AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 23, 2005
REGISTRATION STATEMENT NO. 333-114344
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 5 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
incorporation or organization) Identification No.)
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
399 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 230-8800
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. [ ]
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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(c) 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(c),
MAY DETERMINE.
EXPLANATORY NOTE
THIS POST-EFFECTIVE AMENDMENT NO. 5 TO FORM F-3 IS BEING FILED TO ADD THE NAMES
AND RESPECTIVE HOLDINGS OF CERTAIN SELLING SECURITYHOLDERS IN THE TABLE UNDER
THE CAPTION "SELLING SECURITYHOLDERS". CERTAIN OTHER INFORMATION INCLUDED HEREIN
HAS ALSO BEEN UPDATED.
i
PROSPECTUS (SUBJECT TO COMPLETION)
$450,000,000
AMDOCS LIMITED
0.50% CONVERTIBLE SENIOR NOTES DUE 2024
10,435,995 ORDINARY SHARES ISSUABLE UPON CONVERSION OF THE NOTES
---------------------
Amdocs Limited, a company organized under the laws of the Island of
Guernsey, issued $450,000,000 aggregate principal amount of its 0.50%
Convertible Senior Notes due 2024 in a private placement on March 5, 2004 to the
initial purchasers. The initial purchasers resold the notes to qualified
institutional buyers in accordance with Rule 144A under the Securities Act of
1933, as amended. This prospectus will be used by the selling securityholders
from time to time to resell their notes and any ordinary shares issuable upon
conversion of the notes. We will not receive any proceeds from the sale of the
notes or any ordinary shares issuable upon conversion of the notes offered by
this prospectus.
The notes bear regular interest at 0.50% per annum on the principal amount
from March 5, 2004. Regular interest is payable semi-annually on March 15 and
September 15 of each year, beginning September 15, 2004. The notes are unsecured
and unsubordinated obligations of Amdocs Limited and will rank equal in priority
with all of its other existing and future unsecured and unsubordinated
indebtedness and senior in right of payment to all of its existing and future
subordinated indebtedness.
Holders may convert each note for a number of ordinary shares, which we
refer to as the conversion rate, as follows:
- during any fiscal quarter commencing after March 31, 2004, and only during
that quarter if the closing sale price of our ordinary shares exceeds 130%
of the conversion price for at least 20 trading days in the 30 consecutive
trading days ending on the last trading day of the preceding fiscal
quarter (initially 130% of $43.12, or $56.06),
- upon the occurrence of specified credit rating events with respect to the
notes;
- subject to certain exceptions, during the five business day period after
any five consecutive trading day period (the "measurement period") in
which the trading price per note for each day of that measurement period
was less than 98% of the product of the closing sale price of our ordinary
shares and the conversion rate; provided, however, holders may not convert
their notes (in reliance on this subsection) if on any trading day during
such measurement period the closing sale price of our ordinary shares was
between 100% and 130% of the then current conversion price of the notes
(initially, between $43.12 and $56.06),
- if the notes have been called for redemption, or
- upon the occurrence of specified corporate events described under
"Description of Notes -- Conversion of Notes -- Conversion Upon Specified
Corporate Transactions."
Beginning March 20, 2009, we may redeem any of the notes at a redemption
price equal to 100% of their principal amount, plus accrued and unpaid interest.
Holders may require us to repurchase some or all of their notes at a repurchase
price equal to 100% of their principal amount plus accrued and unpaid interest
and liquidated damages, if any, on March 15 of 2009, 2014 and 2019 or at any
time prior to their maturity following a designated event, as defined herein.
The initial conversion rate for the notes is 23.1911 ordinary shares per
$1,000 principal amount of notes, subject to adjustment as described in this
prospectus, which represents an initial conversion price of approximately $43.12
per share.
Our ordinary shares are traded on the New York Stock Exchange under the
symbol "DOX." On February 22, 2005, the closing sale price of our ordinary
shares on the New York Stock Exchange was $29.33 per share. You are urged to
obtain current market quotations for our ordinary shares.
For a more detailed description of the notes, see "Description of Notes"
beginning on page 25.
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SEE "RISK FACTORS" BEGINNING ON PAGE 8 TO READ ABOUT FACTORS YOU SHOULD
CONSIDER BEFORE INVESTING IN THE NOTES OR OUR ORDINARY SHARES.
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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 , 2005.
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUMMARY.......................................... 1
THE OFFERING................................................ 3
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION....... 6
RATIO OF EARNINGS TO FIXED CHARGES.......................... 7
RISK FACTORS................................................ 8
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION.......... 20
OFFERING STATISTICS AND TIMETABLE........................... 21
REASONS FOR THE OFFER AND USE OF PROCEEDS................... 21
DIVIDEND POLICY............................................. 21
THE OFFER AND LISTING....................................... 22
CAPITALIZATION.............................................. 24
DESCRIPTION OF NOTES........................................ 25
DESCRIPTION OF SHARE CAPITAL................................ 42
COMPARISON OF UNITED STATES AND GUERNSEY CORPORATE LAW...... 44
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS..... 45
CERTAIN GUERNSEY TAX CONSIDERATIONS......................... 49
SELLING SECURITYHOLDERS..................................... 50
VOTING/INVESTMENT CONTROL TABLE............................. 61
PLAN OF DISTRIBUTION........................................ 65
LEGAL MATTERS............................................... 67
EXPERTS..................................................... 67
ENFORCEABILITY OF CIVIL LIABILITIES......................... 67
INCORPORATION OF DOCUMENTS BY REFERENCE..................... 69
WHERE YOU CAN FIND MORE INFORMATION......................... 69
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, the securities
only in jurisdictions where offers and sales are permitted. The information
contained in this prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or of any sale of the
securities.
PROSPECTUS SUMMARY
This summary highlights selected information about us and the notes and is
not intended to be complete. It does not contain all the information that you
should consider before investing in the notes. You should read carefully this
entire prospectus, including "Risk Factors" and our consolidated financial
statements and related notes and the other documents that we incorporate by
reference into this prospectus before making an investment decision.
AMDOCS LIMITED
Our market focus is primarily the communications industry, and we are a
leading provider of software products and services to leading communications
service providers in North America, Europe and the rest of the world. We are
also expanding on our experience by working with service providers in the
financial services sector, since certain of the challenges faced by companies in
this sector are similar to those of the communications service providers.
Our products and services help our customers move toward 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 Customer Care and Billing Systems, or CC&B Systems.
We refer to customer relationship management products included within CC&B
Systems as "CRM" products.
Our portfolio also includes a full range of directory sales and publishing
systems, which we refer to as Directory 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 throughout
the entire customer lifecycle. Consequently, our portfolio includes CRM, order
management, mediation, call rating, invoice calculation and preparation, bill
formatting, collections, provisioning, content and partner relationship
management, support solutions and customer interaction products. We support a
wide range of communications services, including wireline, wireless, cable,
voice, video, data, broadband, content, electronic and mobile commerce and
IP-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 information technology, or IT, services,
including extensive system implementation, integration, modification, ongoing
support, enhancement and maintenance services. In addition, we offer Managed
Services, which include services, such as the operation of data centers, ongoing
support, maintenance services, system modification, the provisions of billing
services and communications facility management services. We are also expanding
to system integration and providing IT consulting services, such as profit
enhancement.
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 and wireless companies.
Our goal is to provide advanced information technology software products
and related 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
1
required by the leading communications companies in the wireless,
wireline, cable and convergent service sectors. However, we are expanding
on our experience by working with service providers in the financial
services sector.
- Target Industry Leaders. We intend to continue to direct our marketing
efforts principally toward 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
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 more 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 help them move
toward true Integrated Customer Management. 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.
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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.
---------------------
Unless the context otherwise requires, references in this prospectus to
"Amdocs," "we," "us," and "our" refer to Amdocs Limited and its subsidiaries.
2
THE OFFERING
Issuer........................ Amdocs Limited, a company organized under the
laws of the Island of Guernsey.
Securities Offered............ $450.0 million principal amount of 0.50%
Convertible Senior Notes due 2024 and
10,435,995 ordinary shares issuable upon
conversion of the notes.
Maturity Date................. March 15, 2024, unless earlier converted,
redeemed or repurchased.
Ranking....................... The notes are our direct, unsecured and
unsubordinated obligations and rank equal in
priority with all of our other existing and
future unsecured and unsubordinated
indebtedness, including our 2% Convertible
Notes due June 1, 2008, which we refer to as
the 2% Notes, and senior in right of payment to
all of our existing and future subordinated
indebtedness. The notes are unsecured and,
therefore, are effectively subordinated to any
of our secured debt, to the extent of the
assets securing such indebtedness. The notes
are also structurally subordinated to the debt
and other liabilities of our subsidiaries. With
the exception of the 2% Notes, substantially
all of the liabilities reflected on our balance
sheet as of December 31, 2004 are liabilities
of our subsidiaries.
Interest...................... 0.50% per annum on the principal amount of the
notes, payable semi-annually in arrears in cash
on March 15 and September 15 of each year,
beginning on September 15, 2004.
Conversion Rights............. You may convert the notes into our ordinary
shares, par value L0.01 per share, which we
refer to as our ordinary shares, at a
conversion rate of 23.1911 shares per $1,000
principal amount of notes (a conversion price
of $43.12 per share), subject to adjustment,
prior to the close of business on the final
maturity date under any of the following
circumstances:
- during any fiscal quarter commencing after
March 31, 2004, and only during that fiscal
quarter if the closing sale price of our
ordinary shares exceeds 130% of the
conversion price for at least 20 trading days
in the 30 consecutive trading days ending on
the last trading day of the preceding fiscal
quarter; or
- after the earlier of (a) the date the notes
are rated by both Standard & Poor's Ratings
Services, a division of The McGraw-Hill
Companies, Inc., and its successors
("Standard & Poor's") and Moody's Investor
Services and its successors ("Moody's") and
(b) five business days from the date the
notes are issued, during any period in which
the credit rating assigned to the notes by
Standard & Poor's or Moody's is "BB-" or
"Ba3," respectively, or lower, or if either
of these rating agencies no longer rates the
notes, or if either of these rating agencies
suspends or withdraws the rating assigned to
the notes, or if the notes are not assigned a
rating by both rating agencies; or
- during the five business day period after any
five consecutive trading day period (the
"measurement period") in which the trading
price per note for each day of that
measurement period
3
was less than 98% of the product of the
closing sale price of our ordinary shares and
the number of shares issuable upon conversion
of $1,000 principal amount of the notes;
provided, however, you may not convert your
notes (in reliance on this subsection) if on
any trading day during such measurement
period the closing sale price of our ordinary
shares was between 100% and 130% of the then
current conversion price of the notes; or
- if the notes have been called for redemption;
or
- upon the occurrence of specified corporate
events described under "Description of
Notes -- Conversion of Notes -- Conversion
Upon Specified Corporate Transactions."
You will not receive any cash payment or
additional shares representing accrued and
unpaid interest upon conversion of a note,
except in limited circumstances. Instead, such
interest, if any, will be forfeited upon
conversion. Notes called for redemption may be
converted until the close of business on the
business day immediately preceding the
redemption date, after which time your right to
convert will expire unless we default in the
payment of the redemption price.
Sinking Fund.................. None.
Optional Redemption........... Prior to March 20, 2009, the notes will not be
redeemable, except as described under
"Description of Notes -- Tax Redemption." On or
after March 20, 2009, we may redeem any of the
notes by giving you at least 30 days' notice.
We may redeem the notes either in whole or in
part at a redemption price equal to 100% of
their principal amount, plus accrued and unpaid
interest and liquidated damages, if any, to,
but excluding, the date of repurchase.
Designated Event.............. If a designated event (as described under
"Description of Notes -- Repurchase at Option
of the Holder Upon a Designated Event") occurs
prior to maturity, you may require us to
purchase all or part of your notes at a
repurchase price equal to 100% of their
principal amount, plus accrued and unpaid
interest and liquidated damages, if any, to,
but excluding, the date of repurchase.
Repurchase at the Option of
the Holder.................... You may require us to repurchase some or all of
your notes on March 15 of 2009, 2014 and 2019,
at a repurchase price equal to 100% of the
principal amount, plus accrued and unpaid
interest and liquidated damages, if any, to,
but excluding, the applicable repurchase date.
We may choose to pay the repurchase price in
cash or ordinary shares (valued using the
method set forth in "Description of
Notes -- Repurchase at Option of the Holder")
or a combination of cash and ordinary shares,
provided that we will pay any accrued and
unpaid interest in cash.
Use of Proceeds............... We will not receive any proceeds from the sale
by the selling securityholders of the notes or
the ordinary shares issuable upon conversion of
the notes.
Registration Rights........... Pursuant to a registration rights agreement, we
have agreed to register the resale of the notes
and the ordinary shares issuable
4
upon conversion of the notes. If we fail to
comply with certain of our obligations under
the registration rights agreement, liquidated
damages will be payable on the notes and the
ordinary shares issuable upon conversion of the
notes. See "Description of
Notes -- Registration Rights."
Book-entry Form............... The notes have been issued in book-entry form
and are represented by global certificates
deposited with, or on behalf of, The Depository
Trust Company, or DTC, and registered in the
name of a nominee of DTC. Beneficial interests
in any of the notes will be shown on, and
transfers will be effected only through,
records maintained by DTC or its nominee and
any such interest may not be exchanged for
certificated securities, except in limited
circumstances.
Trading....................... The notes are new securities for which no
market currently exists. While the initial
purchasers have informed us that they intend to
make a market in the notes, they are under no
obligation to do so and may discontinue such
activities at any time without notice. The
notes are listed on any securities exchange or
included in any automated quotation system.
While the notes are expected to be designated
for trading in The PORTAL Market, we cannot
assure you that any active or liquid market
will develop for the notes.
New York Stock Exchange Symbol
for Our Ordinary Shares....... DOX.
5
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
Our consolidated financial statements are prepared in accordance with U.S.
generally accepted accounting principles in the United States and presented in
U.S. dollars. The summary historical consolidated financial information set
forth below has been derived from our historical consolidated financial
statements for the periods presented. Historical information as of and for the
five years ended September 30, 2004 is derived from our consolidated financial
statements, which have been audited by Ernst & Young LLP, our independent
auditors. The summary historical consolidated interim financial information as
of and for the three months ended December 31, 2004 and 2003 is derived from our
unaudited historical consolidated interim financial statements. The unaudited
historical consolidated interim financial information reflects all adjustments,
consisting of normal recurring adjustments, that we consider necessary for a
fair presentation of those statements. The results for an interim period are not
necessarily indicative of the results for a full fiscal year. You should read
the summary historical consolidated financial information set forth below 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 Securities and Exchange
Commission, referred to herein as the SEC, and incorporated by reference in this
prospectus.
THREE MONTHS ENDED
YEAR ENDED SEPTEMBER 30, DECEMBER 31,
-------------------------------------------------------------- -------------------
2004 2003 2002 2001 2000 2004 2003
---------- ---------- ---------- ---------- ---------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
STATEMENT OF
OPERATIONS DATA:
Revenue.............. $1,773,732 $1,483,327 $1,613,565 $1,533,910 $1,118,320 $469,532 $428,295
Operating
income(1)(2)(3)(4).. 296,200 210,418 49,161 159,281 74,124 81,841 66,969
Net income
(loss)(5).......... 234,860 168,883 (5,061) 66,386 5,978 69,443 53,068
Basic earnings (loss)
per share.......... 1.13 0.78 (0.02) 0.30 0.03 0.34 0.25
Diluted earnings
(loss) per share... 1.10 0.77 (0.02) 0.29 0.03 0.32 0.24
AS OF DECEMBER 31, 2004
-----------------------
(UNAUDITED)
(IN THOUSANDS)
BALANCE SHEET DATA:
Total assets
Long-term obligations....................................... $2,981,237
2% Convertible Notes due 2008(5).......................... 272
0.50% Convertible Senior Notes due 2024(6)................ 450,000
Long-term portions of capital lease obligations............. 2,229
Shareholders' equity(7)..................................... 1,519,528
---------------
(1) In fiscal 2000, we recorded acquisition-related charges of $75,617, relating
to our acquisitions of International Telecommunication Data Systems, Inc.
("ITDS") in November 1999 and Solect Technology Group Inc. ("Solect") in
April 2000, in stock-for-stock transactions. These charges included write-
offs of purchased in-process research and development and other indirect
acquisition-related costs. In addition, fiscal 2000 includes $104,268 of
amortization of goodwill related to our acquisitions.
(2) Fiscal 2001 includes $204,566 of amortization of goodwill related to our
acquisitions.
(3) In fiscal 2002, we recorded acquisition-related charges for in-process
research and development of $17,400, relating to our November 2001
acquisition from Nortel Networks Corporation of substantially all of the
assets of its Clarify business ("Clarify") for cash. We also recorded
restructuring charges of $34,230 relating to the closure of our Stamford,
Connecticut data center and our cost reduction program. In addition, fiscal
2002 includes $204,561 of amortization of goodwill related to our
acquisitions.
6
(4) In fiscal 2003, we recorded a restructuring charge of $9,956 related to our
cost reduction program and an acquisition-related charge of $4,133 related
to our July 2003 acquisition from Bell Canada of its 90% ownership interest
in Certen Inc. ("Certen") for cash. Prior to this acquisition, we had 10%
ownership interest in Certen. This charge reflects our 10% share in Certen's
pre-acquisition results. Effective October 1, 2002, we adopted Statement of
Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other
Intangible Assets", and no longer amortize goodwill.
(5) In May 2001, we issued $500,000 aggregate principal amount of 2% Convertible
Notes due June 1, 2008 (the "2% Notes"). During the first quarter of fiscal
2004, we repurchased $5,000 aggregate principal amount of 2% Notes for an
aggregate purchase price of $4,987. During fiscal 2003 and 2002, we
repurchased $44,600 and $54,946 aggregate principal amount of 2% Notes,
respectively. In fiscal 2004, 2003 and 2002, we recorded gains of $13, $448
and $6,012, respectively, relating to the repurchases of 2% Notes. On June
1, 2004, we purchased $395,110 in aggregate principal amount of 2% Notes
that had been tendered pursuant to the right of the holders to require us to
purchase their 2% Notes on such date at a price equal to 100% of the
principal amount plus accrued and unpaid interest. Of the $344 principal
amount of untendered 2% Notes, $72 was subsequently purchased by us at a
price of 100% of their principal amount and the balance remains as our
outstanding obligations, in accordance with their terms.
(6) In March 2004, we issued $450,000 aggregate principal amount of 0.50%
Convertible Senior Notes due March 15, 2024 (the "0.50% Notes").
(7) In accordance with a share repurchase program authorized by our Board of
Directors, we repurchased 4,990 ordinary shares, at an average price of
$24.82 per share, during the first quarter of fiscal 2004. In connection
with our acquisition of XACCT Technologies Ltd. ("XACCT"), our Board of
Directors approved the repurchase of ordinary shares to offset the dilutive
effect of share issuances in the acquisition. The closing of the acquisition
occurred in February 2004, and we repurchased 484 ordinary shares in
February 2004, at an average price of $27.67 per share. In connection with
our issuance of the 0.50% Notes, the Board of Directors approved the
repurchase of ordinary shares sold short by purchasers of the 0.50% Notes in
negotiated transactions, concurrently with the sale of the 0.50% Notes, to
offset the dilutive effect of the ordinary shares issuable upon conversion
of the 0.50% Notes. The closing of the sale of the 0.50% Notes occurred in
March 2004, and we repurchased 6,074 ordinary shares, for an aggregate
purchase price of $170,061, out of the 10,436 ordinary shares issuable upon
conversion of the 0.50% Notes, based on a conversion rate of 23.1911 shares
per $1,000 principal amount. In July 2004, we announced that our Board of
Directors had extended our share repurchase program for the additional
repurchase of up to $100,000 of our ordinary shares in open market or
privately negotiated transactions and at times and prices we deem
appropriate. In accordance with this extension we repurchased 4,894 ordinary
shares, at an average price of $20.40 per share.
