As filed with the Securities and Exchange Commission on April 8, 2004
Registration Statement No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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)
----------------------------
ISLAND OF GUERNSEY NOT APPLICABLE
(State or other jurisdiction of incorporation or (I.R.S. Employer
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)
----------------------------
THE COMMISSION IS REQUESTED TO SEND COPIES OF ALL COMMUNICATIONS TO:
ROBERT A. SCHWED, ESQ.
HALE AND DORR LLP
300 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 937-7200
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
Amount Proposed Maximum Proposed Maximum Amount of
to be Offering Price Aggregate Registration
Title of Securities to be Registered Registered Per Share Offering Price Fee
---------------------------------------------------- --------------- ---------------- ---------------- ------------
0.50% Convertible Notes due 2024.................... $450,000,000(1) 100% $450,000,000 $57,015
Ordinary Shares,(pound)0.01 par value per share..... 10,435,995(2) (2) (2) (3)
(1) Equals the aggregate principal of the notes being registered.
(2) The number of ordinary shares registered hereunder is based upon the
maximum number of ordinary shares of the registrant that is issuable upon
conversion of the notes. Pursuant to Rule 416 under the Securities Act of
1933, as amended, the amount to be registered also includes an
indeterminate number of ordinary shares issuable as a result of stock
splits, stock dividends, recapitalizations or similar events.
(3) No additional consideration will be received for the ordinary shares, and
therefore no registration fee is required for these shares pursuant to Rule
457(i).
THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING SECURITYHOLDERS NAMED IN THIS PROSPECTUS MAY NOT SELL THESE SECURITIES
UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND THE SELLING SECURITYHOLDERS NAMED IN THIS PROSPECTUS ARE NOT
SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED APRIL 8, 2004
PROSPECTUS
$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 April 5, 2004, the closing sale price of our ordinary shares on
the New York Stock Exchange was $28.84 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 9 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.
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THE DATE OF THIS PROSPECTUS IS _____________ __, 2004.
TABLE OF CONTENTS
PAGE
----
INCORPORATION OF DOCUMENTS BY REFERENCE................................ ii
WHERE YOU CAN FIND MORE INFORMATION.................................... ii
PROSPECTUS SUMMARY..................................................... 1
THE OFFERING........................................................... 3
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION..................... 8
RISK FACTORS........................................................... 9
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........................................... 43
COMPARISON OF UNITED STATES AND GUERNSEY CORPORATE LAW................. 45
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS................ 47
CERTAIN GUERNSEY TAX CONSIDERATIONS.................................... 51
SELLING SECURITYHOLDERS................................................ 52
PLAN OF DISTRIBUTION................................................... 55
LEGAL MATTERS.......................................................... 57
EXPERTS................................................................ 57
ENFORCEABILITY OF CIVIL LIABILITIES.................................... 57
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.
Unless the context otherwise requires, references in this prospectus to
"Amdocs," "we," "us," and "our" refer to Amdocs Limited and its subsidiaries.
i
INCORPORATION OF DOCUMENTS BY REFERENCE
We incorporate by reference into this prospectus the documents listed
below and any future filings we make with the Securities and Exchange
Commission, referred to herein as the SEC, under Sections 13(a), 13(c) or 15(d)
of the Securities Exchange Act of 1934, as amended, referred to herein as the
Exchange Act, including any filings or submissions after the date of this
prospectus, until the selling securityholders have sold all of the ordinary
shares to which this prospectus relates:
- Our annual report on Form 20-F for the fiscal year ended September
30, 2003, filed on December 24, 2003;
- Our report on Form 6-K containing our proxy materials for our
annual general meeting of shareholders, filed on December 24,
2003;
- Our report on Form 6-K containing our results for the quarterly
period ended December 31, 2003, filed on February 17, 2004;
- Our reports on Form 6-K with respect to our offering of 0.50%
Convertible Senior Notes due 2024, filed on March 1, March 2 and
March 5, 2004;
- Our unaudited pro forma condensed consolidated financial
statements and the unaudited financial statements of Certen Inc.
contained in our Registration Statement on Form F-3 filed on March
31, 2004; and
- The description of our ordinary shares contained in our
Registration Statement on Form 8-A filed on June 17, 1998 under
Section 12 of the Exchange Act, including any amendment or report
updating this description.
The information incorporated by reference is an important part of this
prospectus. Any statement in a document incorporated by reference into this
prospectus will be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in (1) this prospectus or
(2) any other subsequently filed document that is incorporated by reference into
this prospectus modifies or supersedes such statement.
You may request a copy of any or all of the documents referred to above
other than exhibits to such documents that are not specifically incorporated by
reference therein. Written or telephone requests should be directed to Thomas G.
O'Brien, Secretary and Treasurer, Amdocs, Inc., 1390 Timberlake Manor Parkway,
Chesterfield, Missouri 63017, telephone (314) 212-8328. Copies of such documents
may also be obtained from various alternative sources. See "Where You Can Find
More Information."
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the reporting requirements of foreign private issuers
under the Exchange Act. Pursuant to the Exchange Act, we file reports with the
SEC, including an Annual Report on Form 20-F, and we submit reports to the SEC,
including Reports of Foreign Private Issuers on Form 6-K. These reports and
other information may be inspected and copied at the Public Reference Section of
the SEC at 450 Fifth Street, N.W, Judiciary Plaza, Washington, D.C. 20549-1004.
Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1-800-SEC-0330. Reports and information statements and other
information filed electronically with the SEC are available at the SEC's website
at http://www.sec.gov. Some of this information may also be found on our website
at www.amdocs.com.
This prospectus is part of a registration statement that we filed with
the SEC. The registration statement contains more information than this
prospectus regarding us and our ordinary shares, including certain exhibits and
schedules. You can obtain a copy of the registration statement from the SEC at
the address listed above or from the SEC's Internet site.
ii
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 major communications
companies in North America, Europe and the rest of the world. Our products and
services provide an integrated approach to customer management, which we refer
to as Integrated Customer Management. Our Integrated Customer Management product
offerings consist primarily of billing and customer relationship management
systems, which we refer to, collectively, as CC&B Systems. Our portfolio also
includes a full range of directory sales and publishing systems for publishers
of both traditional printed yellow page and white page directories and
electronic Internet directories.
Our Integrated Customer Management systems are designed to meet the
mission-critical needs of leading communications service providers, which
include customer relationship management, order management, call rating, invoice
calculation and preparation, bill formatting, collections, partner relationship
management and directory publishing services. We support a wide range of
communications services, including wireline, wireless, voice, data, broadband,
content, electronic and mobile commerce and Internet Protocol based services. We
also support companies that offer multiple service packages, commonly referred
to as bundled or convergent services. Due to the complexity of our customers'
projects and the expertise required for system support, we also provide
extensive system implementation, integration, modification, ongoing support,
enhancement and maintenance services. In addition, we offer Managed Services,
which include a combination of services, such as system modernization and
consolidation, management and operation of data centers, purchase and management
of related hardware assets, billing operations and application support.
Since the inception of our business in 1982, we have concentrated on
providing software products and services to major communications companies. By
focusing on this market, we believe that we have been able to develop the
innovative products and the industry expertise, project management skills and
technological competencies required for the advanced, large-scale,
specifications-intensive system projects typical of leading communications
providers. Our customer base includes major North American, European and other
communications companies, including major wireline companies (such as Bell
Canada, SBC, Telefonica and Deutsche Telekom) and wireless companies (such as
Nextel, Cingular Wireless, Vodafone Group and T-Mobile).
