UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2005 |
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
Commission File Number: 001-16565
ACCENTURE LTD
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Bermuda
(State or other jurisdiction of incorporation or organization) |
98-0341111
(I.R.S. Employer Identification No.) |
Canon’s Court
22 Victoria Street
Hamilton HM 12, Bermuda
(Address of principal executive offices)
(441) 296-8262
(Registrant’s telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
The number of shares of the Registrant’s Class A common shares, par value $0.0000225 per share, outstanding as of April 1, 2005 was 574,934,605 (which number does not include 21,731,624 issued shares held by subsidiaries of the Registrant). The number of shares of the Registrant’s Class X common shares, par value $0.0000225 per share, outstanding as of April 1, 2005 was 342,476,342.
ACCENTURE LTD
INDEX
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Part I.
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Financial Information | 3 | ||||||
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Item 1.
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Financial Statements | 3 | ||||||
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Consolidated Balance Sheets as of February 28, 2005 (unaudited) and August 31, 2004 | 3 | ||||||
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Consolidated Income Statements (unaudited) for the three and six months ended February 28, | |||||||
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2005 and February 29, 2004 | 4 | ||||||
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Consolidated Shareholders’ Equity and Comprehensive Income Statements (unaudited) for the | |||||||
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six months ended February 28, 2005 | 5 | ||||||
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Consolidated Cash Flows Statements (unaudited) for the six months ended February 28, 2005 | |||||||
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and February 29, 2004 | 6 | ||||||
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Notes to Consolidated Financial Statements (unaudited) | 7 | ||||||
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 | ||||||
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk | 32 | ||||||
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Item 4.
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Controls and Procedures | 32 | ||||||
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Part II.
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Other Information | 33 | ||||||
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Item 1.
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Legal Proceedings | 33 | ||||||
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds; Issuer Purchases of Equity Securities | 34 | ||||||
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Item 3.
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Defaults under Senior Securities | 35 | ||||||
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Item 4.
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Submission of Matters to a Vote of Security Holders | 35 | ||||||
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Item 5.
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Other Information | 35 | ||||||
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Item 6.
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Exhibits | 36 | ||||||
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Signatures
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2
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ACCENTURE LTD
CONSOLIDATED BALANCE SHEETS
The accompanying notes are
an integral part of these consolidated financial statements.
3
ACCENTURE LTD
CONSOLIDATED INCOME STATEMENTS
The accompanying notes are
an integral part of these consolidated financial statements.
4
ACCENTURE LTD
CONSOLIDATED SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME STATEMENTS
The accompanying notes are
an integral part of these consolidated financial statements.
5
ACCENTURE LTD
CONSOLIDATED CASH FLOWS STATEMENTS
The accompanying notes are
an integral part of these consolidated financial statements.
6
ACCENTURE LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The
accompanying unaudited interim Consolidated Financial Statements of Accenture Ltd, a
Bermuda company, and its controlled subsidiary companies (together, “Accenture” or the “Company”)
have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission
(the “SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note
disclosures required by accounting principles generally accepted in the United States of America
for complete financial statements. These consolidated financial statements should therefore be read
in conjunction with the consolidated financial statements and notes thereto for the fiscal year
ended August 31, 2004 included in the Company’s Annual Report on Form 10-K filed with the SEC on
November 5, 2004. The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of
America and reflect all adjustments of a normal, recurring nature that are, in the opinion of
management, necessary for a fair presentation of results for these interim periods. The results of
operations for the three and six months ended February 28, 2005 are not necessarily indicative of
the results that may be expected for the fiscal year ending August 31, 2005. Certain prior-period
amounts have been reclassified to conform to the current-period presentation.
2. PRO FORMA IMPACT OF EMPLOYEE STOCK OPTIONS AND SHARE PURCHASE PLANS
Accenture follows the intrinsic value method in accordance with Accounting Principles Board
Opinion No. 25,
Accounting for Stock Issued to Employees
, to account for its employee stock options
and share purchase rights. Accordingly, no compensation expense is recognized for share purchase
rights granted in connection with the issuance of stock options under the Company’s employee share
incentive plan and through its employee share purchase plan; however, compensation expense is
recognized in connection with the issuance of restricted share units granted under the Company’s
share incentive plan. Beginning September 1, 2005, Accenture will be required to record
compensation expense for its employee stock options and share purchase rights as a result of a
revision to Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based
Compensation
, (“SFAS No. 123”) issued in December 2004. Had compensation expense for employee
stock options granted under the Company’s share incentive plan and employee share purchase rights
under its share purchase plan been determined based on fair value at the grant date consistent with
SFAS No. 123 with stock options expensed using the accelerated expense attribution method, the
Company’s net income and earnings per share would have been reduced to the pro forma amounts
indicated below:
7
ACCENTURE LTD
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS – (Continued)
3. EARNINGS PER SHARE
Basic and diluted earnings per share are calculated as follows:
4. RESTRUCTURING AND REORGANIZATION
Restructuring
In fiscal 2002, Accenture recognized restructuring costs of $110,524 (“Fiscal 2002
Restructuring”) related to a global consolidation of office space, consisting of $67,112 to
consolidate various locations and $43,412 to abandon the related fixed assets.
In the second quarter of fiscal 2004, Accenture recognized restructuring costs of $107,256
(“Fiscal 2004 Restructuring”), primarily in the United States and the United Kingdom, consisting of
$89,331 to consolidate various locations and $17,925 to abandon the related fixed assets. The
Fiscal 2004 Restructuring costs were allocated to the reportable operating segments as follows:
$26,952 to Communications & High Tech; $23,579 to Financial Services; $15,774 to Government;
$23,491 to Products; and $17,460 to Resources.
8
ACCENTURE LTD
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS – (Continued)
The Company’s restructuring activity for the three and six months ended February 28, 2005 is
as follows:
The restructuring liabilities at February 28, 2005 were $87,073, of which $18,700 was
included in other accrued liabilities and $68,373 was included in other non-current liabilities.
The recorded liabilities represent the net present value of the estimated remaining obligations
related to existing operating leases. Other than immaterial changes in lease estimates, there have
been no adjustments to the original liabilities recorded, and Accenture does not expect to make
future material adjustments.
Reorganization
In fiscal 2001, Accenture recognized reorganization liabilities in connection with its
transition to a corporate structure. Favorable final determinations of certain reorganization
liabilities accrued in 2001 resulted in net
benefits in our Consolidated Income Statement for the three and six months ended February 28,
2005. Interest related to reorganization liabilities is included in net reorganization benefit/expense.
The Company’s reorganization activity for the
period is as follows:
The reorganization liabilities at February 28, 2005 were $467,827, of which $125,980 was
included in other accrued liabilities, because final determinations could occur within 12 months, and $341,847 was included in other non-current liabilities.
5. ACCUMULATED OTHER COMPREHENSIVE LOSS
The components of Accumulated other comprehensive loss are as follows:
Comprehensive income is as follows:
9
ACCENTURE LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
6. GOODWILL
The changes in the carrying amount of goodwill by reportable segment for the six months ended
February 28, 2005 are as follows:
7. PROFIT SHARING
AND RETIREMENT PLANS
In the United States and certain other countries, Accenture maintains and administers
retirement plans and postretirement medical plans for certain active, retired and resigned
Accenture employees. The components of net periodic pension and
postretirement expense are as follows:
10
ACCENTURE LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
8. MATERIAL TRANSACTIONS AFFECTING SHAREHOLDERS’ EQUITY
On December 20, 2004, a tender offer made to Accenture SCA Class I shareholders on November
16, 2004 by Accenture SCA and one of its subsidiaries resulted in
the redemption and purchase of an aggregate of 3,463,488 Accenture SCA Class I common shares at a price of $24.61 per share. The
total cash outlay for these transactions was $85,236.
Since April 2002, Accenture has conducted its publicly announced, open-market share purchase
program for Accenture Ltd Class A common shares through the Accenture Share Employee Compensation
Trust (the “SECT”) and its predecessor trust. These trusts utilized purchased shares to provide
for select employee benefits, such as equity awards to our partners. Accenture
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ACCENTURE LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
dissolved the SECT
in February 2005 after determining that it could continue to meet its obligations related to its
compensation and employee benefit plans without the SECT. All remaining Accenture Ltd Class A
common shares held by the SECT were transferred to a subsidiary of Accenture Ltd and continue to be
treasury shares. The dissolution of the SECT has no effect on the publicly announced, open-market
share purchase program, which we will continue through one or more subsidiaries of Accenture Ltd.
During the six months ended February 28, 2005, an aggregate of 5,875,000 Accenture Ltd Class
A common shares were purchased for an aggregate purchase price of $149,032.
At February 28, 2005, there was $912,546 available for open-market share purchases and
$2,135,158 of previously authorized funds available for the purchase, redemption and exchange of
Accenture shares held by partners, former partners, their permitted transferees and employees.
Effective as of February 18, 2005, Accenture awarded to certain of its highest-performing
partners stock options to purchase approximately 15 million Accenture Ltd Class A common shares,
having an aggregate fair market value, at the time of grant, of $170,000.
9. COMMITMENTS AND CONTINGENCIES
Guarantees
As a result of our increase in ownership of Accenture HR Services from 50 percent to 100
percent in February 2002, Accenture may be required to make additional purchase price payments
through September 30, 2008, conditional on Accenture HR Services achieving certain levels of
qualifying revenues. An amendment to the purchase agreement was signed in January 2005, increasing
the guaranteed additional purchase price by $10,000 and decreasing the total amount of additional
purchase price that Accenture may be required to make from $187,500 to $177,500. During the three
months and six months ended February 28, 2005, Accenture made payments of $0 and $11,310,
respectively. The remaining potential liability at February 28, 2005 was $164,470.
In February 2005, Accenture signed an amendment to the Avanade, Inc. stockholders agreement.
As a result of the amendment, there is no longer a fixed purchase price minimum or maximum payable
by Accenture for the Avanade, Inc. shares not already owned by Accenture. Accenture now has the
right to purchase substantially all of the remaining outstanding shares of Avanade, Inc. not owned
by Accenture at fair market value if certain events occur. Accenture may also be required to
purchase substantially all of the remaining outstanding shares of Avanade, Inc. at fair market
value if certain events occur.
Accenture has various agreements in which it may be obligated to indemnify the other parties
with respect to certain matters. Generally, these indemnification provisions are included in
contracts arising in the normal course of business under which the Company customarily agrees to
hold the indemnified party harmless against losses arising from a breach of representations related
to such matters as title to assets sold and licensed or certain intellectual property rights.
Payments by Accenture under such indemnification clauses are generally conditioned on the other
party making a claim. Such claims are typically subject to challenge by Accenture and to dispute
resolution procedures specified in the particular contract. Further, the Company’s obligations
under these agreements may be limited in terms of time and/or amount and, in some instances,
Accenture may have recourse against third parties for certain payments made by the Company. It is
not possible to predict the maximum potential amount of future payments under these indemnification
agreements due to the conditional nature of Accenture’s obligations and the unique facts of each
particular agreement. Historically, the Company has not made any payments under these agreements
that have been material individually or in the aggregate. As of February 28, 2005, management was
not aware of any obligations arising under indemnification agreements that would require material
payments.
From time to time, Accenture enters into contracts with clients whereby it has joint and
several liability with other participants and third parties providing related services and products
to clients. Under these arrangements, Accenture and other parties may assume some responsibility to
the client for the performance of others under the terms and conditions of the contract with or for
the benefit of the client. In some arrangements, the extent of Accenture’s obligations for the
performance of others is not expressly specified. As of February 28, 2005, Accenture estimates it
had assumed an aggregate potential liability of approximately $719,827 to its clients for the
performance of others under arrangements described in this paragraph. These contracts typically
provide recourse provisions that would allow Accenture to recover from the other parties all but
approximately
12
ACCENTURE LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
$44,232 if Accenture is obligated to make payments to the clients that are the
consequence of a performance default by the other parties. To date, Accenture has not been required
to make any payments under any of the contracts described in this paragraph.
Legal Contingencies
At February 28, 2005, Accenture or its present personnel had been named as a defendant in
various litigation matters. All of these are civil in nature. Based on the present status of these
litigation matters, the management of Accenture believes they will not ultimately have a material
effect on the results of operations, financial position or cash flows of Accenture.
10. SEGMENT REPORTING
Operating segments are defined by SFAS No. 131,
Disclosures about Segments of an Enterprise
and Related Information
, as components of an enterprise about which separate financial information
is available that is evaluated regularly by the chief operating decision maker, or decision-making
group, in deciding how to allocate resources and in assessing performance.
Accenture’s chief operating decision maker is its chief executive officer. The operating
segments are managed separately because each operating segment represents a strategic business unit
providing management consulting, technology and outsourcing services that serves clients in
different industries.
The reportable operating segments are the five operating groups, which are Communications &
High Tech, Financial Services, Government, Products and Resources. Revenues before reimbursements
and operating income by reportable operating segment are as follows:
13
ACCENTURE LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Reorganization
benefits and restructuring costs were allocated to the reportable
operating segments as follows:
11. SUBSEQUENT EVENTS
On March 7, 2005, a tender offer made to Accenture SCA Class I shareholders on February 1,
2005 by Accenture SCA and one of its subsidiaries resulted in the redemption or purchase
of an aggregate of 18,745,917 Accenture SCA Class I common shares at a price of $26.30 per share.
At the same time, a subsidiary of Accenture SCA purchased 314,038 Accenture Canada Holdings Inc.
exchangeable shares at a price of $26.30 per share. The total cash outlay for these transactions
was $501,277.
On March 15, 2005, as a result of favorable final determinations of certain reorganization
liabilities recorded in connection with our transition to a corporate structure in 2001, we
recognized benefits of approximately $69,000.
14
The following discussion and analysis should be read in conjunction with our Consolidated
Financial Statements and related notes included elsewhere in this Quarterly Report on
Form 10-Q
and
in our Annual Report on
Form 10-K
for the year ended August 31, 2004, and with the information
under the heading “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in our Annual Report on
Form 10-K
for the year ended August 31, 2004.
We use the terms “Accenture,” “we,” “our Company,” “our” and “us” in this report to refer to
Accenture Ltd and its subsidiaries. All references to years, unless otherwise noted, refer to our
fiscal year, which ends on August 31. For example, a reference to “fiscal 2004” or “fiscal year
2004” means the 12-month period that ended on August 31, 2004. All references to quarters, unless
otherwise noted, refer to the quarters of our fiscal year. We use the term “partner” to refer to
the executive employees of Accenture with the “partner” title.
Disclosure Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934
relating to our operations, results of operations and other matters that are based on our current
expectations, estimates and projections. Words such as “expects,” “intends,” “plans,” “projects,”
“believes,” “estimates” and similar expressions are used to identify these forward-looking
statements. These statements are not guarantees of future performance and involve risks,
uncertainties and assumptions that are difficult to predict. Forward-looking statements are based
upon assumptions as to future events that may not prove to be accurate. Actual outcomes and
results may differ materially from what is expressed or forecast in these forward-looking
statements. The reasons for this include changes in general economic and political conditions,
including fluctuations in currency exchange rates, and the following factors:
15
For a more detailed discussion of these factors, see the information under the heading
“Business—Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2004. We
undertake no obligation to update or revise any forward-looking statements.
Overview
Revenues are driven by the ability of our senior executives to secure contracts for new
engagements and to deliver solutions and services that add value to our clients. Our ability to
add value to clients and therefore drive revenues depends in part on our ability to deliver
market-leading service offerings and to deploy skilled teams of professionals quickly and on a
global basis.
