low as $5.85 per share. Our ordinary shares traded as
high as $39.25 per share and as low as $6.10 per share in fiscal 2002 and as
high as $80.50 per share and as low as $25.85 per share in fiscal 2001. As of
June 4, 2004, the closing price of our ordinary shares was $24.59 per share.
Many factors could cause the market price of our ordinary shares to rise and
fall, including:
- market conditions in the industry and the economy as a whole,
- variations in our quarterly operating results,
- announcements of technological innovations by us or our competitors,
- introductions of new products or new pricing policies by us or our
competitors,
- trends in the communications or software industries,
- acquisitions or strategic alliances by us or others in our industry,
- changes in estimates of our performance or recommendations by
financial analysts, and
- political developments in the Middle East.
12
In addition, the stock market often experiences significant price and
volume fluctuations. These fluctuations particularly affect the market prices of
the securities of many high technology companies. These broad market
fluctuations could adversely affect the market price of our ordinary shares.
13
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
In addition to historical information, this prospectus contains
forward-looking statements (within the meaning of the United States federal
securities laws) that involve substantial risks and uncertainties. You can
identify these forward-looking statements by words such as "expect,"
"anticipate," "believe," "seek," "estimate," "project," "forecast," "continue,"
"potential," "should," "would," "could" and "may," and other words that convey
uncertainty of future events or outcome. Statements regarding our future
business and/or results, including, without limitation, the statements under the
captions "Summary" and "Risk Factors," include certain projections and business
trends that are forward-looking. Forward-looking statements are not guarantees
of future performance, and involve risks, uncertainties and assumptions that may
cause our actual results to differ materially from the expectations that we
describe in our forward-looking statements. There may be events in the future
that we are not accurately able to predict, or over which we have no control.
You should not place undue reliance on forward-looking statements. We do not
promise to notify you if we learn that our assumptions or projections are wrong
for any reason. We disclaim any obligation to update our forward-looking
statements, except where applicable law may otherwise require us to do so.
Important factors that may affect these projections or expectations
include, but are not limited to: changes in the overall economy; changes in
competition in markets in which we operate; changes in the demand for our
products and services; consolidation within the industries in which our
customers operate; the loss of a significant customer; changes in the
telecommunications regulatory environment; changes in technology that impact
both the markets we serve and the types of products and services we offer;
financial difficulties of our customers; losses of key personnel; difficulties
in completing or integrating acquisitions; litigation and regulatory
proceedings; and acts of war or terrorism. For a discussion of these important
factors, please read the information set forth above under the caption "Risk
Factors."
14
OFFERING STATISTICS AND TIMETABLE
The 560,777 ordinary shares being offered hereby are being sold by the
selling securityholders listed under the caption "Selling Securityholders"
beginning on page 20. The offer will be open until the earliest to occur of (1)
the date on which all of the ordinary shares being offered hereby have been sold
pursuant to the Registration Statement of which this prospectus constitutes a
part or pursuant to Rule 144 under the Securities Act of 1933, as amended, which
we refer to as to the Securities Act, (2) the date on which all of the shares
being offered hereby can be sold without registration without regard to the
volume restrictions of Rule 144 under the Securities Act and (3) February 19,
2006.
REASONS FOR THE OFFER AND USE OF PROCEEDS
This prospectus relates to the resale from time to time of up to 560,777
ordinary shares previously issued by us to former shareholders of XACCT in
connection with our acquisition of that company. We acquired XACCT's outstanding
shares for approximately $28.4 million, of which approximately $13.3 million was
paid in cash, with the balance paid in 560,777 of our ordinary shares. The
shares were issued in a private placement pursuant to exemptions from
registration provided by Section 4(2) and Regulation S under the Securities Act.
We will not receive any proceeds from the sale of ordinary shares by the selling
securityholders.
DIVIDEND POLICY
We have not paid cash dividends since 1998, and we do not anticipate
paying cash dividends on our ordinary shares in the foreseeable future. We
currently intend to retain our earnings to finance the development of our
business. Any future dividend policy will be determined by our Board of
Directors based upon conditions then existing, including our earnings, financial
condition and capital requirements, as well as such economic and other
conditions as the Board of Directors may deem relevant. In addition, future
agreements under which we or any of our subsidiaries may incur indebtedness may
contain limitations on our ability to pay cash dividends.
MATERIAL CHANGES
On March 5, 2004, we sold $450.0 million aggregate principal amount of
0.50% Convertible Senior Notes due 2024, referred to herein as the 0.50% Notes,
through a private placement to qualified institutional buyers pursuant to Rule
144A under the Securities Act. We granted the initial purchasers of the 0.50%
Notes an option to purchase up to an additional $67.5 million to cover
over-allotments, which will expire on April 1, 2004 if not exercised. We used
approximately $170.1 million of the net proceeds from the sale of the 0.50%
Notes to repurchase approximately 6.1 million of ordinary shares sold short by
purchasers of the 0.50% Notes in negotiated transactions concurrently with the
offering. We intend to use the balance of the net proceeds for general corporate
purposes, including working capital and capital expenditures, as well as for
future possible strategic opportunities, including acquisitions. We also used
net proceeds and other cash resources to repurchase approximately $395.1 million
in aggregate principal amount of our 2% Notes through a cash tender offer that
we announced on May 3, 2004 and which expired on June 1, 2004. The untendered
$344,000 principal amount of 2% Notes remain as obligations of the Company, due
June 1, 2008, in accordance with their terms.
In connection with the sale of the 0.50% Notes, we entered into an
Indenture, dated as of March 5, 2004, by and between us and The Bank of New
York, as Trustee, and a Registration Rights Agreement, dated as of March 5,
2004, with the initial purchasers of the 0.50% Notes, pursuant to which we
agreed to file a registration statement on Form F-3 with respect to the 0.50%
Notes and the ordinary shares issuable upon conversion of the 0.50% Notes. We
filed three reports on Form 6-K with respect to the 0.50%
15
Notes, on each of March 1, March 2 and March 5, 2004. See "Incorporation of
Documents by Reference" and "Where You Can Find More Information."
16
THE OFFER AND LISTING
MARKET INFORMATION
Our ordinary shares have been quoted on the NYSE since June 19, 1998,
under the symbol "DOX." The following table sets forth the high and low reported
sale prices for our ordinary shares for the periods indicated:
HIGH LOW
---- ---
FISCAL YEAR ENDED SEPTEMBER 30,
1999 ..................................................... $ 30.25 $ 8.75
2000 ..................................................... $ 96.00 $19.81
2001 ..................................................... $ 80.50 $25.85
2002 ..................................................... $ 39.25 $ 6.10
2003 ..................................................... $ 27.25 $ 5.85
QUARTER
Fiscal 2002:
First Quarter ......................................... $ 35.90 $24.00
Second Quarter ........................................ $ 39.25 $23.60
Third Quarter ......................................... $ 26.27 $ 6.62
Fourth Quarter ........................................ $ 9.65 $ 6.10
Fiscal 2003:
First Quarter ......................................... $ 11.98 $ 5.85
Second Quarter ........................................ $ 13.95 $ 9.86
Third Quarter ......................................... $ 25.01 $13.25
Fourth Quarter ........................................ $ 27.25 $18.55
Fiscal 2004:
First Quarter ......................................... $ 27.10 $18.90
Second Quarter ........................................ $ 29.74 $22.17
Third Quarter (through June 4, 2004) .................. $ 30.69 $23.62
Most Recent Six Months
December, 2003 ........................................... $ 27.10 $20.00
January, 2004 ............................................ $ 29.74 $22.17
February, 2004 ........................................... $ 29.45 $26.42
March, 2004 .............................................. $ 29.20 $25.77
April, 2004 .............................................. $ 30.69 $26.50
May, 2004 ................................................ $ 28.67 $23.62
As of May 31, 2004, we had 206,124,803 ordinary shares outstanding and
there were approximately 239 holders of record of our ordinary shares. This
figure does not reflect persons or entities who hold their ordinary shares in
nominee or "street" name through various brokerage firms.