Our goal is to provide advanced information technology software
products and related customer service and support to the world's leading
communications companies. We seek to accomplish our goal by pursuing the
strategies described below.
- Continued Focus on the Communications Industry. We intend to
continue to concentrate our main resources and efforts on
providing strategic information systems to the communications
industry. This strategy has enabled us to develop the specialized
industry know-how and capability necessary to deliver the
technologically advanced, large-scale, specifications-intensive
information systems solutions required by the leading
communications companies in the wireless, wireline and convergent
service sectors.
- Target Industry Leaders. We intend to continue to direct our
marketing efforts principally towards the major communications
companies. Our customer base includes major communications
companies in North America (including SBC, Verizon and Nextel),
Europe
1
(including Deutsche Telekom (Germany), BT (UK), Vodafone Group
(UK) and Telefonica (Spain)) and the Asia-Pacific region (Telstra
(Australia)). 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 effective system integration and
implementation services as well as Managed Services to our
customers.
- Provide Customers with a Broad, Integrated Suite of Products. We
seek to provide our customers with a broad suite of products to
meet all their Integrated Customer Management needs. For
communications service providers, we seek to provide CC&B Systems
across all lines of their business, such as wireline, mobile and
data. This approach also means that we can support global
communications service providers throughout their various
international operations. We believe that our ability to provide a
broad suite of products helps establish us as a strategic partner
for our customers, and also provides us with multiple avenues for
strengthening and expanding our ongoing customer relationships.
- Maintain and Develop Long-Term Customer Relationships. We seek to
maintain and develop long-term, mutually beneficial relationships
with our customers. These relationships generally involve
additional product sales, as well as ongoing support, system
enhancement and maintenance services. We believe that such
relationships are facilitated in many cases by the
mission-critical strategic nature of the systems provided by us
and by the added value we provide through our specialized skills
and knowledge. In addition, our strategy is to solidify our
existing customer relationships by means of long-term support and
maintenance contracts.
-------------------------------
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.
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, 2003 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(pound)0.01 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
3
- 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 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.
4
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 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
accounting principles generally accepted 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, 2003 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, 2003 and 2002 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 SEC and incorporated by
reference in this prospectus.
THREE MONTHS
YEAR ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
------------------------------------------------------- ---------------
2003 2002 2001 2000 1999 2003 2002
---- ---- ---- ---- ---- ---- ----
(UNAUDITED)
(in thousands, except per share data)
STATEMENT OF OPERATIONS DATA:
Revenue................................ $1,483,327 $1,613,565 $1,533,910 $1,118,320 $626,855 $428,295 $339,386
Operating income (1)(2)(3)............. 210,418 49,161 159,281 74,124 146,998 66,969 37,955
Net income (loss) (1)(2)(3)(4)......... 168,883 (5,061) 66,386 5,978 98,543 53,068 32,199
Basic earnings (loss) per share........ 0.78 (0.02) 0.30 0.03 0.50 0.25 0.15
Diluted earnings (loss) per share...... 0.77 (0.02) 0.29 0.03 0.49 0.24 0.15
The information below under "As Adjusted" reflects the receipt of the
net proceeds from the sale of the notes by us to the initial purchasers on March
5, 2004, and the application of approximately $170.1 million of net proceeds to
purchase ordinary shares sold short by the initial purchasers of the notes in
negotiated transactions concurrently with the sale of the notes.
AS OF DECEMBER 31, 2003
---------------------------
(UNAUDITED)
(IN THOUSANDS)
ACTUAL AS ADJUSTED
---------- -----------
BALANCE SHEET DATA:
Total assets.......................................................................... $2,826,051 $3,105,990
2% Convertible Notes due June 1, 2008 (4)(5).......................................... 395,454 395,454
0.50% Convertible Senior Notes due 2024............................................... -- 450,000
Long-term obligations, including current portion...................................... 47,148 47,148
Shareholders' equity (6).............................................................. 1,523,535 1,353,474
---------------------
(1) In fiscal 2000, we recorded acquisition-related charges of $75,617,
relating to our acquisitions of International Telecommunication Data
Systems, Inc. in November 1999 and Solect Technology Group Inc. 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.
(2) 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 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.
6
(3) In the first quarter of fiscal 2003, we recorded a restructuring charge
of $9,956 related to our cost reduction program. In the fourth quarter
of fiscal 2003, we recorded an acquisition-related charge of $4,133
related to our July 2003 acquisition from Bell Canada of its 90%
ownership interest in Certen Inc. 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.
(4) In May 2001, we issued $500,000 aggregate principal amount of the 2%
Notes. In July 2002, our Board of Directors authorized us to repurchase
the 2% Notes in such amounts, at such prices and at such times
considered appropriate. During the fourth quarter of fiscal 2003, we
repurchased $44,600 aggregate principal amount of 2% Notes, at an
average price of 99% of the principal amount. During fiscal 2002, we
repurchased $54,946 aggregate principal amount of 2% Notes, at an
average price of 89% of the principal amount. In fiscal 2003 and 2002,
we recorded gains of $448 and $6,012, respectively, relating to the
repurchases of the 2% Notes. As of December 31, 2003, $395,454
aggregate principal amount of 2% Notes was outstanding. As of that
date, the aggregate principal amount of 2% Notes outstanding is
presented as a current liability, due to the holders' option to require
us to repurchase the 2% Notes on June 1, 2004.
(5) We may use net proceeds from the sale of the notes to the initial
purchasers and other cash resources to pay the repurchase price for the
2% Notes, which we may be required to repurchase from the holders
thereof on June 1, 2004. Amounts presented do not give effect to any
repurchases of the 2% Notes.
(6) In November 2001, our Board of Directors approved a twelve-month share
repurchase program and authorized us to repurchase ordinary shares.
During fiscal 2002, we repurchased 7,732 ordinary shares, at an average
price of $14.13 per share. During fiscal 2003, we did not repurchase
any ordinary shares. On November 5, 2003, our Board of Directors
approved an additional twelve-month share repurchase program to
purchase up to 5,000 ordinary shares. In accordance with this program,
as of December 31, 2003, we had repurchased an additional 4,990
ordinary shares, at an average price of $24.82 per share. In connection
with our acquisition of XACCT Technologies Ltd., 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 485 ordinary
shares in February 2004. The as adjusted figure reflects the purchase
of approximately 6,074 ordinary shares sold short by purchasers of the
notes in negotiated transactions concurrently with the sale of the
notes on March 5, 2004.
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, 2003 2003 2002 2001 2000 1999
----------------- ---- ---- ---- ---- ----
Ratio (1).................. 14.47 13.49 3.87 9.19 10.10 15.29
----------------
(1) Computed by dividing pre-tax net income before fixed charges by fixed
charges. Fixed charges means interest expense, amortized premiums,
discounts and capitalized expenses related to indebtedness, and an
estimate of the interest within rental expense.