RATIO OF EARNINGS TO FIXED CHARGES
The following table presents our historical ratios of earnings to fixed
charges for the periods indicated:
FISCAL YEARS ENDED SEPTEMBER 30,
THREE MONTHS ENDED ----------------------------------------
DECEMBER 31, 2004 2004 2003 2002 2001 2000
------------------ ------ ------ ----- ----- ------
Ratio(1)................... 20.48x 14.97x 13.49x 3.87x 9.19x 10.10x
---------------
(1) The ratio of earnings to fixed charges represents the number of times "fixed
charges" are covered by "earnings." "Fixed charges" means interest expense,
amortized premiums, discounts and capitalized expenses related to
indebtedness, and an estimate of the interest within rental expense.
"Earnings" consist of consolidated net income from continuing operations
before income taxes and fixed charges.
7
RISK FACTORS
You should carefully consider the following risk factors, 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 the notes and 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 the notes and ordinary shares issuable
upon conversion of the notes 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 experienced significant financial
pressures that have caused many in the industry to cut expenses and limit
investment in capital intensive projects and have led to numerous restructurings
and bankruptcies. Recent communications company mergers may have a material
adverse effect on our results of operations.
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 in fiscal 2002 and fiscal 2003, 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 restructuring programs in
fiscal 2002 and fiscal 2003 to reduce costs. Although the decline in our
quarterly revenue halted in the second quarter of fiscal 2003, adverse market
conditions in the future could 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 FAIL TO ADAPT TO CHANGING MARKET CONDITIONS AND 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.
These Managed Services include services, such as system modernization and
consolidation, operation of data centers, ongoing support, maintenance, system
modification, billing and communications facility management.
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.
8
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,
- 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.
IF WE DO NOT CONTINUALLY ENHANCE OUR PRODUCTS AND SERVICE OFFERINGS, WE MAY
HAVE DIFFICULTY RETAINING EXISTING CUSTOMERS AND ATTRACTING NEW CUSTOMERS.
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 THAT 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 2004. Aggregate revenue derived from the multiple business arrangements
we have with our five largest customer groups accounted for approximately 61% of
our revenue in fiscal 2004. SBC has historically been one of our largest
shareholders, and, as of December 31, 2004, it beneficially owned approximately
6.3% of our
9
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.
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 AND TO MEET THEIR EXPECTATIONS IN PROVIDING
PRODUCTS AND PERFORMING SERVICES.
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 TO DEVELOP, IMPLEMENT
AND MODIFY OUR SOLUTIONS MAY BE DIFFICULT TO HIRE AND RETAIN, AND IF WE ARE
UNABLE TO HIRE AND RETAIN SUCH PERSONNEL, WE COULD FACE INCREASED COSTS TO
RETAIN OUR SKILLED EMPLOYEES.
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 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.
10
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 and
service fees,
- delays in or cancellations of significant projects by customers,
- 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 combined license fee revenue and service fee revenue
relating to customization, modification, implementation and integration are
recognized as work is performed, using the percentage of completion method of
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. In fiscal 2002 and fiscal 2003, buying
decisions of communications providers were often delayed 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
11
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 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 January 31, 2003, after implementation of the second reduction in
our workforce, we employed approximately 7,800 individuals in software and
information technology positions, compared to approximately 9,100 on November
30, 2001. Our software and information technology workforce increased to 9,000
positions as of November 30, 2003, primarily as a result of the Certen
acquisition in July 2003 and a Managed Services agreement signed in January
2003, and to 9,600 positions as of September 30, 2004. 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. These 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 EXPOSES US TO RISKS ASSOCIATED WITH VARIED AND
CHANGING POLITICAL, CULTURAL AND ECONOMIC CONDITIONS WORLDWIDE.
We are affected by risks associated with conducting business
internationally. We maintain development facilities in Canada, Cyprus, Ireland,
Israel and the United States, operate a support center in Brazil and have
operations in North America, Europe, Latin America and the Asia-Pacific region.
Recently, we established a new development center in India. 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.
12
POLITICAL AND ECONOMIC CONDITIONS IN THE MIDDLE EAST MAY ADVERSELY AFFECT OUR
BUSINESS AND OUR DEVELOPMENT FACILITY IN CYPRUS MAY BE ADVERSELY AFFECTED BY
POLITICAL CONDITIONS IN THAT COUNTRY.
Of the six development centers we maintain worldwide, our largest
development center is located in five different sites throughout Israel.
Approximately 45% 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 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 several 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 has
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.
OUR INTERNATIONAL OPERATIONS EXPOSE US TO RISKS ASSOCIATED WITH FLUCTUATIONS
IN FOREIGN CURRENCY EXCHANGE RATES THAT COULD ADVERSELY AFFECT OUR BUSINESS.
Although approximately 45% of our employees are located in Israel and we
have operations throughout the world, the majority of our revenues and costs are
denominated in, or linked to, the U.S. dollar. Accordingly, we consider the U.S.
dollar to be our functional currency. However, a significant portion of our
operating costs is incurred outside the United States in other currencies.
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 30% in fiscal 2004) is
not incurred in dollars or linked to the dollar, and, therefore, fluctuations in
exchange rates between the currencies in which such revenue is incurred 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.
13
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.
IF WE ARE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY FROM MISAPPROPRIATION,
OUR BUSINESS MAY BE HARMED.
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 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
14
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.
SYSTEM DISRUPTIONS AND FAILURES MAY RESULT IN CUSTOMER DISSATISFACTION,
CUSTOMER LOSS OR BOTH, WHICH COULD MATERIALLY AND ADVERSELY AFFECT OUR
REPUTATION AND BUSINESS.
Our systems are an integral part of our customers' business operations. The
continued and uninterrupted performance of these systems by our customers 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 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.
There can be no assurance that our effective tax rate of 22% for the year
ended September 30, 2004 will not change over time as a result of changes in
corporate income tax rates or other changes in the tax laws of the various
countries in which we operate. We have benefited or currently benefit from a
variety of government programs and tax benefits that generally carry conditions
that we must meet in order to be eligible to obtain any benefit.
For example, the government of Cyprus has issued a permit to our Cypriot
subsidiary pursuant to which its activities are deemed to be offshore activities
for Cypriot tax purposes, resulting in an effective tax rate in Cyprus of 4.25%.
Our Irish subsidiary entered into an agreement with the Irish Industrial
Development Agency by which it qualified for certain job creation grants and,
consequently, certain of its activities were deemed to be manufacturing
activities for Irish tax purposes, resulting in a corporation tax rate of 10%
until December 31, 2002 with respect to such manufacturing activities. Beginning
January 1, 2003, our Irish subsidiary became subject to a single corporation tax
rate of 12.5%. Pursuant to recently enacted legislation, Israeli companies are
generally subject to a company tax rate on taxable income of 35% for 2004, 34%
for 2005, 32% for 2006 and 30% thereafter. However, certain production and
development facilities of our Israeli subsidiary have been granted a status that
allows for taxation at a rate of 25% or lower. The status by which these
facilities enjoy reduced taxation is subject to certain time limitations.
If we fail to meet the conditions upon which certain favorable tax
treatment are based, 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.
15
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 THE SUBJECT OF A SECURITIES EXCHANGE COMMISSION
INVESTIGATION, WHICH COULD NEGATIVELY AFFECT OUR BUSINESS AND RESULTS OF
OPERATIONS.
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 some 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 2004, our ordinary shares have traded as
high as $30.69 per share and as low as $18.08 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 in fiscal 2001 and as low as $5.85 per share in
fiscal 2003. As of February 22, 2005, the closing price of our ordinary shares
was $29.33 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,
16
- changes in estimates of our performance or recommendations by financial
analysts, and
- political developments in the Middle East.
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.
RISKS RELATED TO THE NOTES
THE NOTES ARE EFFECTIVELY SUBORDINATED TO THE DEBT AND OTHER LIABILITIES OF
OUR SUBSIDIARIES.
We are a holding company for the various subsidiaries that conduct our
business on a worldwide basis. The notes are obligations exclusively of our
company and are not guaranteed by our subsidiaries. The notes are unsecured and
effectively subordinated to the liabilities, including trade payables, of our
subsidiaries. Neither we nor our subsidiaries are prohibited from incurring debt
under the indenture, including senior indebtedness. If we or our subsidiaries
were to incur additional debt or liabilities, our ability to pay our obligations
on the notes could be adversely affected. As of December 31, 2004, our
subsidiaries had liabilities of approximately $1,011.4 million. We may from time
to time incur additional debt. Our subsidiaries may also from time to time incur
other additional debt and liabilities. The notes are also effectively
subordinated to any secured obligations to the extent of the value of the assets
securing such obligations. See "Description of Notes."
WE ARE DEPENDENT UPON OUR SUBSIDIARIES TO SERVICE OUR DEBT.
Our assets consist primarily of the capital stock or other equity interests
of our operating subsidiaries. Consequently, our cash flow and ability to
service debt obligations, including the notes, are dependent upon the earnings
of our subsidiaries and the distribution of those earnings to us, or upon loans,
advances or other payments made by the subsidiaries to us. The ability of our
subsidiaries to pay dividends or make other payments or advances to us will
depend upon their operating results and will be subject to applicable laws and
contractual restrictions contained in any instruments governing their
indebtedness. We cannot be certain that payments from our subsidiaries will be
adequate to service our debt obligations, including the notes.
WE MAY NOT HAVE THE FUNDS NECESSARY TO FINANCE THE REPURCHASE OF THE NOTES OR
MAY OTHERWISE BE RESTRICTED FROM MAKING SUCH REPURCHASE IF REQUIRED BY HOLDERS
PURSUANT TO THE INDENTURE.
On March 15, 2009, 2014 and 2019, or at any time prior to maturity
following a "designated event" under the indenture, holders may require us to
repurchase their notes at a price of 100% of the principal amount of the notes,
plus accrued and unpaid interest to the repurchase date. However, it is possible
that we will not have sufficient funds available at such time to make the
required repurchase of notes. In addition, any future credit agreements or other
agreements relating to our indebtedness could contain provisions prohibiting the
repurchase of the notes under certain circumstances, or could provide that a
designated event constitutes an event of default under that agreement. If any
agreement governing our indebtedness prohibits or otherwise restricts us from
repurchasing the notes when we become obligated to do so, we could seek the
consent of the lenders to repurchase the notes or attempt to refinance this
debt. If we do not obtain such a consent or refinance the indebtedness, we would
not be permitted to repurchase the notes without potentially causing a default
under this indebtedness. Our failure to repurchase tendered notes would
constitute an event of default under the indenture, which might constitute a
default under the terms of our other indebtedness.
THE INDEBTEDNESS CREATED BY THE NOTES, AND ANY FUTURE INDEBTEDNESS, COULD
ADVERSELY AFFECT OUR BUSINESS AND OUR ABILITY TO MAKE FULL PAYMENT ON THE
NOTES.
Our aggregate level of indebtedness increased as a result of the sale by us
of the notes to the initial purchasers. As of December 31, 2004, we had $469.7
million of outstanding indebtedness and cash and short term investments of $1.3
billion.
17
We may obtain additional long-term debt and lines of credit to meet future
financing needs, which would have the effect of increasing our total leverage.
Any increase in our leverage could have significant negative consequences,
including:
- increasing our vulnerability to adverse economic and industry conditions,
- limiting our ability to obtain additional financing,
- limiting our ability to make acquisitions,
- requiring the dedication of a substantial portion of our cash flow from
operations to service our indebtedness, thereby reducing the amount of
our cash flow available for other purposes, including capital
expenditures,
- limiting our flexibility in planning for, or reacting to, changes in our
business and the industries in which we compete, and
- placing us at a possible competitive disadvantage with less leveraged
competitors and competitors that may have better access to capital
resources.
Our ability to satisfy our future obligations, including debt service on
the notes, depends on our future operating performance and on economic,
financial, competitive and other factors beyond our control. Our business may
not generate sufficient cash flow to meet these obligations or to successfully
execute our business strategy. If we are unable to service our debt and fund our
business, we may be forced to reduce or delay capital expenditures, seek
additional financing or equity capital, restructure or refinance our debt or
sell assets. We cannot assure you that we would be able to obtain additional
financing or refinance existing debt or sell assets on terms acceptable to us or
at all.
OUR MANAGEMENT HAS BROAD DISCRETION TO ALLOCATE THE PROCEEDS FROM THE SALE OF
THE NOTES TO THE INITIAL PURCHASERS, WHICH MAY RESULT IN DECISIONS THAT
NEGATIVELY AFFECT THE MARKET PRICE OF THE NOTES AND OUR ORDINARY SHARES.
Our management has broad discretion to allocate the proceeds from the sale
of the notes to the initial purchasers and to determine the timing and nature of
expenditures. The allocation of proceeds from the sale of the notes to the
initial purchasers could have a negative effect on the trading prices of the
notes or our ordinary shares. We used approximately $170.1 million of the net
proceeds from the sale of the notes to the initial purchasers to purchase
ordinary shares sold short by purchasers of the notes in negotiated transactions
concurrently with the note 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 are not currently able to estimate the allocation of the
proceeds or timing of the expenditures.
A PUBLIC MARKET MAY NOT DEVELOP FOR THE NOTES.
The notes are a new issue of securities for which there is currently no
public market. The initial purchasers have advised us that they currently intend
to make a market in the notes. However, the initial purchasers are not obligated
to make a market and may discontinue this market making activity at any time
without notice. In addition, market making activity by the initial purchasers
will be subject to the limits imposed by the federal securities laws. As a
result, we cannot assure you that any market for the notes will develop or, if
one does develop, that it will be maintained. Historically, the market for
convertible debt has been subject to disruptions that have caused volatility in
the prices of securities similar to the notes. If an active market for the notes
fails to develop or be sustained, the trading price of the notes could be
materially and adversely affected.
18
THE TRADING PRICES OF THE NOTES COULD BE SIGNIFICANTLY AFFECTED BY THE TRADING
PRICES OF OUR ORDINARY SHARES.
We expect that the trading prices of the notes in the secondary market will
be significantly affected by the trading prices of our ordinary shares. It is
impossible to predict whether the price of our ordinary shares will rise or
fall. Trading prices of our ordinary shares will be influenced by our operating
results and prospects and by economic, financial and other factors. In addition,
general market conditions, including the level of, and fluctuations in, the
trading prices of stocks generally, and sales of substantial amounts of ordinary
shares by us in the market after the offering of the notes, or the perception
that such sales may occur, could affect the price of our ordinary shares.
THE CONDITIONAL CONVERSION FEATURE OF THE NOTES COULD RESULT IN YOUR NOT
RECEIVING THE VALUE OF THE ORDINARY SHARES INTO WHICH THE NOTES ARE
CONVERTIBLE.
The notes are convertible into ordinary shares only if specific conditions
are met. If the specific conditions for conversion are not met, you may not be
able to receive the value of the ordinary shares into which your notes would
otherwise be convertible.
THE CONVERSION RATE OF THE NOTES MAY NOT BE ADJUSTED FOR ALL DILUTIVE EVENTS.
The conversion rate of the notes is subject to adjustment for certain
events including, but not limited to, the issuance of stock dividends on our
ordinary shares, the issuance of certain rights or warrants, subdivisions or
combinations of our ordinary shares, certain distributions of assets, debt
securities, capital stock or cash to holders of our ordinary shares and certain
issuer tender or exchange offers as described under "Description of
Notes -- Conversion of Notes -- Conversion Rate Adjustments." The conversion
rate will not be adjusted for other events, such as an issuance of ordinary
shares for cash, that may adversely affect the trading price of the notes or the
ordinary shares. There can be no assurance that an event that adversely affects
the value of the notes, but does not result in an adjustment to the conversion
rate, will not occur.
CONVERSION OF THE NOTES WILL DILUTE THE OWNERSHIP INTEREST OF EXISTING
SHAREHOLDERS, INCLUDING HOLDERS WHO HAD PREVIOUSLY CONVERTED THEIR NOTES.
The conversion of some or all of the notes will dilute the ownership
interests of existing shareholders. Any sales in the public market of the
ordinary shares issuable upon such conversion could adversely affect prevailing
market prices of our ordinary shares. In addition, the existence of the notes
may encourage short selling by market participants because the conversion of the
notes could depress the price of our ordinary shares.
IF YOU HOLD NOTES, YOU WILL NOT BE ENTITLED TO ANY RIGHTS WITH RESPECT TO OUR
ORDINARY SHARES, BUT YOU WILL BE SUBJECT TO ALL CHANGES MADE WITH RESPECT TO
OUR ORDINARY SHARES.
If you hold notes, you will not be entitled to any rights with respect to
our ordinary shares (including, without limitation, voting rights and rights to
receive any dividends or other distributions on our ordinary shares), but you
will be subject to all changes affecting the ordinary shares. You will have
rights with respect to our ordinary shares only if and when we deliver shares of
ordinary shares to you upon conversion of your notes and, in limited cases,
under the conversion rate adjustments applicable to the notes. For example, in
the event that an amendment is proposed to our Articles of Association requiring
shareholder approval and the record date for determining the shareholders of
record entitled to vote on the amendment occurs prior to delivery of ordinary
shares to you, you will not be entitled to vote on the amendment, although you
will nevertheless be subject to any changes in the powers, preferences or
special rights of our ordinary shares.
19
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 that we make in this
prospectus that are not statements of historical fact also may be
forward-looking statements. 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."
20
OFFERING STATISTICS AND TIMETABLE
The $450,000,000 aggregate principal of notes and the 10,435,995 ordinary
shares issuable upon conversion of the notes are being sold by the selling
securityholders listed under the caption "Selling Securityholders" beginning on
page 50. The offer will be open until the earlier of (1) the date there are no
longer any registrable securities and (2) the date on which all of the
securities being offered hereby held by persons that are not our affiliates can
be sold under Rule 144(k) under the Securities Act of 1933, referred to herein
as the Securities Act, whichever occurs first.
REASONS FOR THE OFFER AND USE OF PROCEEDS
This prospectus relates to the resale by the selling securityholders from
time to time of up to $450,000,000 aggregate principal of notes and the
10,435,995 ordinary shares issuable upon conversion of the notes. We will not
receive any proceeds from the sale by the selling securityholders of the notes
or the ordinary shares issuable upon conversion of the notes.
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.