On June 4, 2004, the last reported sale price of our ordinary shares on
the NYSE was $24.59.
17
EXPENSES OF THE ISSUE
The selling securityholders will pay any underwriting discounts and
commissions and expenses incurred by them for brokerage, accounting, tax or
legal services (other than the reasonable fees, costs and expenses of one
counsel for the selling securityholders up to an aggregate of $10,000) or any
other expenses incurred by the selling securityholders in disposing of the
shares. We will bear all other costs, fees and expenses incurred in effecting
the registration of the shares covered by this prospectus, including, without
limitation, all registration and filing fees, NYSE listing fees and fees and
expenses of our counsel and our accountants. The following table sets forth the
various expenses expected to be incurred by us in connection with the sale and
distribution of the securities being registered hereby. All amounts shown are
estimates except the Securities and Exchange Commission registration fee.
Filing Fee - Securities and Exchange Commission ............... $ 1,885
Legal fees and expenses........................................ $ 25,000
Registrar and Transfer agent fees and expenses................. $ 3,500
Accounting fees and expenses................................... $ 20,000
Printing, EDGAR formatting and mailing expenses................ $ 8,000
Miscellaneous expenses......................................... $ 5,000
--------
Total Expenses....................................... $ 63,385
========
18
CAPITALIZATION
The following table sets forth:
- our unaudited actual consolidated capitalization as of December 31,
2003; and
- our consolidated capitalization as of December 31, 2003, as adjusted
to give effect to the sale on March 5, 2004 of $450.0 million
aggregate principal amount of the 0.50% Notes, and the application
of approximately $170.1 million of the net proceeds from the sale of
the 0.50% Notes to repurchase ordinary shares on March 5, 2004, as
if the sale of the notes and the repurchase of the shares had
occurred on December 31, 2003.
You should read this table in conjunction with "Operating and Financial
Review and Prospects," our consolidated financial statements and related
footnotes and the other financial information included in our reports filed with
the SEC and incorporated by reference in this prospectus.
AS OF DECEMBER 31, 2003
--------------------------
(UNAUDITED)
(IN THOUSANDS)
ACTUAL AS ADJUSTED
------ -----------
Short-term portion of capital lease obligations ................................ $ 26,640 $ 26,640
Capital lease obligations, less current portion ................................ 18,142 18,142
Short-term portion of financing arrangement .................................... 2,366 2,366
2% Convertible Notes due June 1, 2008 (1) ...................................... 395,454 395,454
0.50% Convertible Senior Notes due 2024 (1) .................................... -- 450,000
----------- -----------
Total indebtedness ................................................... 442,602 892,602
Shareholders' equity:
Preferred Shares - Authorized 25,000 shares;(pound)0.01 par value; 0 shares
issued and outstanding ................................................... -- --
Ordinary Shares - Authorized 550,000 shares;(pound)0.01 par value; 224,318
issued and 211,596 outstanding and 205,522 outstanding, as adjusted (2) .. 3,589 3,589
Additional paid-in capital ................................................. 1,827,471 1,827,471
Treasury Stock, at cost - 12,722 ordinary shares and 18,796 ordinary shares,
as adjusted (2) .......................................................... (233,274) (403,335)
Accumulated other comprehensive income ..................................... 51 51
Accumulated deficit ........................................................ (74,302) (74,302)
----------- -----------
Total shareholders' equity ........................................... 1,523,535 1,353,474
----------- -----------
Total capitalization ................................................. $ 1,966,137 $ 2,246,076
=========== ===========
----------------
(1) On June 1, 2004, we completed a cash offer to repurchase approximately
$395,110 aggregate principal amount of the 2% Notes. We used net proceeds
from the sale of the 0.50% Notes and other cash resources to pay for the
repurchase of the 2% Notes. Amounts presented do not give effect to any
repurchases of the 2% Notes.
(2) Reflects the purchase of approximately 6,074 ordinary shares on March 5,
2004, which were sold short by purchasers of the 0.50% Notes in negotiated
transactions concurrently with that offering. Does not include 26,640
ordinary shares reserved for issuance upon the exercise of stock options
that have been granted under our stock option plan and by companies we
have acquired.
19
SELLING SECURITYHOLDERS
We issued the ordinary shares covered by this prospectus in a private
placement in connection with our acquisition of XACCT in February 2004. The
following table sets forth, to our knowledge, certain information about the
selling securityholders based on information provided by or on behalf of the
selling securityholders in a questionnaire and supplementally and is as of the
date it was provided by the securityholders. The percentages set forth below are
based on 206,124,803 of our ordinary shares outstanding as of May 31, 2004.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, and includes voting or investment power with
respect to shares. Unless otherwise indicated below, to our knowledge, all
persons named in the table have sole voting and investment power with respect to
their ordinary shares, except to the extent authority is shared by spouses under
applicable law. The inclusion of any shares in this table does not constitute an
admission of beneficial ownership for the person named below.
ORDINARY SHARES TO BE
ORDINARY SHARES BENEFICIALLY OWNED
BENEFICIALLY OWNED NUMBER OF AFTER
PRIOR TO OFFERING (1) ORDINARY OFFERING (1)(2)
--------------------- SHARES ---------------
NAME OF SELLING SECURITYHOLDER (3) NUMBER PERCENTAGE BEING OFFERED NUMBER PERCENTAGE
---------------------------------- ------ ---------- ------------- ------ ----------
Ampal - American Israel Corporation(4)................... 8,058 * 8,058 0 0
Ampal Industries (Israel) Ltd.(4)........................ 74,682 * 74,682 0 0
Marinera Ltd.(5)......................................... 2,095 * 2,095 0 0
Inveco International, Inc.(6)............................ 845 * 845 0 0
Israel Seed Limited Partnership(7)....................... 7,610 * 7,610 0 0
Israel Seed II, L.P.(7).................................. 9,883 * 9,883 0 0
Technorov Holdings (1993) Ltd.(8)........................ 9,754 * 9,754 0 0
WSG Capital, L.P.(9)..................................... 5,071 * 5,071 0 0
WSG Capital II, L.P.(9).................................. 4,823 * 4,823 0 0
Information Associates-II, L.P.(10)...................... 61,698 * 61,698 0 0
IA-II Affiliates Fund, L.L.C.(10)........................ 3,599 * 3,599 0 0
Eucalyptus Ventures LP(11)............................... 21,966 * 21,966 0 0
Eucalyptus Ventures (Israel) LP(11)...................... 1,104 * 1,104 0 0
Eucalyptus Ventures (Cayman) LP(11)...................... 663 * 663 0 0
Eucalyptus Ventures (Affiliated) LP(11).................. 310 * 310 0 0
TCV III (GP)(12)......................................... 401 * 401 0 0
TCV III, L.P.(12)........................................ 1,904 * 1,904 0 0
TCV III (Q), L.P.(12).................................... 50,613 * 50,613 0 0
TCV III Strategic Partners, L.P.(12)..................... 2,292 * 2,292 0 0
TCV IV, L.P.(12)......................................... 71,987 * 71,987 0 0
TCV IV Strategic Partners, L.P.(12)...................... 2,684 * 2,684 0 0
Deutsche Bank AG, London Branch(13)...................... 415,794 * 19,487 396,307 *
Globe LinQ International Fund I, LLC(14)................. 9,647 * 9,647 0 0
Infocom Corporation(15).................................. 6,493 * 6,493 0 0
Sun Microsystems, Inc.(16)............................... 129,864 * 129,864 0 0
Dell Ventures L.P.(17)................................... 32,466 * 32,466 0 0
Old Point International Corporation(18).................. 12,986 * 12,986 0 0
Credit Suisse First Boston Venture Fund I, L.P.(19)...... 1,948 * 1,948 0 0
John D. Sternfield....................................... 260 * 260 0 0
Edward & Marie Jackson................................... 260 * 260 0 0
20
ORDINARY SHARES TO BE
ORDINARY SHARES BENEFICIALLY OWNED
BENEFICIALLY OWNED NUMBER OF AFTER
PRIOR TO OFFERING (1) ORDINARY OFFERING (1)(2)
--------------------- SHARES ---------------
NAME OF SELLING SECURITYHOLDER (CONTINUED) (3) NUMBER PERCENTAGE BEING OFFERED NUMBER PERCENTAGE
---------------------------------------------- ------ ---------- ------------- ------ ----------
Tad W. Piper............................................. 129 * 129 0 0
H&Q Employee Venture Fund 2000, L.P.(20)................. 260 * 260 0 0
Hambrecht & Quist California(20)......................... 260 * 260 0 0
Eric Zimits.............................................. 26 * 26 0 0
Mark Zanoli(21).......................................... 26 * 26 0 0
Erez Levy(22)............................................ 26 * 26 0 0
Werner Robert Genieser................................... 26 * 26 0 0
Bill Duff................................................ 26 * 26 0 0
Plenus Technologies Ltd. ................................ 4,545 * 4,545 0 0
TOTAL.................................................... 957,084 * 560,777 0 0
------------------------
* Less than one percent.