7
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
In addition to historical information, this prospectus contains
forward-looking statements (within the meaning of the United States federal
securities laws) that involve substantial risks and uncertainties. You can
identify these forward-looking statements by words such as "expect,"
"anticipate," "believe," "seek," "estimate," "project," "forecast," "continue,"
"potential," "should," "would," "could" and "may," and other words that convey
uncertainty of future events or outcome. Statements regarding our future
business and/or results, including, without limitation, the statements under the
captions "Summary" and "Risk Factors," include certain projections and business
trends that are forward-looking. Forward-looking statements are not guarantees
of future performance, and involve risks, uncertainties and assumptions that may
cause our actual results to differ materially from the expectations that we
describe in our forward-looking statements. There may be events in the future
that we are not accurately able to predict, or over which we have no control.
You should not place undue reliance on forward-looking statements. We do not
promise to notify you if we learn that our assumptions or projections are wrong
for any reason. We disclaim any obligation to update our forward-looking
statements, except where applicable law may otherwise require us to do so.
Important factors that may affect these projections or expectations
include, but are not limited to: changes in the overall economy; changes in
competition in markets in which we operate; changes in the demand for our
products and services; consolidation within the industries in which our
customers operate; the loss of a significant customer; changes in the
telecommunications regulatory environment; changes in technology that impact
both the markets we serve and the types of products and services we offer;
financial difficulties of our customers; losses of key personnel; difficulties
in completing or integrating acquisitions; litigation and regulatory
proceedings; and acts of war or terrorism. For a discussion of these important
factors, please read the information set forth above under the caption "Risk
Factors."
8
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. 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. 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. Adverse conditions in the business
environment for communications companies have had, and could continue to have, a
negative impact on our business by reducing the number of new contracts we are
able to sign and the size of initial spending commitments, as well as decreasing
the level of discretionary spending under contracts with existing customers.
IF WE CANNOT COMPETE SUCCESSFULLY WITH EXISTING OR NEW COMPETITORS, OUR
BUSINESS COULD BE HARMED.
We may be unable to compete successfully with existing or new
competitors. If we fail to adapt to changing market conditions and to compete
successfully with established or new competitors, it could have a material
adverse effect on our results of operations and financial condition. We face
intense competition for the software products and services that we sell,
including competition for Managed Services we provide to customers under
long-term service agreements.
The market for communications information systems is highly competitive
and fragmented, and we expect competition to increase. We compete with
independent providers of information systems and services and with the in-house
software departments of communications companies. Our competitors include firms
that provide comprehensive information systems and Managed Services solutions,
software vendors that sell products for particular aspects of a total
information system, software vendors that specialize in systems for particular
communications services such as Internet and wireless services, systems
integrators, service bureaus and companies that offer software systems in
combination with the sale of network equipment.
We believe that our ability to compete depends on a number of factors,
including:
- the development by others of software that is competitive with
our products and services,
- 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
9
prospective customers. In addition, our competitors have acquired, and may
continue to acquire in the future, companies that may enhance their market
offerings. Accordingly, new competitors or alliances among competitors may
emerge and rapidly acquire significant market share. As a result, our
competitors may be able to adapt more quickly than us to new or emerging
technologies and changes in customer requirements, and may be able to devote
greater resources to the promotion and sale of their products. We cannot assure
you that we will be able to compete successfully with existing or new
competitors. Failure by us to adapt to changing market conditions and to compete
successfully with established or new competitors may have a material adverse
effect on our results of operations and financial condition.
WE MUST CONTINUALLY ENHANCE OUR PRODUCTS TO REMAIN COMPETITIVE.
We believe that our future success will depend, to a significant
extent, upon our ability to enhance our existing products and to introduce new
products and features to meet the requirements of our customers in a rapidly
developing and evolving market. We are currently devoting significant resources
to refining and expanding our base software modules and to developing Integrated
Customer Management products that operate in state-of-the-art computing
environments. Our present or future products may not satisfy the evolving needs
of the communications industry. If we are unable to anticipate or respond
adequately to such needs, due to resource, technological or other constraints,
our business and results of operations could be harmed.
WE MAY SEEK TO ACQUIRE COMPANIES OR TECHNOLOGIES, WHICH COULD DISRUPT OUR
ONGOING BUSINESS, DISTRACT OUR MANAGEMENT AND EMPLOYEES AND ADVERSELY
AFFECT OUR RESULTS OF OPERATIONS.
We may acquire companies where we believe we can acquire new products
or services or otherwise enhance our market position or strategic strengths. We
cannot assure you that suitable acquisition candidates can be found, that
acquisitions can be consummated on favorable terms or that we will be able to
complete otherwise favorable acquisitions because of antitrust or other
regulatory concerns. If we do complete acquisitions, we cannot assure you that
they will ultimately enhance our products or strengthen our competitive
position. In addition, any acquisitions that we make could lead to difficulties
in integrating personnel and operations from the acquired businesses and in
retaining and motivating key personnel from these businesses. Acquisitions may
disrupt our ongoing operations, divert management from day-to-day
responsibilities, increase our expenses and harm our results of operations or
financial condition.
OUR BUSINESS IS HIGHLY DEPENDENT ON A LIMITED NUMBER OF SIGNIFICANT
CUSTOMERS.
Our business is highly dependent on a limited number of significant
customers. Our three largest groups of customers are comprised of Bell Canada,
Nextel Communications, Inc. ("Nextel") and SBC Communications Inc. ("SBC") and
certain of their subsidiaries, each of which accounted for more than 10% of our
revenue in fiscal 2003. Aggregate revenue derived from the multiple business
arrangements we have with our five largest customer groups accounted for
approximately 55% of our revenue in fiscal 2003. SBC has historically been one
of our largest shareholders, and, as of February 29, 2004, it beneficially owned
approximately 9.6% of our outstanding ordinary shares. The loss of any
significant customer or a significant decrease in business from any such
customer could harm our results of operations and financial condition.
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.
OUR FUTURE SUCCESS WILL DEPEND ON OUR ABILITY TO DEVELOP LONG-TERM
RELATIONSHIPS WITH OUR CUSTOMERS.
We believe that our future success will depend to a significant extent
on our ability to develop long-term relationships with successful network
operators and service providers with the financial and
10
other resources required to invest in significant ongoing Integrated Customer
Management systems. If we are unable to develop new customer relationships, our
business will be harmed. In addition, our business and results of operations
depend in part on our ability to provide high quality services to customers that
have already implemented our products. If we are unable to meet customers'
expectations in providing products or performing services, our business and
results of operations could be harmed.
WE MAY BE EXPOSED TO THE CREDIT RISK OF CUSTOMERS THAT HAVE BEEN ADVERSELY
AFFECTED BY WEAKENED MARKETS.
We typically sell our software and related services as part of
long-term projects. During the life of a project, a customer's budgeting
constraints can impact the scope of a project and the customer's ability to make
required payments. In addition, the creditworthiness of our customers may
deteriorate over time, and we can be adversely affected by bankruptcies or other
business failures.
THE SKILLED AND HIGHLY QUALIFIED EMPLOYEES THAT WE NEED MAY BE DIFFICULT TO
HIRE AND RETAIN.
Our business operations depend in large part on our ability to attract,
train, motivate and retain highly skilled information technology professionals,
software programmers and communications engineers. In addition, our competitive
success will depend on our ability to attract and retain other outstanding,
highly qualified employees. We continually need to hire sales, support,
technical and other personnel. We may face difficulties identifying and hiring
qualified personnel and may be unable to retain employees with the skills and
experience that we require. Our inability to hire and retain the appropriate
personnel could make it difficult for us to manage our operations 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
business.
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE.