21
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,
2000........................................................ $96.00 $19.81
2001........................................................ $80.50 $25.85
2002........................................................ $39.25 $ 6.10
2003........................................................ $27.25 $ 5.85
2004........................................................ $30.69 $18.08
QUARTER
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............................................. $30.69 $22.65
Fourth Quarter............................................ $24.00 $18.08
Fiscal 2005:
First Quarter............................................. $27.25 $20.70
Second Quarter (through February 22, 2005)................ $30.66 $24.29
Most Recent Six Months
August, 2004.............................................. $22.40 $18.08
September, 2004........................................... $23.20 $20.01
October, 2004............................................. $25.40 $20.70
November, 2004............................................ $27.25 $24.25
December, 2004............................................ $27.56 $23.76
January, 2005............................................. $30.50 $24.29
As of December 31, 2004, we had 202,004,950 ordinary shares outstanding and
there were approximately 217 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 February 22, 2005, the last reported sale price of our ordinary shares
on the NYSE was $29.33.
22
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 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............ $ 57,015
Legal fees and expenses..................................... $ 75,000
Registrar and Transfer agent fees and expenses.............. $ 5,000
Accounting fees and expenses................................ $ 20,000
Printing, EDGAR formatting and mailing expenses............. $ 25,000
Miscellaneous expenses...................................... $ 10,000
--------
Total Expenses............................................ $192,015
========
23
CAPITALIZATION
The following table sets forth our unaudited actual consolidated
capitalization as of December 31, 2004.
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,
2004
(UNAUDITED)
------------------
(IN THOUSANDS)
Short-term portion of capital lease obligations -- secured
and unguaranteed.......................................... $ 12,019
Short-term portion of capital lease obligations -- secured
and guaranteed............................................ 4,175
Capital lease obligations, less current portion -- secured
and unguaranteed.......................................... 2,229
Short-term financing arrangements -- unsecured and
unguaranteed.............................................. 989
2% Convertible Notes due 2008............................... 272
0.50% Convertible Senior Notes due 2024 -- unsecured and
unguaranteed.............................................. 450,000
----------
Total indebtedness..................................... 469,684
Shareholders' equity:
Preferred Shares -- Authorized 25,000 shares; L0.01 par
value; 0 shares issued and outstanding................. --
Ordinary Shares -- Authorized 550,000 shares; L0.01 par
value; 224,947 issued and 201,334 outstanding(1)....... 3,613
Additional paid-in capital................................ 1,843,628
Treasury Stock, at cost -- 23,613 ordinary shares......... (502,416)
Accumulated other comprehensive loss...................... (2,101)
Unearned compensation..................................... (129)
Retained earnings......................................... 176,933
----------
Total shareholders' equity............................. 1,519,528
----------
Total capitalization................................... $1,989,212
==========
---------------
(1) Reflects ordinary shares issued and outstanding as of December 31, 2004.
Does not include 28,094 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. As of December 31, 2004, there were
202,005 ordinary shares outstanding.
24
DESCRIPTION OF NOTES
We issued the notes under an indenture dated as of March 5, 2004, between
Amdocs, as issuer, and The Bank of New York, as trustee. The notes and the
ordinary shares issuable upon conversion of the notes are covered by a
registration rights agreement. You may request a copy of the indenture and the
registration rights agreement from the trustee. We have also filed the indenture
and the registration rights agreement with the SEC. See "Incorporation of
Documents by Reference" and "Where You Can Find More Information."
The following description is a summary of the material provisions of the
notes, the indenture and the registration rights agreement. It does not purport
to be complete. This summary is subject to and is qualified by reference to all
the provisions of the indenture, including the definitions of certain terms used
in the indenture, and to all the provisions of the registration rights
agreement, including the definitions of certain terms in the registration rights
agreement. Wherever particular provisions or defined terms of the indenture,
form of note or registration rights agreement are referred to, these provisions
or defined terms are incorporated in this prospectus by reference. We urge you
to read the indenture and the registration rights agreement because they and not
this description define your rights as a holder of notes and with respect to
your registration rights as a holder of ordinary shares.
As used in this "Description of Notes" section, references to "Amdocs,"
"we," "our" or "us" refer solely to Amdocs Limited and not to our subsidiaries,
unless the context otherwise requires.
GENERAL
The notes are senior unsecured debt of Amdocs and rank on a parity with all
of our other existing and future senior unsecured debt, including the 2% Notes,
and prior to all of our existing and future subordinated debt. The notes are not
obligations of or guaranteed by any of our subsidiaries. The notes are
convertible into ordinary shares as described under "-- Conversion of Notes."
The notes initially will be limited to $450.0 million aggregate principal
amount. The notes were issued in denominations of $1,000 and multiples of
$1,000. We use the term "note" in this prospectus to refer to each $1,000
principal amount of notes. The notes will mature on March 15, 2024, unless
earlier converted, redeemed or repurchased.
We may, without the consent of the holders, reopen the indenture and issue
additional notes under the indenture with the same terms and with the same CUSIP
numbers as the outstanding notes in an unlimited aggregate principal amount,
provided that no such additional notes may be issued unless fungible with the
outstanding notes for U.S. federal income tax purposes. Subject to our
compliance with applicable laws, we may also from time to time repurchase the
notes in open market purchases or negotiated transactions without prior notice
to holders.
The notes are obligations of Amdocs, which is a holding company, and not
its subsidiaries. Because we derive substantially all of our revenues from our
operating subsidiaries and do not have business operations of our own, we are
dependent upon the ability of our subsidiaries to provide us with cash, in the
form of dividends or intercompany advances, loans or otherwise, to meet our
obligations under the notes. Our subsidiaries will have no obligation to pay
amounts due on the notes or to make any funds available to us for payment of the
notes upon maturity or upon a redemption or repurchase of the notes as described
below.
Neither we nor any of our subsidiaries are subject to any financial
covenants under the indenture. In addition, neither we nor any of our
subsidiaries are restricted under the indenture from paying dividends, incurring
debt, whether senior or junior to the notes, or issuing or repurchasing our
securities.
You are not afforded protection under the indenture in the event of a
highly leveraged transaction or a change in control of us, except to the extent
described below under "-- Repurchase at Option of the Holder Upon a Designated
Event."
The notes bear interest at an annual rate of 0.50%. Interest is calculated
on the basis of a 360-day year consisting of twelve 30-day months and accrues
from March 5, 2004, or from the most recent date to which interest has been paid
or duly provided for. We will pay interest on March 15 and September 15 of each
year,
25
beginning September 15, 2004, to record holders at the close of business on the
preceding March 1 and September 1, as the case may be.
We will maintain an office in the Borough of Manhattan, The City of New
York, where we will pay the principal on the notes and you may present the notes
for conversion, registration of transfer or exchange for other denominations,
which will initially be an office or agency of the paying agent. The paying
agent initially will be the trustee. We may pay interest by check mailed to your
address as it appears in the note register, provided that if you are a holder
with an aggregate principal amount in excess of $2.0 million, you will be paid,
at your written election, by wire transfer in immediately available funds.
However, payments to The Depository Trust Company, New York, New York, which we
refer to as DTC, will be made by wire transfer of immediately available funds to
the account of DTC or its nominee.
The notes are not subject to a sinking fund provision and are not subject
to defeasance or covenant defeasance under the indenture.
CONVERSION OF NOTES
You may convert any of your notes, in whole or in part, into ordinary
shares prior to the close of business on the final maturity date of the notes,
subject to prior redemption or repurchase of the notes, only under the following
circumstances:
- subject to certain exceptions, upon satisfaction of a market price
condition;
- upon satisfaction of a trading price condition;
- upon the occurrence of certain credit ratings events;
- upon notice of redemption; or
- upon the occurrence of specified corporate transactions.
The number of ordinary shares you will receive upon conversion of your
notes will be determined by multiplying the number of $1,000 principal amount
notes you convert by the conversion rate on the date of conversion. You may
convert your notes in part so long as such part is $1,000 principal amount or an
integral multiple of $1,000.
If we call notes for redemption, you may convert the notes until the close
of business on the business day immediately preceding the redemption date,
unless we fail to pay the redemption price. If you have submitted your notes for
repurchase upon a designated event, you may convert your notes only if you
withdraw your repurchase election. Similarly, if you exercise your option to
require us to repurchase your notes other than upon a designated event, those
notes may be converted only if you withdraw your election to exercise your
option in accordance with the terms of the indenture. Upon conversion of notes,
a holder will not receive any cash payment of interest or liquidated damages, if
any, except in the circumstances specified in the next paragraph, and such
amounts will be forfeited.
Notwithstanding the preceding paragraph, if notes are converted after a
record date but prior to the next succeeding interest payment date, holders of
such notes at the close of business on the record date will receive the interest
payable on such notes on the corresponding interest payment date notwithstanding
the conversion. Such notes, upon surrender for conversion, must be accompanied
by funds equal to the amount of interest payable on the notes so converted;
provided that no such payment need be made (1) if we have specified a redemption
date that is after a record date but on or prior to the next interest payment
date, (2) if we have specified a repurchase date following a designated event
that is after a record date but on or prior to the next succeeding interest
payment date or (3) to the extent of any overdue interest at the time of
conversion with respect to such note.
CONVERSION UPON SATISFACTION OF MARKET PRICE CONDITION
You may surrender your note for conversion into our ordinary shares prior
to the close of business on the maturity date during any fiscal quarter
commencing after March 31, 2004, and only during such fiscal quarter
26
if the closing sale price of our ordinary shares exceeds 130% of the then
effective conversion price for at least 20 trading days in the 30 consecutive
trading days ending on the last trading day of the preceding fiscal quarter.
The "closing sale price" of our ordinary shares on any date means the
closing per share sale price (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on such date as reported
in composite transactions for the principal United States securities exchange on
which our ordinary shares are traded or, if our ordinary shares are not listed
on a United States national or regional securities exchange, as reported by the
Nasdaq System or by the National Quotation Bureau Incorporated. In the absence
of such a quotation, we will determine the closing sale price on the basis we
consider appropriate, and such determination shall be conclusive. The
"conversion price" as of any day will equal $1,000 divided by the conversion
rate as of such day.
CONVERSION UPON SATISFACTION OF TRADING PRICE CONDITION
You may surrender your notes for conversion into our ordinary shares prior
to the close of business on the maturity date during the five business-day
period after any five consecutive trading-day period (the "measurement period")
in which the "trading price" per $1,000 principal amount of notes, as determined
following a request by a holder of notes in accordance with the procedures
described below, for each day of that measurement period was less than 98% of
the product of the closing sale price of our ordinary shares and the conversion
rate for such date (the "98% Trading Exception"); provided, however, you may not
convert your notes in reliance on this provision if on any trading day during
such measurement period the closing sale price of our ordinary shares was
between 100% and 130% of the then current conversion price of the notes.
The "trading price" of the notes on any date of determination means the
average of the secondary market bid quotations obtained by the trustee for
$10,000,000 principal amount of the notes at approximately 3:30 p.m., New York
City time, on such determination date from three independent nationally
recognized securities dealers we select; provided that if three such bids cannot
reasonably be obtained by the trustee, but two such bids are obtained, then the
average of the two bids shall be used, and if only one such bid can reasonably
be obtained by the trustee, that one bid shall be used. If the trustee cannot
reasonably obtain at least one bid for $10,000,000 principal amount of the notes
from a nationally recognized securities dealer, then the trading price per
$1,000 principal amount of notes will be deemed to be less than 98% of the
product of the "closing sale price" of our ordinary shares and the conversion
rate.
In connection with any conversion upon satisfaction of the above trading
pricing condition, the trustee shall have no obligation to determine the trading
price of the notes unless we have requested such determination; and we shall
have no obligation to make such request unless a holder provides us with
reasonable evidence that the trading price per $1,000 principal amount of notes
would be less than 98% of the product of the closing sale price of our ordinary
shares and the conversion rate. At such time, we shall instruct the trustee to
determine the trading price of the notes beginning on the next trading day and
on each successive trading day until the trading price per $1,000 principal
amount of notes is greater than or equal to 98% of the product of the closing
sale price of our ordinary shares and the conversion rate.
CONVERSION UPON CREDIT RATINGS EVENT
After the earlier of (a) the date the notes are rated by both Standard &
Poor's and Moody's and (b) five business days from the date the notes are
issued, you may surrender your note for conversion into our ordinary shares
prior to close of business on the maturity date during any period in which the
credit rating assigned to the notes by Standard & Poor's or Moody's (or any
successors to these entities) is "BB-" or "Ba3," respectively, or lower, or if
either of these rating agencies no longer rates the notes, or if either of these
rating agencies suspends or withdraws the rating assigned to the notes, or if
the notes are not assigned a rating by both rating agencies.
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CONVERSION UPON NOTICE OF REDEMPTION
If we call notes for redemption, you may convert the notes until the close
of business on the business day immediately preceding the redemption date, after
which time your right to convert will expire unless we default in the payment of
the redemption price.
CONVERSION UPON SPECIFIED CORPORATE TRANSACTIONS
If we elect to:
- distribute to all holders of our ordinary shares certain rights or
warrants entitling them to purchase, for a period expiring within 45 days
of the record date for such issuance, our ordinary shares at less than
the average of the closing sale prices of our ordinary shares for the 10
trading days preceding the declaration date for such distribution; or
- distribute to all holders of our ordinary shares ordinary shares, assets,
debt securities or certain rights to purchase our securities, which
distribution has a per share value exceeding 5% of the closing sale price
of our ordinary shares on the day preceding the declaration date for such
distribution;
we must notify you at least 20 days prior to the ex-dividend date for such
distribution. Once we have given such notice, you may surrender your notes for
conversion at any time until the earlier of the close of business on the
business day prior to the ex-dividend date or any announcement by us that such
distribution will not take place. If you will otherwise participate in the
distribution without conversion, you will not have the right to convert pursuant
to this provision.
In addition, if we are a party to a consolidation, amalgamation, merger,
binding share exchange or sale, lease or transfer of all or substantially all of
our assets, in each case pursuant to which our ordinary shares would be
converted into cash, securities or other property, you may surrender your notes
for conversion at any time from and after the date that is 15 days prior to the
anticipated effective date of the transaction until and including the date that
is 15 days after the actual date of such transaction (or if such consolidation,
amalgamation, merger, binding share exchange or sale, lease or transfer also
constitutes a designated event, until the repurchase date corresponding to such
designated event). If we are a party to a consolidation, amalgamation, merger,
binding share exchange or sale, lease or transfer of all or substantially all of
our assets, in each case pursuant to which our ordinary shares are converted
into cash, securities or other property, then at the effective time of the
transaction, your right to convert a note into our ordinary shares will be
changed into a right to convert it into the kind and amount of cash, securities
and other property that you would have received if you had converted your notes
immediately prior to the transaction. If the transaction also constitutes a
designated event, you can require us to repurchase all or a portion of your
notes as described under "-- Repurchase at Option of the Holder Upon a
Designated Event."
CONVERSION PROCEDURES
The initial conversion rate for the notes is 23.1911 ordinary shares per
$1,000 principal amount of notes, subject to adjustment as described below,
which represents an initial conversion price of $43.12 per share. We will not
issue fractional ordinary shares upon conversion of notes. Instead, we will pay
cash in lieu of fractional shares based on the closing sale price of the
ordinary shares on the trading day prior to the conversion date. Except as
described above, you will not receive any accrued interest or dividends upon
conversion.
To convert your note into ordinary shares you must do the following (or
comply with DTC procedures for doing so in respect of your beneficial interest
in notes evidenced by a global note):
- complete and manually sign the conversion notice on the back of the note
or facsimile of the conversion notice and deliver this notice to the
conversion agent;
- surrender the note to the conversion agent;
- if required, furnish appropriate endorsements and transfer documents;
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- if required, pay all transfer or similar taxes; and
- if required, pay funds equal to interest payable on the next interest
payment date.
The date you comply with these requirements is the conversion date under
the indenture.
CONVERSION RATE ADJUSTMENTS
We will adjust the conversion rate if any of the following events occurs:
(1) We issue ordinary shares as a dividend or distribution on our
ordinary shares.
(2) We issue to all holders of ordinary shares certain rights or
warrants to purchase our ordinary shares, for a period expiring within 45
days of the record date for such issuance, at a price per share that is
less than the average of the closing sale prices of our ordinary shares for
the 10 trading days preceding the declaration date for such distribution.
(3) We subdivide or combine our ordinary shares.
(4) We distribute to all holders of our ordinary shares any shares of
our capital stock, evidences of indebtedness or assets, including cash and
securities but excluding rights or warrants specified above and dividends
or distributions specified above.
If we distribute shares of capital stock of, or similar equity
interests in, a subsidiary or other business unit of ours, then the
conversion rate will be adjusted based on the market value of the
securities so distributed relative to the market value of our ordinary
shares, in each case based on the average of the closing sale prices of
those securities (where such closing sale prices are available) for the 10
trading days commencing on and including the fifth trading day after the
date on which "ex-dividend trading" commences for such distribution on the
New York Stock Exchange or such other national or regional exchange or
market on which the securities are then listed or quoted.
If we distribute cash (excluding any dividend or distribution in
connection with our liquidation, dissolution or winding up), then the
conversion rate shall be increased so that it equals the rate determined by
multiplying the conversion rate in effect on the record date with respect
to the cash distribution by a fraction, (1) the numerator of which shall be
the current market price of our ordinary shares on the record date, and (2)
the denominator of which will be the current market price of our ordinary
shares on the record date minus the amount per share of such distribution.
(5) We or one of our subsidiaries makes a payment in respect of a
tender offer or exchange offer for our ordinary shares to the extent that
the cash and value of any other consideration included in the payment per
share of ordinary shares exceeds the closing sale price per share of
ordinary shares on the trading day next succeeding the last date on which
tenders or exchanges may be made pursuant to such tender or exchange offer.
(6) Someone other than us or one of our subsidiaries makes a payment
in respect of a tender offer or exchange offer in which, as of the closing
date of the offer, our board of directors is not recommending rejection of
the offer.
The adjustment referred to in this clause (6) will only be made if:
- the tender offer or exchange offer is for an amount that increases the
offeror's ownership of ordinary shares to more than 25% of the total
ordinary shares outstanding; and
- the cash and value of any other consideration included in the payment
per share of ordinary shares exceeds the closing sale price per share
of ordinary shares on the trading day next succeeding the last date on
which tenders or exchanges may be made pursuant to the tender or
exchange offer.
However, the adjustment referred to in this clause (6) will generally not
be made if as of the closing of the offer, the offering documents disclose
a plan or an intention to cause us to engage in a consolidation or merger
or a sale of all or substantially all of our assets.
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"Current market price" of our ordinary shares on any day means the average
of the closing price per share of our ordinary shares for each of the 10
consecutive trading days ending on the earlier of the day in question and the
day before the "ex-date" with respect to the issuance or distribution requiring
such computation. For purposes of this paragraph, "ex-date" means the first date
on which our ordinary shares trade on the applicable exchange or in the
applicable market, regular way, without the right to receive such issuance or
distribution.
To the extent that we have a rights plan in effect upon conversion of the
notes into ordinary shares, you will receive, in addition to the ordinary
shares, the rights under the rights plan, unless prior to any conversion, the
rights have separated from the ordinary shares, in which case the conversion
rate will be adjusted at the time of separation as if we distributed to all
holders of our ordinary shares, shares of our capital stock, evidences of
indebtedness or assets as described above, subject to readjustment in the event
of the expiration, termination or redemption of such rights.
In the event of:
- any reclassification of our ordinary shares;
- a consolidation, merger or combination involving us; or
- a sale or conveyance to another person or entity of all or substantially
all of our property and assets;
in which holders of our ordinary shares would be entitled to receive stock,
other securities, other property, assets or cash for their ordinary shares, upon
conversion of your notes you will be entitled to receive the same type of
consideration that you would have been entitled to receive if you had converted
the notes into our ordinary shares immediately prior to any of these events.