Our results of operations are also affected by the economic conditions, levels of business
activity and rates of change in the industries we serve, as well as by the pace of technological
change and the type and level of technology spending by our clients. The ability to identify and
capitalize on these market and technological changes early in their cycles is a key driver of our
performance. The strengthening economic recovery continues to stimulate the technology spending of
many companies. We are continuing to see increasing numbers of opportunities from companies
seeking both revenue-generating and cost-cutting initiatives. We expect revenue growth rates
across our segments to continue to vary from quarter to quarter during fiscal 2005 as the economic
recovery continues to take hold at different rates in different industries and geographic markets.
Revenues before reimbursements for the three and six months ended February 28, 2005 were $3.81
billion and $7.54 billion, respectively, compared with $3.30 billion and $6.56 billion,
respectively, for the three and six months ended February 29, 2004, an increase of 15% for both
periods in U.S. dollars and 10% and 9%, respectively, in local currency terms.
Outsourcing revenues before reimbursements for the three and six months ended February 28,
2005 were $1.51 billion and $2.86 billion, respectively, compared with $1.28 billion and $2.44
billion, respectively, for the three and six months ended February 29, 2004, an increase of 18% and
17%, respectively, in U.S. dollars and 13% and 12%, respectively, in local currency terms.
Outsourcing contracts typically have longer terms than consulting contracts and generally have
lower gross margins than consulting contracts, particularly in the first year. While we expect
that outsourcing will continue to deliver solid growth to our business over the remainder of this
fiscal year, it is likely to grow overall at a slower rate than it did in fiscal 2004. The average
size of most new outsourcing opportunities we see in the market continues to be smaller than those
contracts we executed in the first six months of fiscal 2004. Long-term relationships with many of
our clients continue to contribute to our success in growing our outsourcing business. Long-term,
complex outsourcing contracts, including their consulting components, require ongoing review of
their terms and scope of work, in light of our clients’ evolving business needs and our performance
expectations.
16
Should the size or number of modifications to these arrangements increase, as our
business continues to grow and these contracts evolve, we may experience increased variability in
expected cash flows, revenues and profitability.
Consulting revenues before reimbursements for the three and six months ended February 28, 2005
were $2.30 billion and $4.68 billion, respectively, compared with $2.02 billion and $4.12 billion,
respectively, for the three and six months ended February 29, 2004, an increase of 14% for both
periods in U.S. dollars and 8% for both periods in local currency terms.
We have certain contracts (the “NHS Contracts”) under which we have been engaged to
design, develop and deploy new patient administration, assessment and care systems (the
“Systems”) for the National Health Service in England (the “NHS”) and, subsequently, to provide
ongoing operational services once these systems have been deployed. We have experienced
temporary delays in our ability to deploy, as planned, a number of
the Systems’ components. The delays in deployment have resulted
in lower-than-expected revenues, margins, billings and cash flows to date. We are also continuing to
carry unbilled services on the NHS Contracts in amounts significantly above our initial
estimates. For the first six months of fiscal 2005, we have recorded losses attributable to
these contracts of approximately $38 million. As of February 28, 2005, client financing and
other assets attributable to this client totaled $349 million.
We
are continuing to work with the NHS to agree to alternative deployment plans and to consider
different financing arrangements. Under our contracts with the NHS our ability to bill and
collect the unbilled services we are carrying is subject to our ability to agree with our
client on alternative deployment plans and to successful deployment.
Based on agreeing to the alternative deployment plans currently under
discussion, we expect that aggregate losses on the
NHS Contracts for this fiscal year could be from $110 million to $150 million, and that client financing and
other assets attributable to this client could total
between $400 million and $460 million by our fiscal year end.
Based on agreeing to these deployment plans, we currently expect contract losses to continue in
fiscal 2006, but at levels less than those expected for this fiscal year. We expect further
improved performance in fiscal 2007 and the contracts to achieve expected profitability over
the remainder of their terms. The revenues and costs from the NHS Contracts are apportioned
equally between our Government and Products operating groups.
As a global company, our revenues are generated in multiple currencies and may be
significantly affected by currency exchange-rate fluctuations. During the first six months of
fiscal 2005, the strengthening of various currencies versus the U.S. dollar continued to result in
favorable currency translation and increased our reported revenues, operating expenses and
operating income. If the U.S. dollar strengthens against other currencies, the resulting
unfavorable currency translation could decrease our reported U.S. dollar revenues, operating
expenses and operating income and also result in our reported U.S. dollar revenue growth being
lower than our growth in local currency terms.
The
primary categories of operating expenses are cost of services, sales and marketing
costs, and general and administrative costs. Cost of services is primarily driven by the cost of
client-service personnel, which consists mainly of compensation, sub-contractor and other personnel
costs, and by non-payroll outsourcing costs. Cost of services as a percentage of revenues is
driven by the prices we obtain for our solutions and services; the chargeability, or utilization,
of our client-service workforces; and the level of non-payroll costs associated with the continuing
accelerated growth of new outsourcing contracts. Chargeability represents the
percentage of our professionals’ time spent on billable work. Sales and marketing expense is
driven primarily by business-development activities; the development of new service offerings; the
level of concentration of clients in a particular industry or market; and client-targeting,
image-development and brand recognition activities. General and administrative costs primarily
include costs for non-client-facing personnel, information systems and office space, which we seek
to manage at levels consistent with changes in activity levels in our business. Operating expenses
include reorganization benefits and costs and restructuring costs, which may vary substantially from quarter
to quarter.
Gross margins (revenues before reimbursements less cost of services before reimbursements) for
the three months ended February 28, 2005 were 31% of revenues before reimbursements, compared with
33% for the three months ended February 29, 2004. This decrease
was due
primarily to the lower-than-expected margins attributable to
temporary delays under the NHS Contracts and incurred and expected
cost overruns associated with the development of reusable assets in
connection with several client contracts. To a lesser extent, a
number of delivery inefficiencies, including continuing staffing
costs and higher subcontractor usage, also
contributed to this decrease. We did not accrue variable compensation
expense for the three months ended February 28, 2005, which
partially offset the decrease in gross margins.
Our cost-management strategy continues to be to anticipate changes in demand for our services
and to identify cost-management initiatives. We aggressively plan and manage our payroll costs to
meet the anticipated demand for our services, given that payroll costs are the most significant
portion of our operating expenses.
Our attrition rate for the three months ended February 28, 2005 was 18%, lower than the 20%
attrition rate we experienced in the first quarter of fiscal 2005. Increasing competition for
scarce talent will likely present us with supply-and-demand and
17
skill-level imbalance challenges in
certain industry segments, skill sets and geographic regions for the remainder of fiscal 2005.
We continue to add substantial numbers of new employees and will continue to actively
recruit new employees to balance our mix of skills and resources to meet current and projected
future demands, replace departing employees and expand our global sourcing approach, which includes
our network of delivery centers and other capabilities around the world. We may need to continue
to adjust compensation over the course of the year in certain industry segments, skill sets and
geographies in order to attract and retain appropriate numbers of qualified employees. Our ability
to grow our business could also be adversely affected if we do not effectively assimilate
substantial numbers of new employees into our workforces. These compensation adjustments and the
additional costs of recruiting, hiring, training and assimilating increasing numbers of new
employees could adversely affect our operating margins.
Sales and marketing and general and administrative costs as a percentage of revenues before
reimbursements were 19% and 20%, respectively, for the three and six months ended February 28,
2005, compared with 20% and 21%, respectively, for the three and six months ended February 29,
2004.
Operating income as a percentage of revenues before reimbursements for the three months ended
February 28, 2005 increased to 12% from 9% for the three months ended February 29, 2004. This
increase was primarily related to restructuring costs of $107 million recorded in fiscal 2004.
Excluding reorganization and restructuring, operating income as a percentage of
revenues before reimbursements for the three months ended February 28, 2005 decreased by 1.1
percentage points compared with the three months ended February 29, 2004. For both the six months
ended February 28, 2005 and February 29, 2004, operating income as a percentage of revenues before
reimbursements was 12%.
New Contract Bookings and Backlog
New contract bookings for the three months ended February 28, 2005 were $4,875 million, a
decrease of $2,774 million, or 36% from the three months ended February 29, 2004, with consulting
bookings decreasing 3%, to $2,810 million, and outsourcing
bookings decreasing 57%, to $2,065
million. New contract bookings for the six months ended February 28, 2005 were $8,905 million, a
decrease of $3,795 million, or 30%, from the six months ended February 29, 2004, with consulting
bookings decreasing 4% and outsourcing bookings decreasing 47%. The size and scope of many of our
new outsourcing contract bookings have decreased when compared to new outsourcing contract bookings for
the six months ended February 29, 2004. The decreases in new
contract bookings were partially attributable to the signing of the two large NHS
Contracts in the second quarter of fiscal 2004, which significantly
increased new contract bookings for the three and six months ended
February 29, 2004.
We provide information regarding our new contract bookings because we believe doing so
provides useful trend information regarding changes in the volume of our new business over time.
However, the timing of large new contract bookings can significantly affect the level of bookings
in a particular quarter. Information regarding our new bookings is not comparable to, nor should it
be substituted for, an analysis of our revenues over time. New contract bookings include new
contracts as well as renewals, extensions and additions to existing contracts. New contract
bookings for prior-period amounts are not adjusted for currency fluctuations.
The majority of our contracts are terminable by the client on short notice or without notice.
Accordingly, we do not believe it is appropriate to characterize bookings attributable to these
contracts as backlog. Normally, if a client terminates a project, the client remains obligated to
pay for commitments we have made to third parties in connection with the project, services
performed and reimbursable expenses incurred by us through the date of termination.
Critical Accounting Policies and Estimates
For a complete description of our critical accounting policies and estimates, refer to our
Annual Report on Form 10-K for the year ended August 31, 2004.
18
Segments/Operating Groups
Our five reportable operating segments are our operating groups, which are Communications &
High Tech, Financial Services, Government, Products and Resources. Operating groups are managed on
the basis of revenues before reimbursements because our management believes these are a better
indicator of operating group performance than revenues. From time to time, our operating groups
work together to sell and implement certain contracts. The resulting revenues and costs from these
contracts may be apportioned among the participating operating groups. Generally, operating
expenses for each operating group have similar characteristics and are subject to the same factors,
pressures and challenges. However, the economic environment and its effects on the industries
served by our operating groups affect revenues and operating expenses within our operating groups
to differing degrees. Decisions relating to staffing levels are not made uniformly across our
operating groups, due in part to the needs of our operating groups to tailor their workforces to
meet the specific needs of their businesses. The shift in mix toward outsourcing contracts is not
uniform among our operating groups and, consequently, neither is the impact on operating group
results caused by this shift. Local currency fluctuations also tend to affect our operating groups
differently, depending on the geographic concentrations and locations of their businesses.
Revenues for each of our operating groups, geographic regions and types of work are as
follows:
19
Three Months Ended February 28, 2005 Compared to Three Months Ended February 29, 2004
Revenues
Operating Groups
Our Communications & High Tech operating group achieved revenues before reimbursements for the
three months ended February 28, 2005 of $982 million, compared with $931 million for the three
months ended February 29, 2004, an increase of 6% in U.S. dollars and 1% in local currency terms.
The increase was primarily due to growth in consulting revenues across all industry groups and
geographic regions, particularly in our Communications industry group. Outsourcing revenue growth
in nearly all our regions and industry groups was more than offset by a decline in our
Communications industry group’s outsourcing revenues in North America. The outsourcing revenue
decline was due partly to a substantial reduction, which began in fiscal 2004, in the scope of our
work with a major telecommunications client as a result of that client’s changing business
strategies. This revenue decline will continue to adversely affect the operating group’s growth
rates in outsourcing revenues for the next fiscal quarter as compared to the corresponding quarter
of fiscal 2004.
Our Financial Services operating group achieved revenues before reimbursements for the three
months ended February 28, 2005 of $859 million, compared with $648 million for the three months
ended February 29, 2004, an increase of 33% in U.S. dollars and 25% in local currency terms.
Growth was driven by the strength of our business in both the Americas and EMEA regions,
particularly in the United Kingdom, and in our Insurance and Banking industry groups, partially
offset by a decline in our Capital Markets industry group.
20
Our Government operating group achieved revenues before reimbursements for the three months
ended February 28, 2005 of $521 million, compared with $468 million for the three months ended
February 29, 2004, an increase of 11% in U.S. dollars and 7% in local currency terms. Results were
driven by strong growth with clients in Europe and our Asia Pacific region. This growth was
partially offset by a decrease in revenues from clients in the United States at the Federal, state
and local levels.
Our Products operating group achieved revenues before reimbursements for the three months
ended February 28, 2005 of $851 million, compared with $715 million for the three months ended
February 29, 2004, an increase of 19% in U.S. dollars and 14% in local currency terms, with both
consulting and outsourcing contributing to the growth in revenues. Strong growth in outsourcing
revenues was primarily due to our Retail & Consumer industry group, whereas our Health Services
industry group contributed to our consulting revenue growth.
Our Resources operating group achieved revenues before reimbursements for the three months
ended February 28, 2005 of $597 million, compared with $538 million for the three months ended
February 29, 2004, an increase of 11% in U.S. dollars and 5% in local currency terms. Strong
growth in our EMEA region, particularly in the Energy industry group, more than offset a decline in
our North America region.
Geography
Our Americas region achieved revenues before reimbursements for the three months ended
February 28, 2005 of $1,542 million, compared with $1,501 million for the three months ended
February 29, 2004, an increase of 3% in U.S. dollars and 2% in local currency terms. A key
contributor to this growth was our business in Brazil.
Our Europe, Middle East and Africa (“EMEA”) region achieved revenues before reimbursements for
the three months ended February 28, 2005 of $1,996 million, compared with $1,576 million for the
three months ended February 29, 2004, an increase of 27% in U.S. dollars and 17% in local currency
terms. A key contributor to this growth was our business in the United Kingdom, where revenues
before reimbursements grew 32% in U.S. dollars and 22% in local currency terms over the same period
in fiscal 2004, due primarily to several large contracts sold there in fiscal 2004. Also
contributing to the strong growth in EMEA were our businesses in Germany, Italy, the Netherlands,
Norway and Spain.
Our Asia Pacific region achieved revenues before reimbursements for the three months ended
February 28, 2005 of $275 million, compared with $225 million for the three months ended February
29, 2004, an increase of 22% in U.S. dollars and 15% in local currency terms. Our businesses in
Australia and Japan continued to drive the growth in our Asia Pacific region.
Operating Expenses
Operating expenses for the three months ended February 28, 2005 were $3,744 million, an
increase of $369 million, or 11%, over the three months ended February 29, 2004. Operating
expenses before reimbursements decreased as a percentage of revenues before reimbursements to 88%
for the three months ended February 28, 2005 from 91% for the three months ended February 29, 2004.
Excluding reorganization and restructuring, operating expenses before
reimbursements as a percentage of revenues before reimbursements would have increased by 1.1
percentage points for the three months ended February 28, 2005 compared with the three months ended
February 29, 2004.
The strengthening of various currencies against the U.S. dollar increased our reported
operating expenses for the three months ended February 28, 2005 compared with the three months
ended February 29, 2004 and partially offset corresponding increases in reported revenues.
During the three months ended February 28, 2005, we did not record any variable compensation
expense, compared with $64 million in variable compensation expense recorded for the three months
ended February 29, 2004.
Cost of Services
Cost of services for the three months ended February 28, 2005 was $3,042 million, an increase
of $449 million, or 17%, over the three months ended February 29, 2004, and increased as a
percentage of revenues to 72% from 70% during this period. Cost of services before reimbursable
expenses for the three months ended February 28, 2005 was $2,639 million, an increase of $426
million, or 19%, over the three months ended February 29, 2004 and increased as a percentage of
revenues before reimbursements to 69% from 67% during this period. Gross margins (revenues before
reimbursements less cost of services before reimbursements) as a percentage of revenues before
reimbursements decreased to 31% for the three months ended February 28, 2005 from 33% for the three
months ended February 29, 2004.