We have experienced fluctuations in our quarterly operating results and
anticipate that such movement may continue and could intensify. Fluctuations may
result from many factors, including:
- the size and timing of significant customer projects and license
fees,
- delays in or cancellations of significant projects by customers,
- changes in operating expenses,
- increased competition,
- changes in our strategy,
- personnel changes,
- foreign currency exchange rate fluctuations, and
- general economic and political conditions.
Generally, our license fee revenue and our service fee revenue relating
to customization and modification are recognized as work is performed, using
percentage of completion accounting. Given our reliance on a limited number of
significant customers, our quarterly results may be significantly affected by
the size and timing of customer projects and our progress in completing such
projects.
We believe that the placement of customer orders may be concentrated in
specific quarterly periods due to the time requirements and budgetary
constraints of our customers. Although we recognize revenue as projects
progress, progress may vary significantly from project to project, and we
believe that variations in quarterly revenue are sometimes attributable to the
timing of initial order placements. Due
11
to the relatively fixed nature of certain of our costs, a decline of revenue in
any quarter would result in lower profitability for that quarter.
OUR BUSINESS IS IMPACTED BY THE LENGTH OF OUR SALES CYCLE.
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. The lengthening of our sales cycle could
reduce growth in our revenue in the future. In addition, the lengthening of our
sales cycle contributes to an increased cost of sales, thereby reducing our
profitability.
IF THE MARKET FOR OUR PRODUCTS DETERIORATES, WE MAY INCUR ADDITIONAL
RESTRUCTURING CHARGES.
In an effort to implement long-term cost reduction measures, we reduced
our workforce in the fourth quarter of fiscal 2002 and in the first quarter of
fiscal 2003 and reallocated certain personnel among different areas of our
operations. A reduction in personnel can result in significant severance,
administrative and legal expenses and may also adversely affect or delay various
sales, marketing and product development programs and activities. Depending on
market conditions in the communications industry and our business and financial
needs, we may be forced to implement additional restructuring plans to further
reduce our costs, which could result in additional restructuring charges.
Additional restructuring charges could have a material adverse effect on our
financial results.
IF WE FAIL TO SUCCESSFULLY PLAN AND MANAGE CHANGES IN THE SIZE OF OUR
OPERATIONS OUR BUSINESS WILL SUFFER.
Over the last several years, we have both grown and contracted our
operations in order to profitably offer our products and services in a rapidly
changing market. If we are unable to manage these changes and plan and manage
any future changes in the size and scope of our operations, our business will
suffer.
Our restructurings and cost reduction measures reduced the size of our
operations. On February 29, 2004, we employed approximately 9,000 individuals in
software and information technology positions, compared to approximately 7,800
on January 31, 2003 and 9,100 on November 30, 2001. Our software and information
technology workforce increased in the fourth quarter of fiscal 2003 and first
quarter of fiscal 2004, primarily as a result of the Certen acquisition in July
2003 and a Managed Services agreement signed in January 2003. During periods of
contraction, we disposed of office space and related obligations in an effort to
keep pace with the changing size of our operations. Our recent cost reduction
measures included consolidating and/or relocating certain of our operations to
different geographic locations. These activities could lead to difficulties and
significant expenses related to subleasing or assigning any surplus space. We
have accrued the estimated expenses that will result from our restructuring
efforts. However, if it is determined that the amount accrued is insufficient,
an additional charge could have an unfavorable impact on our consolidated
financial statements in the period this was determined.
OUR INTERNATIONAL PRESENCE CREATES SPECIAL RISKS.
We are affected by risks associated with conducting business
internationally. We maintain development facilities in Israel, the United
States, Cyprus, Ireland and Canada, operate a support center in Brazil and have
operations in North America, Europe, Latin America and the Asia-Pacific region.
Although a majority of our revenue is derived from customers in North America
and Europe, we obtain
12
significant revenue from customers in the Asia-Pacific region and Latin America.
Our strategy is to continue to broaden our North American and European customer
base and to expand into new international markets. Conducting business
internationally exposes us to certain risks inherent in doing business in
international markets, including:
- lack of acceptance of non-localized products,
- legal and cultural differences in the conduct of business,
- difficulties in staffing and managing foreign operations,
- longer payment cycles,
- difficulties in collecting accounts receivable and withholding
taxes that limit the repatriation of earnings,
- trade barriers,
- immigration regulations that limit our ability to deploy our
employees,
- political instability, and
- variations in effective income tax rates among countries where we
conduct business.
One or more of these factors could have a material adverse effect on
our international operations, which could harm our results of operations and
financial condition.
POLITICAL AND ECONOMIC CONDITIONS IN THE MIDDLE EAST MAY ADVERSELY AFFECT
OUR BUSINESS.
Of the five development centers we maintain worldwide, our largest
development center is located in five different sites throughout Israel.
Approximately half of our employees are located in Israel. As a result, we are
directly influenced by the political, economic and military conditions affecting
Israel and its neighboring region. Any major hostilities involving Israel could
have a material adverse effect on our business. We have developed contingency
plans to provide ongoing services to our customers in the event political or
military conditions disrupt our normal operations. These plans include the
transfer of some development operations within Israel to various of our other
sites both within and outside of Israel. If we have to implement these plans,
our operations would be disrupted and we would incur significant additional
expenditures, which would adversely affect our business and results of
operations.
While Israel has entered into peace agreements with both Egypt and
Jordan, Israel has not entered into peace arrangements with any other
neighboring countries. Over the past three years there has been a significant
deterioration in Israel's relationship with the Palestinian Authority and a
related increase in violence. Efforts to resolve the problem have failed to
result in an agreeable solution. Continued violence between the Palestinian
community and Israel may have a material adverse effect on our business. Further
deterioration of relations with the Palestinian Authority might require more
military reserve service by some of our employees, which may have a material
adverse effect on our business.
In addition, our development facility in Cyprus may be adversely
affected by political conditions in that country. As a result of intercommunal
strife between the Greek and Turkish communities, Turkish troops invaded Cyprus
in 1974 and continue to occupy approximately 40% of the island. After intensive
discussions facilitated by the United Nations, the European Union and the United
States, the Greek and Turkish communities recently agreed on a timetable calling
for the parties to negotiate and agree on a plan of reunification prior to the
entry of Cyprus to the European Union. Cyprus is scheduled to join the European
Union on May 1, 2004. 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.
13
FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE RATES COULD ADVERSELY AFFECT OUR
BUSINESS.
A significant portion of our operating costs is incurred outside the
United States. Therefore, fluctuations in exchange rates between the currencies
in which such costs are incurred and the dollar may have a material adverse
effect on our results of operations and financial condition. The cost of our
operations outside of the United States, as expressed in dollars, could be
adversely affected by the extent to which any increase in the rate of inflation
in a particular country is not offset (or is offset with a time delay) by a
devaluation of the local currency in relation to the dollar. As a result of this
differential, from time to time we may experience increases in the costs of our
operations outside the United States, as expressed in dollars, which could have
a material adverse effect on our results of operations and financial condition.
In addition, a portion of our revenue (approximately 20% in fiscal 2003
and 30% in the first quarter of fiscal 2004) is not earned in dollars or linked
to the dollar, and, therefore, fluctuations in exchange rates between the
currencies in which such revenue is earned and the dollar may have a material
effect on our results of operations and financial condition. If more of our
customers seek contracts that are denominated in currencies such as the euro and
not the dollar, our exposure to fluctuations in currency exchange rates could
increase.