(1) Of the total ordinary shares listed as owned by the selling
securityholders, a total of 68,529 ordinary shares are held in an
escrow account to secure indemnification obligations of the former
shareholders of XACCT to us. We expect that these ordinary shares,
less any ordinary shares that may be distributed from the escrow
account to us in satisfaction of indemnification claims, will be
released from escrow and distributed to the selling securityholders
on August 19, 2005. The number of ordinary shares indicated as owned
by each selling securityholder includes those ordinary shares that
such selling securityholder is entitled to receive upon distribution
of these shares from the escrow account.
(2) We do not know when or in what amounts a selling securityholder may
offer ordinary shares for sale. The selling securityholders might
not sell any or all of the shares offered by this prospectus.
Because the selling securityholders may offer all or some of the
shares pursuant to this offering, and because there are currently no
agreements, arrangements or understandings with respect to the sale
of any of the shares, we cannot estimate the number of the ordinary
shares that will be held by the selling securityholders after
completion of the offering. However, for purposes of this table, we
have assumed that, after completion of this offering, none of the
ordinary shares covered by this prospectus will be held by the
selling securityholder.
(3) The former shareholders of XACCT appointed Fahn KanneTrust Limited
as their agents and representatives. The address of each of the
selling securityholders is c/o Fahn KanneTrust Limited, 23 Menachem
Begin Road, Tel Aviv 66184, Israel.
(4) Ampal Industries (Israel) Ltd. is owned by Ampal Industries Inc.,
which is owned by Ampal American-Israel Corporation. Ampal American
Israel Corporation is a public company traded on the Nasdaq National
Market. Mr. Yosef A. Maiman is the beneficial owner of 59.58% of the
outstanding shares of Class A stock of Ampal American Israel
Corporation.
(5) Daniel Steinmetz holds voting and dispositive power over the
ordinary shares held by Marinera Ltd. Mr. Steinmetz disclaims
beneficial ownership of any shares held by Marinera Ltd. except to
the extent of his pecuniary interest therein.
(6) Inveco International, Inc. is owned and controlled by Hillel Peled.
(7) The sole General Partner of each of Israel Seed Limited Partnership
and Israel Seed II, L.P. (the "Israel Seed Entities") is Seed
Venture Partners Ltd. which has sole investment control with respect
to the Israel Seed Entities. The sole principals of the investment
advisors to Seed Venture Partners Ltd. are Jonathan Medved, Neil
Cohen and Michael Eisenberg and, as such, they may be deemed to
share voting power over the ordinary shares held by the Israel Seed
Entities. Each individual disclaims beneficial ownership of any
shares held by the Israel Seed Entities except to the extent of
their respective pecuniary interests.
(8) Technorov Holdings (1993) Ltd. is a subsidiary of Alrov Ltd., a
widely-held company listed on the Tel Aviv Stock Exchange.
(9) The general partner of WSG Capital, LP and WSG Capital II, LP is WSG
Management, LLC. All of the membership interests of WSG Management,
LLC are held in equal parts by Eran Wagner, Limor Schweitzer and
Eric Gries. Eran Wagner, Limor Schweitzer and Eric Gries were each
significant shareholders of XACCT. In addition, Mr. Wagner served as
Chairman of the Board of Directors and Executive Vice
21
President-Technologies, Mr. Schweitzer served as Chief Technology
Officer and a director, and Mr. Gries served as President and Chief
Executive Officer. Each of these persons is currently employed by us
or our affiliates. Each of these persons disclaims beneficial
ownership of such shares except to the extent of his pecuniary
interest therein.
(10) Todd A. Springer is a Managing Director of Trident Capital
Management, L.L.C., which is the General Partner of Information
Associates-II, L.P. He is also a Managing Director and Member of
IA-II Affiliates, L.L.C. Mr. Springer served as a director of XACCT
from October 1998 until its acquisition. Mr. Springer disclaims
beneficial ownership of such shares except to the extent of his
pecuniary interest therein.
(11) Eucalyptus Ventures Management LLC is the general partner of
Eucalyptus Ventures L.P., Eucalyptus Ventures (Israel) L.P.,
Eucalyptus Ventures (Cayman), L.P. and Eucalyptus Ventures
(Affiliated) L.P. Eldad Tamir, Danny Fishman, Bruce Crocker and
Aaron Mankovski are members of the investment committee of
Eucalyptus Ventures Management LLC and may be deemed to share voting
power over the ordinary shares held by the Israel Seed Entities.
Each individual disclaims beneficial ownership of any shares held by
the Israel Seed Entities except to the extent of their respective
pecuniary interests.
(12) Jon Q. Reynolds, Jr. is a non-managing Member of Technology
Crossover Management III, L.L.C. which is the Managing General
Partner of TCV III (GP) and the sole General Partner of TCV III,
L.P., TCV III (Q), L.P. and TCV III Strategic Partners, L.P. He is
also a non-managing Member of Technology Crossover Management IV,
L.L.C. which is the sole General Partner of TCV IV, L.P. and TCV IV
Strategic Partners, L.P. Mr. Reynolds was a director of XACCT from
October 1999 until its acquisition. Mr. Reynolds disclaims
beneficial ownership of such shares except to the extent of his
pecuniary interest therein.
(13) Deutsche Bank AG, London Branch is an affiliate of a
registered-broker dealer and may be deemed to be an underwriter. The
ordinary shares were acquired in the ordinary course of the selling
shareholder's investment business and not for the purpose of resale
or distribution. Deutsche Bank AG, London Branch has not
participated in the distribution of the shares on behalf of the
issuer. Deutsche Bank AG, the shares of which are traded on the New
York Stock Exchange, is widely held and a reporting company under
the Exchange Act.
(14) NAIC-IT, LLC is the managing member of Globe LinQ International Fund
I, LLC. Shinichi G. Kawaratani is the President of NAIC-IT, LLC and,
by virute of his position, may be deemed to hold voting and
dispositive power over the ordinary shares. Mr. Kawaratani disclaims
beneficial ownership except to the extent of his pecuniary interest
therein.
(15) Atsushi Numa is the Chief Executive Officer of Infocom Corporation
and, by virtue of his position, may be deemed to have voting and
dispositive power over the ordinary shares. Mr. Numa disclaims
beneficial ownership except to the extent of his pecuniary interest
therein.