21
The increase in cost of services and the decrease in gross margins as a percentage of revenues
before reimbursements were due primarily to the lower-than-expected
margins attributable to temporary delays under the
NHS Contracts and incurred and expected cost overruns associated with
the development of reusable assets in
connection with several client contracts. To a lesser extent, a number of delivery inefficiencies, including
continuing staffing costs and higher subcontractor usage, also contributed to this
decrease. We did not accrue variable compensation expense for
the three months ended February 28, 2005, which partially offset
the decrease in gross margins.
Sales and Marketing
Sales and marketing expense for the three months ended February 28, 2005 was $377 million, an
increase of $18 million, or 5%, over the three months ended February 29, 2004 and decreased as a
percentage of revenues before reimbursements to 10% for the three months ended February 28, 2005
from 11% for the three months ended February 29, 2004.
General and Administrative Costs
General and administrative costs for the three months ended February 28, 2005 were $361
million, an increase of $45 million, or 14%, over the three months ended February 29, 2004 and
remained flat as a percentage of revenues before reimbursements
during that period.
Reorganization (Benefits) and Restructuring Costs
During
the three months ended February 28, 2005, Accenture recorded net reorganization benefits of
$36 million. The current year benefit was primarily driven by final determinations of certain
reorganization liabilities established in connection with our transition to a corporate structure in
2001. These benefits from final determinations were partially offset
by interest on reorganization liabilities. At February 28, 2005, the remaining liability for
reorganization costs was $468
million, of which $126 million was classified as current liabilities because final determinations
could occur within 12 months. During the three months ended
February 29, 2004, benefits from final determinations offset
interest on reorganization liabilities.
During the three months ended February 29, 2004, Accenture recorded restructuring costs of
$107 million relating to the Company’s global consolidation of office space, primarily in the
United States and United Kingdom. These costs include losses on operating leases and write-downs
of related assets such as leasehold improvements resulting from abandoned office space. No
restructuring costs were recorded for the three months ended February 28, 2005.
Operating Income
Operating income for the three months ended February 28, 2005 was $472 million, an increase of
$165 million, or 54%, over the three months ended February 29, 2004 and increased as a percentage
of revenues before reimbursements to 12% from 9% during this period.
Excluding reorganization and restructuring, operating income as a percentage of revenues before
reimbursements would have decreased by 1.1 percentage points for the three months ended February
28, 2005 compared with the three months ended February 29, 2004.
22
Operating income
for each of the operating groups was as follows:
Reorganization
benefits and restructuring costs were allocated to the reportable
operating groups as follows:
Excluding
the effects of reorganization and restructuring, operating
income for the three months ended February 28, 2005 increased by $22 million over the three months
ended February 29, 2004, reflecting increases in Communications & High Tech, Financial Services and
Resources, which were partially offset by decreases in Government and Products. The following
commentary excludes the effects of reorganization and restructuring:
The NHS Contracts will continue to adversely affect the operating income of our Government and
Products operating groups for the remainder of this fiscal year and,
to a lesser extent, for fiscal 2006.
Interest Income
Interest income for the three months ended February 28, 2005 was $28 million, an increase of
$13 million, or 85%, over the three months ended February 29, 2004. The increase resulted
primarily from an increase in interest rates, as well as an increase in average investment
(short-term and non-current) and average client financing balances during the three months ended
February 28, 2005, compared with the average balances for the three months ended February 29, 2004.
23
Other (Expense) Income
Other expense was $3 million for the three months ended February 28, 2005, compared with other
income of $18 million for the three months ended February 29, 2004. The decrease in other income
was primarily due to foreign currency exchange losses in fiscal 2005 compared with foreign currency
exchange gains in fiscal 2004.
Provision for Income Taxes
The effective tax rates for the three months ended February 28, 2005 and February 29, 2004
were 30.6% and 34.8%, respectively. The effective tax rate of 30.6% includes the effect of the
reduction in the annual effective tax rate for fiscal 2005 from 34.0% to 32.3%, due to changes in
our forecasted geographic mix of income and a reduction in reorganization liabilities.
Minority Interest
Minority interest for the three months ended February 28, 2005 was $131 million, an increase
of $34 million, or 35%, over the three months ended February 29, 2004. The increase was primarily
due to an increase in income before minority interest of $121 million, partially offset by a
reduction in the minority’s average ownership interest to 38% at February 28, 2005 from 44% at
February 29, 2004.
Earnings Per Share
Diluted earnings per share for the three months ended February 28, 2005 were $0.35, compared
with $0.22 for the three months ended February 29, 2004. For the three months ended February 28,
2005, net reorganization benefits of $36 million increased diluted
earnings per share by $0.03. For
the three months ended February 29, 2004, restructuring costs of $107 million decreased diluted
earnings per share by $0.07. For information regarding our earnings per share calculation, please
see Footnote 3, “Earnings Per Share,” to our consolidated financial statements above under Item 1,
“Financial Statements.”
Six Months Ended February 28, 2005 Compared to Six Months Ended February 29, 2004
Revenues
Operating Groups
Our Communications & High Tech operating group achieved revenues before reimbursements for the
six months ended February 28, 2005 of $1,955 million, compared with $1,810 million for the six
months ended February 29, 2004, an increase of 8% in U.S. dollars and 4% in local currency terms.
The increase was primarily due to growth in consulting revenues across all industry groups and
geographic regions, particularly in our Communications industry group. Outsourcing revenue growth
in nearly all our regions and industry groups was more than offset by a decline in our
Communications industry group’s outsourcing revenues in North America. The outsourcing revenue
decline was due partly to a substantial reduction, which began in fiscal 2004, in the scope of our
work with a major telecommunications client as a result of that client’s changing business
strategies. This revenue decline will continue to adversely affect the operating group’s growth
rates in outsourcing revenues for the next fiscal quarter as compared to the corresponding quarter
of fiscal 2004.
Our Financial Services operating group achieved revenues before reimbursements for the six
months ended February 28, 2005 of $1,666 million, compared with $1,294 million for the six months
ended February 29, 2004, an increase of 29% in U.S. dollars and 21% in local currency terms.
Growth was driven by the strength of our business in both the Americas and EMEA regions,
particularly in the United Kingdom and in our Insurance and Banking industry groups.
Our Government operating group achieved revenues before reimbursements for the six months
ended February 28, 2005 of $1,045 million, compared with $946 million for the six months ended
February 29, 2004, an increase of 10% in U.S. dollars and 6% in local currency terms. Results were
driven by strong growth with clients in Europe and our Asia Pacific region. This growth was
partially offset by a decrease in revenues from clients in the United States at the Federal, state
and local levels.
Our Products operating group achieved revenues before reimbursements for the six months ended
February 28, 2005, of $1,714 million, compared with $1,416 million for the six months ended
February 29, 2004, an increase of 21% in U.S. dollars and 15% in local currency terms, with both
consulting and outsourcing contributing to the growth in revenues. All industry groups,
particularly our Retail & Consumer industry group, contributed to the strong outsourcing revenue
growth, whereas our Health Services and Retail & Consumer industry groups contributed to consulting
revenue growth.
24
Our Resources operating group achieved revenues before reimbursements for the six months ended
February 28, 2005 of $1,161 million, compared with $1,093 million for the six months ended February
29, 2004 an increase of 6% in U.S. dollars and generally flat in local currency terms. Strong
growth in our EMEA region, particularly in the Energy industry group, more than offset a decline in
our North America region.
Geography
Our Americas region achieved revenues before reimbursements for the six months ended February
28, 2005 of $3,084 million, compared with $2,993 million for the six months ended February 29,
2004, an increase of 3% in U.S. dollars and 2% in local currency terms. A key
contributor was strong growth in our Brazilian business, partially offset by a decline in our
Canadian business.
Our Europe, Middle East and Africa (“EMEA”) region achieved revenues before reimbursements for
the six months ended February 28, 2005 of $3,915 million, compared with $3,126 million for the six
months ended February 29, 2004, an increase of 25% in U.S. dollars and 15% in local currency terms.
A key contributor to this growth was our business in the United Kingdom, where revenues before
reimbursements grew 41% in U.S. dollars and 29% in local currency terms over the same period in
fiscal 2004. The growth in the United Kingdom was primarily due to several large contracts that
were sold during fiscal 2004. Also contributing to the strong growth in EMEA were our businesses
in Germany, Italy, the Netherlands, Norway and Spain.
Our Asia Pacific region achieved revenues before reimbursements for the six months ended
February 28, 2005 of $545 million, compared with $445 million for the six months ended February 29,
2004, an increase of 22% in U.S. dollars and 17% in local currency terms. Our businesses in
Australia and Japan continued to drive the growth in our Asia Pacific region.
Operating Expenses
Operating expenses for the six months ended February 28, 2005 were $7,358 million, an increase
of $915 million, or 14%, over the six months ended February 29, 2004. Operating expenses before
reimbursements as a percentage of revenues before reimbursements remained flat at 88% for the six
months ended February 28, 2005 and February 29, 2004.
Excluding reorganization and
restructuring, operating expenses before reimbursements as a percentage of revenues before
reimbursements would have increased by 0.8 percentage points for the six months ended February 28,
2005 compared with the six months ended February 29, 2004.
The strengthening of various currencies against the U.S. dollar increased our reported
operating expenses for the six months ended February 28, 2005 compared with the six months ended
February 29, 2004 and partially offset corresponding increases in reported revenues.
During the six months ended February 28, 2005, we recorded $43 million of net variable
compensation expense, including a reduction of $7 million related to finalization of estimated
payouts accrued for fiscal 2004, compared with $60 million in net variable compensation expense,
including a reduction of $4 million related to fiscal 2003, for the six months ended February 29,
2004.
Cost of Services
Cost of services for the six months ended February 28, 2005 was $5,898 million, an increase of
$842 million, or 17%, over the six months ended February 29, 2004 and increased as a percentage of
revenues to 71% from 70% during this period. Cost of services before reimbursable expenses for the
six months ended February 28, 2005 was $5,154 million, an increase of $791 million, or 18%, over
the six months ended February 29, 2004 and increased as a percentage of revenues before
reimbursements to 68% from 66% during this period. Gross margins (revenues before reimbursements
less cost of services before reimbursements) as a percentage of revenues before reimbursements
decreased to 32% from 34% during this period.
The increase in cost of services and the decrease in gross margins as a percentage of revenues
before reimbursements were due primarily to the lower-than-expected
margins attributable to temporary delays under the NHS
Contracts and incurred and expected cost overruns associated with the development of reusable assets in connection
with several client contracts. To a lesser extent, a number of
delivery inefficiencies, including continuing staffing
costs and higher subcontractor usage, also contributed to this decrease.
25
Sales and Marketing
Sales and marketing expense for the six months ended February 28, 2005 was $736 million, an
increase of $27 million, or 4%, over the six months ended
February 29, 2004, and decreased as a
percentage of revenues before reimbursements to 10% from 11% during this period.
General and Administrative Costs
General and administrative costs for the six months ended February 28, 2005 were $752 million,
an increase of $97 million, or 15%, over the six months ended February 29, 2004 and remained flat
as a percentage of revenues before reimbursements at 10% for the six months ended February 28, 2005
and February 29, 2004.
Reorganization (Benefits) and Restructuring Costs
During the six months ended February 28, 2005 and February 29, 2004, Accenture recorded
net reorganization benefits of $29 million and $86 million, respectively, primarily driven by final
determinations of certain reorganization liabilities established in connection with our transition to a
corporate structure in 2001. At February 28, 2005, the remaining liability for reorganization
costs was $468 million, of which $126 million was classified as current liabilities because
final determinations could occur within 12 months.
During the six months ended February 29, 2004, Accenture recorded restructuring costs of $107
million relating to the Company’s global consolidation of office space, primarily in the United
States and United Kingdom. These costs include losses on operating leases and write-downs of
related assets such as leasehold improvements resulting form abandoned office space. No
restructuring costs were recorded for the six months ended February 28, 2005.
Operating Income
Operating income for the six months ended February 28, 2005 was $930 million, an increase of
$115 million, or 14%, over the six months ended February 29, 2004 and remained flat as a percentage
of revenues before reimbursements at 12% for the six months ended February 28, 2005 and February
29, 2004. Excluding reorganization and restructuring, operating income as a
percentage of revenues before reimbursements would have decreased by 0.8 percentage points for the
six months ended February 28, 2005, compared with the six months ended February 29, 2004.
Operating income for each of the operating groups was as follows:
26
Reorganization benefits and
restructuring costs were allocated to the reportable operating groups as follows:
Excluding
the effects of reorganization and restructuring, operating
income increased by $65 million, reflecting increases in Communications & High Tech, Financial
Services and Resources, which were partially offset by decreases in Government and Products. The
following commentary excludes the effects of reorganization and restructuring:
The NHS Contracts will continue to adversely affect the operating income of our Government and
Products operating groups for the remainder of this fiscal year and,
to a lesser extent, for fiscal 2006.
Gain on Investments, Net
Gain on investments, net was $15 million for the six months ended February 28, 2005, an
increase of $11 million over the six months ended February 29, 2004. This reflects a gain on our
retained interests in our venture and investment portfolio, which we sold in fiscal 2003.
Interest Income
Interest income for the six months ended February 28, 2005 was $48 million, an increase of $23
million, or 88%, over the six months ended February 29, 2004. The increase resulted primarily from
an increase in interest rates, as well as an increase in average investment (short-term and
non-current) and average client financing balances during the six months ended February 28, 2005
compared with the average balances for the six months ended February 29, 2004.
Other (Expense) Income
Other expense was $5 million for the six months ended February 28, 2005, compared with other
income of $19 million for the six months ended February 29, 2004. The decrease in other income is
primarily due to foreign currency exchange losses in fiscal 2005 compared with foreign currency
exchange gains in fiscal 2004.
27
Provision for Income Taxes
The effective tax rates for the six months ended February 28, 2005 and February 29, 2004 were
32.3% and 34.8%, respectively. The fiscal 2005 annual effective tax rate declined from 34.0% to
32.3% as a result of changes in our forecasted geographic mix of income and a reduction in
reorganization liabilities. The fiscal 2004 effective tax rate was 32.0%.
Minority Interest
Minority interest for the six months ended February 28, 2005 was $254 million, a decrease of
$3 million, or 1%, over the six months ended February 29, 2004. The decrease was primarily due to a
reduction in the minority’s average ownership interest to 38% at February 28, 2005 from 46% at
February 29, 2004, partially offset by an increase in income before minority interest of $106
million.
Earnings Per Share
Diluted earnings per share for the six months ended February 28, 2005 were $0.67, compared
with $0.55 for the six months ended February 29, 2004. For the six months ended February 28, 2005,
reorganization benefits of $29 million increased diluted earnings per share by $0.02. For the six
months ended February 29, 2004, reorganization benefits and restructuring costs, net of tax, had no
effect on diluted earnings per share. For information regarding our earnings per share
calculation, please see Footnote 3, “Earnings Per Share,” to our consolidated financial statements
above under Item 1, “Financial Statements.”
Liquidity and Capital Resources
Our primary sources of liquidity are cash flows from operations, debt capacity available under
various credit facilities and available cash reserves. We may also be able to raise additional
funds through public or private debt or equity financings in order to:
At February 28, 2005, cash and cash equivalents of $3,060 million combined with $702 million
of liquid fixed-income securities that are classified as investments on our Consolidated Balance
Sheet, totaled $3,762 million. Our cash flows from operating, investing and financing activities,
as reflected in the Consolidated Statement of Cash Flows, are summarized in the following table:
Operating Activities.