Generally, the effects of fluctuations in foreign currency exchange
rates are mitigated by the fact that the majority of our revenue and operating
costs is in dollars or linked to the dollar and we generally hedge our currency
exposure on both a short-term and long-term basis with respect to expected
revenue and operating costs. However, we cannot assure you that we will be able
to effectively limit all of our exposure to currency exchange rate fluctuations.
The imposition of exchange or price controls or other restrictions on
the conversion of foreign currencies could also have a material adverse effect
on our business, results of operations and financial condition.
WE MAY BE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY.
Any misappropriation of our technology or the development of
competitive technology could seriously harm our business. We regard a
substantial portion of our software products and systems as proprietary and rely
on a combination of statutory and common law copyright, trademark, trade secret
laws, customer licensing agreements, employee and third party non-disclosure
agreements and other methods to protect our proprietary rights. We do not
include in our software any mechanisms to prevent 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
14
defending against the claim, and could distract our management from our
business. Furthermore, a party making such a claim, if successful, could secure
a judgment that requires us to pay substantial damages. A judgment could also
include an injunction or other court order that could prevent us from selling
our products or offering our services, or prevent a customer from continuing to
use our products. Any of these events could seriously harm our business.
If anyone asserts a claim against us relating to proprietary technology
or information, while we might seek to license their intellectual property, we
might not be able to obtain a license on commercially reasonable terms or on any
terms. In addition, any efforts to develop non-infringing technology could be
unsuccessful. Our failure to obtain the necessary licenses or other rights or to
develop non-infringing technology could prevent us from selling our products and
could therefore seriously harm our business.
PRODUCT DEFECTS OR SOFTWARE ERRORS COULD ADVERSELY AFFECT OUR BUSINESS.
Design defects or software errors may cause delays in product
introductions or damage customer satisfaction and may have a material adverse
effect on our business, results of operations and financial condition. Our
software products are highly complex and may, from time to time, contain design
defects or software errors that may be difficult to detect and correct.
Because our products are generally used by our customers to perform
critical business functions, design defects, software errors, misuse of our
products, incorrect data from external sources or other potential problems
within or out of our control may arise from the use of our products, and may
result in financial or other damages to our customers, for which we may be held
responsible. Although we have license agreements with our customers that contain
provisions designed to limit our exposure to potential claims and liabilities
arising from customer problems, these provisions may not effectively protect us
against such claims in all cases and in all jurisdictions. In addition, as a
result of business and other considerations, we may undertake to compensate our
customers for damages caused to them arising from the use of our products, even
if our liability is limited by a license or other agreement. Claims and
liabilities arising from customer problems could also damage our reputation,
adversely affecting our business, results of operations and financial condition
and the ability to obtain "Errors and Omissions" insurance.
SYSTEM DISRUPTIONS AND FAILURES MAY RESULT IN CUSTOMER DISSATISFACTION,
CUSTOMER LOSS OR BOTH, WHICH COULD MATERIALLY AND ADVERSELY AFFECT OUR
REPUTATION AND BUSINESS.
Our Integrated Customer Management systems are an integral part of our
customers' business operations. The continued and uninterrupted performance of
these systems is critical to our success. Customers may become dissatisfied by
any system failure that interrupts our ability to provide services to them.
Sustained or repeated system failures would reduce the attractiveness of our
services significantly, and could result in decreased demand for our products
and services.
Our Managed Services include a combination of services, such as system
modernization and consolidation, management and operation of data centers,
purchase and management of related hardware assets, billing operations and
application support. Our ability to perform Managed Services depends on our
ability to protect our computer systems against damage from fire, power loss,
water damage, telecommunications failures, earthquake, terrorism attack,
vandalism and similar unexpected adverse events. Despite our efforts to
implement network security measures, our systems are also vulnerable to computer
viruses, break-ins and similar disruptions from unauthorized tampering. We do
not carry enough business interruption insurance to compensate for any
significant losses that may occur as a result of any of these events.
We have experienced systems outages and service interruptions in the
past. We expect to experience additional outages in the future. To date, these
outages have not had a material adverse effect on us. However, in the future, a
prolonged system-wide outage or frequent outages could cause harm to our
reputation and could cause our customers to make claims against us for damages
allegedly resulting
15
from an outage or interruption. Any damage or failure that interrupts or delays
our operations could result in material harm to our business and expose us to
material liabilities.
THE TERMINATION OR REDUCTION OF CERTAIN GOVERNMENT PROGRAMS AND TAX
BENEFITS COULD ADVERSELY AFFECT OUR OVERALL EFFECTIVE TAX RATE.
We have benefited or currently benefit from a variety of government
programs and tax benefits, including programs and benefits in Israel, Cyprus and
Ireland. Generally, these programs contain conditions that we must meet in order
to be eligible to obtain any benefit. If we fail to meet these conditions, we
could be required to refund tax benefits already received. Additionally, some of
these programs and the related tax benefits are available to us for a limited
number of years, and these benefits expire from time to time.
Any of the following could have a material effect on our overall
effective tax rate:
- some programs may be discontinued,
- we may be unable to meet the requirements for continuing to
qualify for some programs,
- these programs and tax benefits may be unavailable at their
current levels,
- upon expiration of a particular benefit, we may not be eligible
to participate in a new program or qualify for a new tax benefit
that would offset the loss of the expiring tax benefit, or
- we may be required to refund previously recognized tax benefits
if we are found to be in violation of the stipulated conditions.
WE ARE CURRENTLY A PARTY TO SECURITIES LITIGATION CLASS ACTION LAWSUITS AND
A SECURITIES EXCHANGE COMMISSION INVESTIGATION, WHICH COULD NEGATIVELY
AFFECT OUR BUSINESS AND RESULTS OF OPERATIONS.
Beginning in June 2002, a number of complaints were filed by holders of
our ordinary shares against Amdocs and certain of our officers and directors in
the United States District Court for the Eastern District of Missouri and the
Southern District of New York. The cases were transferred to and consolidated in
the Eastern District of Missouri. The consolidated amended complaint filed in
the action alleged that Amdocs and the individual defendants had made false or
misleading statements about our business and future prospects during a putative
class period between July 18, 2000 and June 20, 2002. On December 1, 2003, the
court issued an order granting our motion to dismiss the securities class action
lawsuits and directing that judgment be entered in favor of the defendants. On
December 29, 2003, the lead plaintiffs appealed to the United States Court of
Appeals for the Eighth Circuit from the final judgment entered on December 1,
2003. The litigation has been, and may continue to be, time-consuming and costly
and could divert the attention of our management personnel. These lawsuits or
any future lawsuits filed against us could harm our business.
In addition, we have been informed that the Midwest Regional Office of
the SEC is conducting a private investigation into the events leading up to our
announcement in June 2002 of revised projected revenue for the third and fourth
quarters of fiscal 2002. The investigation appears to be focused on, but is not
explicitly limited to, our forecasting beginning with our April 23, 2002 press
release. Although we believe that we will be able to satisfy any concerns the
SEC staff may have in this regard, we are unable to predict the duration, scope
or outcome of the investigation. We are cooperating fully with the SEC staff. At
a minimum, this investigation may divert the attention of our management and
other resources that would otherwise be engaged in operating our business.
RISKS RELATED TO OUR CAPITAL STRUCTURE
THE MARKET PRICE OF OUR ORDINARY SHARES HAS AND MAY CONTINUE TO FLUCTUATE
WIDELY.