(16) Dell Ventures L.P. is a wholly-owned subsidiary of Dell Inc. Dell
Inc., the shares of which are traded on the Nasdaq National Market,
is widely held and is a reporting company under the Exchange Act.
(17) Sun Microsystems, Inc., the shares of which are traded on the Nasdaq
National Market, is widely held and is a reporting company under the
Exchange Act.
(18) Sage Capital Ltd. is the investment manager of Old Point
International Corporation. Daniel Golan is the Chief Executive
Officer of Sage Capital Ltd. and, by virtue of his position, may be
deemed to have voting and dispositive power over the ordinary
shares. Mr. Golan disclaims beneficial ownership of any shares held
by Old Point International Corporation except to the extent of his
pecuniary interest therein.
(19) Credit Suisse First Boston Venture Fund, L.P. is an affiliate of a
registered-broker dealer and may be deemed to be an underwriter. The
ordinary shares were acquired in the ordinary course of the selling
shareholder's investment business and not for the purpose of resale
or distribution. Credit Suisse First Boston Venture Fund has not
participated in the distribution of the shares on behalf of the
issuer. The beneficial owner of the ordinary shares is CSFB
Technology Holdings 2000, LLC. George F. Boutros and William J.B.
Brady, III, each a managing director at Credit Suisse First Boston
LLC, are co-presidents of CSFB Technology Holdings 2000, LLC and may
be deemed to share voting and dispositive power over the ordinary
share. Each individual disclaims beneficial ownership except to the
extent of his pecuniary interest therein.
(20) Hambrecht & Quist California and Hambrecht & Quist Employee Venture
Fund 2000, LP are affiliates of a registered-broker dealer, J.P.
Morgan Securities Inc., and may be deemed to be underwriters. The
ordinary shares were acquired in the ordinary course of the selling
shareholders' investment business and not for the purpose of resale
or distribution. Hambrecht & Quist California and Hambrecht & Quist
Employee Venture Fund 2000, LP have not participated in the
distribution of the shares on behalf of the issuer. Hambrecht &
22
Quist Employee Venture Fund 2000, LP is a limited partnership whose
general partner is H&Q Venture Management LLC, a wholly owned entity
of Hambrecht & Quist California. Hambrecht & Quist California is a
wholly owned entity of J.P. Morgan Chase & Co, the shares of which
are traded on the New York Stock Exchange. J.P. Morgan Chase & Co is
widely held and is a reporting company under the Exchange Act.
(21) Mark Zanoli is affiliated with a registered broker-dealer and may be
deemed to be an underwriter. The ordinary shares were acquired by
the selling shareholder for investment purposes and not for the
purpose of resale or distribution. Mr. Levy has not participated in
the distribution of the shares on behalf of the issuer.
(22) Erez Levy is affiliated with a registered broker-dealer and may be
deemed to be an underwriter. The ordinary shares were acquired by
the selling shareholder for investment purposes and not for the
purpose of resale or distribution. Mr. Levy has not participated in
the distribution of the shares on behalf of the issuer.
Except as noted above, none of the selling securityholders has held any
position or office with, or has otherwise had a material relationship with, us
or any of our subsidiaries within the past three years.
23
DESCRIPTION OF SHARE CAPITAL
The following description summarizes the most important terms of our share
capital. Because it is only a summary, it does not contain all of the
information that may be important to you. For a complete description, you should
refer to our Articles of Association.
The share capital of Amdocs is (pound)5,750,000 divided into (i)
25,000,000 preferred shares with a par value of (pound)0.01 per share and (ii)
550,000,000 ordinary shares with a par value of (pound)0.01 per share,
consisting of 500,000,000 voting ordinary shares and 50,000,000 non-voting
ordinary shares. As of May 31, 2004, 206,124,803 ordinary shares were
outstanding (net of treasury shares) and no non-voting ordinary shares or
preferred shares were outstanding. The rights, preferences and restrictions
attaching to each class of the shares are as follows:
PREFERRED SHARES
- Issue -- the preferred shares may be issued from time to time in one
or more series of any number of shares up to the amount authorized.
- Authorization to Issue Preferred Shares -- authority is vested in
the directors from time to time to authorize the issue of one or
more series of preferred shares and to provide for the designations,
powers, preferences and relative participating, optional or other
special rights and qualifications, limitations or restrictions
thereon.
- Relative Rights -- all shares of any one series of preferred shares
must be identical with each other in all respects, except that
shares of any one series issued at different times may differ as to
the dates from which dividends shall be cumulative.
- Liquidation -- in the event of any liquidation, dissolution or
winding-up, the holders of our preferred shares are entitled to
preference with respect to payment and to receive payment (at the
rate fixed in any resolution or resolutions adopted by the directors
in such case) plus an amount equal to all dividends accumulated to
the date of final distribution to such holders. The holders of
preferred shares are entitled to no further payment other than that
stated above. If upon any liquidation our assets are insufficient to
pay in full the amount stated above, then such assets shall be
distributed among the holders of our preferred shares.
- Voting Rights -- except as otherwise provided for by the directors
upon the issue of any new series of preferred shares, the holders of
shares of preferred shares have no right or power to vote on any
question or in any proceeding or to be represented at, or to receive
notice of, any meeting of members.
ORDINARY SHARES AND NON-VOTING ORDINARY SHARES
Except as otherwise provided by the Memorandum of Association and Articles
of Association, the ordinary shares and non-voting ordinary shares are identical
and entitle holders thereof to the same rights and privileges.
- Dividends -- when and as dividends are declared on our shares, the
holders of voting ordinary shares and non-voting ordinary shares are
entitled to share equally, share for share, in such dividends except
that if dividends are declared which are payable in voting ordinary
shares or non-voting ordinary shares, dividends must be declared
which are payable at the same rate in both classes of shares.
- Conversion of Non-Voting Ordinary Shares into Voting Ordinary Shares
-- upon the transfer of non-voting ordinary shares from the original
holder thereof to any third party not affiliated with such original
holder, non-voting ordinary shares are redesignated in our books as
voting ordinary shares and automatically convert into the same
number of voting ordinary shares.
24
- Liquidation -- upon any liquidation, dissolution or winding-up, any
of our assets remaining after creditors and the holders of any
preferred shares have been paid in full shall be distributed to the
holders of voting ordinary shares and non-voting ordinary shares
equally share for share.
- Voting Rights -- the holders of voting ordinary shares are entitled
to vote on all matters to be voted on by the members, and the
holders of non-voting ordinary shares are not entitled to any voting
rights.
- Preferences -- the voting ordinary shares and non-voting ordinary
shares are subject to all the powers, rights, privileges,
preferences and priorities of the preferred shares as are set out in
the Articles of Association.
25
COMPARISON OF UNITED STATES AND GUERNSEY CORPORATE LAW
The following discussion is a summary of the material differences between
United States and Guernsey corporate law relevant to an investment in the
ordinary shares. The following discussion is based upon laws and relevant
interpretations thereof in effect as of the date hereof, all of which are
subject to change.
Under the laws of many jurisdictions in the United States, controlling
shareholders generally have certain "fiduciary" responsibilities to minority
shareholders. Shareholder action by controlling shareholders must be taken in
good faith and actions by such shareholders that are obviously unreasonable may
be declared null and void. Guernsey law protecting the interests of minority
shareholders may not be as protective in all circumstances as the law protecting
minority shareholders in United States jurisdictions.