The $267 million decrease in cash provided was primarily due to an
increase in net client balances (receivables from clients, unbilled services (current and
non-current) and deferred revenues), planned variable compensation payments of $216 million and an
increase in income taxes paid in fiscal 2005, partially offset by an increase in accounts payable
and other non-current liabilities. The increase in net client balances was due to growth in
revenues and an increase in total client financing, partially offset by an increase in client
prepayments.
28
Investing Activities.
The $202 million decrease in cash used was primarily due to a decrease
in net purchases of marketable securities. During the six months ended February 28, 2005 and
February 29, 2004, we invested $116 million and $101 million, respectively, in capital
expenditures, primarily for technology assets, furniture and equipment, and leasehold improvements
to support our operations. We expect that our capital expenditures will be approximately $400
million in fiscal 2005.
Financing Activities.
The $19 million decrease in cash used was primarily driven by net
proceeds from the issuance of short-term borrowings and lower net purchases of Accenture Ltd Class
A common shares in fiscal 2005, partly offset by a net decrease in restricted cash of the
predecessor to the Accenture Share Employee Compensation Trust.
At February 28, 2005, we had the following borrowing capacity, including the issuance of
letters of credit, available for general working capital purposes:
We continue to be in compliance with the terms of these facilities.
In addition to the short-term borrowings noted above, at February 28, 2005 and August 31, 2004
we had total outstanding debt of $49 million, which was primarily incurred in conjunction with our
ownership of Accenture HR Services.
In isolated circumstances, we agree to extend financing to clients. The terms vary by
contract, but generally we contractually link payment for services to the achievement of specified
performance milestones. We finance these client obligations primarily with existing working
capital and bank financing in the country of origin. Information pertaining to client financing is
as follows:
The increase in client financing from August 31, 2004 is primarily due to balances increasing
at certain large contracts that were signed in fiscal 2004, including the NHS Contracts.
Share Purchases and Redemptions
From time to time Accenture purchases, redeems and exchanges Accenture shares through the
Company’s open-market purchase program and through purchases, redemptions and exchanges of
Accenture shares held by partners, former partners and their permitted transferees. Accenture also
purchases, pursuant to our RSU Sell-Back Program, certain Accenture Ltd Class A common shares
awarded to employees pursuant to restricted share units issued in connection with our initial
public offering. For a complete description of our share purchase and redemption activity for the
three months ended February 28, 2005, see Item 2 of Part II, “Unregistered Sales of Equity
Securities and Use of Proceeds; Issuer Purchases of Equity
Securities.”
Open-Market Purchases
Since April 2002, we have conducted our publicly announced, open-market share purchase program
for Accenture Ltd Class A common shares through the Accenture Share Employee Compensation Trust
(the “SECT”) and its predecessor trust. These trusts utilized purchased shares to provide for
select employee benefits, such as equity awards to our partners. Shares held in the SECT and its
predecessor trust have been treated as treasury shares and are excluded from our earnings per share
calculations. We dissolved the SECT in February 2005 after determining that we could continue to
meet our obligations related to our compensation and employee benefit plans without the SECT. All
remaining Accenture Ltd Class A common shares held by the
29
SECT were transferred to a subsidiary of
Accenture Ltd and continue to be treasury shares. The dissolution of the SECT has no effect on our
publicly announced, open-market share purchase program, which we will continue through one or more
subsidiaries of Accenture Ltd. During the six months ended
February 28, 2005, an aggregate of 5,875,000 Accenture Ltd
Class A common shares were purchased for an aggregate purchase price of $149
million.
Share Management Plan and RSU Sell-Back Program Transactions
For a more detailed description of our Share Management Plan, see “Certain Transactions and
Relationships—Share Management Plan” in our Annual Report on Form 10-K for the year ended August
31, 2004 and “Annex C: Share Management Plan” in our proxy statement for the 2005 annual general
meeting of shareholders.
As
we have previously announced, through our Share Management Plan, we
intend for the remainder
of fiscal 2005 to allow quarterly transactions to provide our partners, former partners and their
permitted transferees with the opportunity to dispose of those shares that are currently eligible
for transfer under the terms of the various transfer restrictions applicable
to them. We may also approve the inclusion of
additional shares that will become eligible for transfer on or before July 24, 2005 in these
quarterly transactions. We do not expect to permit the aggregate number of Accenture Ltd Class A
common shares sold in any quarterly transaction in fiscal 2005 to exceed the average weekly volume
of trading in the Accenture Ltd Class A common shares on the New York Stock Exchange for the four
weeks prior to the start of these transactions. Based on recent
weekly trading volumes and the methodology we use to determine the
size of offers made to our partners, former
partners and their permitted transferees who hold Accenture SCA Class
I common shares and Accenture Canada Holdings Inc. exchangeable
preferred shares, in any future
quarterly transaction we could expect to offer to purchase or redeem
numbers of shares comparable to the numbers of shares offered in our
March 7, 2005 transactions.
On December 20, 2004, a tender offer made to Accenture SCA Class I shareholders on November
16, 2004 by Accenture SCA and one of its subsidiaries
resulted in the redemption and
purchase of an aggregate of 3,463,488 Accenture SCA Class I common shares at a price of $24.61 per share. The
total cash outlay for these transactions was $85 million. During the six months ended February 28,
2005, $1.4 million was used to facilitate isolated redemptions of 54,630 Accenture SCA Class I
common shares from the estates of deceased partners in accordance with the terms of the Accenture
SCA Class I common shares.
During the six months ended February 28, 2005, Accenture purchased 158,431 Accenture Ltd Class
A common shares under the RSU Sell-Back Program for an aggregate purchase price of $4 million.
Senior Executive Compensation
As previously announced, effective February 18, 2005, Accenture awarded to certain of its
highest-performing partners stock options to purchase approximately 15 million Accenture Ltd Class
A common shares, having an aggregate fair market value, at the time of grant, of $170 million.
Beginning in fiscal 2006, the enhanced program for senior executives will expand the use of equity
in the form of restricted share units, relative to cash and stock options, both as a reward at the
time of a promotion and to recognize outstanding performance measured on an annual basis.
Other Redemptions and Purchases
During the six months ended February 28, 2005, Accenture acquired 270,842 Accenture Ltd Class
A common shares for a cost of $6.7 million from employees electing net share delivery under the
Accenture Ltd 2001 Employee Share Purchase Plan and Accenture Ltd 2001 Share Incentive Plan.
Subsequent Developments
On March 7, 2005, a tender offer made to Accenture SCA Class I shareholders on February 1,
2005 by Accenture SCA and one of its subsidiaries resulted
in the redemption and purchase
of an aggregate of 18,745,917 Accenture SCA Class I common shares at a price of $26.30 per share.
At the same time, a subsidiary of Accenture SCA purchased 314,038 Accenture Canada Holdings Inc.
exchangeable shares at a price of $26.30 per share. The total cash outlay for these transactions
was $501 million.
30
On March 15, 2005, as a result of favorable final determinations of certain
reorganization liabilities recorded in connection with our transition to a corporate structure in
2001, we recognized benefits of approximately $69 million.
Off-Balance Sheet Arrangements
We have various agreements by which we may be obligated to indemnify the other party with
respect to certain matters. Generally, these indemnification provisions are included in contracts
arising in the normal course of business under which we customarily agree to hold the indemnified
party harmless against losses arising from a breach of representations related to such matters as
title to assets sold and licensed or certain intellectual property rights. Payments by us under
such indemnification clauses are generally conditioned on the other party making a claim. Such
claims are generally subject to challenge by us and dispute resolution procedures specified in the
particular contract. Furthermore, our obligations under these arrangements may be limited in terms
of time and/or amount and, in some instances, we may have recourse against third parties for
certain payments made by us. It is not possible to predict the maximum potential amount of future
payments under these indemnification agreements due to the conditional nature of our obligations
and the unique facts of each particular agreement. Historically, the Company has not made any
payments under these agreements that have been material individually or in the aggregate. As of
February 28, 2005, we were not aware of any obligations under such indemnification agreements that
would require material payments.
From time to time, Accenture enters into contracts with clients whereby it has joint and
several liability with other participants and third parties providing related services and products
to the client. Under these arrangements, Accenture and other parties may assume some
responsibility to the client for the performance of others under the terms and conditions of the
contract with or for the benefit of the client. To date, Accenture has not been required to make
any payments under any of the contracts described in this paragraph. For further discussion of
these transactions, please see Footnote 9 (Commitments and Contingencies) to our Consolidated
Financial Statements above under Item 1, “Financial Statements.”
Newly Issued Accounting Standards
In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards No. 123R,
Share-Based Payment
(“SFAS No. 123R”). This Statement is
a revision of SFAS No. 123,
Accounting for Stock-Based Compensation,
and supersedes Accounting
Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees,
and its related
implementation guidance. SFAS No. 123R focuses primarily on accounting for transactions in which an
entity obtains employee services in share-based payment transactions. The Statement requires
entities to recognize compensation expense for awards of equity instruments to employees based on
the grant-date fair value of those awards (with limited exceptions). SFAS No. 123R is effective
for the first interim or annual reporting period that begins after June 15, 2005.
Accenture expects to adopt SFAS No. 123R on September 1, 2005. Adoption of SFAS No. 123R will not affect Accenture’s cash flows or
financial position, but it will reduce reported income and earnings per share because Accenture
currently uses the intrinsic value method as permitted by Opinion No. 25. Accordingly, no
compensation expense is currently recognized for share purchase rights granted under the Company’s
employee stock option and employee share purchase plans.
31
Specifically, adopting SFAS No. 123R will result in Accenture recording compensation expense
for employee stock options and employee share purchase rights. Had Accenture expensed employee
stock options and employee share purchase rights under SFAS No. 123 for the three and six months
ended February 28, 2005, the following reported items would have been reduced: income before income
taxes by $50 million and $82 million, respectively; income before minority interest by $36 million
and $58 million, respectively; net income by $22 million and $36 million, respectively; and diluted
earnings per share by $0.04 and $0.06, respectively. Assuming the continuation of current programs,
our preliminary estimate is that stock based compensation expense for fiscal 2006 will be in the
range of $155 million to $175 million. This estimate includes expenses for fiscal 2006 related to
the $170 million in stock options that were granted on February 18, 2005.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
During the three and six months ended February 28, 2005, there were no material changes in our
market risk exposure. For a discussion of our market risk associated with foreign currency risk,
interest rate risk and equity price risk as of August 31, 2004, see “Quantitative and Qualitative
Disclosures about Market Risk” in Part II, Item 7A, of Accenture Ltd’s Annual Report on Form 10-K
for the year ended August 31, 2004.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Based on their evaluation for the period covered by this Quarterly Report on Form 10-Q, the
chief executive officer and the chief financial officer of Accenture Ltd have concluded that, as of
the end of such period, Accenture Ltd’s disclosure controls and procedures (as defined in Rule
13a-15(e) under the Exchange Act) are effective to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the Securities and Exchange
Commission’s rules and forms.
Transition of Business and Financial Systems
As of September 1, 2004, we transitioned certain of our business and financial systems to new
platforms. Implementation of the new systems necessarily involves changes to our procedures for
control over financial reporting. The new systems were subjected to testing prior to and after
September 1, 2004 and are functioning to ensure that information required to be disclosed by
Accenture Ltd in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the Securities and Exchange
Commission’s rules and forms. We have not experienced any significant difficulties to date in
connection with the implementation or operation of the new systems.
32
February 28, 2005 and August 31, 2004
(In thousands of U.S. dollars, except share and per share amounts)
February 28, 2005
(Unaudited)
August 31, 2004
$
3,060,203
$
2,552,958
406,456
285,288
1,816,354
1,662,211
1,459,331
1,049,870
83,558
105,636
520,146
501,231
7,346,048
6,157,194
288,306
211,705
321,823
340,121
657,444
643,946
242,926
214,482
357,779
309,045
128,513
136,991
1,996,791
1,856,290
$
9,342,839
$
8,013,484
$
33,012
$
20,103
12,593
16,612
734,995
523,931
1,321,505
980,461
1,429,326
1,508,126
848,471
795,948
47,605
42,744
527,062
550,864
4,954,569
4,438,789
36,736
32,161
562,484
532,307
22,756
18,769
679,186
578,689
1,301,162
1,161,926
1,200,007
940,963
—
—
13
13
8
9
599,249
475,240
(251,567
)
(150,777
)
1,662,272
1,643,652
(520,997
)
(132,313
)
—
(296,894
)
448,462
46,636
(50,339
)
(113,760
)
1,887,101
1,471,806
$
9,342,839
$
8,013,484
For the Three and Six Months Ended February 28, 2005 and February 29, 2004
(In thousands of U.S. dollars, except share and per share amounts)
(Unaudited)
Three Months Ended
Six Months Ended
February 28, 2005
February 29, 2004
February 28, 2005
February 29, 2004
$
3,813,522
$
3,302,209
$
7,543,877
$
6,563,794
402,862
380,095
743,879
692,998
4,216,384
3,682,304
8,287,756
7,256,792
2,638,950
2,212,547
5,154,389
4,363,437
402,862
380,095
743,879
692,998
3,041,812
2,592,642
5,898,268
5,056,435
376,919
358,662
735,862
709,259
361,478
316,133
752,293
655,489
(35,777
)
107,438
(28,769
)
21,040
3,744,432
3,374,875
7,357,654
6,442,223
471,952
307,429
930,102
814,569
93
3,332
14,633
3,830
28,063
15,187
48,184
25,610
(6,300
)
(5,816
)
(12,616
)
(11,567
)
(2,846
)
17,765
(5,173
)
19,291
—
(516
)
—
(1,202
)
490,962
337,381
975,130
850,531
150,350
117,408
314,967
295,984
340,612
219,973
660,163
554,547
(128,688
)
(96,987
)
(250,369
)
(257,145
)
(2,138
)
103
(3,735
)
27
$
209,786
$
123,089
$
406,059
$
297,429
591,694,862
544,052,062
590,746,753
531,738,351
979,750,161
998,003,396
979,880,579
1,009,403,593
$
0.35
$
0.23
$
0.69
$
0.56
$
0.35
$
0.22
$
0.67
$
0.55
For the Six Months Ended February 28, 2005
(In thousands of U.S. dollars and in thousands of share amounts)
(Unaudited)
Class A
Class X
Restricted
Common
Common
Share Units
Treasury
Treasury
Accumulated
Shares
Shares
Common Shares
Shares
Shares—SECT
Other
Deferred
Additional
Compre-
Preferred
No.
No.
No.
Compen-
Paid-in
No.
No.