The market price of our ordinary shares has fluctuated widely and may
continue to do so. During fiscal year 2003, our ordinary shares traded as high
as $27.25 per share and as low as $5.85 per share.
16
Our ordinary shares traded as high as $39.25 per share and as low as $6.10 per
share in fiscal 2002 and as high as $80.50 per share and as low as $25.85 per
share in fiscal 2001. As of April 5, 2004, the closing price of our ordinary
shares was $28.84 per share. Many factors could cause the market price of our
ordinary shares to rise and fall, including:
- market conditions in the industry and the economy as a whole,
- variations in our quarterly operating results,
- announcements of technological innovations by us or our
competitors,
- introductions of new products or new pricing policies by us or
our competitors,
- trends in the communications or software industries,
- acquisitions or strategic alliances by us or others in our
industry,
- changes in estimates of our performance or recommendations by
financial analysts, and
- political developments in the Middle East.
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.
WE MAY NEED TO USE A SIGNIFICANT AMOUNT OF OUR CASH AND/OR ISSUE A
SIGNIFICANT NUMBER OF OUR ORDINARY SHARES IF WE ARE REQUIRED TO REPURCHASE
OUR 2% CONVERTIBLE NOTES DUE 2008.
Holders of our 2% Convertible Notes due June 1, 2008, which we refer to
as the 2% Notes, may require us to repurchase all or any of their 2% Notes as
early as June 1, 2004 at a repurchase price equal to 100% of the principal
amount plus accrued and unpaid interest, if any. The 2% Notes are convertible
into our ordinary shares at a conversion rate of 10.8587 shares per $1,000
principal amount, representing a conversion price of approximately $92.09 per
share. As of April 5, 2004, the closing price of our ordinary shares on the New
York Stock Exchange, or the NYSE, was $28.84. Because the conversion price of
the 2% Notes is significantly higher than the current market price of the
ordinary shares, it is likely that the holders of the 2% Notes will require us
to repurchase their 2% Notes on June 1, 2004.
We may choose to pay the repurchase price for the 2% Notes in cash,
ordinary shares or a combination of cash and ordinary shares. As of December 31,
2003, $395.5 million aggregate principal amount of the 2% Notes was outstanding.
If we repurchase the 2% Notes using cash, it would significantly reduce the
amount of cash and cash equivalents on our consolidated balance sheet. If we
repurchase the 2% Notes using shares, it could involve the issuance of a
significant number of our ordinary shares. If we repurchased all of the 2% Notes
using only ordinary shares, we could be required to issue over 13.7 million
ordinary shares, based on the closing price of the ordinary shares on the NYSE
on April 5, 2004. If we repurchased all or part of the 2% Notes using ordinary
shares, it could cause the trading price of the ordinary shares to decline.
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, 2003, our
subsidiaries had liabilities of approximately $907.1 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
17
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, 2003, after
giving pro forma effect to the issuance and sale of the notes as if they had
occurred on December 31, 2003, after deducting discounts and commissions and
offering expenses and the application of approximately $170.1 million of the net
proceeds from the sale of the notes to the initial purchasers to repurchase
ordinary shares concurrently with the note offering, we would have had $892.6
million of outstanding indebtedness and cash and short term investments of $1.5
billion. If we use cash to pay for the repurchase of the $395.5 million
aggregate principal amount of the 2% Notes that holders may put to us on June 1,
2004, our total pro forma long-term indebtedness after such repurchase would be
$497.1 million and our pro forma cash and short-term investments would be $1.1
billion.
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,
18
- 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 WILL HAVE 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 will have 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 may also use net proceeds and other cash resources to pay the
repurchase price for our 2% Notes, which we may be required to repurchase from
the holders thereof on June 1, 2004. As of December 31, 2003, there was
approximately $395.5 million aggregate principal amount of our 2% Notes
outstanding. 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.
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
19
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.
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 52. 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, 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,
1999 .............................................. $ 30.25 $ 8.75
2000 .............................................. $ 96.00 $ 19.81
2001 .............................................. $ 80.50 $ 25.85
2002 .............................................. $ 39.25 $ 6.10
2003 .............................................. $ 27.25 $ 5.85
QUARTER
Fiscal 2002:
First Quarter .................................. $ 35.90 $ 24.00
Second Quarter ................................. $ 39.25 $ 23.60
Third Quarter .................................. $ 26.27 $ 6.62
Fourth Quarter ................................. $ 9.65 $ 6.10
Fiscal 2003:
First Quarter .................................. $ 11.98 $ 5.85
Second Quarter ................................. $ 13.95 $ 9.86
Third Quarter .................................. $ 25.01 $ 13.25
Fourth Quarter ................................. $ 27.25 $ 18.55
Fiscal 2004:
First Quarter .................................. $ 27.10 $ 18.90
Second Quarter ................................. $ 29.74 $ 22.17
Third Quarter (through April 5, 2004) .......... $ 28.94 $ 28.05
Most Recent Six Months
October, 2003 ..................................... $ 21.70 $ 18.90
November, 2003 .................................... $ 25.66 $ 20.85
December, 2003 .................................... $ 27.10 $ 20.00
January, 2004 ..................................... $ 29.74 $ 22.17
February, 2004 .................................... $ 29.45 $ 26.42
March, 2004 ....................................... $ 29.20 $ 25.77
As of February 29, 2004, we had 211,438,162 ordinary shares outstanding
and there were approximately 224 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 April 5, 2004, the last reported sale price of our ordinary shares
on the NYSE was $28.84.
22
EXPENSES OF THE ISSUE
The selling securityholders will pay any underwriting discounts and
commissions and expenses incurred by the 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............................................. $ 25,000
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............................................ $ 142,015
=========
23
CAPITALIZATION
The following table sets forth:
- our unaudited actual consolidated capitalization as of December
31, 2003; and
- our consolidated capitalization as of December 31, 2003, as
adjusted to give effect to the sale on March 5, 2004 of $450.0
million aggregate principal amount of the notes, and the
application of approximately $170.1 million of the net proceeds
from the sale of the notes to repurchase ordinary shares on March
5, 2004, as if the sale of the notes and the repurchase of the
shares had occurred on December 31, 2003.
You should read this table in conjunction with "Operating and Financial
Review and Prospects," our consolidated financial statements and related
footnotes and the other financial information included in our reports filed with
the SEC and incorporated by reference in this prospectus.
AS OF DECEMBER 31, 2003
----------------------------
(UNAUDITED)
(IN THOUSANDS)
ACTUAL AS ADJUSTED
---------- -----------
Short-term portion of capital lease obligations.................................... $ 26,640 $ 26,640
Capital lease obligations, less current portion.................................... 18,142 18,142
Short-term portion of financing arrangement........................................ 2,366 2,366
2% Convertible Notes due June 1, 2008 (1).......................................... 395,454 395,454
0.50% Convertible Senior Notes due 2024 (1)........................................ -- 450,000
---------- ----------
Total indebtedness....................................................... 442,602 892,602
Shareholders' equity:
Preferred Shares - Authorized 25,000 shares;(pound)0.01 par value;
0 shares issued and outstanding.............................................. -- --
Ordinary Shares - Authorized 550,000 shares;(pound)0.01 par value;
224,318 issued and 211,596 outstanding and 205,522 outstanding, as
adjusted (2)................................................................. 3,589 3,589
Additional paid-in capital..................................................... 1,827,471 1,827,471
Treasury Stock, at cost - 12,722 ordinary shares and 18,796 ordinary shares,
as adjusted (2).............................................................. (233,274) (403,335)
Accumulated other comprehensive income......................................... 51 51
Accumulated deficit............................................................ (74,302) (74,302)
---------- ----------
Total shareholders' equity............................................... 1,523,535 1,353,474
---------- ----------
Total capitalization..................................................... $1,966,137 $2,246,076
========== ==========
--------------------
(1) We may use net proceeds from the sale of the notes and other cash resources
to pay the repurchase price for the 2% Notes, which we may be required to
repurchase from the holders thereof on June 1, 2004. Amounts presented do
not give effect to any repurchases of the 2% Notes.