Under Guernsey law, an individual shareholder cannot, without the
authority of the majority of the shareholders of the corporation, initiate
litigation in the corporation's name, but an individual shareholder may seek to
enforce the corporation's rights by suing in representative form on behalf of
himself and all of the other shareholders of the corporation (except the
wrongdoers where the complaint is against other shareholders) against the
wrongdoers, who may include directors. In these circumstances, the corporation
itself may be joined as a nominal defendant in order that it can be bound by the
judgment and, if an action results in any property or damages recovered, such
recovery goes not to the plaintiff, but to the corporation. Alternatively,
Guernsey law makes specific provision to enable a shareholder to apply to the
court for relief on the ground that the affairs of the corporation are being or
have been conducted in a manner that is unfairly prejudicial to the interests of
certain shareholders (including at least himself) or any actual or proposed act
or omission of the corporation is or would be so prejudicial. In such
circumstances, the court has wide discretion to make orders to regulate the
conduct of the corporation's affairs in the future, to require the corporation
to refrain from doing or continuing to do an act that the applicant has
complained it has omitted to do, to authorize civil proceedings to be brought in
the name and on behalf of the corporation and to provide for the purchase of
shares of any shareholder of the corporation by other members or by the
corporation itself.
As in most United States jurisdictions, unless approved by a special
resolution of our shareholders, our directors do not have the power to take
certain actions, including an amendment of our Memorandum of Association or
Articles of Association or an increase or reduction in our authorized capital.
Directors of a Guernsey corporation, without shareholder approval, in certain
instances may, among other things, implement a reorganization and effect certain
mergers or consolidations, certain sales, transfers, exchanges or dispositions
of assets, property, parts of the business or securities of the corporation; or
any combination thereof, if they determine any such action is in the best
interests of the corporation, its creditors or its shareholders.
As in most United States jurisdictions, the board of directors of a
Guernsey corporation is charged with the management of the affairs of the
corporation. In most United States jurisdictions, directors owe a fiduciary duty
to the corporation and its shareholders, including a duty of care, pursuant to
which directors must properly apprise themselves of all reasonably available
information, and a duty of loyalty, pursuant to which they must protect the
interests of the corporation and refrain from conduct that injures the
corporation or its shareholders or that deprives the corporation or its
shareholders of any profit or advantage. Under Guernsey law, directors have
comparable fiduciary duties. Many United States jurisdictions have enacted
various statutory provisions that permit the monetary liability of directors to
be eliminated or limited. Guernsey has not adopted provisions eliminating or
limiting the liabilities of directors, although Guernsey law protecting the
interests of shareholders may not be as protective in all circumstances as the
law protecting shareholders in United States jurisdictions. Under our Articles
of Association, we are obligated to indemnify any person who is made or
threatened to be made a party to a legal or administrative proceeding by virtue
of being a director, officer or agent of Amdocs, provided that we have no
obligation to indemnify any such persons for any claims they incur or sustain by
or through their own willful act or default.
26
PLAN OF DISTRIBUTION
The selling securityholders may offer and sell the ordinary shares covered
by this prospectus from time to time. The term "selling securityholders"
includes donees, pledgees, transferees, distributees or other
successors-in-interest selling shares received after the date of this prospectus
from a selling securityholder as a gift, pledge, partnership or limited
liability company distribution or other transfer. The selling securityholders
will act independently of us in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made on one or more exchanges or
in the over-the-counter market or otherwise, at prices and under terms then
prevailing or at prices related to the then current market price or in
negotiated transactions. The selling securityholders may sell their ordinary
shares by one or more of, or a combination of, the following methods:
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- block trades in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
- on any national securities exchange or U.S. inter-dealer system of a
registered national securities association on which our ordinary
shares may be listed or quoted at the time of sale;
- in privately negotiated transactions; and
- in options transactions.
In addition, the selling securityholders may sell any shares that qualify
for sale under Rule 144 rather than pursuant to this prospectus.
In connection with distributions of the ordinary shares covered by this
prospectus or otherwise, the selling securityholders may enter into hedging
transactions with broker-dealers or other financial institutions. In connection
with such transactions, broker-dealers or other financial institutions may
engage in short sales of the ordinary shares in the course of hedging the
positions they assume with selling securityholders. The selling securityholders
may also sell ordinary shares short and deliver the shares offered by this
prospectus to close out such short positions. The selling securityholders may
also enter into option or other transactions with broker-dealers or other
financial institutions which require the delivery to such broker-dealer or other
financial institution of ordinary shares offered by this prospectus, which
shares such broker-dealer or other financial institution may resell pursuant to
this prospectus, as supplemented or amended to reflect such transaction. The
selling securityholders may also pledge shares to a broker-dealer or other
financial institution, and, upon a default, such broker-dealer or other
financial institution, may effect sales of the pledged shares pursuant to this
prospectus, as supplemented or amended to reflect such transaction.
In effecting sales, broker-dealers or agents engaged by the selling
securityholders may arrange for other broker-dealers to participate.
Broker-dealers or agents may receive commissions, discounts or concessions from
the selling securityholders in customary or specifically negotiated amounts.
In offering the ordinary shares covered by this prospectus, the selling
securityholders and any broker-dealers who execute sales for the selling
securityholders may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. Any profits realized by the
selling securityholders and the compensation of any broker-dealer may be treated
as underwriting discounts and commissions.
Our ordinary shares are listed on the New York Stock Exchange.
27
In order to comply with the securities laws of some states, the selling
securityholders may be required to sell their shares in such jurisdictions only
through registered or licensed brokers or dealers. In addition, some states may
restrict the selling securityholders from selling their shares unless the shares
have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and is
complied with.
We have advised the selling securityholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling securityholders and their
affiliates. In addition, we will make copies of this prospectus, as it may be
supplemented or amended from time to time, available to the selling
securityholders for the purpose of satisfying the prospectus delivery
requirements of the Securities Act, which may include delivery through the
facilities of the NYSE pursuant to Rule 153 under the Securities Act. The
selling securityholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
At the time a particular offer of shares is made, if required, we will
distribute a prospectus supplement that will set forth the number of ordinary
shares being offered and the terms of the offering, including the name of any
underwriter, dealer or agent, the purchase price paid by any underwriter, any
discount, commission and other item constituting compensation, any discount,
commission or concession allowed or reallowed or paid to any dealer, and the
proposed selling price to the public. In addition, to the extent required, we
may amend or supplement this prospectus from time to time to describe a
particular plan of distribution.
We have agreed to indemnify the selling securityholders against certain
liabilities, including certain liabilities under the Securities Act.
We have agreed with the selling securityholders to keep the Registration
Statement of which this prospectus constitutes a part effective until the
earliest to occur of (1) the date on which all of the shares being offered
hereby have been sold pursuant to the Registration Statement of which this
prospectus constitutes a part or pursuant to Rule 144 under the Securities Act,
(2) the date on which all of the shares being offered hereby can be sold without
registration without regard to the volume restrictions of Rule 144 under the
Securities Act and (3) February 19, 2006.
LEGAL MATTERS
The validity of the ordinary shares offered hereby will be passed upon for
us by Carey Olsen, Island of Guernsey.
EXPERTS
The consolidated financial statements and schedule of Amdocs Limited
appearing in Amdocs Limited's Annual Report (Form 20-F) for the year ended
September 30, 2003, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such consolidated financial statements and schedule are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
Deloitte & Touche, LLP, independent registered chartered accountants, have
audited the Financial Statements of Certen Inc. as set forth in their report
included in our Annual Report on Form 20-F for the year ended September 30,
2003, which is incorporated by reference herein. The Financial Statements of
Certen are incorporated by reference in reliance on Deloitte & Touche, LLP's
report, given on their authority as experts in accounting and auditing.
28
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of the Island of Guernsey. Several of
our directors and officers are not residents of the United States, and a
significant portion of our assets and the assets of those persons are located
outside the United States. Where legal proceedings are commenced in the courts
of the United States under the civil liability provisions of the U.S. federal
securities laws against us, our officers or directors resident in a foreign
country, or against any underwriters or experts named in the registration
statement, the question of service will be governed by U.S. law for the purposes
of the action.