We may, from time to time, increase the conversion rate if our Board of
Directors has made a determination that this increase would be in our best
interests. Any such determination by our board will be conclusive. In addition,
we may increase the conversion rate if our board of directors deems it advisable
to avoid or diminish any income tax to holders of ordinary shares resulting from
any stock or rights distribution. See "Certain United States Federal Income Tax
Considerations -- Tax Consequences to U.S. Holders -- Adjustment to Conversion
Rate."
The holders of the notes may, in certain circumstances, be deemed to have
received a distribution subject to U.S. federal income tax as a dividend as a
result of the adjustments to the conversion rate described above. See "Certain
United States Federal Income Tax Considerations -- Tax Consequences to U.S.
Holders -- Adjustment to Conversion Rate."
We will not be required to make an adjustment in the conversion rate unless
the adjustment would require a change of at least 1% in the conversion rate.
However, we will carry forward any adjustments that are less than 1% of the
conversion rate. Except as described above in this section, we will not adjust
the conversion rate for any issuance of our ordinary shares or convertible or
exchangeable securities or rights to purchase our ordinary shares or convertible
or exchangeable securities.
OPTIONAL REDEMPTION BY AMDOCS
Beginning March 20, 2009, we may redeem the notes in whole or in part for
cash at any time at a redemption price equal to 100% of the principal amount of
notes, plus accrued and unpaid interest and liquidated damages, if any, to, but
excluding, the redemption date. If such redemption date falls after a record
date but on or prior to the next succeeding interest payment date, we will pay
the full amount of accrued and unpaid interest, and liquidated damages, if any,
on such interest payment date to the holder of record on the close of business
on the corresponding record date. We are required to give notice of redemption
by mail to holders not more than 60 but not less than 30 days prior to the
redemption date.
If less than all of the outstanding notes are to be redeemed, the trustee
will select the notes to be redeemed in principal amounts of $1,000 or multiples
of $1,000 by lot, pro rata or by another method the trustee considers fair and
appropriate. If a portion of your notes is selected for partial redemption and
you
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convert a portion of your notes, the converted portion will be deemed to the
extent practicable to be of the portion selected for redemption.
We may not redeem the notes if we have failed to pay any interest on the
notes and such failure to pay is continuing, or if the principal amount of the
notes has been accelerated.
REPURCHASE AT OPTION OF THE HOLDER
You have the right to require us to repurchase your notes, in whole or in
part, on March 15 of 2009, 2014 and 2019. We will be required to repurchase any
outstanding note for which you deliver a written repurchase notice to the paying
agent. This notice must be delivered during the period beginning at any time
from the opening of business on the date that is 20 business days prior to the
repurchase date until the close of business on the repurchase date. If a
repurchase notice is given and withdrawn during that period, we will not be
obligated to repurchase the notes listed in the notice. Our repurchase
obligation will be subject to certain additional conditions.
The repurchase price payable for a note will be equal to the principal
amount to be repurchased, plus accrued and unpaid interest and liquidated
damages, if any, to, but excluding, the repurchase date.
At our option, instead of paying the repurchase price in cash, we may pay
it in our ordinary shares or a combination of cash and our ordinary shares
valued at 100% of the average of the closing sales prices of such ordinary
shares on the NYSE (or such other national or regional exchange or market on
which the securities are then listed or quoted) for the five consecutive trading
days ending on the third trading day prior to the repurchase date. We may only
pay the repurchase price in ordinary shares if we satisfy certain conditions
provided in the indenture, including:
- registration of the ordinary shares to be issued upon repurchase under
the Securities Act and the Securities Exchange Act of 1934, referred to
herein as the Exchange Act, if required;
- qualification of the ordinary shares to be issued upon repurchase under
applicable state securities laws, if necessary, or the availability of an
exemption therefrom; and
- listing of the ordinary shares on a United States national securities
exchange or quotation thereof in an inter-dealer quotation system of any
registered United States national securities association.
If any condition is not satisfied, such as the condition that there be no
restrictions on any transfer of the shares, the repurchase price may be paid
only in cash. For a discussion of the tax treatment of a holder receiving cash,
ordinary shares or any combination thereof, see "Certain United States Federal
Income Tax Considerations." We may, at any time, irrevocably relinquish our
right to pay the repurchase price in ordinary shares by entering into a
supplemental indenture with the trustee.
You may withdraw any written repurchase notice by delivering a written
notice of withdrawal to the paying agent prior to the close of business on the
repurchase date. The withdrawal notice must state:
- the principal amount of the withdrawn notes;
- if certificated notes have been issued, the certificate numbers of the
withdrawn notes (or, if your notes are not certificated, your withdrawal
notice must comply with appropriate DTC procedures); and
- the principal amount, if any, that remains subject to the repurchase
notice.
We must give notice of an upcoming repurchase date to all note holders not
less than 20 business days prior to the repurchase date at their addresses shown
in the register of the registrar. We will also give notice to beneficial owners
as required by applicable law. This notice will state, among other things:
whether we will pay the repurchase price of the notes in cash or ordinary
shares, or both cash and ordinary shares (in which case the relative percentages
will be specified); if we elect to pay all or a portion of the repurchase price
in ordinary shares, the method by which we are required to calculate market
price of the ordinary shares; and the procedures that holders must follow to
require us to repurchase their notes.
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Payment of the repurchase price for a note for which a repurchase notice
has been delivered and not withdrawn is conditioned upon book-entry transfer or
delivery of the note, together with necessary endorsements, to the paying agent
at its office in the Borough of Manhattan, The City of New York, or any other
office of the paying agent, at any time after delivery of the repurchase notice.
Payment of the repurchase price for the note will be made promptly following the
later of the repurchase date and the time of book-entry transfer or delivery of
the note. If the paying agent holds money sufficient to pay the repurchase price
of the note on the business day following the repurchase date, then, on and
after the date:
- the note will cease to be outstanding;
- interest will cease to accrue; and
- all other rights of the holder will terminate, other than the right to
receive the repurchase price upon delivery of the note.
This will be the case whether or not book-entry transfer of the note has
been made or the note has been delivered to the paying agent.
No notes may be repurchased by us at the option of the holders if the
principal amount of the notes has been accelerated, and such acceleration has
not been rescinded, on or prior to the indicated repurchase date. We may be
unable to repurchase the notes if you elect to require us to repurchase the
notes pursuant to this provision. If you elect to require us to repurchase the
notes on March 15 of 2009, 2014 or 2019, we may not have enough funds to pay the
repurchase price for all tendered notes. Any future credit agreements or other
agreements relating to our indebtedness may contain provisions prohibiting the
repurchase of the notes under certain circumstances. If you elect to require us
to repurchase the notes at a time when we are prohibited from repurchasing
notes, we could seek the consent of our lenders to repurchase the notes or
attempt to refinance this debt. If we do not obtain consent, we would not be
permitted to repurchase the notes. Our failure to repurchase tendered notes
would constitute an event of default under the indenture, which might constitute
a default under the terms of our other indebtedness.
We will comply with the provisions of Rule 13e-4 and any other tender offer
rules under the Exchange Act that may be applicable at the time of the tender
offer. To the extent applicable, we will file a Schedule TO or any other
schedule required in connection with any offer by us to repurchase the notes.
REPURCHASE AT OPTION OF THE HOLDER UPON A DESIGNATED EVENT
If a designated event occurs at any time prior to the maturity of the
notes, you may require us to repurchase your notes, in whole or in part, on a
repurchase date that is not less than 20 nor more than 35 business days after
the date of our notice of the designated event. The notes will be repurchased
only in integral multiples of $1,000 principal amount.
We will repurchase the notes at a price equal to 100% of the principal
amount to be repurchased, plus accrued and unpaid interest, and liquidated
damages, if any, to, but excluding, the repurchase date. If such repurchase date
falls after a record date and on or prior to the corresponding interest payment
date, we will pay the full amount of accrued and unpaid interest payable on such
interest payment date to the holder of record on the close of business on the
corresponding record date.
At our option, instead of paying the repurchase price in cash, we may pay
it in our ordinary shares or, if applicable, our parent's common equity, or a
combination of cash and shares valued at 100% of the average of the closing
sales prices of such shares on the New York Stock Exchange (or such other
national or regional exchange or market on which the securities are then listed
or quoted) for the five consecutive trading days ending on the third trading day
prior to the repurchase date. We may only pay the repurchase price in shares if
we satisfy certain conditions provided in the indenture, including:
- registration of the shares to be issued upon redemption under the
Securities Act and the Exchange Act, if required;
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- qualification of the shares to be issued upon redemption under applicable
state securities laws, if necessary, or the availability of an exemption
therefrom; and
- listing of the shares on a United States national securities exchange or
quotation thereof in an inter-dealer quotation system of any registered
United States national securities association.
If any condition is not satisfied, such as the condition that there be no
restrictions on any transfer of the shares, the repurchase price may be paid
only in cash. We may, at any time, irrevocably relinquish our right to pay the
repurchase price in shares by entering into a supplemental indenture with the
trustee.
We will mail to all record holders a notice of a designated event within 15
days after it has occurred. This notice will state, among other things: whether
we will pay the repurchase price of the notes in cash, shares of our ordinary
shares or, if applicable, our parent's common equity, or both cash and shares
(in which case the relative percentages will be specified); if we elect to pay
all or a portion of the repurchase price in shares, the method by which we are
required to calculate market price of the shares; and the procedures that
holders must follow to require us to repurchase their notes. We are also
required to deliver to the trustee a copy of the designated event notice. If you
elect to require us to repurchase your notes, you must deliver to us or our
designated agent, on or before the repurchase date specified in our designated
event notice, your repurchase notice and any notes to be repurchased, duly
endorsed for transfer. We will promptly pay the repurchase price for notes
surrendered for repurchase following the repurchase date.
You may withdraw any written repurchase notice by delivering a written
notice of withdrawal to the paying agent prior to the close of business on the
repurchase date. The withdrawal notice must state:
- the principal amount of the withdrawn notes;
- if certificated notes have been issued, the certificate numbers of the
withdrawn notes (or, if your notes are not certificated, your withdrawal
notice must comply with appropriate DTC procedures); and
- the principal amount, if any, that remains subject to the repurchase
notice.
Payment of the repurchase price for a note for which a repurchase notice
has been delivered and not withdrawn is conditioned upon book-entry transfer or
delivery of the note, together with necessary endorsements, to the paying agent
at its corporate trust office in the Borough of Manhattan, The City of New York,
or any other office of the paying agent, at any time after delivery of the
repurchase notice. Payment of the repurchase price for the note will be made
promptly following the later of the repurchase date and the time of book-entry
transfer or delivery of the note. If the paying agent holds money sufficient to
pay the repurchase price of the note on the repurchase date, then, on and after
the business day following the repurchase date:
- the note will cease to be outstanding;
- interest will cease to accrue; and
- all other rights of the holder will terminate, other than the right to
receive the repurchase price upon delivery of the note.
This will be the case whether or not book-entry transfer of the note has
been made or the note has been delivered to the paying agent.
A "designated event" will be deemed to have occurred upon a fundamental
change or a termination of trading.
A "fundamental change" is any transaction or event (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise) in connection with which all or
substantially all of our ordinary shares are exchanged for, converted into,
acquired for or constitute solely the right to receive, consideration that is
not all or substantially all common stock (or comparable equity security of a
non-U.S. entity) that:
- is listed on, or immediately after the transaction or event will be
listed on, a United States national securities exchange, or
33
- is approved, or immediately after the transaction or event will be
approved, for quotation on the NASDAQ National Market or any similar
United States system of automated dissemination of quotations of
securities prices.
A "termination of trading" will be deemed to have occurred if our ordinary
shares (or other securities into which the notes are then convertible) are
neither listed for trading on a United States national securities exchange nor
approved for trading on the NASDAQ National Market.
We will comply with the provisions of Rule 13e-4 and any other tender offer
rules under the Exchange Act that may be applicable at the time of a designated
event. To the extent applicable, we will file a Schedule TO or any other
schedule required in connection with any offer by us to repurchase the notes in
the event of a designated event.
These designated event repurchase rights could discourage a potential
acquirer of Amdocs. However, this designated event repurchase feature is not the
result of management's knowledge of any specific effort to obtain control of us
by means of a merger, tender offer or solicitation, or part of a plan by
management to adopt a series of anti-takeover provisions. The term "designated
event" is limited to specified transactions and may not include other events
that might adversely affect our financial condition or business operations. Our
obligation to offer to repurchase the notes upon a designated event would not
necessarily afford you protection in the event of a highly leveraged
transaction, reorganization, merger or similar transaction involving us. No
notes may be repurchased by us at the option of holders upon a designated event
if the principal amount of the notes has been accelerated and such acceleration
has not been rescinded.
We may be unable to repurchase the notes in the event of a designated
event. If a designated event were to occur, we may not have enough funds to pay
the repurchase price for all tendered notes. Any future credit agreements or
other agreements relating to our indebtedness may contain provisions prohibiting
repurchase of the notes under certain circumstances, or expressly prohibit our
repurchase of the notes upon a designated event or may provide that a designated
event constitutes an event of default under that agreement. If a designated
event occurs at a time when we are prohibited from repurchasing notes, we could
seek the consent of our lenders to repurchase the notes or attempt to refinance
this debt. If we do not obtain consent, we would not be permitted to repurchase
the notes. Our failure to repurchase tendered notes would constitute an event of
default under the indenture, which might constitute a default under the terms of
our other indebtedness.
ADDITIONAL TAX AMOUNTS
All amounts payable (whether in respect of principal, interest, liquidated
damages or otherwise) in respect of the notes will be made free and clear of and
without withholding or deduction for or on account of any present or future
taxes, duties, levies, assessments or governmental charges of whatever nature
imposed or levied by or on behalf of Guernsey or any political subdivision
thereof or any authority or agency therein or thereof having power to tax,
unless the withholding or deduction of such taxes, duties, levies, assessments
or governmental charges is required by law. In that event, we will pay, or cause
to be paid, such additional amounts as may be necessary in order that the net
amounts receivable by the holder after such withholding or deduction shall equal
the respective amounts that would have been receivable by such holder in the
absence of such withholding or deduction; except that no such additional amounts
shall be payable in relation to any payment in respect of any of the notes:
- to, or to a third party on behalf of, a person who is liable for such
taxes, duties, levies, assessments or governmental charges in respect of
such note by reason of his having some connection with (including being a
citizen of, being incorporated or engaged in a trade or business in, or
having a residence or principal place of business or other presence in)
Guernsey other than (a) the mere holding of such note or (b) the receipt
of principal, interest or other amount in respect of such note; or
- presented for payment more than 30 days after the relevant date (as
defined below), except to the extent that the relevant holder would have
been entitled to such additional amounts on presenting the same for
payment on or before the expiry of such period of 30 days; or
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- on account of any inheritance, gift, estate, personal property, sales, or
similar taxes duties, levies, assessments or similar governmental
charges; or
- on account of any taxes, duties, levies, assessments or governmental
charges that are payable otherwise than by withholding from payments in
respect of such note.
The "relevant date" means, in respect of any payment, the date on which
such payment first becomes due and payable, but if the full amount of the moneys
payable has not been received by the trustee on or prior to such due date, it
means the first date on which, the full amount of such moneys having been so
received and being available for payment to holders, notice to that effect shall
have been duly given to the holders of the notes.
If Amdocs becomes subject generally at any time to any taxing jurisdiction
other than or in addition to Guernsey, references to Guernsey in this section
and the following section shall be read and construed as references to such
other jurisdiction(s) and/or to Guernsey.
Notwithstanding the foregoing discussion concerning withholding taxes, in
the event that any deduction or withholding on account of tax is required to be
made, or is made, in connection with the European Union directive on the
taxation of savings income adopted on June 3, 2003, or any law, regardless of
whether or not enacted by a member state of the European Union or otherwise,
required by such directive implementing or complying with, or introduced in
order to conform to, such directive, no additional amounts shall be payable or
paid by us to any holder in respect of the notes. See "Certain Guernsey Tax
Considerations -- European Union Savings Tax Directive."
Any reference in this section to "principal" and/or "interest" in respect
of the notes shall be deemed also to refer to any additional amounts that may be
payable under this section. Unless the context otherwise requires, any reference
in this section to "principal" shall include any redemption amount and any other
amounts in the nature of principal payable pursuant to this section and
"interest" shall include all amounts payable pursuant to this section and any
other amounts in the nature of interest payable pursuant to this section,
including liquidated damages.
TAX REDEMPTION
Subject to the conditions described below, the notes may be redeemed for
cash, in whole but not in part, at our option, upon not less than 30 days' nor
more than 60 days' prior notice to the holders at the redemption price equal to
100% of the principal amount, plus accrued and unpaid interest and liquidated
damages, if any, to, but excluding, the date fixed for redemption, if we
determine, based on an opinion received from a tax advisor who is an expert in
the tax laws of the relevant jurisdiction, that on the next succeeding interest
payment date, as a result of any change in or amendment to the laws or treaties,
or any regulations or rulings promulgated thereunder, of Guernsey or any
political subdivision thereof or any authority or agency therein or thereof
having power to tax and affecting taxation, or any proposed change in such laws,
treaties, regulations or rulings (including a holding by a court of competent
jurisdiction) which change or amendment becomes effective or is proposed on or
after the closing date of the sale of the notes, Amdocs has or will become
obligated to pay additional amounts on any notes, provided, however, that (i)
the obligation to withhold or deduct cannot be avoided by us by using our
reasonable best efforts to obtain an exemption from such deduction or
withholding obligation (in the event application to the appropriate authorities
is reasonably required in order to avoid such obligation) and such application
has been denied, and (ii) no such notice of redemption may be given earlier than
90 days prior to the earliest date on which we would be obligated to pay such
additional amounts.
Notwithstanding the foregoing, if we give notice of redemption as described
above, each holder of notes will have the right to elect that such holder's
notes will not be subject to such redemption. If a holder of notes elects not to
be subject to such redemption, we will not be required to pay any additional
amounts with respect to payments made on that holder's notes (solely as a result
of the change in Guernsey tax law that caused additional amounts to be payable)
following the redemption date fixed by us, and all subsequent payments on such
holder's notes whether in cash or ordinary shares will be subject to applicable
Guernsey taxes. In such
35
event, payments of interest on the notes arising on maturity, redemption,
purchase or conversion of a note or on an assignment or other transfer of a note
to a person resident in Guernsey may be subject to Guernsey taxes, and the tax
consequences to holders of notes described under "Certain Guernsey Tax
Considerations" will no longer apply.
Because the tax consequences to holders in such circumstances could be
material and adverse, holders of notes should consult their own tax advisors in
considering whether to elect their option to avoid redemption in such
circumstances. In the event that cash payments which a holder would otherwise be
entitled to receive from us are insufficient to pay applicable Guernsey taxes,
we may require from a holder as a condition to the holder's right to receive any
ordinary shares on conversion or other amounts from us an amount of cash
sufficient to pay applicable Guernsey taxes. Holders of notes must elect their
option to avoid such redemption by written notice to the trustee no later than
the 15th day prior to the redemption date fixed by us.