(2) Reflects the purchase of approximately 6,074 ordinary shares on March 5,
2004, which were sold short by purchasers of the notes in negotiated
transactions concurrently with that offering. Does not include 26,640
ordinary shares reserved for issuance upon the exercise of stock options
that have been granted under our stock option plan and by companies we have
acquired.
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.
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."
25
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, 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.
26
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 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
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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.
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):
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- 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;
- 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:
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- 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.
"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.
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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 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 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:
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- 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.
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.
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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;
- 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;
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- 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
- 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.
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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
- 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.
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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 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
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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.
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;
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- 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;
- 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
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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.
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.
39
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.
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:
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- 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%.
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, by issuing a press release to Reuters Economic
Services and Bloomberg Business News.
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.
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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.
42
DESCRIPTION OF SHARE CAPITAL
The following description summarizes the most important terms of our
share capital. Because it is only a summary, it does not contain all of the
information that may be important to you. For a complete description, you should
refer to our Articles of Association.
The share capital of Amdocs is (pound)5,750,000 divided into (i)
25,000,000 preferred shares with a par value of (pound)0.01 per share and (ii)
550,000,000 ordinary shares with a par value of (pound)0.01 per share,
consisting of 500,000,000 voting ordinary shares and 50,000,000 non-voting
ordinary shares. As of February 29, 2004, 211,438,162 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.
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- Liquidation -- upon any liquidation, dissolution or winding-up,
any of our assets remaining after creditors and the holders of
any preferred shares have been paid in full shall be distributed
to the holders of voting ordinary shares and non-voting ordinary
shares equally share for share.
- Voting Rights -- the holders of voting ordinary shares are
entitled to vote on all matters to be voted on by the members,
and the holders of non-voting ordinary shares are not entitled to
any voting rights.
- Preferences -- the voting ordinary shares and non-voting ordinary
shares are subject to all the powers, rights, privileges,
preferences and priorities of the preferred shares as are set out
in the Articles of Association.
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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 is based on the advice of Hale and Dorr LLP, with respect to the
corporate law of the United States, and Carey Olsen, with respect to the
corporate law of Guernsey. 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
45
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.
46
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.
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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 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
48
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.
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
49
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.
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.
50
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.
51
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 211,438,162 of our ordinary shares outstanding as of
February 29, 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 $1,000 principal of the notes. However, the maximum
conversion rate is subject to adjustment as described under "Description of
Notes - Conversion of Notes - Conversion Rate Adjustments." As a result, the
amount of ordinary shares issuable upon conversion of the notes may increase or
decrease in the future.
Except as indicated below, none of the selling securityholders has had
any material relationship with us or our affiliates within the past three years.
This table assumes that other holders of notes or any future transferees from
any such holder do not beneficially own any ordinary shares other than ordinary
shares issuable upon conversion of the notes.
52
ORDINARY SHARES ORDINARY SHARES
PRINCIPAL BENEFICIALLY OWNED PRINCIPAL BENEFICIALLY
AMOUNT OF NOTES UPON CONVERSION AMOUNT OF NOTES OWNED
BENEFICIALLY OF THE NOTES BENEFICIALLY AFTER OFFERING
OWNED THAT MAY ---------------------- OWNED AFTER ------------------
NAME OF SELLING SECURITYHOLDER BE SOLD ($) NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
--------------------------------------------------- --------------- ---------- ---------- --------------- ------ ----------
Acuity Master Fund, Ltd............................ 3,600,000 83,487 * 0 0 *
ACUITY Capital Management LLC
4 Greenwich Office Park, 3rd Floor
Greenwich, CT 06831 USA
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
Bear, Stearns & Co. Inc............................ 10,000,000 231,911 * 0 0 *
Bear, Stearns & Co. Inc.
383 Madison Avenue
23rd Floor, Global Fund
New York, NY 10179 USA
Black Diamond Convertible Offshore LDC............ 1,221,000 28,316 * 0 0 *
UBS Fund Services [Cayman] Limited
P.O. Box 852
UBS House, 75 Fort Street
George Town, Grand Cayman
Cayman Islands BWI
Black Diamond Offshore Ltd........................ 763,000 17,694 * 0 0 *
UBS Fund Services [Cayman] Limited
P.O. Box 852
UBS House, 75 Fort Street
George Town, Grand Cayman
Cayman Islands BWI
Cheyne Fund L.P. .................................. 1,425,000 33,047 * 0 0 *
Cheyne Capital Management Ltd.
13 Park Place
London SW1A 1LP
Cheyne Leveraged Fund L.P. ........................ 1,075,000 24,930 * 0 0 *
Cheyne Capital Management Ltd.
13 Park Place
London SW1A 1LP
Citadel Credit Trading Ltd......................... 5,850,000 135,667 * 0 0 *
Citadel Investment Group, L.L.C
131 South Dearborn, 27th Floor
Chicago, IL 60603 USA
Citadel Equity Fund Ltd............................. 33,150,000 768,783 * 0 0 *
Citadel Investment Group, L.L.C
131 South Dearborn, 27th Floor
Chicago, IL 60603 USA
DKR SoundShore Strategic Holding Fund Ltd.......... 15,500,000 359,462 * 0 0 *
DKR Capital Partners LP
1281 East Main Street
Stamford, CT 06902 USA
Double Black Diamond Offshore LDC.................. 3,888,000 90,166 * 0 0 *
UBS Fund Services [Cayman] Limited
P.O. Box 852
UBS House, 75 Fort Street
George Town, Grand Cayman
Cayman Islands BWI
Maystone Continuum Master Fund, Ltd................ 250,000 5,797 * 0 0 *
Maystone Partners, LLC
20 East Elm Street
Greenwich, CT 06830 USA
MLQA Convertible Securities Arbitrage Ltd.......... 7,500,000 173,933 * 0 0 *
Merrill Lynch Investment Managers
800 Scudders Mill Road, 2D Trading
Plainsboro, NJ 08536 USA
Nomura Securities Int'l Inc........................ 25,000,000 579,777 * 0 0 *
Nomura Securities International Inc.
2 World Financial Center, 18th Floor
New York, NY 10281 USA
Teachers Insurance and Annuity Association of
America............................................ 6,000,000 139,146 * 0 0 *
TIAA-CREF
730 Third Avenue
New York, NY 10017 USA
Thrivent Financial For Lutherans................... 1,000,000 23,191 * 0 0 *
Thrivent Financial for Lutherans
625 Fourth Avenue South
Minneapolis, MN 55415 USA
Triborough Partners International LTD.............. 4,170,000 96,706 * 0 0 *
Paul Berkman & Company, LLC
225 West 34th Street, Suite 1006
New York, NY 10122 USA
Triborough Partners LLC............................ 1,830,000 42,439 * 0 0 *
Paul Berkman & Company, LLC
225 West 34th Street, Suite 1006
New York, NY 10122 USA
White River Securities L.L.C....................... 10,000,000 231,911 * 0 0 *
Bear, Stearns & Co. Inc.