Retained
hensive
Shares
$
Shares
$
Shares
$
Shares
sation
Capital
$
Shares
$
Shares
Earnings
Income (Loss)
Total
$
—
$
13
591,497
$
9
365,325
$
475,240
28,279
$
(150,777
)
$
1,643,652
$
(132,313
)
(6,098
)
$
(296,894
)
(13,120
)
$
46,636
$
(113,760
)
$
1,471,806
406,059
406,059
(3,340
)
(3,340
)
66,761
66,761
63,421
469,480
10,775
10,775
(132
)
(3,699
)
(126,019
)
(4,897
)
(30,481
)
(1,275
)
(160,199
)
(327,375
)
(14,395
)
327,375
14,395
—
138,356
5,222
(138,356
)
—
37,566
306
37,872
(1
)
(3,563
)
(86,641
)
(86,642
)
2,065
46,580
27,819
1,622
74,399
2,266
28,822
33,352
1,628
(4,468
)
57,706
693
(14,347
)
(892
)
10,573
3,539
199
235
—
3,427
3,427
8,477
8,477
$
—
$
13
596,389
$
8
361,762
$
599,249
32,609
$
(251,567
)
$
1,662,272
$
(520,997
)
(21,941
)
$
—
—
$
448,462
$
(50,339
)
$
1,887,101
For the Six Months Ended February 28, 2005 and February 29, 2004
(In thousands of U.S. dollars)
(Unaudited)
February 28,
February 29,
2005
2004
$
406,059
$
297,429
121,906
142,819
(28,769
)
(86,216
)
(14,633
)
(3,830
)
3,415
4,446
37,872
31,863
(16,682
)
(12,518
)
254,104
257,118
(2,654
)
2,771
(115,116
)
47,667
(2,540
)
1,456
(415,141
)
(178,381
)
741
(23,363
)
231,846
(81,697
)
281,637
214,047
(151,331
)
164,254
49,840
190,137
(2,513
)
47,436
87,966
(21,943
)
726,007
993,495
606,022
103,303
(691,646
)
(400,251
)
2,325
3,114
(116,213
)
(101,240
)
—
(6,131
)
(199,512
)
(401,205
)
(6,258
)
(7,011
)
135,532
1,582,025
(260,407
)
(1,793,497
)
1,859
395
(6,520
)
(1,912
)
36,639
72,990
(25,444
)
(80,214
)
—
83,280
(124,599
)
(143,944
)
105,349
73,108
507,245
521,454
2,552,958
2,332,161
$
3,060,203
$
2,853,615
(In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
Three Months Ended
Six Months Ended
February 28,
February 29,
February 28,
February 29,
2005
2004
2005
2004
$
209,786
$
123,089
$
406,059
$
297,429
11,126
8,830
21,511
15,606
(33,164
)
(22,492
)
(57,174
)
(43,709
)
(22,038
)
(13,662
)
(35,663
)
(28,103
)
$
187,748
$
109,427
$
370,396
$
269,326
$
0.35
$
0.23
$
0.69
$
0.56
$
0.32
$
0.20
$
0.63
$
0.51
$
0.35
$
0.22
$
0.67
$
0.55
$
0.31
$
0.20
$
0.61
$
0.50
(In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
Basic Earnings per Share
Three Months Ended
Six Months Ended
February 28,
February 29,
February 28,
February 29,
2005
2004
2005
2004
$
209,786
$
123,089
$
406,059
$
297,429
591,694,862
544,052,062
590,746,753
531,738,351
$
0.35
$
0.23
$
0.69
$
0.56
Diluted
Earnings per Share
Three Months Ended
Six Months Ended
February 28,
February 29,
February 28,
February 29,
2005
2004
2005
2004
$
209,786
$
123,089
$
406,059
$
297,429
128,688
96,987
250,369
257,145
$
338,474
$
220,076
$
656,428
$
554,574
591,694,862
544,052,062
590,746,753
531,738,351
362,980,043
428,726,617
364,364,167
452,945,527
24,623,445
24,882,476
24,335,060
24,416,604
451,811
342,241
434,599
303,111
979,750,161
998,003,396
979,880,579
1,009,403,593
$
0.35
$
0.22
$
0.67
$
0.55
(1)
Diluted earnings per share assumes the redemption and exchange of all Accenture
SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares,
respectively, for Accenture Ltd Class A common shares, on a one-for-one basis. The
income effect does not take into account “Minority interest – other,” since those shares
are not redeemable or exchangeable for Accenture Ltd Class A common shares.
(In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
Three months ended
Six months ended
Fiscal 2004
Fiscal 2002
Fiscal 2004
Fiscal 2002
Restructuring
Restructuring
Restructuring
Restructuring
$
78,384
$
21,685
$
78,756
$
24,005
(7,245
)
(4,922
)
(10,137
)
(7,912
)
506
(1,335
)
3,026
(665
)
$
71,645
$
15,428
$
71,645
$
15,428
(1)
Other represents foreign currency translation, imputed interest and immaterial changes in
lease estimates.
Three months ended
Six months ended
February 28,
February 29,
February 28,
February 29,
2005
2004
2005
2004
$
502,478
$
438,042
$
454,042
$
510,149
(35,777
)
182
(28,769
)
(86,216
)
1,126
23,739
42,554
38,030
$
467,827
$
461,963
$
467,827
$
461,963
February 28,
August 31,
2005
2004
$
44,009
$
(22,752
)
(2,816
)
524
(91,532
)
(91,532
)
$
(50,339
)
$
(113,760
)
February 28,
February 29,
2005
2004
$
230,091
$
164,091
469,480
364,280
(In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
Foreign currency
Balance at
Additions/
translation
Ending balance at
August 31, 2004
Adjustments(1)
adjustments
February 28, 2005
$
70,949
$
3,316
$
3,472
$
77,737
43,668
8,304
1,824
53,796
23,242
1,766
790
25,798
46,402
4,485
1,734
52,621
30,221
1,995
758
32,974
$
214,482
$
19,866
$
8,578
$
242,926
(1)
Includes an increase related to Accenture HR Services and reclassifications made in
fiscal 2005.
Pension Benefits
Three Months Ended
February 28,
February 29,
2005
2004
Non-U.S.
Non-U.S.
Components of pension expense
U.S. Plans
Plans
U.S. Plans
Plans
$
14,000
$
12,270
$
11,312
$
7,032
8,796
4,518
9,065
3,158
(10,723
)
(3,765
)
(6,184
)
(1,810
)
—
138
—
(55
)
3,360
(276
)
5,169
150
323
308
618
23
—
(546
)
—
—
$
15,756
$
12,647
$
19,980
$
8,498
(In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
Pension Benefits
Six Months Ended
February 28,
February 29,
2005
2004
Non-U.S.
Non-U.S.
Components of pension expense
U.S. Plans
Plans
U.S. Plans
Plans
$
28,000
$
23,383
$
22,624
$
13,984
17,591
8,737
18,130
6,115
(21,446
)
(7,048
)
(12,368
)
(3,525
)
—
269
—
(111
)
6,720
(535
)
10,338
294
645
592
1,236
45
—
341
—
—
$
31,510
$
25,739
$
39,960
$
16,802
Postretirement Benefits
Three Months Ended
February 28,
February 29,
2005
2004
Non-U.S.
Non-U.S.
Components of postretirement expense
U.S. Plans
Plans
U.S. Plans
Plans
$
1,773
$
413
$
1,816
$
449
1,384
448
1,292
420
(334
)
—
(356
)
—
20
—
20
(6
)
373
24
600
17
(200
)
(68
)
(200
)
—
$
3,016
$
817
$
3,172
$
880
Postretirement Benefits
Six Months Ended
February 28,
February 29,
2005
2004
Non-U.S.
Non-U.S.
Components of postretirement expense
U.S. Plans
Plans
U.S. Plans
Plans
$
3,545
$
863
$
3,632
$
898
2,767
923
2,584
840
(667
)
—
(712
)
—
40
—
40
(12
)
746
46
1,200
34
(401
)
(68
)
(400
)
—
$
6,030
$
1,764
$
6,344
$
1,760
(In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
(In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
Three Months Ended
February 28, 2005
February 29, 2004
Revenues before
Operating
Revenues before
Operating
Reimbursements
Income
Reimbursements
Income
$
982,088
$
138,496
$
930,812
$
59,488
859,336
127,053
647,531
62,139
521,111
13,343
467,926
43,271
851,394
97,991
715,386
96,015
596,493
95,069
538,268
46,783
3,100
—
2,286
(267
)
$
3,813,522
$
471,952
$
3,302,209
$
307,429
(In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
Six Months Ended
February 28, 2005
February 29, 2004
Revenues before
Operating
Revenues before
Operating
Reimbursements
Income
Reimbursements
Income
$
1,955,019
$
287,825
$
1,809,822
$
134,520
1,666,029
222,479
1,293,580
165,819
1,044,914
59,610
946,145
137,174
1,713,592
183,859
1,416,527
229,852
1,160,885
176,329
1,092,895
147,204
3,438
—
4,825
—
$
7,543,877
$
930,102
$
6,563,794
$
814,569
Three Months Ended
Six Months Ended
February 28,
February 29,
February 28,
February 29,
Income (Expense)
2005
2004
2005
2004
$
8,898
$
(26,998
)
$
7,156
$
(5,288
)
8,082
(23,619
)
6,548
(4,668
)
5,661
(15,801
)
4,545
(3,092
)
8,070
(23,531
)
6,447
(4,597
)
5,066
(17,489
)
4,073
(3,395
)
$
35,777
$
(107,438
)
$
28,769
$
(21,040
)
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
•
Our results of operations are materially affected by economic conditions, levels of business activity and rates of
change in the industries we serve.
•
Our business will be negatively affected if we are not able to anticipate and keep pace with rapid changes in
technology or if growth in the use of technology in business is not as rapid as in the past.
•
We may face damage to our professional reputation or legal liability if our clients are not satisfied with our services.
•
Our engagements with clients may not be profitable or may be terminated by our clients on short notice.
•
Our global operations pose complex management, foreign currency, legal, tax and economic risks, which we may not
adequately address.
•
The consulting, technology and outsourcing markets are highly competitive and the pace of consolidation, as well as
vertical integration, among our competitors continues to increase. As a result, we may not be able to compete effectively if
we cannot efficiently respond to these developments in a timely manner.
•
If we are unable to attract, retain and motivate employees, we will not be able to compete effectively and will not be
able to grow our business.
•
Our profitability will suffer if we are not able to maintain our pricing and utilization rates and control our costs. A
continuation of current pricing pressures could result in permanent changes in pricing policies and delivery capabilities.
•
Our quarterly revenues, operating results and profitability will vary from quarter to quarter, which may result in
increased volatility of our share price.
•
We continue to achieve greater percentages of revenues and growth through outsourcing. This strategy could result in
higher concentrations of revenues and contributions to income from a smaller number of larger clients on customized
outsourcing solutions or, in the case of more-standardized business process outsourcing services provided through our BPO
businesses, from larger portfolios of clients for whom we provide similar services and solutions utilizing standard
operating models. As our outsourcing business continues to grow, we may continue to experience increased pressure on our
overall margins, particularly during the early stages of new outsourcing contracts.
•
On certain complex engagements where we partner with third parties, clients are increasingly demanding that we
guarantee the performance of our business partners whom we do not control.
•
If we are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 or attain an
unqualified report from our independent auditors as to our internal controls as required as of the end of the current fiscal year, our
reputation, our financial results and the market price of our stock could suffer.
•
We may experience difficulties with new business and financial systems implemented as of September 1, 2004 that could
disrupt our ability to timely and accurately process and report key components of our results of operations and financial
condition, although, to date, we have not experienced any significant difficulties.
•
Recent tax legislation, future legislation and negative publicity related to Bermuda companies may lead to an increase
in our tax burden or affect our relationships with our clients.
•
Our services or solutions may infringe upon the intellectual property rights of others.
•
We have only a limited ability to protect our intellectual property rights, which are important to our success.
•
If our alliances do not succeed, we may not be successful in implementing our growth strategy.
•
We may continue to be controlled by our partners, whose interests may differ from those of our other shareholders.
•
The share price of Accenture Ltd Class A common shares may decline due to the large number of Class A common shares
eligible for future sale.
•
We may need additional capital in the future, and this capital may not be available to us. The raising of additional
capital may dilute shareholders’ ownership in us.
•
We are registered in Bermuda, and a significant portion of our assets is located outside the United States. As a
result, it may not be possible for shareholders to enforce civil liability provisions of the Federal or state securities
laws of the United States.
•
Bermuda law differs from the laws in effect in the United States and may afford less protection to shareholders.
n/m = not meaningful
(1)
EMEA includes Europe, the Middle East and Africa.
n/m = not meaningful
(1)
EMEA includes Europe, the Middle East and Africa.
Three Months Ended
Increase (Decrease)
Excluding
February 28,
February 29,
Increase
Reorganization and
2005
2004
(Decrease)
Restructuring
(in millions)
$
139
$
59
$
80
$
45
127
62
65
33
13
43
(30
)
(52
)
98
96
2
(30
)
95
47
48
26
$
472
$
307
$
165
$
22
Three Months Ended
February 28,
February 29,
Income (Expense)
2005
2004
Increase
(in millions)
$
9
$
(26
)
$
35
8
(24
)
32
6
(16
)
22
8
(24
)
32
5
(17
)
22
$
36
$
(107
)
$
143
•
Communications & High Tech operating income increased primarily due to
lower-than-expected margins on three contracts in the second quarter of fiscal 2004 and
higher gross margins in the second quarter of fiscal 2005, reflecting a higher
proportion of consulting revenues.
•
The increase in Financial Services operating income reflected a 33% increase in
revenues before reimbursements.
•
Government operating income decreased partly due to
lower-than-expected margins attributable to temporary delays under
the NHS Contracts, as well as cost overruns associated with the
development of reusable assets in connection with certain client
contracts and delivery inefficiencies on
several other contracts.
•
Products operating income decreased, driven by the continued shift in the mix of our
business toward outsourcing and lower-than-expected margins
attributable to temporary delays under the NHS
Contracts.
•
The increase in Resources operating income was driven by improved pricing and
reduced delivery costs.
Six Months Ended
Increase (Decrease)
Excluding
February 28,
February 29,
Increase
Reorganization and
2005
2004
(Decrease)
Restructuring
(in millions)
$
288
$
135
$
153
$
141
222
166
56
44
60
137
(77
)
(85
)
184
230
(46
)
(57
)
176
147
29
22
$
930
$
815
$
115
$
65
Six Months Ended
February 28,
February 29,
Income (Expense)
2005
2004
Increase
(in millions)
$
7
$
(5
)
$
12
7
(5
)
12
5
(3
)
8
6
(5
)
11
4
(3
)
7
$
29
$
(21
)
$
50
•
Communications & High Tech operating income increased primarily due to
lower-than-expected margins on three contracts in fiscal 2004 and higher gross margins
in fiscal 2005, reflecting a higher proportion of consulting revenues.
•
The increase in Financial Services operating income reflected a 29% increase in
revenues before reimbursements.
•
Government operating income decreased partly due to
lower-than-expected margins attributable to temporary delays under
the NHS Contracts, as well as cost overruns associated with the
development of reusable assets in connection with certain client
contracts and delivery inefficiencies on
several other contracts.
•
Products operating income decreased, driven by the continued shift in the mix of our
business toward outsourcing and lower-than-expected margins
attributable to temporary delays under the NHS
Contracts.
•
The increase in Resources operating income was driven by improved pricing and
reduced delivery costs.
•
take advantage of opportunities, including more rapid expansion;
•
acquire complementary businesses or technologies;
•
develop new services and solutions;
•
respond to competitive pressures; or
•
facilitate purchases, redemptions and exchanges of Accenture shares held by our partners, former partners and
their permitted transferees as previously authorized by the Board of Directors of Accenture Ltd and certain other
share purchases from our other employees.
Six Months Ended
February 28,
February 29,
Increase
2005
2004
(Decrease)
(in millions)
$
726
$
993
$
(267
)
(199
)
(401
)
202
(125
)
(144
)
19
105
73
32
$
507
$
521
$
(14
)
Facility
Borrowings
Amount
Outstanding
(in millions)
$
1,500
$
—
251
23
240
—
n/a
10
$
1,991
$
33
February 28,
August 31,
2005
2004
(in millions, except number of clients)
34
40
$
423
$
243
288
212
$
711
$
455
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are involved in a number of judicial and arbitration proceedings concerning matters arising
in the ordinary course of our business. We do not expect that any of these matters, individually
or in the aggregate, will have a material impact on our results of operations or financial
condition.
As previously reported in July 2003, we became aware of an incident of possible noncompliance
with the Foreign Corrupt Practices Act and/or with Accenture’s internal controls in connection with
certain of our operations in the Middle East. In 2003, we voluntarily reported the incident to the
appropriate authorities in the United States promptly after its discovery. Shortly thereafter, the
SEC advised us it would be undertaking an informal investigation of this incident, and the U.S.