MERGER AND SALE OF ASSETS BY AMDOCS
The indenture provides that we may not consolidate with or merge with or
into any other person or convey, transfer, sell or lease our properties and
assets substantially as an entirety to another person, and we may not permit any
person to consolidate with or merge into us or convey, transfer, sell or lease
such person's properties and assets substantially as an entirety to us, unless
among other items:
- the person formed by such consolidation or into or with which we are
merged or the person to which our properties and assets are so conveyed,
transferred, sold or leased, shall be a corporation, limited liability
company, partnership or trust organized and validly existing under either
(1) the laws of Guernsey, the United States, any state within the United
States or the District of Columbia or any other country (including its
political subdivisions) which on the issue date is a member of the
Organization for Economic Cooperation and Development or (2) any other
country whose legal and jurisprudential system is principally based on,
or substantially similar to, English common law so long as the location
of that entity in such common law country would not adversely affect the
rights of holders and, in each case, if we are not the surviving person,
the surviving person files a supplement to the indenture and expressly
assumes the payment of the principal and interest on the notes and the
performance of our other covenants under the indenture;
- after giving effect to such transaction, there is no event of default
under the indenture, and no event which, after notice or passage of time
or both, would become an event of default; and
- other requirements as described in the indenture are met.
EVENTS OF DEFAULT; NOTICE AND WAIVER
The following are events of default under the indenture:
- we fail to pay principal when due at maturity, upon redemption,
repurchase or otherwise on the notes;
- we fail to pay any interest and liquidated damages, if any, on the notes,
when due and such failure continues for a period of 30 days;
- we fail to provide timely notice of a designated event;
- we fail to perform or observe any of the covenants in the indenture for
60 days after written notice to us from the trustee (or to us and the
trustee from the holders of at least 25% in principal amount of the
outstanding notes);
- payment defaults or other defaults causing acceleration of indebtedness
prior to maturity, where the principal amount of the indebtedness subject
to such defaults aggregates $50.0 million or more;
- we fail to deliver our ordinary shares upon conversion of the notes
within the time period required by the indenture, and such failure
continues for a period of five days; or
- certain events involving our bankruptcy, insolvency or reorganization.
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The trustee may withhold notice to the holders of the notes of any default,
except defaults in payment of interest or liquidated damages, if any, on the
notes. However, the trustee must consider it to be in the interest of the
holders of the notes to withhold this notice.
If an event of default occurs and continues, the trustee or the holders of
at least 25% in principal amount of the outstanding notes may declare the
principal, and accrued interest and liquidated damages, if any, on the
outstanding notes to be immediately due and payable. In case of certain events
of bankruptcy or insolvency involving us, the principal, and accrued interest
and liquidated damages, if any, on the notes will automatically become due and
payable. However, if we cure all defaults, except the nonpayment of principal,
interest or liquidated damages, if any, that became due as a result of the
acceleration, and meet certain other conditions, with certain exceptions, this
declaration may be cancelled and the holders of a majority of the principal
amount of outstanding notes may waive these past defaults.
Payments of principal or interest or liquidated damages, if any, on the
notes that are not made when due will accrue interest from the required payment
date at the annual rate of 1% above the then applicable interest rate for the
notes.
The holders of a majority of outstanding notes will have the right to
direct the time, method and place of any proceedings for any remedy available to
the trustee, subject to limitations specified in the indenture.
No holder of the notes may pursue any remedy under the indenture, except in
the case of a default in the payment of principal or interest on the notes,
unless:
- the holder has given the trustee written notice of an event of default;
- the holders of at least 25% in principal amount of outstanding notes make
a written request and offer indemnity reasonably satisfactory to the
trustee to pursue the remedy;
- the trustee does not receive an inconsistent direction from the holders
of a majority in principal amount of the notes;
- the holder or holders have offered security or indemnity reasonably
satisfactory to the trustee against any costs, liability or expense of
the trustee; and
- the trustee fails to comply with the request within 60 days after receipt
of the request and offer of indemnity.
MODIFICATION AND WAIVER
The consent of the holders of a majority in principal amount of the
outstanding notes is required to modify or amend the indenture. However, a
modification or amendment requires the consent of the holder of each outstanding
note if it would:
- extend the fixed maturity of any note;
- reduce the rate or extend the time for payment of interest, or liquidated
damages, if any, on any note;
- reduce the principal amount of any note;
- reduce any amount payable upon redemption or repurchase of any note;
- adversely change our obligation to repurchase any note at the option of a
holder or upon a designated event;
- impair the right of a holder to institute suit for payment on any note;
- change the currency in which any note is payable;
- impair the right of a holder to convert any note or reduce the number of
ordinary shares or the amount of any other property receivable upon
conversion;
- reduce the quorum or voting requirements under the indenture;
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- subject to specified exceptions, modify certain of the provisions of the
indenture relating to modification or waiver of provisions of the
indenture; or
- reduce the percentage of notes required for consent to any modification
of the indenture.
We are permitted to modify certain provisions of the indenture without the
consent of the holders of the notes.
FORM, DENOMINATION AND REGISTRATION
The notes were issued:
- in fully registered form;
- without interest coupons; and
- in denominations of $1,000 principal amount and integral multiples of
$1,000.
GLOBAL NOTE, BOOK-ENTRY FORM
Notes are evidenced by one or more global notes. We deposited the global
note or notes with DTC and register the global notes in the name of Cede & Co.
as DTC's nominee. Except as set forth below, a global note may be transferred,
in whole or in part, only to another nominee of DTC or to a successor of DTC or
its nominee.
Beneficial interests in a global note may be held directly through DTC if
such holder is a participant in DTC, or indirectly through organizations that
are participants in DTC (called "participants"). Transfers between participants
will be effected in the ordinary way in accordance with DTC rules and will be
settled in clearing house funds. The laws of some states require that certain
persons take physical delivery of securities in definitive form. As a result,
the ability to transfer beneficial interests in the global note to such persons
may be limited.
Holders who are not participants may beneficially own interests in a global
note held by DTC only through participants, or certain banks, brokers, dealers,
trust companies and other parties that clear through or maintain a custodial
relationship with a participant, either directly or indirectly (called "indirect
participants"). So long as Cede & Co., as the nominee of DTC, is the registered
owner of a global note, Cede & Co. for all purposes will be considered the sole
holder of such global note. Except as provided below, owners of beneficial
interests in a global note will:
- not receive physical delivery of certificates in definitive registered
form; and
- not be considered holders of the global note.
We will pay interest on and the redemption price and the repurchase price
of a global note to Cede & Co., as the registered owner of the global note, by
wire transfer of immediately available funds on each interest payment date or
the redemption or repurchase date, as the case may be. Neither we, the trustee
nor any paying agent will be responsible or liable:
- for the records relating to, or payments made on account of, beneficial
ownership interests in a global note; or
- for maintaining, supervising or reviewing any records relating to the
beneficial ownership interests.
Neither we, the trustee, registrar, paying agent nor conversion agent will
have any responsibility for the performance by DTC or its participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations. DTC has advised us that it will take any
action permitted to be taken by a holder of notes, including the presentation of
notes for exchange, only at the direction of one or more participants to whose
account with DTC interests in the global note are credited, and only in respect
of the principal amount of the notes represented by the global note as to which
the participant or participants has or have given such direction.
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DTC has advised us that it is:
- a limited purpose trust company organized under the laws of the State of
New York, and a member of the Federal Reserve System;
- a "clearing corporation" within the meaning of the Uniform Commercial
Code; and
- a "clearing agency" registered pursuant to the provisions of Section 17A
of the Exchange Act.
DTC was created to hold securities for its participants and to facilitate
the clearance and settlement of securities transactions between participants
through electronic book-entry changes to the accounts of its participants.
Participants include securities brokers, dealers, banks, trust companies and
clearing corporations and other organizations. Some of the participants or their
representatives, together with other entities, own DTC. Indirect access to the
DTC system is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
DTC has agreed to the foregoing procedures to facilitate transfers of
interests in a global note among participants. However, DTC is under no
obligation to perform or continue to perform these procedures, and may
discontinue these procedures at any time.
We will issue the notes in definitive certificated form if DTC notifies us
that it is unwilling or unable to continue as depositary or DTC ceases to be a
clearing agency registered under the Exchange Act and a successor depositary is
not appointed by us within 90 days. In addition, beneficial interests in a
global note may be exchanged for definitive certificated notes upon request by
or on behalf of DTC in accordance with customary procedures. We may determine at
any time and in our sole discretion that notes shall no longer be represented by
global notes, in which case we will issue certificates in definitive form in
exchange for the global notes.
REGISTRATION RIGHTS
We entered into a registration rights agreement dated March 5, 2004 with
the initial purchasers pursuant to which we have, at our own expense, for the
benefit of the noteholders, filed with the SEC the shelf registration statement
of which this prospectus is a part, covering resale of the notes and the
ordinary shares issuable upon conversion of the notes. Our obligation to keep
the shelf registration statement effective terminates upon the earlier of:
- such time as all of the registrable securities have been sold pursuant to
the shelf registration statement or sold to the public pursuant to Rule
144 under the Securities Act, or any other similar provision then in
force (but not Rule 144A); or
- the expiration of the holding period applicable to such securities held
by persons that are not affiliates of Amdocs under Rule 144(k) under the
Securities Act, or any successor provision.
When we use the term "registrable securities" in this section, we are
referring to the notes and the ordinary shares issuable upon conversion of the
notes until the earliest of:
- the effective registration under the Securities Act and the resale of the
securities in accordance with the registration statement;
- the expiration of the holding period with respect to the registrable
securities under Rule 144(k) under the Securities Act; and
- the sale of the registrable securities to the public pursuant to Rule 144
under the Securities Act.
We may, upon written notice to all the holders of registrable securities,
postpone having the shelf registration statement declared effective for a
reasonable period not to exceed 90 days if we in good faith reasonably believe
that we possess material non-public information, the disclosure of which would
have a material adverse effect on us and our subsidiaries taken as a whole.
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We may suspend the use of the prospectus under certain circumstances
relating to pending corporate developments, public filings with the SEC and
similar events. Any suspension period shall not exceed:
- 30 days in any three-month period; or
- an aggregate of 90 days for all periods in any 12-month period.
Notwithstanding the foregoing, we will be permitted to suspend the use of
the prospectus for up to 60 days in any three-month period under certain
circumstances, relating to possible acquisitions, financings or other similar
transactions.
We will pay predetermined liquidated damages on the interest payment dates
for the notes if the shelf registration statement is not timely filed or
declared effective or if the prospectus included in such registration statement
is unavailable for periods in excess of those permitted above:
- on the notes at an annual rate equal to 0.25% of the aggregate principal
amount of the notes outstanding for the first 90-day period immediately
following the failure to timely file or make effective a shelf
registration statement or the failure to make the prospectus available
for periods described above, and such rate will increase to 0.50% per
annum thereafter until the registration statement is filed or made
effective or until the prospectus is made available; and
- on the ordinary shares that have been issued upon conversion of the
notes, at an annual rate equal to 0.25% of an amount equal to $1,000
divided by the conversion rate during such periods for the first 90-day
period immediately following the failure to timely file or make effective
a shelf registration statement or the failure to make the prospectus
available for periods described above, and such rate will increase to
0.50% per annum thereafter until the registration statement is filed or
made effective or until the prospectus is made available.
In no event will liquidated damages accrue at an annual rate exceeding
0.50%.
As a result of the shelf registration statement not being declared
effective within the time periods described above, we became obligated to pay to
the holders of the notes aggregate liquidated damages in the amount of $68,750.
We paid $43,750 of this amount on September 15, 2004 in conjunction with our
interest payment to the record holders of the notes as of the close of business
on September 1, 2004, and we will pay the balance in connection with our March
15, 2005 interest payment to the record holders of the notes as of the close of
business on March 1, 2005.
A holder who elects to sell registrable securities pursuant to the shelf
registration statement will be required to:
- be named as a selling securityholder in the related prospectus;
- deliver a prospectus to purchasers; and
- be subject to the provisions of the registration rights agreement,
including indemnification provisions.
Under the registration rights agreement we will:
- pay all customary expenses with respect to the shelf registration
statement;
- provide each registered holder copies of the prospectus;
- notify holders when the shelf registration statement has become
effective; and
- take other reasonable actions as are required to permit unrestricted
resales of the registrable securities in accordance with the terms and
conditions of the registration rights agreement.
The plan of distribution of the shelf registration statement, of which this
prospectus is a part, permits resales of registrable securities by selling
securityholders through brokers and dealers.
We agreed in the registration rights agreement to give notice to all
holders of the filing and effectiveness of the shelf registration statement, of
which this prospectus is a part.
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This summary in this prospectus of provisions of the registration rights
agreement is not complete. This summary is subject to, and is qualified in its
entirety by reference to, all the provisions of the registration rights
agreement, a copy of which has previously been filed with the SEC.
RULE 144A INFORMATION REQUEST
We will furnish to the holders or beneficial holders of the notes or the
underlying ordinary shares and prospective purchasers, upon their request, the
information required under Rule 144A(d)(4) under the Securities Act until such
time as such securities are no longer "restricted securities" within the meaning
of Rule 144 under the Securities Act, assuming these securities have not been
owned by an affiliate of ours.
INFORMATION CONCERNING THE TRUSTEE
We have appointed The Bank of New York, the trustee under the indenture, as
paying agent, conversion agent, note registrar and custodian for the notes. The
trustee or its affiliates may provide banking and other services to us in the
ordinary course of their business.
The indenture contains certain limitations on the rights of the trustee, if
it or any of its affiliates is then our creditor, to obtain payment of claims in
certain cases or to realize on certain property received on any claim as
security or otherwise. The trustee and its affiliates are permitted to engage in
other transactions with us. However, if the trustee or any affiliate continues
to have any conflicting interest and a default occurs with respect to the notes,
the trustee must eliminate such conflict or resign.
GOVERNING LAW
The notes and the indenture are governed by, and construed in accordance
with, the laws of the State of New York.
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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 L5,750,000 divided into (i) 25,000,000
preferred shares with a par value of L0.01 per share and (ii) 550,000,000
ordinary shares with a par value of L0.01 per share, consisting of 500,000,000
voting ordinary shares and 50,000,000 non-voting ordinary shares. As of December
31, 2004, 202,004,950 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.
- 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.
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- 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.
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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 notes
and our ordinary shares. The following discussion is based upon laws and
relevant interpretations thereof in effect as of the date of this prospectus,
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.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes the anticipated material United States
federal income tax consequences of the purchase, ownership and disposition of
the notes and ordinary shares into which the notes may be converted, as of the
date hereof. The information provided below is based on the Internal Revenue
Code of 1986, as amended (the "Code"), and regulations, rulings and judicial
decisions all as in effect as of the date hereof, all of which may be repealed,
revoked or modified with possible retroactive effect. The summary applies only
to holders that purchase notes in the initial offering at their issue price and
hold the notes and ordinary shares into which the notes may be converted as
capital assets for tax purposes. The summary does not address tax considerations
that may be relevant to particular investors because of their specific
circumstances, or because they are subject to special rules. For example, this
summary does not address tax considerations applicable to investors to whom
special tax rules may apply, such as:
- banks or other financial institutions;
- entities treated as partnerships or other flow-through entities for
United States federal income tax purposes;
- U.S. Holders (as defined below) whose functional currency is other than
the United States dollar;
- tax-exempt entities;
- insurance companies;
- regulated investment companies;
- dealers in securities or currencies; or
- persons that will hold notes or the ordinary shares into which the notes
may be converted as a hedge against currency risk or as part of a
straddle, synthetic security, conversion transaction or other integrated
investment comprised of the notes or the ordinary shares into which the
notes may be converted (as the case may be) and one or more other
investments.
Finally, the summary does not describe the effect of the federal gift or
estate tax laws or the effect of any applicable foreign, state or local laws.
This discussion is for general information only and is not intended as legal or
tax advice to any particular investor. This summary does not provide a complete
analysis or listing of all potential tax considerations. Prospective holders
should consult their tax advisors as to the particular tax consequences to them
of purchasing, holding or disposing of the notes and the ordinary shares into
which the notes may be converted.
For purposes of this discussion, the term "U.S. Holder" means a beneficial
owner of a note or our ordinary shares acquired upon conversion of a note that
is, for United States federal income tax purposes, (i) a citizen or resident of
the United States, (ii) a corporation or other entity subject to tax as a
corporation for United States federal income tax purposes that is created or
organized in or under the laws of the United States or any political subdivision
thereof, (iii) an estate the income of which is subject to United States federal
income taxation regardless of source, or (iv) a trust if a court within the
United States is able to exercise primary supervision over its administration
and one or more United States persons have authority to control all of its
substantial decisions. A "Non-U.S. Holder" is any beneficial owner of a note or
our ordinary shares acquired upon conversion of a note that is not a U.S.
Holder. If a partnership or other flow-through entity is a beneficial owner of a
note or ordinary shares, the tax treatment of the partner will depend upon the
status of the partner or other owner and the activities of the partnership or
other entity.
TAX CONSEQUENCES TO U.S. HOLDERS
INTEREST
U.S. Holders will be required to recognize as ordinary income any interest
paid or accrued on the notes at the time that such payments are accrued or
received, in accordance with their regular method of accounting. In general, if
the terms of a debt instrument entitle a holder to receive payments, other than
fixed periodic
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interest and certain de minimis payments, that exceed the issue price of the
instrument, the holder may be required to recognize the additional amounts as
"original issue discount" over the term of the instrument. We believe that the
notes will not be issued with original issue discount for U.S. federal income
tax purposes.
We may make payments of liquidated damages or certain other contingent
payments to holders of the notes:
- if we do not file, or cause to be declared effective, or keep effective,
a registration statement, or if the prospectus included in such
registration statement is unavailable for specified periods, as described
under "Description of Notes -- Registration Rights";
- if Guernsey imposes an obligation to withhold or deduct certain amounts
from the payments in respect of the notes, as described under
"Description of Notes -- Additional Tax Amounts"; and
- if we choose to pay the repurchase price of the notes in ordinary shares
or a combination of cash and ordinary shares, as described under
"Description of Notes -- Repurchase at Option of the Holder".
We believe that there is only a remote possibility that we will make any of
these payments, and therefore we do not intend to treat the notes as subject to
the special rules governing certain "contingent payment" debt instruments
(which, if applicable, would affect the timing, amount and character of income
with respect to a note). Our determination in this regard, while not binding on
the U.S. Internal Revenue Service, or the IRS, is binding on holders unless they
disclose their contrary position to the IRS. If, contrary to expectations, we
make any of the payments described above, U.S. Holders may be required to
recognize additional interest income.
CONVERSION OF NOTES INTO ORDINARY SHARES
A U.S. Holder will not recognize gain or loss upon conversion of the notes
solely into our ordinary shares, except with respect to cash received in lieu of
a fractional share. The U.S. Holder's basis in the ordinary shares received on
conversion will be the same as the U.S. Holder's adjusted tax basis in the notes
at the time of conversion (reduced by any basis allocable to any fractional
share interest). The holding period for the ordinary shares received on
conversion will generally include the holding period of the notes that were
converted.
Cash received in lieu of a fractional share upon conversion will generally
be treated as a payment in exchange for such fractional share. Accordingly, the
receipt of cash in lieu of a fractional share will generally result in capital
gain or loss (measured by the difference between the cash received for the
fractional share and the holder's adjusted tax basis in the fractional share).