The United States and the United Kingdom are parties to the Hague
Convention of November 15, 1965 on the service abroad of judicial and
extrajudicial documents in civil and commercial matters (the "Hague Convention")
and the United Kingdom has extended the application of the Hague Convention to
the Channel Islands, including Guernsey. It is expected that it would be
possible for U.S. court documents to be served in Guernsey on us, our officers
or directors, or any underwriters or experts named in the registration statement
(provided such persons are resident in Guernsey) in the manners permitted under
the terms of the Hague Convention.
It is doubtful that the Royal Court of Guernsey would recognize service of
Guernsey legal proceedings on us or any officer or director, or any underwriter
or expert named in the registration statement, outside of Guernsey unless
permission had first been obtained from that court so to do. The Royal Court of
Guernsey does recognize service of Guernsey legal proceedings by the Sergeant's
office in Guernsey on us at our registered office in Guernsey.
We have been advised by Carey Olsen, our Guernsey counsel, that there is
doubt as to the enforceability against our directors and officers in Guernsey,
whether in original actions in a Guernsey court or in actions in a Guernsey
court for the enforcement of judgments of a U.S. court, of civil liabilities
predicated solely upon the laws of the United States, including the federal
securities laws.
If non-Guernsey resident investors obtained a judgment based on the civil
liability provisions of the U.S. federal securities laws from the Royal Court of
Guernsey against us, our officers or directors, underwriters or experts named in
the registration statement, such judgment would be enforceable against any of
the defendants in the same manner as any judgment of the Royal Court of
Guernsey. That is to say that the judgment creditors would be entitled to
enforce their judgment against any Guernsey assets (whether personalty or
realty) of the judgment debtors.
There is no statutory regime under which the reciprocal enforcement of
judgments may be effected between the United States and Guernsey. However,
subject to certain time and other limitations, the Royal Court of Guernsey may
permit the foreign judgment creditor to sue in Guernsey on the foreign judgment.
In order for the Royal Court of Guernsey to entertain an action to sue on
a foreign judgment, it is expected that the following criteria would have to be
met:
1. The foreign court is recognized by the Royal Court of Guernsey as having
jurisdiction to determine the dispute. It is likely that such jurisdiction
will be recognized in the following circumstances:
- If the judgment debtor was present in the foreign country at the time the
foreign proceedings were instituted;
- If the judgment debtor was claimant or counterclaimant in the proceedings
in the foreign court;
29
- If the judgment debtor, being a defendant in the foreign court, submitted
to the jurisdiction of that court by voluntarily appearing in the
proceedings; or
- If the judgment debtor, being a defendant in the original court, had
before the commencement of the proceedings agreed, in respect of the
subject matter of the proceedings to submit to the jurisdiction of that
court or of the courts of that country.
2. The foreign judgment was not obtained by fraud, is not contrary to public
policy in Guernsey and the proceedings were not contrary to the principles
of natural justice. This is likely to include the requirement that the
judgment debtor was given sufficient notice of the proceedings.
The foreign judgment must be final and conclusive on the merits and is for
a definite sum of money, other than a sum in respect of taxes, fines or
other penalties.
30
INCORPORATION OF DOCUMENTS BY REFERENCE
We incorporate by reference into this prospectus the documents listed
below and any future filings we make with the Securities and Exchange
Commission, referred to herein as the SEC, under Sections 13(a), 13(c) or 15(d)
of the Securities Exchange Act of 1934, as amended, referred to herein as the
Exchange Act, including any filings or submissions after the date of this
prospectus, until the selling securityholders have sold all of the ordinary
shares to which this prospectus relates:
- Our annual report on Form 20-F for the fiscal year ended September
30, 2003, filed on December 24, 2003;
- Our report on Form 6-K containing our proxy materials for our annual
general meeting of shareholders, filed on December 24, 2003;
- Our report on Form 6-K containing our results for the quarterly
period ended December 31, 2003, filed on February 17, 2004;
- Our reports on Form 6-K with respect to our offering of 0.50%
Convertible Senior Notes due 2024, filed on March 1, March 2 and
March 5, 2004;
- Our report on Form 6-K containing our results for the quarterly
period ended March 31, 2004, filed on June 10, 2004; and
- The description of our ordinary shares contained in our Registration
Statement on Form 8-A filed on June 17, 1998 under Section 12 of the
Exchange Act, including any amendment or report updating this
description.
The information incorporated by reference is an important part of this
prospectus. Any statement in a document incorporated by reference into this
prospectus will be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in (1) this prospectus or
(2) any other subsequently filed document that is incorporated by reference into
this prospectus modifies or supersedes such statement.
You may request a copy of any or all of the documents referred to above
other than exhibits to such documents that are not specifically incorporated by
reference therein. Written or telephone requests should be directed to Thomas G.
O'Brien, Secretary and Treasurer, Amdocs, Inc., 1390 Timberlake Manor Parkway,
Chesterfield, Missouri 63017, telephone (314) 212-8328. Copies of such documents
may also be obtained from various alternative sources. See "Where You Can Find
More Information."
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the reporting requirements of foreign private issuers
under the Exchange Act. Pursuant to the Exchange Act, we file reports with the
SEC, including an Annual Report on Form 20-F, and we submit reports to the SEC,
including Reports of Foreign Private Issuers on Form 6-K. These reports and
other information may be inspected and copied at the Public Reference Section of
the SEC at 450 Fifth Street, N.W, Judiciary Plaza, Washington, D.C. 20549-1004.
Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1-800-SEC-0330. Reports and information statements and other
information filed electronically with the SEC are available at the SEC's website
at http://www.sec.gov. Some of this information may also be found on our website
at www.amdocs.com.
This prospectus is part of a registration statement that we filed with the
SEC. The registration statement contains more information than this prospectus
regarding us and our ordinary shares, including certain exhibits and schedules.
You can obtain a copy of the registration statement from the SEC at the address
listed above or from the SEC's Internet site.
31
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated statement of operations for
the twelve months ended September 30, 2003, gives effect to the acquisition from
Bell Canada of its 90% ownership interest in Certen Inc., which we refer to as
Certen, which closed on July 2, 2003, as if it had occurred on October 1, 2002.
The unaudited pro forma condensed consolidated statements of operations
are based upon, and should be read in conjunction with, (i) our historical
audited financial statements for the year ended September 30, 2003, (ii) the
historical audited financial statements of Certen for the year ended December
31, 2002 (together with the reconciliation to U.S. GAAP), and (iii) the
historical unaudited financial statements of Certen for the six months ended
June 30, 2003 (together with the reconciliation to U.S. GAAP).
The historical financial statements of Certen have been prepared in
accordance with Canadian GAAP. For the purpose of presenting the unaudited pro
forma condensed consolidated financial statements, financial statements relating
to Certen have been adjusted to conform with accounting policies under U.S.
GAAP. In addition, the historical financial information of Certen has been
presented in accordance with Amdocs' fiscal year.
The historical financial statements of Certen were presented in Canadian
dollars. For the purpose of presenting the unaudited pro forma condensed
consolidated statements, the adjusted income statements of Certen for the nine
months ended June 30, 2003 have been translated into U.S. dollars using the
average Canadian dollar/U.S. dollar exchange rates for the period presented as
listed on Bloomberg. The average Canadian dollar/U.S. dollar exchange rate was
1.493 for the nine months ended June 30, 2003.
The unaudited pro forma financial information has been prepared to provide
an analysis of the financial effects of the acquisition of Certen for purposes
of illustration only. The pro forma financial information is not intended to be
a projection of future results and is not necessarily indicative of the results
that would have occurred if the business combination had been in effect on the
period presented.