Department of Justice indicated it would also conduct a review. Since that time, there have been no
further developments. We do not believe that this incident will have any material impact on our
results of operations or financial condition.
We currently maintain the types and amounts of insurance customary in the industries and
countries in which we operate, including coverage for professional liability, general liability and
management liability. We consider our insurance coverage to be adequate both as to the risks and
amounts for the businesses we conduct.
33
The following table provides information relating to the Company’s purchases of Accenture Ltd
Class A common shares and Class X common shares for the second quarter of fiscal 2005. For
year-to-date information on all share purchases, redemptions and exchanges by the Company and
further discussion of the Company’s share purchase activity, see “Management’s Discussion and
Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources-Share
Purchases and Redemptions.”
34
Purchases and redemptions of Accenture SCA Class I common shares
The following table provides additional information relating to the purchase and redemption of
Class I common shares of Accenture SCA, one of the Company’s subsidiaries, for the second quarter
of fiscal 2005. The Company’s management believes the following table and footnotes provide
useful information regarding the share purchase and redemption activity of the Company and its
subsidiaries on a consolidated basis. These transactions are primarily conducted pursuant to the
Company’s Share Management Plan. Purchases or redemptions of Accenture SCA Class I common shares
held by partners, former partners and their permitted transferees reduce shares outstanding for
purposes of computing earnings per share.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
For a description of matters submitted to a vote of security holders during the three months
ended February 28, 2005, please see Item 8.01 of our Form 8-K dated February 3, 2005 filed with the
SEC on February 9, 2005.
ITEM 5. OTHER INFORMATION
(a) None.
(b) None.
35
ITEM 6. EXHIBITS
Exhibit Index:
36
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS; ISSUER PURCHASES OF EQUITY SECURITIES
Approximate Dollar
Value of Shares that
Total Number of Shares
May Yet Be Purchased
Purchased as Part of
Under Publicly
Total Number of
Average Price
Publicly Announced
Announced Plans or
Period
Shares Purchased
Paid per Share
Plans or Programs(1)(2)
Programs
(in thousands, except share and per share amounts)
1,689
$
27.32
—
$
1,164,213
3,462,866
$
0.0000225
—
—
2,856,258
$
25.85
2,847,528
$
1,090,598
—
—
—
—
1,844,748
$
25.64
1,834,299
$
1,043,550
—
—
—
—
4,702,695
$
25.77
4,681,827
3,462,866
$
0.0000225
—
(1)
Since April 2002, the Board of Directors of Accenture Ltd has authorized and
periodically confirmed a publicly announced open-market share purchase program for
acquiring Accenture Ltd Class A common shares. During the second quarter of fiscal 2005,
4.6 million Accenture Ltd Class A common shares were purchased under this program. To
date, the Board of Directors of Accenture Ltd has authorized an aggregate of $1.6 billion
for use in these open-market share purchases. In accordance with the prior direction from
the Board of Directors of Accenture Ltd, transaction fees paid by our partners, former
partners and their permitted transferees related to purchases, redemptions and exchanges of
their shares have been made available for use toward open-market purchases of Accenture Ltd
Class A common shares. At February 28, 2005, an aggregate of $913 million remained
available for these open-market share purchases. The open-market purchase program does not
have an expiration date.
(2)
In July 2002, the Company publicly announced our RSU Sell-Back Program, whereby we
offer to purchase Accenture Ltd Class A common shares awarded to employees pursuant to
restricted share units issued in connection with our initial public offering. The Board of
Directors of Accenture Ltd has authorized funds for this purpose, and $181 million was set
aside under this program. During the second quarter of fiscal 2005, 81,827 Accenture Ltd
Class A common shares were purchased under this program. At February 28, 2005,
approximately $131 million remained available for purchases under this program. These
purchases are not made on the open market and this program does not have an expiration
date.
(3)
During the second quarter of fiscal 2005, Accenture purchased 20,868 Accenture Ltd
Class A common shares in transactions unrelated to publicly announced share plans or
programs. These unrelated transactions consisted of the acquisition of Accenture Ltd Class
A common shares from employees via share withholding for payroll taxes obligations due from
employees and former employees in connection with the delivery of Accenture Ltd Class A
common shares under the Company’s various employee equity share plans.
(4)
During the second quarter of fiscal 2005, the Company redeemed 3,462,866 Accenture Ltd
Class X common shares in accordance with its bye-laws. Accenture Ltd Class X common shares
are redeemable at their par value of $0.0000225 per share.
Approximate Dollar Value
Total Number of Shares
of Shares that May Yet Be
Purchased as Part of
Purchased Under Publicly
Total Number of
Average Price
Publicly Announced Plans
Announced Plans or
Period
Shares Purchased(1)
Paid per Share
or Programs
Programs
3,463,488
$
24.61
—
—
2,841,000
$
25.84
—
—
1,800,000
$
25.66
—
—
8,104,488
$
25.27
—
—
(1)
To date, the Board of Directors of Accenture has authorized an aggregate of $3.2 billion
for Share Management Plan purchases and redemptions from our partners, former partners and
their permitted transferees. At February 28, 2005, an aggregate of $2.1 billion remained
available for Share Management Plan purchases and redemptions.
(2)
During the second quarter of fiscal 2005, Accenture SCA redeemed or purchased 3,463,488
Accenture SCA Class I common shares pursuant to an issuer tender offer. The share numbers in
the table above do not reflect the issuer tender offer completed on March 7, 2005, pursuant to
which Accenture SCA purchased or redeemed a total of 18,745,917 Accenture SCA Class I common
shares. At the same time, a subsidiary of Accenture SCA purchased 314,038 Accenture Canada
Holdings Inc. exchangeable shares at a price of $26.30 per share. These redemptions or
purchases were made in transactions unrelated to publicly announced share plans or programs.
(3)
During the second quarter of fiscal 2005, Accenture SCA redeemed or purchased an aggregate of
41,000 Class I common shares at the request of former partners or the estates of deceased
partners in transactions on terms similar to those provided for in the Articles of Association
of Accenture SCA. The share numbers in the table above do not reflect
the redemption or purchase of an aggregate of 272,025 Class I common
shares at the request of former partners or the estates of deceased
partners completed after February 28, 2005. These redemptions or purchases were made in transactions unrelated to
publicly announced share plans or programs.
(4)
During the second quarter of fiscal 2005, Accenture SCA purchased 4,600,000 Accenture SCA
Class I common shares from Accenture Ltd in conjunction with Accenture Ltd’s publicly
announced open-market share purchase program. These purchases were made in transactions
unrelated to publicly announced share plans or programs. These purchases do not reduce shares
outstanding for purposes of computing earnings per share reflected in the Company’s
consolidated financial statements.
Exhibit
Number
Exhibit
Bye-laws of the Registrant,
effective as of February 2, 2005 (filed herewith)
Form of Voting Agreement, dated as of April 18, 2001, among the Registrant and the
covered persons party thereto, as amended and restated as of
February 3, 2005 (filed herewith)
Articles of Association of
Accenture SCA, consolidated and updated as of January 17, 2005
(filed herewith)
Form of Accenture SCA Transfer Rights Agreement, dated as of April 18, 2001, among
Accenture SCA and the covered persons party thereto, as amended and restated as of
February 3, 2005 (filed herewith)
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Date: April 8, 2005
ACCENTURE LTD
By:
/s/ Michael G. McGrath
Name:
Michael G. McGrath
Title:
Chief Financial Officer
Exhibit 3.1
BYE-LAWS
OF
ACCENTURE LTD
(effective 2 February 2005)
Bye-Laws of Accenture Ltd
TABLE OF CONTENTS
| Page | ||||
|
INTERPRETATION
REGISTERED OFFICE |
1
4 |
|||
|
SHARE CAPITAL
|
4 | |||
|
SHARE RIGHTS
|
6 | |||
|
VARIATION OF RIGHTS
|
8 | |||
|
SHARES
|
8 | |||
|
INCREASE OF CAPITAL
|
9 | |||
|
ALTERATION OF CAPITAL
|
9 | |||
|
REDUCTION OF CAPITAL
|
10 | |||
|
CERTIFICATES
|
11 | |||
|
LIEN
|
12 | |||
|
CALLS ON SHARES
|
13 | |||
|
FORFEITURE OF SHARES
|
14 | |||
|
REGISTER OF SHAREHOLDERS
|
15 | |||
|
REGISTER OF DIRECTORS AND OFFICERS
|
16 | |||
|
TRANSFER OF SHARES
|
16 | |||
|
RESTRICTIONS ON TRANSFER OF COVERED SHARES
|
17 | |||
|
TRANSMISSION OF SHARES
|
26 | |||
|
GENERAL
MEETINGS
|
27 | |||
|
NOTICE OF GENERAL MEETINGS
|
28 | |||
|
PROCEEDINGS AT GENERAL MEETINGS
|
28 | |||
|
VOTING
|
31 | |||
|
PROXIES AND CORPORATE REPRESENTATIVES
|
33 | |||
|
AMALGAMATIONS, DISCONTINUANCE AND SALES
|
35 | |||
|
APPOINTMENT AND REMOVAL OF DIRECTORS
|
36 | |||
|
RESIGNATION AND DISQUALIFICATION OF DIRECTORS
|
38 | |||
|
DIRECTORS’ REMUNERATION AND EXPENSES
|
39 | |||
|
DIRECTORS’ INTERESTS
|
40 | |||
|
POWERS OF THE BOARD
|
41 | |||
|
DELEGATION OF THE BOARD’S POWERS
|
42 | |||
|
PROCEEDINGS OF THE BOARD
|
43 | |||
|
OFFICERS
|
45 | |||
|
MINUTES
|
45 | |||
|
SECRETARY AND RESIDENT REPRESENTATIVE
|
46 | |||
|
THE SEAL
|
46 | |||
|
DIVIDENDS AND OTHER PAYMENTS
|
46 | |||
|
RESERVES
|
48 | |||
|
CAPITALISATION OF
RESERVES
|
48 | |||
|
RECORD DATES
|
51 | |||
|
ACCOUNTING
RECORDS
|
51 | |||
|
AUDITORS
|
52 | |||
|
UNTRACED SHAREHOLDERS
|
52 | |||
|
SERVICE OF NOTICES AND OTHER DOCUMENTS
|
53 | |||
|
DESTRUCTION OF
DOCUMENTS
|
54 | |||
|
WINDING UP
|
55 | |||
|
EXEMPTION AND INDEMNIFICATION OF OFFICERS
|
55 | |||
|
ALTERATION OF BYE-LAWS
|
56 | |||
Bye-Laws
of
Accenture Ltd
INTERPRETATION
| 1. | In these Bye-Laws, unless the context otherwise requires: | |||
| “ Bermuda ” means the Islands of Bermuda; | ||||
| “ Board ” means the board of directors for the time being of the Company; | ||||
| “ Bye-Laws ” means these Bye-Laws in their present form or as from time to time amended; | ||||
| “ Class A Common Shares ” means class A common shares of par value US$0.0000225 per share (or such other par value as may result from any reorganisation of capital) in the capital of the Company, having the rights and being subject to the limitations set out in these Bye-Laws; | ||||
| “ Class X Common Shares ” means redeemable class X common shares of par value US$0.0000225 per share (or such other par value as may result from any reorganisation of capital) in the capital of the Company, having the rights and being subject to the limitations set out in these Bye-Laws; | ||||
| “ clear days ” means, in relation to the period of a notice, that period excluding the day on which the notice is given or served, or deemed to be given or served, and the day for which it is given or on which it is to take effect; | ||||
| “ Companies Acts ” means every Bermuda statute, regulation and order from time to time in force concerning companies insofar as the same apply to the Company; | ||||
| “ Company ” means Accenture Ltd, an exempted company registered in Bermuda with registration number EC 30090 (following its continuance into Bermuda on 21 February 2001); | ||||
| “ Director ” means a director for the time being of the Company; | ||||
| “ Employee Covered Shares ” has the same meaning as is given to that term in the Voting Agreement; | ||||
| “ Group Company ” means the Company, any holding company of the Company and any subsidiary of the Company or of any such holding company; | ||||
| “ Officer ” means a Director, Secretary, or other officer of the Company appointed pursuant to Bye-Law 105, but does not include any person holding the office of auditor in relation to the Company; | ||||
| “ Paid Up ” means paid up or credited as paid up; | ||||
| “ Person entitled by Transmission ” means a person whose entitlement to a share in consequence of the death or bankruptcy of a Shareholder or of any other event giving rise to its transmission by operation of law has been noted in the Register; | ||||
| “ Redemption Date ” means the date specified in a notice served by the Company on a Class X Common Shareholder under Bye-Law 4.3(d); | ||||
| “ Register ” means the register of shareholders of the Company and, except in Bye-Laws 38.1, 38.2 and 38.3, includes any branch register; | ||||
| “ Registered Office ” means the registered office for the time being of the Company; | ||||
| “ Resident Representative ” means the person or, if permitted by the Companies Acts, the company appointed to perform the duties of resident representative of the Company as set out in the Companies Acts (and includes any assistant or deputy resident representative appointed by the Board); | ||||
| “ Resolution ” means a resolution of the Shareholders or, where required, of a separate class or separate classes of Shareholders, adopted in general meeting or passed in accordance with the provisions of these Bye-Laws; | ||||
| “ Seal ” means the common seal of the Company and includes any duplicate seal; | ||||
| “ Secretary ” means the secretary of the Company or, if there are joint secretaries, any of the joint secretaries and includes a deputy or assistant secretary and any person appointed by the Board to perform any of the duties of the secretary; | ||||
| “ Shareholder ” means a holder of a share (of any class) of the Company; | ||||
| “ Share ” means any share in the capital of the Company; | ||||
| “ Subsidiary ” and “holding company” have the same meanings as in section 86 of the Companies Act 1981, except that references in that section to a company shall include any body corporate or other legal entity, whether incorporated or established in Bermuda or elsewhere; | ||||
| “ Undesignated Shares ” means the 2,000,000,000 shares of par value US$0.0000225 per share (or such other par value as may result from any reorganisation of capital) in the capital of the Company, having such rights and being subject to such limitations as may be attached to them pursuant to Bye-Law 5.3; | ||||
| “ US dollars ” or “ US$ ” means United States dollars; and | ||||
|
Bye-Laws of Accenture Ltd |
Page 2 of 57 |
“
Voting Agreement
” means the voting agreement relating to shares in the Company
to be dated as of 18 April 2001 and entered into among the Company and the covered
persons from time to time party to that agreement.
2.