ADJUSTMENT TO CONVERSION RATE
The conversion rate of the notes will be adjusted if we distribute cash
with respect to shares of our ordinary shares and in certain other
circumstances. See "Description of Notes -- Conversion of Notes." Under section
305(c) of the Code and the applicable Treasury regulations, an increase in the
conversion rate as a result of a taxable distribution to our ordinary
shareholders will generally result in a deemed distribution to you. Other
adjustments in the conversion rate (or failures to make such adjustments) that
have the effect of increasing your proportionate interest in our assets or
earnings may have the same result. Any deemed distribution to you will be
subject to tax as a dividend to the extent of our current or accumulated
earnings and profits. In such a case, U.S. Holders will recognize dividend
income as a result of an event pursuant to which they receive no cash or other
property that could be used to pay the related tax. See "-- Dividends" below.
Such deemed dividend income may not qualify for preferential U.S. income tax
rates generally afforded to dividend income under recently enacted legislation.
Holders of notes are advised to consult with their tax advisors with respect to
the potential tax consequences of such constructive distributions.
46
SALE, EXCHANGE, REDEMPTION OR OTHER TAXABLE DISPOSITION OF NOTES
A U.S. Holder will generally recognize capital gain or loss upon the sale,
exchange, redemption or other taxable disposition of the notes in an amount
equal to the difference between (i) the amount of cash proceeds and the fair
market value of any property received (except to the extent such amount is
attributable to accrued interest income not previously included in income, which
is subject to tax as ordinary income) and (ii) such U.S. Holder's adjusted tax
basis in the note. A U.S. Holder's adjusted tax basis in a note will generally
equal the cost of the note to such holder. Such capital gain or loss will be
long-term capital gain or loss if the notes were held for more than one year.
The deductibility of capital losses is subject to certain limitations. If we
repurchase the notes in exchange for our ordinary shares in certain
circumstances at the option of the holder, such a repurchase generally will be
treated in the same manner as a conversion to the extent of the portion of the
notes exchanged for our ordinary shares. See "-- Conversion of Notes into
Ordinary Shares."
DIVIDENDS
Dividends paid on our ordinary shares will generally be includable in the
income of a U.S. Holder as ordinary income to the extent of our current or
accumulated earnings and profits, with any excess treated first as a return of
capital to the extent of the U.S. Holder's basis in the ordinary shares, which
will not be subject to tax, and thereafter as capital gain. Pursuant to recently
enacted legislation, dividends on our ordinary shares paid to certain U.S.
Holders (including individuals) may qualify for preferential U.S. federal income
tax rates (a maximum rate of 15%) if we constitute a "qualified foreign
corporation" and certain other conditions are satisfied. We believe that we
constitute a "qualified foreign corporation."
SALE, EXCHANGE OR OTHER TAXABLE DISPOSITION OF ORDINARY SHARES
Upon the sale, exchange, or other taxable disposition of our ordinary
shares, a U.S. Holder will generally recognize capital gain or loss equal to the
difference between (i) the amount of cash and the fair market value of any
property received upon the sale or exchange and (ii) such holder's adjusted tax
basis in the ordinary shares. Such capital gain or loss will be long-term
capital gain or loss if the U.S. Holder's holding period of the ordinary shares
is more than one year at the time of the sale or exchange. The deductibility of
capital losses is subject to certain limitations.
PASSIVE FOREIGN INVESTMENT COMPANY CONSIDERATIONS
If, during any taxable year, 75% or more of our gross income consists of
certain types of passive income, or the average value during a taxable year of
passive assets (generally assets that generate passive income) is 50% more of
the average value of all of our assets, we will be treated as a "passive foreign
investment company" under U.S. federal income tax law for such year and
succeeding years. If we are treated as a passive foreign investment company, a
U.S. Holder may be subject to increased tax liability upon the sale of our
ordinary shares or upon the receipt of certain distributions, unless such U.S.
Holder makes an election to mark our ordinary shares to market annually.
Based on an analysis of our financial position, we believe that we have not
been a passive foreign investment company for U.S. federal income tax purposes
for any preceding taxable year and expect that we will not become a passive
foreign investment company during the current taxable year. However, because the
tests for determining passive foreign investment company status are applied as
of the end of each taxable year and are dependent upon a number of factors, some
of which are beyond our control, including the value of our assets, based on the
market price of our ordinary shares, and the amount and type of our gross
income, we cannot assure you that we will not become a passive foreign
investment company in the future or that the IRS will agree with our conclusion
regarding our current passive foreign investment company status. We intend to
use reasonable efforts to avoid becoming a passive foreign investment company.
Rules relating to a passive foreign investment company are very complex.
U.S. Holders should consult their own tax advisors regarding the U.S. federal
income tax considerations discussed above and the applicability of passive
foreign investment company rules to their investments in our ordinary shares.
47
SPECIAL TAX RULES APPLICABLE TO NON-U.S. HOLDERS
Payments (or deemed payments attributable to adjustments in the conversion
rate) on the notes or the ordinary shares to a Non-U.S. Holder, or gain realized
on the sale, exchange or redemption of the notes or the ordinary shares by a
Non-U.S. Holder, will not be subject to U.S. federal income or withholding tax,
as the case may be, unless such income is effectively connected with a trade or
business conducted by such Non-U.S. Holder in the United States, or, in the case
of gain, such Non-U.S. Holder is a nonresident alien individual who holds the
notes or ordinary shares, as the case may be, as a capital asset and who is
present in the United States more than 182 days in the taxable year of the sale
and certain other conditions are met.
U.S. trade or business income of a Non-U.S. Holder will generally be
subject to regular United States federal income tax in the same manner as if it
were realized by a U.S. Holder. Non-U.S. Holders that realize U.S. trade or
business income with respect to the notes or ordinary shares should consult
their tax advisors as to the treatment of such income or gain.
BACKUP WITHHOLDING AND INFORMATION REPORTING
U.S. HOLDERS
Payments of interest or dividends made by us on, or the proceeds of the
sale or other disposition of, the notes or ordinary shares may be subject to
information reporting and United States federal backup withholding tax at the
rate of 28% if the U.S. Holder who receives such payments fails to supply an
accurate taxpayer identification number or otherwise fails to comply with
applicable United States information reporting or certification requirements.
Any amount withheld from a payment to a U.S. Holder under the backup withholding
rules is allowable as a credit against the holder's United States federal income
tax, provided that the required information is furnished to the IRS.
NON-U.S. HOLDERS
A Non-U.S. Holder may be required to comply with certification procedures
to establish that the holder is not a U.S. person in order to avoid backup
withholding tax and information reporting requirements.
THE PRECEDING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY, EACH
PROSPECTIVE INVESTOR SHOULD CONSULT ITS TAX ADVISOR AS TO THE PARTICULAR U.S.
FEDERAL, STATE, AND LOCAL TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING
OF THE NOTES AND OUR ORDINARY SHARES. TAX ADVISORS SHOULD ALSO BE CONSULTED AS
TO THE U.S. ESTATE AND GIFT TAX CONSEQUENCES AND THE FOREIGN TAX CONSEQUENCES OF
PURCHASING, HOLDING AND DISPOSING OF THE NOTES AND OUR ORDINARY SHARES, AS WELL
AS THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.
48
CERTAIN GUERNSEY TAX CONSIDERATIONS
Under the laws of Guernsey, as currently in effect, a holder of the notes
(and, upon conversion, a holder of ordinary shares) who is not a resident of
Guernsey and who does not carry on business in Guernsey through a permanent
establishment situated there, would be exempt from Guernsey income tax on
interest and dividends paid with respect to such notes and such ordinary shares,
respectively, and would not be liable for Guernsey income tax on gains realized
upon the sale or other disposition of such notes and such ordinary shares. In
addition, Guernsey would not impose a withholding tax on interest and dividends
paid by us to the holders of such notes and such ordinary shares.
There are no capital gains, gift or inheritance taxes levied by Guernsey,
and the notes and ordinary shares generally would not be subject to any transfer
taxes, stamp duties or similar charges on issuance or transfer.
EUROPEAN UNION SAVINGS TAX DIRECTIVE
The European Union adopted a directive regarding taxation of savings income
on June 3, 2003. It is proposed that, subject to a number of important
conditions being met, each EU member state will, from January 1, 2005, be
required to provide to the tax authorities of another EU member state details of
payments of interest (or other similar income) paid by a person within its
jurisdiction to or for the benefit of an individual resident in that other EU
member state; however, Austria, Belgium and Luxembourg will instead apply a
withholding tax system for a transitional period in relation to such payments.
Although Guernsey is not subject to the EU savings tax directive, the
Advisory and Finance Committee of Guernsey has announced that, in keeping with
Guernsey's policy of constructive international engagement, Guernsey proposes to
introduce a withholding tax system in respect of payments of interest, or other
similar income, made to an individual beneficial owner resident in an EU member
state by an issuer or paying agent situated in Guernsey. The withholding tax
system would apply for a transitional period prior to the implementation of a
system of automatic exchange of information regarding such payments. During this
transitional period, such an individual beneficial owner resident in an EU
member state will be entitled to request an issuer or paying agent situated in
Guernsey not to withhold tax from such payments but instead to apply a system by
which the details of such payments are communicated to the tax authorities of
the EU member state in which the beneficial owner is resident.
As indicated above under "Description of Notes -- Additional Tax Amounts,"
we will not make any additional payments to holders to compensate them for any
tax that is required to be withheld as a result of these proposals.
49
SELLING SECURITYHOLDERS
We originally issued the notes on March 5, 2004 to Morgan Stanley & Co.
Incorporated, Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, whom we refer to as the initial purchasers of the notes. The
initial purchasers advised us that the notes were resold by them in transactions
exempt from the registration requirements of the Securities Act to persons
reasonably believed by the initial purchasers to be "qualified institutional
buyers," as defined in Rule 144A of the Securities Act. These subsequent
purchasers, listed below as selling securityholders, or their transferees,
pledgees or donees or their successors, may from time to time offer and sell any
or all the notes and ordinary shares issuable upon conversion of the notes
pursuant to this prospectus.
The selling securityholders have represented to us that they purchased the
notes and the ordinary shares issuable upon conversion of the notes for their
own account for investment only and not with a view toward selling or
distributing them, except through sales registered under the Securities Act or
exemptions therefrom. We agreed with the initial purchasers to file this
registration statement to register the resale of the notes and the sale of the
ordinary shares issuable upon conversion of the notes. We agreed to prepare and
file all necessary amendments and supplements to the registration statement to
keep it effective until the date on which the notes and the ordinary shares
issuable upon conversion of the notes no longer qualify as "registrable
securities" under our registration rights agreement.
The following table sets forth, to our knowledge, certain information
regarding the selling securityholders based upon information provided by or on
behalf of the selling securityholders in a questionnaire and is as of the date
specified by the securityholders in those questionnaires. The percentages set
forth below are based on 202,004,950 of our ordinary shares outstanding as of
December 31, 2004.
The selling securityholders may offer all, some or none of the notes or
ordinary shares issuable upon conversion of the notes. Thus, we cannot estimate
the amount of the notes or the ordinary shares issuable upon conversion of the
notes that will be held by the selling securityholders upon termination of any
sales. The column showing ownership after completion of the offering assumes
that the selling securityholders will sell all of the securities offered by this
prospectus. In addition, the selling securityholders identified below may have
sold, transferred or otherwise disposed of all or a portion of their notes since
the date on which they provided the information about their notes in
transactions exempt from the registration requirements of the Securities Act.
The information contained under the column "Ordinary Shares Beneficially
Owned Upon Conversion of the Notes" represents ordinary shares issuable upon
conversion of the principal amount of notes listed and assumes conversion of the
full amount of the notes at the initial conversion rate of 23.1911 shares per
each $1,000 principal of the notes. However, the maximum conversion rate is
subject to adjustment as described under "Description of Notes -- Conversion of
Notes -- Conversion Rate Adjustments." As a result, the amount of ordinary
shares issuable upon conversion of the notes may increase or decrease in the
future.
Except as indicated below, none of the selling securityholders has had any
material relationship with us or our affiliates within the past three years.
This table assumes that other holders of notes or any future transferees from
any such holder do not beneficially own any ordinary shares other than ordinary
shares issuable upon conversion of the notes.
ORDINARY SHARES
PRINCIPAL BENEFICIALLY OWNED PRINCIPAL ORDINARY SHARES
AMOUNT OF UPON CONVERSION AMOUNT OF NOTES BENEFICIALLY OWNED
NOTES BENEFICIALLY OF THE NOTES BENEFICIALLY AFTER OFFERING
OWNED THAT MAY ----------------------- OWNED AFTER -------------------
NAME OF SELLING SECURITYHOLDER BE SOLD($) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
------------------------------ ------------------ ---------- ---------- --------------- ------ ----------
Acuity Master Fund, Ltd. .......... 1,640,000 38,033 * 0 0 *
ACUITY Capital Management LLC
4 Greenwich Office Park, 3rd
Floor
Greenwich, CT 06831 USA
50
ORDINARY SHARES
PRINCIPAL BENEFICIALLY OWNED PRINCIPAL ORDINARY SHARES
AMOUNT OF UPON CONVERSION AMOUNT OF NOTES BENEFICIALLY OWNED
NOTES BENEFICIALLY OF THE NOTES BENEFICIALLY AFTER OFFERING
OWNED THAT MAY ----------------------- OWNED AFTER -------------------
NAME OF SELLING SECURITYHOLDER BE SOLD($) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
------------------------------ ------------------ ---------- ---------- --------------- ------ ----------
Allstate Insurance Company(1)...... 3,250,000 75,371 * 0 0 *
Allstate Investments, LLC
3075 Sanders Road
Suite G6B
Northbrook, IL 60062-7127
Allstate Life Insurance Company.... 3,000,000 69,573 * 0 0 *
Allstate Investments, LLC
3075 Sanders Road
Suite G6B
Northbrook, IL 60062-7127
AM International E MAC 63 Ltd. .... 630,000 14,610 * 0 0 *
350 Park Avenue, 4th Floor
New York, NY 10022
AM Master Fund I, LP............... 8,470,000 196,428 * 0 0 *
350 Park Avenue, 4th Floor
New York, NY 10022
American Investors Life Insurance
Co. ............................. 700,000 16,233 * 0 0 *
Inflective Asset Management, LLC
1334 Parkview Avenue
Suite 310
Manhattan Beach, CA 90266
AmerUs Life Insurance Company...... 4,200,000 97,402 * 0 0 *
Inflective Asset Management, LLC
1334 Parkview Avenue
Suite 310
Manhattan Beach, CA 90266
The Animi Master Fund, Ltd. ....... 14,000,000 324,675 * 0 0 *
Archeus Capital Management, LLC
360 Madison Avenue, 10th Floor
New York, NY 10017
Arbitex Master Fund L.P.(1)........ 9,000,000 208,719 * 0 0 *
Arbitex Asset Management L.P.
1601 Elm Street, Suite 4000
Dallas, TX 75201
Argent Classic Convertible
Arbitrage Fund (Bermuda) Ltd. ... 6,955,000 161,294 * 0 0 *
Argent Financial Group (Bermuda)
Ltd.
73 Front Street
Hamilton HM12 Bermuda
Argent Classic Convertible
Arbitrage Fund II, L.P. ......... 255,000 5,913 * 0 0 *
Argent
55 Vilcom Circle
Suite 200
Chapel Hill, NC 27514
Argent Classic Convertible
Arbitrage Fund L.P. ............. 1,150,000 26,669 * 0 0 *
Argent
55 Vilcom Circle
Suite 200
Chapel Hill, NC 27514
51
ORDINARY SHARES
PRINCIPAL BENEFICIALLY OWNED PRINCIPAL ORDINARY SHARES
AMOUNT OF UPON CONVERSION AMOUNT OF NOTES BENEFICIALLY OWNED
NOTES BENEFICIALLY OF THE NOTES BENEFICIALLY AFTER OFFERING
OWNED THAT MAY ----------------------- OWNED AFTER -------------------
NAME OF SELLING SECURITYHOLDER BE SOLD($) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
------------------------------ ------------------ ---------- ---------- --------------- ------ ----------
Argent LowLev Convertible Arbitrage
Fund LLC......................... 1,770,000 41,048 * 0 0 *
Argent
55 Vilcom Circle
Suite 200
Chapel Hill, NC 27514
Argent LowLev Convertible Arbitrage
Fund II, LLC..................... 280,000 6,493 * 0 0 *
Argent
55 Vilcom Circle
Suite 200
Chapel Hill, NC 27514
Argent LowLev Convertible Arbitrage
Fund Ltd. ....................... 10,280,000 238,404 * 0 0 *
Argent Financial Group (Bermuda)
Ltd.
PO Box 3013
Hamilton, HMMX Bermuda
Aviva Life Insurance Co. .......... 250,000 5,797 * 0 0 *
Aviva Life Insurance Co
Morley Fund Management
No. 1 Poultry
London EC2R 8EJ
Aviva Life Insurance Co. .......... 2,750,000 63,775 * 0 0 *
Aviva Life Insurance Co
Morley Fund Management
No. 1 Poultry
London EC2R 8EJ
Bankers Life Insurance Company of
New York......................... 75,000 1,739 * 0 0 *
Inflective Asset Management, LLC
1334 Parkview Avenue
Suite 310
Manhattan Beach, CA 90266
Bear, Stearns & Co. Inc.(1)........ 6,250,000 144,944 * 0 0 *
Bear, Stearns & Co. Inc.
383 Madison Avenue
23rd Floor, Global Fund
New York, NY 10179 USA
Black Diamond Convertible Offshore
LDC.............................. 2,300,000 53,339 * 0 0 *
UBS Fund Services [Cayman]
Limited
P.O. Box 852
UBS House, 75 Fort Street
George Town, Grand Cayman
Cayman Islands BWI
52
ORDINARY SHARES
PRINCIPAL BENEFICIALLY OWNED PRINCIPAL ORDINARY SHARES
AMOUNT OF UPON CONVERSION AMOUNT OF NOTES BENEFICIALLY OWNED
NOTES BENEFICIALLY OF THE NOTES BENEFICIALLY AFTER OFFERING
OWNED THAT MAY ----------------------- OWNED AFTER -------------------
NAME OF SELLING SECURITYHOLDER BE SOLD($) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
------------------------------ ------------------ ---------- ---------- --------------- ------ ----------
Black Diamond Offshore Ltd. ....... 1,360,000 31,539 * 0 0 *
UBS Fund Services [Cayman]
Limited
P.O. Box 852
UBS House, 75 Fort Street
George Town, Grand Cayman
Cayman Islands BWI
BTOP Multi Strategy Master
Portfolio Ltd. .................. 3,430,000 79,545 * 0 0 *
25 Deforest Avenue
Summit, NJ 07901
Citadel Credit Trading Ltd.(1)..... 11,775,000 273,075 * 0 0 *
Citadel Investment Group, L.L.C.
131 South Dearborn
Chicago, IL 60603 USA
Citadel Equity Fund Ltd.(1)........ 66,725,000 1,547,426 * 0 0 *
Citadel Investment Group, L.L.C.
131 South Dearborn
Chicago, IL 60603 USA
Citigroup Global Markets Inc.(2)... 4,400,000 102,040 * 0 0 *
Citigroup Global Markets Inc.