32
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2003
(in thousands, except per share data)
(in U.S. dollars)
AMDOCS CERTEN PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS CONSOLIDATED
U.S. GAAP U.S. GAAP (*) U.S. GAAP U.S. GAAP
--------- ------------- --------- ---------
Revenue................................................ $1,483,327 $ 226,579 $ (87,949) (2) $ 1,621,957
Cost of revenue........................................ 913,359 214,437 (27,767) (3)
(35,196) (4) 1,064,833
Research and development............................... 119,256 -
Selling, general and administrative.................... 206,265 8,333
Amortization of purchased intangible assets............ 19,940 - 3,738 (5) 23,678
Restructuring charges and other........................ 14,089 54 (4,133) (6)
---------- ----------- ----------- -----------
1,272,909 222,824 (63,358) 1,432,375
---------- ----------- ----------- -----------
Operating income....................................... 210,418 3,755 (24,591) 189,582
Interest income (expense) and other, net............... 14,759 (311) (1,314) (7) 11,979
(1,931) (8)
776 (9)
---------- ----------- ----------- -----------
Income before income taxes............................. 225,177 3,444 (27,060) 201,561
Income taxes........................................... 56,294 2,322 (8,226) (10) 50,390
---------- ----------- ----------- -----------
Net income............................................. $ 168,883 $ 1,122 $ (18,834) $ 151,171
========== =========== =========== ===========
Basic income per share................................. $ 0.78 $ 0.70
========== ===========
Diluted income per share............................... $ 0.77 $ 0.69
========== ===========
Basic weighted average number of shares outstanding.... 215,849 215,849
========== ===========
Diluted weighted average number of shares outstanding.. 219,876 219,876
========== ===========
(*) Certen historical U.S. GAAP statement reflects Certen's results for the
nine months ended June 30, 2003. Certen's results for the period from July
1, 2003 to September 30, 2003 are included and consolidated in the
historical consolidated financial statement column.
See Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements for discussion of adjustments.
33
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands)
(in U.S. dollars, unless otherwise stated)
(1) On July 2, 2003, Amdocs acquired from Bell Canada its 90% ownership
interest in Certen for approximately U.S. $66 million in cash, pursuant to
an Acquisition Agreement, dated as of May 28, 2003. Amdocs and Bell Canada
formed Certen, which commenced operations in January 2001, to provide
customer care and billing solutions to Bell Canada and a number of Bell
Canada's affiliated companies. Prior to the acquisition of Certen, Bell
Canada's ownership interest in Certen was 90% and Amdocs owned the
remainder. Accordingly, Certen's operations are included in the historical
results of Amdocs from July 2, 2003. Since Certen's inception, Amdocs has
provided customer care and billing software required by Certen, including
related customization, installation, maintenance and other services.
Prior to the acquisition of Certen, Amdocs accounted for the investment in
Certen under the cost method for its 10% ownership. In the fourth quarter
of 2003, Amdocs recognized the cumulative effect of its 10% interest in
Certen prior to the acquisition of Certen. The cumulative effect is a loss
of $4,133.
The acquisition of Certen increased the amount of goodwill on the
Company's consolidated financial statements by approximately $102,830, an
increase of 14% from September 30, 2002. In addition to goodwill,
approximately $36,385 of the purchase price was allocated to an intangible
for a customer arrangement and approximately $74,307 was allocated to
deferred income taxes.
The following is the revised preliminary allocation of the purchase price:
Purchase price $ 65,887
Estimated transaction costs 5,000
-----------
Total purchase price 70,887
Write-off of deferred revenue and allowance on Amdocs
books, net of tax (33,666)
-----------
Net amount for purchase price allocation $ 37,221
===========
Allocation of purchase price:
90% of tangible assets acquired, net of capitalized Amdocs
system on Certen's books $ 80,929
90% of liabilities assumed (241,760)
-----------
Net liabilities acquired (160,831)
Customer arrangement 36,385
Adjustment to fair value of pension and other
post-employment benefit liabilities (10,534)
EITF 95-3 and other liabilities (4,936)
Deferred taxes, resulting from the difference between the
assigned value of certain assets and liabilities and
their respective tax bases 74,307
-----------
Net fair value of liabilities acquired (65,609)
Goodwill 102,830
-----------
$ 37,221
===========
34
(2) Reflects the elimination of revenue to Amdocs attributable to license and
services provided to Certen.
(3) Reflects the elimination of expenses incurred by Certen attributable to
Amdocs services that were not capitalized.
(4) Reflects the elimination of depreciation related to Amdocs system on
Certen's books.
(5) Reflects the amortization of purchased customer arrangements incurred in
the acquisition of Certen.
(6) Reflects the elimination of the cumulative effect of Amdocs' 10% interest
in Certen results prior to the acquisition of Certen.
(7) Reflects the elimination of interest income earned on the cash used for
the acquisition of Certen.
(8) Reflects the elimination of capitalized interest expense in Certen related
to the convertible debentures issued to Amdocs.
(9) Reflects the amortization of liability related to adjustment to fair value
of capital lease obligations on Certen's books.
(10) Reflects the tax adjustment to reflect the combined results at Amdocs'
effective tax rate.
35
UNAUDITED FINANCIAL STATEMENTS OF CERTEN INC.
The unaudited financial statements of Certen for the six months ended June
30, 2003 and 2002, are based upon, and should be read in conjunction with, the
historical audited financial statements of Certen for the year ended December
31, 2002 and 2001 (together with the reconciliation to U.S. GAAP). The
historical financial statements of Certen have been prepared in accordance with
Canadian GAAP and presented in Canadian dollars.
36
CERTEN INC.
STATEMENT OF OPERATIONS AND RETAINED EARNINGS
SIX-MONTH PERIOD ENDED JUNE 30, 2003
(in thousands of dollars)
(unaudited)
2003 2002
-------- ---------
$ $
REVENUE
Billing services 215,881 184,106
Professional services 11,799 29,642
------- -------
227,680 213,748
Cost of services, selling and administrative expenses 169,270 159,297
Net benefit plans expense 2,139 637
------- -------
Operating earnings before undernoted 56,271 53,814
Amortization 56,453 30,843
Restructuring charge 80 721
------- -------
Operating (loss) income (262) 22,250
Interest expense - long-term debt 3,615 3,623
Accretion on convertible debentures due to related party 3,054 2,286
Other income (1,414) (2,385)
------- -------
(Loss) income before income taxes (5,517) 18,726
------- -------
Income taxes
Current - (371)
Future (691) (9,163)
------- -------
(691) (9,534)
------- -------
NET (LOSS) INCOME (6,208) 9,192
Retained earnings, beginning of period 51,068 35,774
------- -------
RETAINED EARNINGS, END OF PERIOD 44,860 44,966
======= =======
37
CERTEN INC.
BALANCE SHEET
AS AT JUNE 30, 2003
(in thousands of dollars)
(unaudited)
$
ASSETS
Current assets
Cash 34,358
Accounts receivable 4,891
Other current receivables 24,292
Prepaid expense 7,471
-------
71,012
Property, plant and equipment 53,495
Intangible assets 384,277
Future income taxes 10,082
Accrued benefit asset 3,046
-------
521,912
=======
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 155,110
Income and other taxes payable 8,241
Current portion of loan payable 2,976
Current portion of obligation under capital lease 27,740
Other current liabilities 4,920
-------
198,987
Convertible debentures due to related party 36,281
Loan 1,529
Obligation under capital lease 25,179
Future income taxes 39,493
Accrued benefit liability 10,318
Other long-term liabilities 25,136
-------
336,923
-------
SHAREHOLDERS' EQUITY
Option on convertible debentures due to related party 37,960
Common shares 102,169
Retained earnings 44,860
-------
184,989
-------
521,912
=======
38
CERTEN INC.