For the purposes of these Bye-Laws, unless the context otherwise requires:
2.1
a corporation shall be deemed to be present in person at a meeting if its representative,
duly authorised pursuant to these Bye-Laws, is present;
2.2
words importing only the singular number include the plural number and vice versa;
2.3
words importing only one gender include the other genders;
2.4
references to a company include any body corporate or other legal entity, whether
incorporated or established in Bermuda or elsewhere;
2.5
references to a person include any company, partnership or other body of persons,
whether corporate or not, any trust and any government, governmental body or
agency or public authority, whether of Bermuda or elsewhere;
2.6
references to writing include typewriting, printing, lithography, photography,
electronic mail and other modes of representing or reproducing words in a legible and
non-transitory form;
2.7
a reference to anything being done by electronic means includes its being done by
means of any electronic or other communications equipment or facilities and
references to any communication being delivered or received, or being delivered or
received at a particular place, include the transmission of an electronic or similar
communication, and to a recipient identified in such manner or by such means, as the
Board may from time to time approve or prescribe, either generally or for a particular
purpose;
2.8
references to a signature or to anything being signed or executed include such forms
of electronic signature or other means of verifying the authenticity of an electronic or
similar communication as the Board may from time to time approve or prescribe,
either generally or for a particular purpose;
2.9
references to a dividend include a distribution paid in respect of shares to
Shareholders out of contributed surplus or any other distributable reserve;
2.10
any words or expressions defined in the Companies Acts, if not otherwise defined in
or given a particular meaning by these Bye-Laws, have the same meaning in these
Bye-Laws, except that the definition of “attorney” shall not apply;
2.11
any reference to any statute or statutory provision (whether of Bermuda or elsewhere)
includes a reference to any modification or re-enactment of it for the time being in
force and to every rule, regulation or order made under it (or under any such
modification or re-enactment) and for the time being in force and any reference to any
rule, regulation or order made under any such statute or statutory provision includes a
Bye-Laws of Accenture Ltd
Page 3 of 57
| reference to any modification or replacement of such rule, regulation or order for the time being in force; and | ||||
| 2.12 | references to shares carrying the general right to vote at general meetings of the Company are to those shares (of any class or series) carrying the right to vote, other than shares which entitle the holders to vote only in limited circumstances or upon the occurrence of a specified event or condition (whether or not those circumstances have arisen or that event or condition has occurred). | |||
REGISTERED OFFICE
| 3. | The Registered Office shall be at such place in Bermuda as the Board from time to time decides. |
SHARE CAPITAL
| 4.1 | The authorised share capital of the Company at the date of adoption of these Bye- Laws is US$517,500 divided into 20,000,000,000 Class A Common Shares, 1,000,000,000 Class X Common Shares and 2,000,000,000 Undesignated Shares. | |||
| 4.2 | Class A Common Shares | |||
| The Class A Common Shares shall entitle the holders thereof to the following rights:- | ||||
| (a) |
as regards dividend :-
after making all necessary provisions, where relevant, for payment of any preferred dividend in respect of any preference shares in the Company then outstanding, the Company shall apply any profits or reserves which the Directors resolve to distribute in paying such profits or reserves to the holders of the Class A Common Shares in respect of their holdings of such shares pari passu and pro rata to the number of Class A Common Shares held by each of them; |
|||
| (b) |
as regards capital :-
on a return of assets on liquidation, reduction of capital or otherwise, the holders of the Class A Common Shares shall be entitled to be paid the surplus assets of the Company remaining after payment of its liabilities (subject to the rights of the holders of any preferred shares in the Company then in issue having preferred rights on a return of capital) in respect of their holdings of Class A Common Shares pari passu and pro rata to the number of Class A Common Shares held by each of them; |
|||
| (c) |
as regards voting in general meetings:-
the holders of the Class A Common Shares shall be entitled to receive notice of, and to attend and vote at, general meetings of the Company; every holder of Class A Common Shares present in person or by proxy shall have one vote |
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| for each Class A Common Share held by him (and, except as otherwise provided by the Companies Acts or these Bye-Laws, the holders of Class A Common Shares and Class X Common Shares shall vote as a single class). |
| 4.3 | Class X Common Shares | |||
| The Class X Common Shares shall entitle the holders thereof to the following rights and will be subject to the following restrictions:- | ||||
| (a) |
as regards dividend:-
the holders of Class X Common Shares will have no right to receive any dividend or distribution in respect of their holdings of Class X Common Shares; |
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| (b) |
as regards capital:-
on a return of assets on liquidation, reduction of capital or otherwise, the holders of the Class X Common Shares will not be entitled to any payment out of the surplus assets of the Company in respect of their holdings of Class X Common Shares; |
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| (c) |
as regards voting in general meetings:-
the holders of the Class X Common Shares shall be entitled to receive notice of, and to attend and vote at, general meetings of the Company; every holder of Class X Common Shares present in person or by proxy shall have one vote for each Class X Common Share held by him (and, except as otherwise provided by the Companies Acts or these Bye-Laws, the holders of Class A Common Shares and Class X Common Shares shall vote as a single class); |
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| (d) | as regards redemption:- | |||
| (i) | subject as provided in this Bye-Law 4.3(d), any Class X Common Shares may, at the option of the Company, at any time (subject to the requirements of the Companies Acts) be redeemed by the Company; | |||
| (ii) | if the Company exercises its right under this Bye-Law 4.3(d) it will, within 30 days of the Redemption Date, notify the Class X Common Shareholder in writing of the date of completion of the redemption, the number of Class X Common Shares held by him which have been redeemed and of his right to claim a redemption payment under paragraph (iii); | |||
| (iii) | (subject to delivery of any share certificate as referred to in paragraph (iv) below) the Company will, within 30 days of receipt by it from the Shareholder of a written request for payment, (subject to paragraph (v) below) pay to such holder or, in the case of joint holders, to the holder whose name stands first in the register of members in respect of such | |||
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| shares, in respect of each Class X Common Share which has been redeemed the par value of that share; | ||||
| (iv) | the holder of any Class X Common Shares which have been redeemed shall, within 30 days of receipt by him of the notice referred to in paragraph (ii), deliver to the Company at its Registered Office (or such other place as the Company directs) any certificates for the Class X Common Shares held by him which have been redeemed. If relevant, the Company will issue to the Shareholder a new share certificate for any unredeemed Class X Common Shares held by that shareholder); | |||
| (v) | if a redemption of Class X Common Shares under this Bye-Law 4.3(d) would otherwise result in the Shareholder being entitled to receive a redemption payment of a fractional part of one cent of a US dollar, then the amount of the payment will be rounded up to the nearest whole cent; | |||
| (vi) | the receipt of the registered holder or, in the case of joint holders, the holder whose name stands first in the register of members for the time being of Class X Common Shares being redeemed for the monies payable on redemption of such shares shall constitute an absolute discharge to the Company in respect thereof; and | |||
| (vii) | any redemption payment which is uncollected for a period of 1 year from the date of issue by the Company of the notice relating to it under paragraph (ii) above shall be forfeited and will revert to the Company; | |||
| (e) |
as regards transfer:-
Class X Common Shares are not transferable by their holders, unless the Class X Common Shareholder has received the prior written consent of the Company to the proposed transfer to the proposed transferee; and |
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| (f) |
as regards certificates:-
unless the Board resolves otherwise (either generally or in any particular case or cases) holders of Class X Common Shares will not be entitled to receive a share certificate in respect of any Class X Common Shares held by him. |
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SHARE RIGHTS
| 5.1 | Subject to the Companies Acts and to the rights conferred on the holders of any other class of shares, any share in the Company may be issued with or have attached to it such preferential, deferred, qualified or special rights, privileges or conditions as the Company may by Resolution decide or, if no such Resolution is in effect or insofar as the Resolution does not make specific provision, as the Board may from time to time determine. |
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| 5.2 | Without limiting the foregoing and subject to the Companies Acts, the Company may issue preference shares (including any preference shares created pursuant to Bye-Law (5.3) which (i) are liable to be redeemed on the happening of a specified event or events or on a given date or dates and/or (ii) are liable to be redeemed at the option of the Company and/or the holder. The terms and manner of redemption of any redeemable shares created pursuant to Bye-Law 5.3 shall be as the Board may by resolution determine before the allotment of such shares and the terms and manner of redemption of any other redeemable preference shares shall be either (i) as the Company may by Resolution determine or (ii) insofar as the Board is so authorised by any Resolution, as the Board may by resolution determine, in either case, before the allotment of such shares. A copy of any such Resolution or resolution of the Board for the time being in force shall be attached as an appendix to (but shall not form part of) these Bye-Laws. | |||
| 5.3 | The rights attaching to the Undesignated Shares shall be as follows : | |||
5.3.1
each Undesignated Share shall have attached to it such preferred, qualified or
other special rights, privileges and conditions and be subject to such
restrictions, whether in regard to dividend, return of capital, redemption,
conversion into Class A Common Shares or voting or otherwise, as the Board
may determine on or before its allotment;
5.3.2
the Board may allot the Undesignated Shares in more than one series and, if it
does so, may name and designate each series in such manner as it deems
appropriate to reflect the particular rights and restrictions attached to that
series, which may differ in all or any respects from any other series of
Undesignated Shares;
5.3.3
the particular rights and restrictions attached to any Undesignated Share shall
be recorded in a resolution of the Board. The Board may at any time before
the allotment of any Undesignated Share by further resolution in any way
amend such rights and restrictions or vary or revoke its designation. A copy
of any such resolution or amending resolution for the time being in force shall
be annexed as an appendix to (but shall not form part of) these Bye-Laws; and
5.3.4
the Board shall not attach to any Undesignated Share any rights or restrictions
which would alter or abrogate any of the special rights attached to any other
class of series of shares for the time being in issue without such sanction as is
required for any alteration or abrogation of such rights, unless expressly
authorised to do so by the rights attaching to or by the terms of issue of such
shares.
| 5.4 | The terms of any redeemable preference shares (including any redeemable preference shares created pursuant to Bye-Law 5.3) may provide for the whole or any part of the amount due on redemption to be paid or satisfied otherwise than in cash, to the extent permitted by the Companies Acts. |
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VARIATION OF RIGHTS
| 6.1 | Subject to the Companies Acts, all or any of the special rights for the time being attached to any class of shares for the time being in issue may, unless otherwise expressly provided in the rights attaching to or by the terms of issue of the shares of that class, from time to time (whether or not the Company is being wound up), be altered or abrogated with the consent in writing of the holders of not less than 50 per cent of all of the votes capable of being cast at the relevant time at a separate general meeting of the holders of the issued shares of that class or with the sanction of a Resolution passed at a separate general meeting of the holders of shares of that class by a majority of not less than 50 per cent of the votes cast. | |||
| 6.2 | All the provisions of these Bye-Laws relating to general meetings of the Company shall apply mutatis mutandis to any separate general meeting of any class of Shareholders, except that the necessary quorum shall be two or more Shareholders present in person or by proxy together holding or representing a majority of the issued shares of the relevant class; provided that, if the relevant class of Shareholders has only one Shareholder, one Shareholder present in person or by proxy shall constitute the necessary quorum. | |||
| 7. | The special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to or the terms of issue of such shares, be deemed to be altered or abrogated by (i) the creation or issue of further shares ranking pari passu with them, (ii) the creation or issue for full value (as determined by the Board) of further shares ranking as regards participation in the profits or assets of the Company or otherwise in priority to them or (iii) the purchase or redemption by the Company of any of its own shares. | |||
SHARES
| 8.1 | Subject to the other provisions of these Bye-Laws, the unissued shares of the Company (whether forming part of the original share capital or any increased capital) shall be at the disposal of the Board, which may offer, allot, grant options or other rights over or otherwise deal with or dispose of them to such persons, at such times and for such consideration and generally on such terms and conditions as the Board may from time to time determine. | |||
| 8.2 | Shares may be issued in fractional denominations and in such event the Company shall deal with such fractions to the same extent as its whole shares, so that a share in a fractional denomination shall have, in proportion to the fraction of a whole share that it represents, all the rights of a whole share, including (but without limiting the generality of the foregoing) the right to vote, to receive dividends and distributions and to participate in a winding-up. | |||
| 9. | The Board may, in connection with the issue of any shares, exercise all powers of paying commissions and brokerages conferred or permitted by law. | |||
| 10. | Subject to the Companies Acts, the Company may purchase its own shares and the Board may (without the sanction of a Resolution) authorise any exercise of the | |||
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| Company’s power to purchase its own shares, whether in the market, by tender or by private agreement, at such prices (whether at par or above or below par) and otherwise on such terms and conditions as the Board may from time to time determine. The whole or any part of the amount payable on any such purchase may be paid or satisfied otherwise than in cash, to the extent permitted by the Companies Acts. | ||||
| 11. | Except only as otherwise provided in these Bye-Laws, as ordered by a court of competent jurisdiction or as otherwise required by law, the Company shall be entitled to treat the registered holder of any share (or any fractional part of a share) as the absolute owner of it and accordingly no person shall be recognised by the Company as holding any share (or any fractional part of a share) upon trust, and the Company shall not be bound by or required in any way to recognise (even when having notice of it) any equitable, contingent, future or partial interest or other right in any share (or any fractional part of a share) except an absolute right to the entirety of the share or to the fractional part of a share in the registered holder of it. | |||
INCREASE OF CAPITAL
| 12. | The Company may from time to time increase its capital by such sum, to be divided into shares of such par value, as the Company by Resolution shall prescribe. | |||
| 13. | The Company may, by the Resolution increasing the capital, direct that the new shares or any of them shall be offered in the first instance either at par or at a premium or (subject to the provisions of the Companies Acts) at a discount to all the holders for the time being of shares of any class or classes in proportion to the number of such shares held by them respectively or make any other provision as to the issue of the new shares. | |||
| 14. | The new shares shall be subject to all the provisions of these Bye-Laws with reference to lien, the payment of calls, forfeiture, transfer, transmission and otherwise. | |||
ALTERATION OF CAPITAL
| 15.1 | The Company may (subject to Bye-Law 15.2) from time to time by Resolution: |
| 15.1.1 | divide its shares into several classes and attach to them respectively any preferential, deferred, qualified or special rights, privileges or conditions; | |||
| 15.1.2 | consolidate and divide all or any of its share capital into shares of larger par value than any of its existing shares; | |||
| 15.1.3 | sub-divide its shares or any of them into shares of smaller par value than is fixed by its memorandum, so, however, that in the sub-division the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived; | |||
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| 15.1.4 | make provision for the issue and allotment of shares which do not carry any voting rights; | |||
| 15.1.5 | cancel shares which, at the date of the passing of the relevant Resolution, have not been taken or agreed to be taken by any person, and diminish the amount of its authorised share capital by the amount of the shares so cancelled; and | |||
| 15.1.6 | change the currency denomination of its share capital. | |||
| 15.2 | In the case of any split, subdivision, combination or reclassification of Class A Common Shares or Class X Common Shares, the shares of the other such class of common shares shall also be split, subdivided, combined or reclassified, in each case so that the numbers of Class A Common Shares and Class X Common Shares in issue immediately following such split, subdivision, combination or reclassification shall bear the same relationship to one another as do the numbers of Class A Common Shares and Class X Common Shares in issue immediately prior to such split, subdivision, combination or reclassification. | |||
| 15.3 | Where any difficulty arises in regard to any division, consolidation or sub-division under this Bye-Law 15, the Board may settle the same as it thinks expedient and, in particular, may arrange for the sale of the shares representing fractions and the distribution of the net proceeds of sale in due proportion among the Shareholders who would have been entitled to the fractions, except that any proceeds in respect of any holding which are less than a sum fixed by the Board may be retained for the benefit of the Company. For the purpose of any such sale the Board may authorise some person to transfer the shares representing fractions to the purchaser, who shall not be bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale. | |||
| 16. | Subject to the Companies Acts and to any confirmation or consent required by law or these Bye-Laws, the Company may from time to time by Resolution convert any preference shares in the Company (unless otherwise expressly provided by the rights attaching to or by the terms of issue of the preference shares in question) into redeemable preference shares. | |||
REDUCTION OF CAPITAL
| 17. | Subject to the Companies Acts and to any confirmation or consent required by law or these Bye-Laws, the Company may from time to time by Resolution authorise the reduction in any manner of its issued share capital (but not to a sum less than the minimum share capital prescribed by its memorandum) or any share premium account. | |||