390 Greenwich Street, 3rd Floor
Convertible Trading
New York, NY 10013
Class C Trading Company, Ltd. ..... 700,000 16,233 * 0 0 *
Argent
55 Vilcom Circle
Suite 200
Chapel Hill, NC 27514
Commissioners of the Land Office... 1,000,000 23,191 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
Context Convertible Arbitrage Fund,
LP............................... 1,350,000 31,307 * 0 0 *
Context Capital Management, LLC
12626 High Bluff Drive, #440
San Diego, CA 92130
Context Convertible Arbitrage
Offshore Fund, LTD. ............. 3,800,000 88,126 * 0 0 *
Context Capital Management, LLC
12626 High Bluff Drive, #440
San Diego, CA 92130
Credit Suisse First Boston Europe
Ltd.(1).......................... 160,000 3,710 * 0 0 *
Credit Suisse First Boston LLC
Reorg. Department -- 2nd Floor
One Madison Avenue
New York, NY 10010
Custom Investments PCC, Ltd. ...... 220,000 5,102 * 0 0 *
Argent
55 Vilcom Circle
Suite 200
Chapel Hill, NC 27514
53
ORDINARY SHARES
PRINCIPAL BENEFICIALLY OWNED PRINCIPAL ORDINARY SHARES
AMOUNT OF UPON CONVERSION AMOUNT OF NOTES BENEFICIALLY OWNED
NOTES BENEFICIALLY OF THE NOTES BENEFICIALLY AFTER OFFERING
OWNED THAT MAY ----------------------- OWNED AFTER -------------------
NAME OF SELLING SECURITYHOLDER BE SOLD($) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
------------------------------ ------------------ ---------- ---------- --------------- ------ ----------
Deephaven Domestic Convertible
Trading Ltd(1)................... 22,662,000 525,556 * 0 0 *
Deephaven Domestic Convertible
Trading Ltd.
130 Chesire Lane
Suite 102
Minnetonka, MN 55305
Deutsche Bank Securities Inc.(2)... 200,000 4,638 * 0 0 *
1251 Avenue of the Americas
26th Floor,
Mail Stop NYCO7-2638
New York, NY 10020
Diaco Investments LP............... 360,000 8,348 * 0 0 *
Diaco Investments
1271 Avenue of the Americas
New York, NY 10020
Double Black Diamond Offshore LDC.. 7,319,000 169,735 * 0 0 *
UBS Fund Services [Cayman]
Limited
P.O. Box 852
UBS House, 75 Fort Street
George Town, Grand Cayman
Cayman Islands BWI
Georgia Firefighters Pension
Fund............................. 450,000 10,435 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
GLG Market Neutral Fund............ 1,000,000 23,191 * 0 0 *
GLG Partners LP
One Curzon Street
London W1J5HB United Kingdom
Guggenheim Portfolio Co. XV, LLC... 1,360,000 31,539 * 0 0 *
Ramius Capital Group, LLC
666 Third Avenue, 26th Floor
New York, NY 10017
HFR CA Global Select Master Trust
Account.......................... 440,000 10,204 * 0 0 *
Argent
55 Vilcom Circle
Suite 200
Chapel Hill, NC 27514
HSBC Asset Management (Americas)
Inc. for the HSBC Multi-Strategy
Arbitrage Fund(1)................ 1,000,000 23,191 * 0 0 *
HSBC Asset Management (Americas)
Inc.
452 5th Avenue, 18th Floor
New York, NY 10018
54
ORDINARY SHARES
PRINCIPAL BENEFICIALLY OWNED PRINCIPAL ORDINARY SHARES
AMOUNT OF UPON CONVERSION AMOUNT OF NOTES BENEFICIALLY OWNED
NOTES BENEFICIALLY OF THE NOTES BENEFICIALLY AFTER OFFERING
OWNED THAT MAY ----------------------- OWNED AFTER -------------------
NAME OF SELLING SECURITYHOLDER BE SOLD($) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
------------------------------ ------------------ ---------- ---------- --------------- ------ ----------
Huntrise Capital Leveraged
Partners, LLC.................... 31,000 718 * 0 0 *
Inflective Asset Management, LLC
1334 Parkview Avenue
Suite 310
Manhattan Beach, CA 90266
Indianapolis Life Insurance Co. ... 21,100,000 489,332 * 0 0 *
Inflective Asset Management, LLC
1334 Parkview Avenue
Suite 310
Manhattan Beach, CA 90266
Inflective Convertible Opportunity
Fund I, L.P. .................... 725,000 16,813 * 0 0 *
Inflective Asset Management, LLC
1334 Parkview Avenue
Suite 310
Manhattan Beach, CA 90266
Inflective Convertible Opportunity
Fund I, LTD. .................... 35,000 811 * 0 0 *
Inflective Asset Management, LLC
1334 Parkview Avenue
Suite 310
Manhattan Beach, CA 90266
Injured Workers Insurance Fund..... 1,450,000 33,627 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
Intl. Truck & Engine Corp. Non
Contributory Retirement Plan
Trust............................ 1,000,000 23,191 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
Intl. Truck & Engine Corp.
Retirement Plan for Salaried
Employee's Trust................. 1,700,000 39,424 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
Jefferies Umbrella Fund US
Convertible Bonds................ 150,000 3,478 * 0 0 *
Jefferies Asset Management LTD.
Uraniastrasse 12
CH-8023
Zurich, Switzerland
JP Morgan Securities Inc.(2)....... 3,000,000 69,573 * 0 0 *
500 Stanton Christiana Road
Newark, DE 19713
KBC Convertible Arbitrage
Fund(1).......................... 26,590,000 616,651 * 0 0 *
KBC Financial Products
140 East 45th Street
2 Grand Central Tower, 33rd Floor
New York, NY 10017-3144
55
ORDINARY SHARES
PRINCIPAL BENEFICIALLY OWNED PRINCIPAL ORDINARY SHARES
AMOUNT OF UPON CONVERSION AMOUNT OF NOTES BENEFICIALLY OWNED
NOTES BENEFICIALLY OF THE NOTES BENEFICIALLY AFTER OFFERING
OWNED THAT MAY ----------------------- OWNED AFTER -------------------
NAME OF SELLING SECURITYHOLDER BE SOLD($) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
------------------------------ ------------------ ---------- ---------- --------------- ------ ----------
KBC Convertible Mac 28 Ltd.(1)..... 2,127,000 49,327 * 0 0 *
KBC Financial Products
140 East 45th Street
2 Grand Central Tower, 33rd Floor
New York, NY 10017-3144
KBC Financial Products USA
Inc.(2).......................... 4,200,000 97,402 * 0 0 *
KBC Financial Products
140 East 45th Street
2 Grand Central Tower, 42nd Floor
New York, NY 10017-3144
KBC Multi Strategy Arbitrage
Fund(1).......................... 22,852,000 529,963 * 0 0 *
KBC Financial Products
140 East 45th Street
2 Grand Central Tower, 33rd Floor
New York, NY 10017-3144
KeySpan Foundation................. 75,000 1,739 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
KeySpan Insurance Company.......... 100,000 2,319 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
Lehman Brothers(2)................. 1,050,000 24,350 * 0 0 *
745 Seventh Avenue
16th Floor
New York, NY 10019
Lord Abbett Investment Trust -- LA
Convertible Fund................. 1,750,000 40,584 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
Lydian Global Opportunities Master
Fund Limited..................... 7,500,000 173,933 * 0 0 *
495 Post Road East
Westport, CT 06880
Lydian Overseas Partners Master
Fund LP.......................... 10,000,000 231,911 * 0 0 *
495 Post Road East
Westport, CT 06880
Lyxor/AM Investment Fund LTD. ..... 1,870,000 43,367 * 0 0 *
350 Park Avenue, 4th Floor
New York, NY 10022
Lyxor/Context Fund LTD(1).......... 650,000 15,074 * 0 0 *
Context Capital Management, LLC
12626 High Bluff Drive, #440
San Diego, CA 92130
Lyxor/Inflective Convertible
Opportunity Fund LTD. ........... 325,000 7,537 * 0 0 *
Inflective Asset Management, LLC
1334 Parkview Avenue
Suite 310
Manhattan Beach, CA 90266
56
ORDINARY SHARES
PRINCIPAL BENEFICIALLY OWNED PRINCIPAL ORDINARY SHARES
AMOUNT OF UPON CONVERSION AMOUNT OF NOTES BENEFICIALLY OWNED
NOTES BENEFICIALLY OF THE NOTES BENEFICIALLY AFTER OFFERING
OWNED THAT MAY ----------------------- OWNED AFTER -------------------
NAME OF SELLING SECURITYHOLDER BE SOLD($) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
------------------------------ ------------------ ---------- ---------- --------------- ------ ----------
Lyxor Master Fund Ref: Argent/
LowLev CB c/o Argent............. 1,750,000 40,584 * 0 0 *
Argent
55 Vilcom Circle
Suite 200
Chapel Hill, NC 27514
Melody 1AM Ltd.(1)................. 1,610,000 37,337 * 0 0 *
KBC Financial Products
140 East 45th Street
2 Grand Central Tower, 33rd Floor
New York, NY 10017-3144
National Bank of Canada(1)......... 550,000 12,755 * 0 0 *
Context Capital Management, LLC
12626 High Bluff Drive, #440
San Diego, CA 92130
National Benefit Life Insurance
Company(1)....................... 112,000 2,597 * 0 0 *
Citigroup Insurance Company
242 Trumbull Street
PO Box 150449
Hartford, CT 06115-0449
Nomura Securities Int'l Inc(2)..... 15,000,000 347,866 * 0 0 *
Nomura Securities International
Inc.
2 World Financial Center, 18th
Floor
New York, NY 10281 USA
Partners Group Alternative
Strategies PCC LTD. ............. 800,000 18,552 * 0 0 *
Argent
55 Vilcom Circle
Suite 200
Chapel Hill, NC 27514
Primerica Life Insurance
Company(1)....................... 1,031,000 23,910 * 0 0 *
Citigroup Insurance Company
242 Trumbull Street
PO Box 150449
Hartford, CT 06115-0449
Pyramid Equity Strategies Fund..... 570,000 13,218 * 0 0 *
25 Deforest Avenue
Summit, NJ 07901
R2 Investments, LDC(1)............. 660,000 15,306 * 0 0 *
c/o Amalgamated Gadget, L.P. as
Investment
Manager
301 Commerce, Suite 2975
Ft. Worth, TX 76102
Radian Asset Assurance, Inc. ...... 2,625,000 60,876 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
Radian Group Convertible
Securities....................... 1,300,000 30,148 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
57
ORDINARY SHARES
PRINCIPAL BENEFICIALLY OWNED PRINCIPAL ORDINARY SHARES
AMOUNT OF UPON CONVERSION AMOUNT OF NOTES BENEFICIALLY OWNED
NOTES BENEFICIALLY OF THE NOTES BENEFICIALLY AFTER OFFERING
OWNED THAT MAY ----------------------- OWNED AFTER -------------------
NAME OF SELLING SECURITYHOLDER BE SOLD($) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
------------------------------ ------------------ ---------- ---------- --------------- ------ ----------
Radian Guaranty.................... 5,950,000 137,987 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
Ramius Capital Group(1)............ 425,000 9,856 * 0 0 *
Ramius Capital Group, LLC
666 Third Avenue, 26th Floor
New York, NY 10017
Ramius Master Fund, LTD(1)......... 6,715,000 155,728 * 0 0 *
Ramius Capital Group, LLC
666 Third Avenue, 26th Floor
New York, NY 10017
RCG Halifax Master Fund, LTD(1).... 425,000 9,856 * 0 0 *
Ramius Capital Group, LLC
666 Third Avenue, 26th Floor
New York, NY 10017
RCG Latitude Master Fund, LTD(1)... 6,885,000 159,670 * 0 0 *
Ramius Capital Group, LLC
666 Third Avenue, 26th Floor
New York, NY 10017
RCG Multi Strategy Master Fund,
LTD(1)........................... 850,000 19,712 * 0 0 *
Ramius Capital Group, LLC
666 Third Avenue, 26th Floor
New York, NY 10017
Royal Bank of Canada
(Norshield)(1)................... 475,000 11,015 * 0 0 *
Context Capital Management, LLC
12626 High Bluff Drive, #440
San Diego, CA 92130
Silver Convertible Arbitrage Fund,
LDC.............................. 700,000 16,233 * 0 0 *
Argent
55 Vilcom Circle
Suite 200
Chapel Hill, NC 27514
Sphinx Convertible Arbitrage Fund
SPC.............................. 588,000 13,636 * 0 0 *
Deephaven Domestic Convertible
Trading Ltd.
130 Chesire Lane
Suite 102
Minnetonka, MN 55305
State of Florida Division of
Treasury......................... 1,300,000 30,148 * 0 0 *
Froley Revy Investment Co. Inc.
10900 Wilshire Blvd. Ste. 900
Los Angeles, CA 90024
Teachers Insurance and Annuity
Association of America........... 23,300,000 540,352 * 0 0 *
TIAA-CREF
730 Third Avenue
New York, NY 10017 USA
Thomas Weisel Partners(2).......... 3,500,000 81,168 * 0 0 *
Thomas Weisel Partners
1 Montgomery Street, 37th Floor
San Francisco, CA 94104
58
ORDINARY SHARES
PRINCIPAL BENEFICIALLY OWNED PRINCIPAL ORDINARY SHARES
AMOUNT OF UPON CONVERSION AMOUNT OF NOTES BENEFICIALLY OWNED
NOTES BENEFICIALLY OF THE NOTES BENEFICIALLY AFTER OFFERING
OWNED THAT MAY ----------------------- OWNED AFTER -------------------
NAME OF SELLING SECURITYHOLDER BE SOLD($) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
------------------------------ ------------------ ---------- ---------- --------------- ------ ----------
Thrivent Financial For
Lutherans(1)..................... 1,000,000 23,191 * 0 0 *
Thrivent Financial for Lutherans
625 Fourth Avenue South
Minneapolis, MN 55415 USA
Total Fina Elf Finance USA,
Inc. ............................ 300,000 6,957 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
Travelers Insurance Company --
Life(1).......................... 2,604,000 60,389 * 0 0 *
Citigroup Insurance Company
242 Trumbull Street
PO Box 150449
Hartford, CT 06115-0449
Travelers Insurance Company
Separate Account TLAC(1)......... 88,000 2,040 * 0 0 *
Citigroup Insurance Company
242 Trumbull Street
PO Box 150449
Hartford, CT 06115-0449
Travelers Life and Annuity
Company(1)....................... 154,000 3,571 * 0 0 *
Citigroup Insurance Company
242 Trumbull Street
PO Box 150449
Hartford, CT 06115-0449
Travelers Series Trust Convertible
Bond Portfolio................... 1,500,000 34,786 * 0 0 *
Citigroup Insurance Company
242 Trumbull Street
PO Box 150449
Hartford, CT 06115-0449
UBS AG f/b/o IPB Client............ 1,000,000 23,191 * 0 0 *
Ferox Capital Management Ltd.
66 St. James Street
London, SW1A 1NE
United Kingdom
University of Arkansas............. 450,000 10,435 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
University of Arkansas
Foundation....................... 450,000 10,435 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
Univest Convertible Arbitrage Fund
II LTD (Norshield)............... 175,000 4,058 * 0 0 *
Context Capital Management, LLC
12626 High Bluff Drive, #440
San Diego, CA 92130
59
ORDINARY SHARES
PRINCIPAL BENEFICIALLY OWNED PRINCIPAL ORDINARY SHARES
AMOUNT OF UPON CONVERSION AMOUNT OF NOTES BENEFICIALLY OWNED
NOTES BENEFICIALLY OF THE NOTES BENEFICIALLY AFTER OFFERING
OWNED THAT MAY ----------------------- OWNED AFTER -------------------
NAME OF SELLING SECURITYHOLDER BE SOLD($) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
------------------------------ ------------------ ---------- ---------- --------------- ------ ----------
Vermont Mutual Insurance Company... 175,000 4,058 * 0 0 *
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302
Wachovia Securities International
Ltd.(1)(2)....................... 5,000,000 115,955 * 0 0 *
201 S. College Street
Charlotte, NC 28214
White River Securities L.L.C.(2)... 6,250,000 144,944 * 0 0 *
Bear, Stearns & Co. Inc.
383 Madison Avenue
23rd Floor, Global Fund
New York, NY 10179 USA
Worldwide Transactions Ltd. ....... 221,000 5,125 * 0 0 *
Worldwide Transactions Ltd.
Washington Mall-Phase I
Church Street, 3rd Floor
Hamilton HM 11 Bermuda
Xavex Convertible Arbitrage 5
Fund............................. 340,000 7,884 * 0 0 *
Ramius Capital Group, LLC
666 Third Avenue, 26th Floor
New York, NY 10017
Xavex Convertible Arbitrage 10
Fund............................. 640,000 14,842 * 0 0 *
Argent
55 Vilcom Circle
Suite 200 Chapel Hill, NC 27514
Xavex Convertible Arbitrage 2
Fund............................. 400,000 9,276 * 0 0 *
Argent
55 Vilcom Circle
Suite 200
Chapel Hill, NC 27514
Any other holder of notes or future
transferee, pledgee, donee or
successor of any holder(3)....... 36,936,000 856,634 * 0 0 *
---------------
* Less than one percent.
(1) The selling securityholder is an affiliate of a registered broker-dealer and
has informed us that it acquired the notes in the ordinary course of
business, and at the time of the acquisition of the notes had no agreements,
understandings or arrangements with any other persons, either directly or
indirectly, to distribute the notes.
(2) The selling securityholder is a registered broker-dealer and an
"underwriter" within the meaning of the Securities Act.
(3) Information about other selling securityholders will be set forth in an
amendment to the registration statement of which this prospectus is a part
and information about future transferees, pledgees, donees or successors of
any holder named as a selling securityholder in this prospectus will be set
forth in prospectus amendments or supplements, as required.