383 Madison Avenue
23rd Floor, Global Fund
New York, NY 10179 USA
Worldwide Transactions Ltd......................... 128,000 2,968 * 0 0 *
Worldwide Transactions Ltd.
Washington Mall-Phase I
Church Street, 3rd Floor
Hamilton HM 11 Bermuda
Any other holder of notes or future transferee,
pledge, donee or successor of any holder(1).... 314,650,000 7,297,092 3.45 0 0 *
------------ ---------- ---- - - -
TOTAL.............................................. $450,000,000 10,435,995 4.94% 0 0 *
53
------------------------
* Less than one percent.
(1) Information about other selling securityholders will be set forth in
an amendment to the registration statement of which this prospectus is
a part or in prospectus amendments or supplements, as required.
54
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 term "selling
securityholders" includes donees, pledgees, transferees or other
successors-in-interest selling notes and ordinary shares issuable upon
conversion of the notes received after the date of this prospectus from a
selling securityholder as a gift, pledge, partnership distribution or other
transfer. The selling securityholders will act independently of us in making
decisions with respect to the timing, manner and size of each sale. 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
55
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 securityholders 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.
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.
56
LEGAL MATTERS
The validity of the ordinary shares 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 Hale and Dorr LLP, New York, New
York.
EXPERTS
The consolidated financial statements and schedule of Amdocs Limited
appearing in Amdocs Limited's Annual Report (Form 20-F) for the year ended
September 30, 2003, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such consolidated financial statements and schedule are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
Deloitte & Touche, LLP, independent auditors, have audited the
Financial Statements of Certen Inc. as set forth in their report included in our
Annual Report on Form 20-F for the year ended September 30, 2003, which is
incorporated by reference herein. The Financial Statements of Certen are
incorporated by reference in reliance on Deloitte & Touche, LLP's report, given
on their authority as experts in accounting and auditing.
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. As a result, it may not be possible for investors to
effect service of process within the United States upon those persons or to
enforce against them in U.S. courts judgments predicated upon the civil
liability provisions of the laws of the United States, including the federal
securities laws.
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. However, subject to certain time limitations, Guernsey
courts may base original actions in Guernsey on foreign final executory
judgments, including those of the United States, for liquidated amounts in civil
matters, obtained after completion of due process before a court of competent
jurisdiction (according to the rules of private international law currently
prevailing in Guernsey) which recognizes and enforces similar Guernsey
judgments, provided that:
- adequate service of process has been effected and the defendant
has had a reasonable opportunity to be heard;
- such judgments or the enforcement thereof are not contrary to the
law, public policy, security or sovereignty of Guernsey;
- such judgments were not obtained by fraudulent means and do not
conflict with any other valid judgment in the same matter between
the same parties; and
- an action between the same parties in the same matter is not
pending in any Guernsey court at the time the lawsuit is
instituted in the foreign court.
57
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.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Deloitte & Touche, LLP.
23.3 Consent of Carey Olsen (included in Exhibit 5.1).
24.1 Power of Attorney (See page II-4 of this Registration Statement).
99.1 Share Purchase Agreement dated as of May 28, 2003 between Amdocs
Holdings ULC and Bell Canada (confidential material has been
redacted and complete exhibits have been separately filed with
the Securities and Exchange Commission).
99.2 Software Master Agreement between Amdocs Software Systems Limited
and SBC Services, Inc., effective December __, 2003 (confidential
material has been redacted and complete exhibits have been
separately filed with the Securities and Exchange Commission).
99.3 Agreement between Amdocs Inc. and SBC Services, Inc. for Software
and Professional Services, effective August 7, 2003 (confidential
material has been redacted and complete exhibits have been
separately filed with the Securities and Exchange Commission).
58
ITEM 10. UNDERTAKINGS.
Item 512(a) of Regulation S-K. The undersigned Registrant hereby
undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933, as amended
(the "Securities Act");
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if
the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference in this Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
Item 512(b) of Regulation S-K. The Registrant hereby undertakes that,
for purposes of determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Item 512(h) of Regulation S-K. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
indemnification provisions described herein, or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as
59
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.
60
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form F-3 and has duly caused this 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 8th day of
April, 2004.
AMDOCS LIMITED
By: /s/ Bruce K. Anderson
--------------------------------------
Bruce K. Anderson
President and Chairman of the Board
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Amdocs Limited, hereby
severally constitute Bruce K. Anderson, Robert A. Minicucci and Thomas G.
O'Brien, and each of them singly, our true and lawful attorneys with full power
to them, and each of them singly, to sign for us and in our names in the
capacities indicated below, the Registration Statement on Form F-3 filed
herewith and any and all subsequent amendments to said Registration Statement,
and generally to do all such things in our names and behalf in our capacities as
officers and directors to enable Amdocs Limited to comply with all requirements
of the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Bruce K. Anderson President and Chairman of the Board April 8, 2004
--------------------------------- (Principal Executive Officer)
Bruce K. Anderson
/s/ Robert A. Minicucci Vice President and Director April 8, 2004
--------------------------------- (Principal Financial Officer)
Robert A. Minicucci
/s/ Avinoam Naor Director April 8, 2004
---------------------------------
Avinoam Naor
61
/s/ Adrian Gardner Director April 8, 2004
---------------------------------
Adrian Gardner
/s/ Dov Baharav Director April 8, 2004
---------------------------------
Dov Baharav
/s/ Julian A. Brodsky Director April 8, 2004
---------------------------------
Julian A. Brodsky
/s/ Charles E. Foster Director April 8, 2004
---------------------------------
Charles E. Foster
/s/ Eli Gelman Director April 8, 2004
---------------------------------
Eli Gelman
/s/ James S. Kahan Director April 8, 2004
---------------------------------
James S. Kahan
/s/ Nehmeia Lemelbaum Director April 8, 2004
---------------------------------
Nehmeia Lemelbaum
/s/ John T. McLennan Director April 8, 2004
---------------------------------
John T. McLennan
/s/ Mario Segal Director April 8, 2004
---------------------------------
Mario Segal
/s/ Thomas G. O'Brien Amdocs Limited's Authorized April 8, 2004
--------------------------------- Representative in the United States
Thomas G. O'Brien
62
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.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Deloitte & Touche, LLP.
23.3 Consent of Carey Olsen (included in Exhibit 5.1).
24.1 Power of Attorney (See page II-4 of this Registration Statement).
99.1 Share Purchase Agreement dated as of May 28, 2003 between Amdocs
Holdings ULC and Bell Canada (confidential material has been
redacted and complete exhibits have been separately filed with
the Securities and Exchange Commission).
99.2 Software Master Agreement between Amdocs Software Systems Limited
and SBC Services, Inc., effective December __, 2003 (confidential
material has been redacted and complete exhibits have been
separately filed with the Securities and Exchange Commission).
99.3 Agreement between Amdocs Inc. and SBC Services, Inc. for Software
and Professional Services, effective August 7, 2003 (confidential
material has been redacted and complete exhibits have been
separately filed with the Securities and Exchange Commission).
63