STATEMENT OF CASH FLOWS
SIX-MONTH PERIOD ENDED JUNE 30, 2003
(in thousands of dollars)
(unaudited)
2003 2002
------- --------
$ $
OPERATING ACTIVITIES
Net (loss) income (6,208) 9,192
Adjustments for:
Amortization 56,453 30,843
Accretion on convertible debentures due to related party 3,054 2,286
Gain from sale of property, plant and equipment (11) -
Future income taxes 691 9,163
Net benefit plans expense 2,139 637
Net change in non-cash working capital items 47,987 (17,535)
------- --------
104,105 34,586
------- --------
INVESTING ACTIVITIES
Capital expenditures (79,311) (127,823)
Proceeds from disposal of property, plant and equipment 332 -
------- --------
(78,979) (127,823)
------- --------
FINANCING ACTIVITIES
Repayment of capital leases (24,358) (3,022)
Issuance of convertible debentures due to related party - 33,859
Issuance of Common shares - 47,241
------- --------
(24,358) 78,078
------- --------
Net increase (decrease) in cash and cash equivalents 768 (15,159)
Cash and cash equivalents, beginning of period 33,590 57,693
------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD 34,358 42,534
======= ========
39
CERTEN INC.
NOTES TO THE FINANCIAL STATEMENTS
SIX-MONTH PERIOD ENDED JUNE 30, 2003
(unaudited)
(all tabular amounts are in thousands of dollars except where otherwise noted)
1. RECONCILIATION OF RESULTS REPORTED IN ACCORDANCE WITH CANADIAN GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES (GAAP) TO UNITED STATES GAAP
The significant differences between Canadian and United States GAAP
affecting Certen's net earnings and shareholders' equity are detailed as
follows:
RECONCILIATION OF NET EARNINGS: 2003 2002
------------------------------- ------- -------
$ $
CANADIAN GAAP - NET (LOSS) INCOME (6,208) 9,192
Adjustments:
Accretion on convertible debentures due to related party (a) 3,054 2,286
Capitalization of training costs (b) (1,013) -
Capitalization of interest (c) 2,939 1,287
Income taxes (d) (661) (424)
------ ------
UNITED STATES GAAP - NET (LOSS) INCOME (1,889) 12,341
====== ======
RECONCILIATION OF SHAREHOLDERS' EQUITY: 2003 2002
--------------------------------------- -------- -------
$ $
CANADIAN GAAP - SHAREHOLDERS' EQUITY 184,989 185,096
Adjustments:
Accretion on convertible debentures due to related party (a) 9,419 3,194
Option on convertible debentures due to related party (a) (37,960) (37,960)
Capitalization of training costs (b) (5,859) -
Capitalization of interest (c) 6,915 1,366
Income taxes (d) (346) (451)
------- -------
UNITED STATES GAAP - SHAREHOLDERS' EQUITY 157,158 151,245
======= =======
(a) Accretion on convertible debentures due to related party
Under Canadian GAAP, the issuer of financial instruments that contain both
a liability and an equity component must separate and classify the
instruments according to their nature. Under United States GAAP, the
issuer is not required to separate such financial instruments.
Consequently, the accretion on convertible debentures due to related party
is added back to United States GAAP net earnings.
(b) Capitalization of training costs
Under Canadian GAAP, training costs incurred in the development of
internal-use software is capitalized. Under United States GAAP, these
costs are expensed as incurred.
(c) Capitalization of interest expense
Under United States GAAP, interest expense related to internally developed
capital assets must be capitalized. Canadian GAAP makes no such
requirements and therefore, Certen has expensed all interest costs.
(d) Income taxes
The income tax adjustment reflects the impact on income taxes of the
United States GAAP adjustments described above.
40
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 8. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Guernsey law permits a company's articles of association to provide for
the indemnification of officers and directors except to the extent that such a
provision may be held by the courts of Guernsey to be contrary to public policy
(for instance, for purporting to provide indemnification against the
consequences of committing a crime) and except to the extent that Guernsey law
prohibits the indemnification of any director against any specific provisions of
Guernsey Company law under which personal liability may be imposed or incurred.
Under our Articles of Association, we are obligated to indemnify any
person who is made or threatened to be made a party to a legal or administrative
proceeding by virtue of being a director, officer or agent of Amdocs, provided
that we have no such obligation to indemnify any such persons for any claims
they incur or sustain by or through their own willful act or default.
We have entered into an indemnity agreement with our directors and some of
our officers, under which we have agreed to pay the indemnified party the amount
of Loss (as defined therein) suffered by that party due to claims made against
that party for a Wrongful Act (as defined therein).
ITEM 9. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.1 Memorandum and Articles of Association of Amdocs Limited (incorporated by
reference to Exhibits 3.1 and 3.2 to Amdocs' Registration Statement on Form F-1
dated June 19, 1998; Registration No. 333-8826).
4.2 Specimen Certificate for the ordinary shares of Amdocs Limited (incorporated by
reference to Exhibit 4.1 to Amdocs' Registration Statement on Form F-1 dated June 19,
1998; Registration No. 333-8826).
5.1* Opinion of Carey Olsen.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Deloitte & Touche, LLP.
23.3* Consent of Carey Olsen (included in Exhibit 5.1).
24.1* Power of Attorney (see page II-4 of this Registration Statement).
-------------
* Previously filed.
II-1
ITEM 10. UNDERTAKINGS.
Item 512(a) of Regulation S-K. The undersigned Registrant hereby
undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in the
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference in this Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
Item 512(b) of Regulation S-K. The Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Item 512(h) of Regulation S-K. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the indemnification provisions
described herein, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as
II-2
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form F-3 and has duly caused this
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of New York, State of New
York, on this 10th day of June, 2004.
AMDOCS LIMITED
By: /s/ Bruce K. Anderson
------------------------------------------
Bruce K. Anderson
President and Chairman of the Board
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Bruce K. Anderson President and Chairman of the Board June 10, 2004
---------------------------- (Principal Executive Officer)
Bruce K. Anderson
/s/ Ron Moskovitz Principal Accounting Officer June 10, 2004
----------------------------
Ron Moskovitz
* Vice President and Director June 10, 2004
----------------------------
Robert A. Minicucci
* Director June 10, 2004
----------------------------
Avinoam Naor
* Director June 10, 2004
----------------------------
Adrian Gardner
* Director June 10, 2004
----------------------------
Dov Baharav
II-4
* Director June 10, 2004
----------------------------
Julian A. Brodsky
* Director June 10, 2004
----------------------------
Charles E. Foster
* Director June 10, 2004
----------------------------
Eli Gelman
* Director June 10, 2004
----------------------------
James S. Kahan
* Director June 10, 2004
----------------------------
Nehmeia Lemelbaum
* Director June 10, 2004
----------------------------
John T. McLennan
* Director June 10, 2004
----------------------------
Mario Segal
/s/ Thomas G. O'Brien Amdocs Limited's Authorized June 10, 2004
---------------------------- Representative in the United States
Thomas G. O'Brien
*By: /s/ Bruce K. Anderson
----------------------------
Bruce K. Anderson
Attorney-in-Fact
II-5
Exhibit Index
EXHIBIT\
NUMBER DESCRIPTION
------ -----------
4.1 Memorandum and Articles of Association of Amdocs Limited (incorporated by
reference to Exhibits 3.1 and 3.2 to Amdocs' Registration Statement on Form F-1
dated June 19, 1998; Registration No. 333-8826).
4.2 Specimen Certificate for the ordinary shares of Amdocs Limited (incorporated by
reference to Exhibit 4.1 to Amdocs' Registration Statement on Form F-1 dated June 19,
1998; Registration No. 333-8826).
5.1* Opinion of Carey Olsen.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Deloitte & Touche, LLP.
23.3* Consent of Carey Olsen (included in Exhibit 5.1).
24.1* Power of Attorney (see page II-4 of this Registration Statement).
-------------
* Previously filed.
II-6