60
VOTING/INVESTMENT CONTROL TABLE
NAME OF SELLING SECURITYHOLDER NATURAL PERSON OR PERSONS WITH VOTING/INVESTMENT CONTROL
------------------------------ --------------------------------------------------------
Acuity Master Fund, Ltd. .................... Howard Needle and David J. Harris
Allstate Insurance Company................... (1)
Allstate Life Insurance Company.............. (1)
AM International E MAC 63 Ltd. .............. Adam Stern and Mark Friedman
AM Master Fund I, LP......................... Adam Stern and Mark Friedman
American Investors Life Insurance Co. ....... Thomas J. Ray
AmerUs Life Insurance Company................ Thomas J. Ray
The Animi Master Fund, Ltd. ................. (2)
Arbitex Master Fund L.P. .................... Clark Hunt, Jonathan Bren and Ken Tananbaum
Argent Classic Convertible Arbitrage Fund
(Bermuda) Ltd. ............................ Nathanial Brown and Robert Richardson
Argent Classic Convertible Arbitrage Fund II,
L.P. ...................................... Nathanial Brown and Robert Richardson
Argent Classic Convertible Arbitrage Fund
L.P. ...................................... Nathanial Brown and Robert Richardson
Argent LowLev Convertible Arbitrage Fund
LLC........................................ Nathanial Brown and Robert Richardson
Argent LowLev Convertible Arbitrage Fund II,
LLC........................................ Nathanial Brown and Robert Richardson
Argent LowLev Convertible Arbitrage Fund
Ltd. ...................................... Nathanial Brown and Robert Richardson
Aviva Life Insurance Co. .................... David Clott
Aviva Life Insurance Co. .................... David Clott
Bankers Life Insurance Company of New York... Thomas J. Ray
Bear, Stearns & Co. Inc. .................... Yan Erlikh & David Liebowitz
Black Diamond Convertible Offshore LDC....... Clint D. Carlson
Black Diamond Offshore Ltd. ................. Clint D. Carlson
BTOP Multi Strategy Master Portfolio Ltd. ... Eric Lobben
Citadel Credit Trading Ltd. ................. (4)
Citadel Equity Fund Ltd. .................... (4)
Citigroup Global Markets Inc. ............... (5)
Class C Trading Company, Ltd. ............... Nathanial Brown and Robert Richardson
Commissioners of the Land Office............. Maren Lindstrom
Context Convertible Arbitrage Fund, LP....... Michael Rosen and William Fertig
Context Convertible Arbitrage Offshore Fund,
LTD. ...................................... Michael Rosen and William Fertig
Credit Suisse First Boston Europe Ltd. ...... Gerry Murtagh
Custom Investments PCC, Ltd. ................ Nathanial Brown and Robert Richardson
Deephaven Domestic Convertible Trading
Ltd. ...................................... Colin Smith
Deutsche Bank Securities Inc. ............... (6)
Diaco Investments LP......................... Simon Glick
Double Black Diamond Offshore LDC............ Clint D. Carlson
Georgia Firefighters Pension Fund............ Maren Lindstrom
GLG Market Neutral Fund...................... (7)
Guggenheim Portfolio Co. XV, LLC............. Alex Adair
HFR CA Global Select Master Trust Account.... Nathanial Brown and Robert Richardson
HSBC Asset Management (Americas) Inc. for the
HSBC Multi-Strategy Arbitrage Fund......... Warren Stein and John Moore Stanley
61
NAME OF SELLING SECURITYHOLDER NATURAL PERSON OR PERSONS WITH VOTING/INVESTMENT CONTROL
------------------------------ --------------------------------------------------------
Huntrise Capital Leveraged Partners, LLC..... Thomas J. Ray
Indianapolis Life Insurance Co. ............. Thomas J. Ray
Inflective Convertible Opportunity Fund I,
L.P. ...................................... Thomas J. Ray
Inflective Convertible Opportunity Fund I,
LTD. ...................................... Thomas J. Ray
Injured Workers Insurance Fund............... Maren Lindstrom
Intl. Truck & Engine Corp. Non Contributory
Retirement Plan Trust...................... Maren Lindstrom
Intl. Truck & Engine Corp. Retirement Plan
for Salaried Employee's Trust.............. Maren Lindstrom
Jefferies Umbrella Fund US Convertible
Bonds...................................... Andre Sager and Evelyne Kaser
JP Morgan Securities Inc. ................... Craig Petherick
KBC Convertible Arbitrage Fund............... Andrew Preston
KBC Convertible Mac 28 Ltd. ................. Andrew Preston
KBC Financial Products USA Inc. ............. (8)
KBC Multi Strategy Arbitrage Fund............ Andrew Preston
KeySpan Foundation........................... Maren Lindstrom
KeySpan Insurance Company.................... Maren Lindstrom
Lehman Brothers.............................. Kevin Lowe
Lord Abbett Investment Trust -- LA
Convertible Fund........................... Maren Lindstrom
Lydian Overseas Partners Master Fund......... (9)
Lydian Global Opportunities Master Fund
Limited.................................... (9)
Lyxor/AM Investment Fund LTD. ............... (3)
Lyxor/Context Fund LTD. ..................... Michael Rosen and William Fertig
Lyxor/Inflective Convertible Opportunity Fund
LTD. ...................................... Thomas J. Ray
Lyxor Master Fund Ref: Argent/LowLev CB c/o
Argent..................................... Nathanial Brown and Robert Richardson
Melody 1AM Ltd. ............................. Andrew Preston
National Bank of Canada...................... Michael Rosen and William Fertig
National Benefit Life Insurance Company...... David A. Tyson and Robert Simmons
Nomura Securities Int'l Inc. ................ Simon Pharr
Partners Group Alternative Strategies PCC
LTD. ...................................... Nathanial Brown and Robert Richardson
Primerica Life Insurance Company............. David A. Tyson and Robert Simmons
Pyramid Equity Strategies Fund............... Eric Lobben
R2 Investments, LDC.......................... (10)
Radian Asset Assurance, Inc. ................ Maren Lindstrom
Radian Group Convertible Securities.......... Maren Lindstrom
Radian Guaranty.............................. Maren Lindstrom
Ramius Capital Group......................... Alex Adair
Ramius Master Fund, LTD. .................... Alex Adair
RCG Halifax Master Fund, LTD. ............... Alex Adair
RCG Latitude Master Fund, LTD. .............. Alex Adair
RCG Multi Strategy Master Fund, LTD. ........ Alex Adair
Royal Bank of Canada (Norshield)............. Michael Rosen and William Fertig
62
NAME OF SELLING SECURITYHOLDER NATURAL PERSON OR PERSONS WITH VOTING/INVESTMENT CONTROL
------------------------------ --------------------------------------------------------
Silver Convertible Arbitrage Fund, LDC....... Nathanial Brown and Robert Richardson
Sphinx Convertible Arbitrage Fund SPC........ Colin Smith
State of Florida Division of Treasury........ Ann Houlihan
Teachers Insurance and Annuity Association of
America.................................... Elizabeth Black and Edward L Toy
Thomas Weisel Partners....................... Tim Heekin
Thrivent Financial For Lutherans............. (11)
Total Fina Elf Finance USA, Inc. ............ Maren Lindstrom
Travelers Insurance Company -- Life.......... David A. Tyson and Robert Simmons
Travelers Insurance Company Separate Account
TLAC....................................... David A. Tyson and Robert Simmons
Travelers Life and Annuity Company........... David A. Tyson and Robert Simmons
Travelers Series Trust Convertible Bond
Portfolio.................................. David A. Tyson and Robert Simmons
UBS AG f/b/o IPB Client...................... Alexander Warren
University of Arkansas....................... Maren Lindstrom
University of Arkansas Foundation............ Maren Lindstrom
Univest Convertible Arbitrage Fund II LTD
(Norshield)................................ Michael Rosen and William Fertig
Vermont Mutual Insurance Company............. Maren Lindstrom
Wachovia Securities International Ltd. ...... Eric Peyton
White River Securities L.L.C. ............... Yan Erlikh & David Liebowitz
Worldwide Transactions Ltd. ................. (12)
Xavex Convertible Arbitrage 5 Fund........... Alex Adair
Xavex Convertible Arbitrage 10 Fund.......... Nathanial Brown and Robert Richardson
Xavex Convertible Arbitrage 2 Fund........... Nathanial Brown and Robert Richardson
---------------
(1) The securityholder is a wholly owned subsidiary of The Allstate
Corporation, a reporting entity with the Securities and Exchange
Commission. The Allstate Corporation has voting and investment control over
the securities held by the securityholder.
(2) Archeus Capital Management, LLC is the Investment Manager for The Animi
Master Fund, Ltd., the selling securityholder. Peter Hirsch is a Managing
Member of Archeus Capital Management, LLC and its Chief Investment Officer
on behalf of The Animi Master Fund, Ltd. and, as a result, exercises voting
and dispositive power of the securities held by the selling securityholder.
Mr. Hirsch disclaims beneficial ownership of the securities held by the
Animi Master Fund, Ltd.
(3) AM Investment Partners LLC has the authority to vote over the Company's
securities as Investment Managers. The principals of AM Investment Partners
LLC are Adam Stern and Mark Friedman and as a result, the exercise voting
and investment control over the securities held by the selling
securityholder.
(4) Citadel Limited Partnership ("Citadel") is the trading manager of this
securityholder and consequently has investment discretion over the
referenced securities held by the securityholder. Citadel disclaims
beneficial ownership of the shares beneficially owned by the
securityholder. Kenneth C. Griffin indirectly controls Citadel and
therefore has ultimate investment discretion over securities held by the
securityholder. Mr. Griffin disclaims beneficial ownership of the shares
held by the securityholder.
(5) Citigroup Global Markets Inc. is an indirect wholly owned subsidiary of
Citigroup Inc., which is a reporting company under the Exchange Act.
(6) The securityholder is a reporting entity with the Securities and Exchange
Commission.
(7) GLG Market Neutral Fund is a publicly owned company listed on the Irish
Stock Exchange. GLG Partners LP, an English limited partnership, acts as
the investment manager of the fund and has
63
voting and dispositive power over the securities held by the fund. The
general partner of GLG Partners LP GLG Partners Limited, an English limited
company. The shareholders of GLG Partners Limited are Noam Gottesman,
Pierre Lagrange, Jonathan Green, Philippe Jabre and Lehman (Cayman)
Limited, a subsidiary of Lehman Brothers, Inc., a publicly held entity, and
as a result, each has voting and dispositive power over the securities held
by the selling securityholder. GLG Partners LP, GLG Partners Limited, Noam
Gottesman, Pierre Lagrange, Jonathan Green, Philippe Jabre and Lehman
(Cayman) Limited disclaim beneficial ownership of the securities held by
the fund, except for their pecuniary interest therein.
(8) KBC Financial Products USA Inc. exercises voting and investment control
over any ordinary shares issuable upon conversion of the notes owned by
this selling securityholder. Luke Edwards, Managing Director, exercises
voting and investment control on behalf of KBC Financial Products USA Inc.
(9) Lydian Asset Management is the investment advisor for the selling
securityholder. David Friezo is a principal of Lydian Asset Management and,
as a result, exercises voting and dispositive power over the securities
held by the selling securityholder.
(10) Amalgamated Gadget, L.P. has the sole power to vote or direct the vote and
to dispose or direct the disposition of the securities pursuant to an
Investment Management Agreement with R2 Investments, LDC. Amalgamated
Gadget, L.P. is controlled by Scepter Holdings, Inc., its sole general
partner, which is in turn controlled by Geoffrey Raynor, the president and
sole shareholder of Scepter Holdings, Inc.
(11) John Pickering, Michael Swendsen, Mark Swanson and Rand Mattsson
(12) Pursuant to an Investment Management Agreement, between Carlson Capital,
L.P. and Worldwide Transactions Ltd., Carlson Capital, L.P. exercises
voting and investment control over the securities held by the selling
securityholder. Clint D. Carlson is the CIO of Carlson Capital, L.P. and
therefore exercises voting and investment control over the securities held
by the selling securityholder. Mr. Carlson disclaims beneficial ownership
of the securities held by the selling securityholder.
64
PLAN OF DISTRIBUTION
We will not receive any of the proceeds from the sale of the notes and the
ordinary shares issuable upon conversion of the notes offered by this
prospectus. The selling securityholders may offer and sell the notes and
ordinary shares covered by this prospectus from time to time. The selling
securityholders will act independently of us in making decisions with respect to
the timing, manner and size of each sale. If the notes and the ordinary shares
issuable upon conversion of the notes are sold through underwriters,
broker-dealers or agents, the selling securityholders will be responsible for
underwriting discounts or commissions or agent's commissions. Such notes and
shares may be sold in one or more transactions at fixed prices, at prevailing
market prices at the time of sale, at varying prices determined at the time or
at negotiated prices. Such sales may be effected in one or more transactions,
which may involve block transactions:
- on any national securities exchange or quotation service on which the
notes and shares may be listed or quoted at the time of sale;
- in the over-the-counter market; or
- in transactions otherwise than on such exchanges or services or in the
over-the-counter market.
In addition, the selling securityholders may sell ordinary shares issuable
upon conversion of the notes 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;
- 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.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In connection with
distributions of the notes and the ordinary shares issuable upon conversion of
the notes, the selling securityholders may pledge the notes and the ordinary
shares issuable upon conversion of the notes 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 notes and the ordinary
shares issuable upon conversion of the notes pursuant to this prospectus, as
supplemented or amended to reflect such transaction. The selling securityholders
may also loan the notes and the ordinary shares issuable upon conversion of the
notes to a broker-dealer that in turn may sell the securities.
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 notes and ordinary shares issuable upon conversion of the
notes covered by this prospectus, the selling securityholders and any
broker-dealers who execute sales for the selling securityholders may be treated
as "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.
In order to comply with the securities laws of some states, if applicable,
the selling securityholders may be required to sell their notes and ordinary
shares issuable upon conversion of the notes in such jurisdictions only through
registered or licensed brokers or dealers. In addition, some states may restrict
the selling securi-
65
tyholders from selling notes and ordinary shares issuable upon conversion of the
notes unless the securities 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 notes and
ordinary shares issuable upon conversion of the notes 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 New York Stock Exchange pursuant
to Rule 153 under the Securities Act with respect to our ordinary shares. The
selling securityholders may indemnify any broker-dealer that participates in
transactions involving the sale of the notes and ordinary shares issuable upon
conversion of the notes against certain liabilities, including liabilities
arising under the Securities Act.
At the time a particular offer of notes and ordinary shares issuable upon
conversion of the notes is made, if required, we will distribute a prospectus
supplement that will set forth the number of notes and ordinary shares issuable
upon conversion of the notes 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.
In addition, upon receiving notice from a selling securityholder that a
donee, pledgee or transferee or other successor-in-interest intends to sell
notes or ordinary shares covered by this prospectus, we will file a supplement
to this prospectus pursuant to Rule 424(b) under the Securities Act to identify
the transferee.
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
earlier of (1) the date there are no longer any registrable securities and (2)
the date on which all of the securities being offered hereby held by persons
that are not our affiliates can be sold under Rule 144(k) under the Securities
Act, whichever occurs first.
66
LEGAL MATTERS
The validity of the ordinary shares and the notes offered hereby will be
passed upon for us by Carey Olsen, Island of Guernsey.
Certain legal matters in connection with the offering will be passed upon
for us by Wilmer Cutler Pickering Hale and Dorr LLP, New York, New York.
Carey Olson has rendered an opinion as to the validity of the Notes and
Wilmer Cutler Pickering Hale and Dorr LLP has rendered an opinion that the Notes
are binding obligations of the Company under the laws of the state of New York.
The foregoing opinions are exhibits to the registration statement of which this
prospectus is included and are subject to the qualifications and assumptions set
forth in such opinions.
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, 2004, have been audited by Ernst & Young LLP, independent
registered public accounting firm, 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.
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.
67
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;
- 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.
68
INCORPORATION OF DOCUMENTS BY REFERENCE
We incorporate by reference into this prospectus the documents listed below
and any future filings we make with the SEC, under Sections 13(a), 13(c) or
15(d) of 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,
2004, filed on December 30, 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 filed on February 14, 2005; 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.
69
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)
4.3 Indenture, dated March 5, 2004, between Amdocs Limited and
The Bank of New York, as trustee, for 0.50% Convertible
Senior Notes due 2024 (incorporated by reference to Exhibit
99.1 to Amdocs' Report on Form 6-K, filed March 5, 2004)
4.4 Registration Rights Agreement, dated March 5, 2004, among
Amdocs Limited and Morgan Stanley & Co. Incorporated,
Goldman, Sachs & Co. and Merrill Lynch, Pierce Fenner &
Smith Incorporated (incorporated by reference to Exhibit
99.2 to Amdocs' Report on Form 6-K, filed March 5, 2004)
5.1* Opinion of Carey Olsen.
5.2* Opinion of Wilmer Cutler Pickering Hale and Dorr LLP.
12.1* Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Ernst & Young LLP.
23.3* Consent of Carey Olsen (included in Exhibit 5.1).
23.4* Consent of Wilmer Cutler Pickering Hale and Dorr LLP
(included in Exhibit 5.2).
24.1* Power of Attorney.
25.1* Form T-1, Statement of Eligibility under the Trust Indenture
Act of The Bank of New York.
99.1* Share Purchase Agreement dated as of May 28, 2003 between
Amdocs Holdings ULC and Bell Canada.
99.2*+ Software Master Agreement between Amdocs Software Systems
Limited and SBC Services, Inc., effective December 10, 2003.
99.3*+ Agreement between Amdocs Inc. and SBC Services, Inc. for
Software and Professional Services, effective August 7,
2003.
II-1
---------------
* Previously filed.
+ Confidential treatment requested as to certain portions, which portions have
been filed separately with the Securities and Exchange Commission.
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
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 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-2
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
Post-Effective Amendment No. 5 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 23rd day of February, 2005.
AMDOCS LIMITED
By: /s/ THOMAS G. O'BRIEN
------------------------------------------
Thomas G. O'Brien
Treasurer and Secretary
Authorized U.S. Representative
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 5 to Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
* Chairman of the Board February 23, 2005
-------------------------------------
Bruce K. Anderson
/s/ DOV BAHARAV Director and Principal February 23, 2005
------------------------------------- Executive Officer
Dov Baharav
/s/ RON MOSKOVITZ Principal Accounting Officer February 23, 2005
-------------------------------------
Ron Moskovitz
* Director February 23, 2005
-------------------------------------
Robert A. Minicucci
* Director February 23, 2005
-------------------------------------
Adrian Gardner
* Director February 23, 2005
-------------------------------------
Julian A. Brodsky
* Director February 23, 2005
-------------------------------------
Charles E. Foster
* Director February 23, 2005
-------------------------------------
Eli Gelman
* Director February 23, 2005
-------------------------------------
James S. Kahan
II-3
SIGNATURE TITLE DATE
--------- ----- ----
* Director February 23, 2005
-------------------------------------
Nehmeia Lemelbaum
* Director February 23, 2005
-------------------------------------
John T. McLennan
* Director February 23, 2005
-------------------------------------
Simon Olswang
* Director February 23, 2005
-------------------------------------
Mario Segal
*By: /s/ THOMAS G. O'BRIEN
------------------------------
Thomas G. O'Brien
Attorney-in-Fact
II-4
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)
4.3 Indenture, dated March 5, 2004, between Amdocs Limited and
The Bank of New York, as trustee, for 0.50% Convertible
Senior Notes due 2024 (incorporated by reference to Exhibit
99.1 to Amdocs' Report on Form 6-K, filed March 5, 2004)
4.4 Registration Rights Agreement, dated March 5, 2004, among
Amdocs Limited and Morgan Stanley & Co. Incorporated,
Goldman, Sachs & Co. and Merrill Lynch, Pierce Fenner &
Smith Incorporated (incorporated by reference to Exhibit
99.2 to Amdocs' Report on Form 6-K, filed March 5, 2004)
5.1* Opinion of Carey Olsen.
5.2* Opinion of Wilmer Cutler Pickering Hale and Dorr LLP.
12.1* Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Ernst & Young LLP.
23.3* Consent of Carey Olsen (included in Exhibit 5.1).
23.4* Consent of Wilmer Cutler Pickering Hale and Dorr LLP
(included in Exhibit 5.2).
24.1* Power of Attorney.
25.1* Form T-1, Statement of Eligibility under the Trust Indenture
Act of The Bank of New York.
99.1* Share Purchase Agreement dated as of May 28, 2003 between
Amdocs Holdings ULC and Bell Canada.
99.2*+ Software Master Agreement between Amdocs Software Systems
Limited and SBC Services, Inc., effective December 10, 2003.
99.3*+ Agreement between Amdocs Inc. and SBC Services, Inc. for
Software and Professional Services, effective August 7,
2003.
---------------
* Previously filed.
+ Confidential treatment requested as to certain portions, which portions have
been filed separately with the Securities and Exchange Commission.