| 18. | In relation to any such reduction, the Company may by Resolution determine the terms upon which the reduction is to be effected, including, in the case of a reduction of part only of a class of shares, those shares to be affected. | |||
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CERTIFICATES
| 19.1 | Shares shall be issued in registered form. Unless the Board resolves otherwise, no Covered Person (as such term is defined in the Voting Agreement) will be entitled to a share certificate for any shares held by him. Otherwise, unless otherwise provided by the rights attaching to or by the terms of issue of any particular shares, each Shareholder shall, upon becoming the holder of any share, be entitled to a share certificate for all the shares of each class held by him (and, on transferring a part of his holding, to a certificate for the balance), but the Board may decide not to issue certificates for any shares held by, or by the nominee of, any securities exchange or depository or any operator of any clearance or settlement system except at the request of any such person. In the case of a share held jointly by several persons, delivery of a certificate in their joint names to one of several joint holders shall be sufficient delivery to all. | |||
| 19.2 | Share certificates shall be in such form as the Board may from time to time prescribe, subject to the requirements of the Companies Acts. No fee shall be charged by the Company for issuing a share certificate. | |||
| 20. | If a share certificate is worn-out or defaced, or alleged to have been lost or destroyed, it may be replaced without fee but on such terms (if any) as to evidence and indemnity and to payment of any exceptional costs and out of pocket expenses of the Company in investigating such evidence and preparing such indemnity as the Board may think fit and, in case of wearing-out or defacement, on delivery of the certificate to the Company. The Board may require any such indemnity to be secured in such manner as the Board may think fit. | |||
| 21.1 | All certificates for shares (other than letters of allotment, scrip certificates and other like documents) shall, except to the extent that the terms of issue of any shares otherwise provide, be issued under the Seal or a facsimile of it. Each certificate shall be signed by such person or persons (whether or not Officers) as the Board may from time to time decide, but the Board may determine that certificates for shares or for particular shares need not be signed by any person. | |||
| 21.2 | The Board may also determine, either generally or in any particular case, that any signatures on certificates for shares (or certificates or agreements or other documents evidencing the issue by the Company of awards under any share option, share incentive or other form of employee benefits plan adopted by the Company from time to time) need not be autographic but may be affixed to such certificates, agreements or other documents by some mechanical means or may be facsimiles printed on such certificates, agreements or other documents. If any Officer who has signed, or whose facsimile signature has been used on, any such certificate, agreement or other document ceases for any reason to hold his office, such certificate, agreement or other document may nevertheless be issued as though that Officer had not ceased to hold such office. | |||
| 22. | Nothing in these Bye-Laws shall preclude (i) title to a share being evidenced or transferred otherwise than in writing to the extent permitted by the Companies Acts and otherwise as may be determined by the Board from time to time or (ii) the Board | |||
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| from recognising the renunciation of the allotment of any share by the allottee in favour of some other person on such terms and subject to such conditions as the Board may from time to time decide. |
LIEN
| 23. | The Company shall have a first and paramount lien on every share (not being a fully paid share) for all moneys, whether presently due or not, called or payable in respect of such share. The Company’s lien on a share shall extend to all dividends payable on it. The Board may at any time, either generally or in any particular case, waive any lien that has arisen or declare any share to be wholly or in part exempt from the provisions of this Bye-Law. | |||
| 24.1 | The Company may sell, in such manner as the Board may think fit, any share on which the Company has a lien, but no sale shall be made unless some sum in respect of which the lien exists is presently due nor until the expiration of 14 clear days after a notice, stating and demanding payment of the sum presently due and giving notice of the intention to sell in default of such payment, has been served on the holder for the time being of the share or the person entitled by transmission to it. | |||
| 24.2 | The net proceeds of sale by the Company of any shares on which it has a lien shall be applied in or towards payment or discharge of the debt or liability in respect of which the lien exists so far as the same is due, and any residue shall (subject to a like lien for debts or liabilities not presently due as existed upon the share prior to the sale) be paid to the holder of, or the person entitled by transmission to, the share immediately before such sale. For giving effect to any such sale the Board may authorise some person to transfer the share to the purchaser. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of the purchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings relating to the sale. | |||
| 24.3 | Whenever any law for the time being of any country, state or place imposes or purports to impose any immediate or future or possible liability upon the Company to make any payment or empowers any government or taxing authority or government official to require the Company to make any payment in respect of any shares registered in any of the Company’s registers as held either jointly or solely by any Shareholders or in respect of any dividends, bonuses or other monies due or payable or accruing due or which may become due or payable to such Shareholder by the Company on or in respect of any Shares registered as mentioned above or for or on account or in respect of any Shareholder and whether in consequence of: | |||
| (a) | the death of such Shareholder; | |||
| (b) | the non-payment of any income tax or other tax by such Shareholder; | |||
| (c) | the non-payment of any estate, probate, succession, death, stamp, or other duty by the executor or administrator of such Shareholder or by or out of his estate; or | |||
| (d) | any other act or thing; | |||
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| in every such case (except to the extent that the rights conferred upon holders of any class of shares render the Company liable to make additional payments in respect of sums withheld on account of the foregoing): |
| (i) | the Company shall be fully indemnified by such Shareholder or his executor or administrator from all liability; | |||
| (ii) | the Company shall have a lien upon all dividends and other monies payable in respect of the shares registered in any of the Company’s registers as held either jointly or solely by such Shareholder for all monies paid or payable by the Company as referred to above in respect of such Shares or in respect of any dividends or other monies thereon or for or on account or in respect of such Shareholder under or in consequence of any such law, together with interest at the rate of 15% per annum (or such other rate as the Board may determine) thereon from the date of payment to date of repayment, and the Company may deduct or set off against such dividends or other monies so payable any monies paid or payable by the Company as referred to above together with interest at the same rate; | |||
| (iii) | the Company may recover as a debt due from such Shareholder or his executor or administrator (wherever constituted) any monies paid by the Company under or in consequence of any such law and interest thereon at the rate and for the period referred to above in excess of any dividends or other monies then due or payable by the Company; and | |||
| (iv) | the Company may if any such money is paid or payable by it under any such law as referred to above refuse to register a transfer of any Shares by any such Shareholder or his executor or administrator until such money and interest is set off or deducted as referred to above or in the case that it exceeds the amount of any such dividends or other monies then due or payable by the Company, until such excess is paid to the Company. | |||
| Subject to the rights conferred upon the holders of any class of shares, nothing in this Bye-Law 24.3 will prejudice or affect any right or remedy which any law may confer or purport to confer on the Company. As between the Company and every such Shareholder as referred to above (and, his executor, administrator and estate, wherever constituted), any right or remedy which such law shall confer or purport to confer on the Company shall be enforceable by the Company. |
CALLS ON SHARES
| 25.1 | The Board may from time to time make calls upon the Shareholders in respect of any moneys unpaid on their shares (whether on account of the par value of the shares or by way of premium) and not by the terms of issue of the shares made payable at a date fixed by or in accordance with their terms of issue and each Shareholder shall (subject to the Company serving on him at least 14 clear days’ notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified the amount called on his shares. A call may be revoked or postponed as the Board may determine. | |||
| 25.2 | A call may be made payable by instalments and shall be deemed to be made at the time when the resolution of the Board authorising the call is passed. | |||
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| 25.3 | A person on whom a call is made shall (in addition to the transferee) remain liable for it notwithstanding the subsequent transfer of the share in respect of which the call is made. | |||
| 26. | The joint holders of a share shall be jointly and severally liable to pay all calls in respect of it. | |||
| 27. | If a sum called in respect of a share is not paid before or on the day appointed for its payment, the person from whom the sum is due shall pay interest on the sum from the day appointed for payment to the time of actual payment at such rate as the Board may determine, but the Board may waive payment of such interest, wholly or in part. | |||
| 28. | Any sum which, by the terms of issue of a share, becomes payable on allotment or at any date fixed by or in accordance with such terms of issue, whether on account of the nominal value of the share or by way of premium, shall for all purposes of these Bye-Laws be deemed to be a call duly made, notified and payable on the date on which, by the terms of issue, the same becomes payable, and, in case of non-payment, all the relevant provisions of these Bye-Laws as to payment of interest, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified. | |||
| 29. | The Board may, on the issue of any shares, differentiate between the allottees or holders as to the amount of calls to be paid and the times of payment. | |||
| 30. | The Board may, if it thinks fit, receive all or any part of the moneys payable on a share beyond the sum actually called up on it if the holder is willing to make payment in advance and, on any moneys so paid in advance, may (until they would otherwise be due) pay interest at such rate as may be agreed between the Board and the Shareholder paying the sum in advance. | |||
FORFEITURE OF SHARES
| 31. | If a Shareholder fails to pay any call or instalment of a call on the day appointed for its payment, the Board may at any time while any part of such call or instalment remains unpaid serve on him a notice requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued. The notice shall state a further day (not being less than 14 clear days from the date of the notice) on or before which, and the place where, the payment required by the notice is to be made and shall state that, in the event of non-payment on or before the day and at the place appointed, the shares in respect of which such call is made or instalment is payable will be liable to be forfeited. | |||
| 32. | The Board may accept the surrender of any share liable to be forfeited, and, in any such case, references in these Bye-Laws to forfeiture include surrender. | |||
| 33. | If the requirements of any notice given under Bye-Law 31 are not complied with, any share in respect of which the notice was given may, at any time before payment of all calls or instalments and interest due in respect of it is made, be forfeited by a | |||
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| resolution of the Board to that effect. Such forfeiture shall include all dividends declared and other moneys payable in respect of the forfeited shares and not actually paid before the forfeiture. |
| 34. | When any share has been forfeited, notice of the forfeiture shall be served on the person who was before forfeiture the holder of the share or the person entitled by transmission to it, but no forfeiture shall be invalidated by any omission to give such notice. | |||
| 35. | A forfeited share shall become the property of the Company and may be sold, reoffered or otherwise disposed of either to the person who was, before forfeiture, the holder of, or entitled to, the share or to any other person, on such terms and in such manner as the Board thinks fit. At any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the Board may think fit. | |||
| 36. | A person whose shares have been forfeited shall cease to be a Shareholder in respect of the forfeited shares but shall, notwithstanding the forfeiture, remain liable to pay to the Company all moneys which at the date of forfeiture were payable by him to the Company in respect of the shares, together with interest at such rate as the Board may determine from the date of forfeiture until payment and the Company may enforce payment without being under any obligation to make any allowance for the value of the shares forfeited. | |||
| 37. | An affidavit to the effect that the deponent is a Director or the Secretary and that a share has been duly forfeited on the date stated in the affidavit shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the share. The Company may receive the consideration (if any) given for the share on its sale, re-allotment or disposition, and the Board may authorise some person to transfer the share to the person to whom it is sold, re-allotted or disposed of. That person shall be registered as the holder of the share and shall not be bound to see to the application of the purchase money (if any), nor shall his title to the share be affected by any irregularity or invalidity in the proceedings relating to the forfeiture, sale, re-allotment or disposal of the share. | |||
REGISTER OF SHAREHOLDERS
| 38.1 | The Register shall be kept in the manner prescribed by the Companies Acts at the Registered Office or at such other place in Bermuda as may be authorised by the Board from time to time. | |||
| 38.2 | The Company may also keep one or more branch registers at such place or places outside Bermuda to the extent and in the manner permitted by the Companies Acts and the Board may make such regulations as it thinks fit regarding the keeping of any branch register and may revoke or vary any such regulations. The Board may authorise any share on the Register to be included in a branch register or any share registered on a branch register to be registered on another branch register, provided that at all times the Register is maintained in accordance with the Companies Acts. | |||
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| 38.3 | The Register or any branch register may be closed at such times and for such periods as the Board may from time to time decide, subject to the Companies Acts. Except during such time as it is closed, the Register and each branch register shall be open to inspection in the manner prescribed by the Companies Acts between 10:00 a.m. and 12:00 noon (or between such other times as the Board from time to time determines) on every working day. | |||
| 38.4 | Unless the Board so determines, no Shareholder or intending Shareholder shall be entitled to have entered in the Register any indication of any trust or any equitable, contingent, future or partial interest in any share or any fractional part of a share, and if any such entry exists or is permitted by the Board it shall not be deemed to abrogate any provisions of Bye-Law 11. | |||
REGISTER OF DIRECTORS AND OFFICERS
| 39. | The Secretary shall maintain a register of the Directors and Officers of the Company as required by the Companies Acts. The register of Directors and Officers shall be open to inspection in the manner prescribed by the Companies Acts between 10:00 a.m. and 12:00 noon (or between such other times as the Board from time to time determines) on every working day. |
TRANSFER OF SHARES
| 40. | Subject to the Companies Acts and to such of the restrictions contained in these Bye- Laws (including, without limitation, Bye-Law 4.3(e)) as may be applicable, any Shareholder may transfer all or any of his shares (of any class) by an instrument of transfer in the usual common form or in any other form which the Board may from time to time approve. The instrument of transfer may be endorsed on the certificate. | |||
| 41.1 | The instrument of transfer of a share shall be signed by or on behalf of the transferor and, if the share is not fully paid, by or on behalf of the transferee and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the Register in respect of it. All instruments of transfer may be retained by the Company. | |||
| 41.2 | The Board may, in its absolute discretion and without assigning any reason for its decision, decline to register any transfer of any share which is not a fully-paid share. The Board may also decline to register any transfer if: | |||
| 41.2.1 | the instrument of transfer is not duly stamped, if required, and lodged at the Registered Office or any other place as the Board may from time to time specify for the purpose, accompanied by the certificate (if any) for the shares to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; | |||
| 41.2.2 | the instrument of transfer is in respect of more than one class of share; | |||
| 41.2.3 | the instrument of transfer is in favour of more than four persons jointly; | |||
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| 41.2.4 | it is not satisfied that all applicable consents, authorisations, permissions or approvals of any governmental body or agency in Bermuda or any other applicable jurisdiction required to be obtained under relevant law prior to such transfer have been obtained; or | |||
| 41.2.5 | it is not satisfied that the transfer would not violate the terms of any agreement to which the Company (or any of its subsidiaries) and the transferor are party or subject. | |||
| 41.3 | Subject to any directions of the Board from time to time in force, the Secretary may exercise the powers and discretions of the Board under Bye-Law 41.2 and Bye-Laws 40 and 42. | |||
| 42.1 | If the Board declines to register a transfer it shall, within one month after the date on which the instrument of transfer was lodged, send to the transferee notice of such refusal. | |||
| 42.2 | No fee shall be charged by the Company for registering any transfer or for making any entry in the Register concerning any other document relating to or affecting the title to any share (except that the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed on it in connection with such transfer or entry). | |||
RESTRICTIONS ON TRANSFER OF COVERED SHARES
| 43.1 | Each Covered Person shall at all times be the Sole Beneficial Owner of all Covered Shares beneficially owned by such Covered Person as of or prior to the IPO Date, except as provided herein. Any Covered Shares Transferred in compliance with Bye- Laws 43.1 through 43.7 shall no longer be subject to such provisions. Capitalized terms used in Bye-Laws 43.1 through 43.7 hereof shall have the meanings ascribed to such terms in Bye-Law 43.7 | |||
| 43.2 | Notwithstanding Bye-Law 43.1, an Employee Covered Person may: | |||
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(a) | (i) | commencing on the date that is one year after the IPO Date, Transfer up to 10% of the aggregate number of Class A Common Shares beneficially owned by such Employee Covered Person as of the IPO Date; |
| (ii) | commencing on the date that is two years after the IPO Date, Transfer an aggregate (together with all other Transfers made pursuant to this paragraph (a)) of up to 25% of the aggregate number of Class A Common Shares beneficially owned by such Employee Covered Person as of the IPO Date; | |||
| (iii) | commencing on the date that is three years after the IPO Date, Transfer an aggregate (together with all other Transfers made pursuant to this paragraph (a)) of up to 35% of the aggregate number of Class A Common Shares beneficially owned by such Employee Covered Person as of the IPO Date; | |||
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| (iv) | commencing on the date that is four years after the IPO Date, Transfer an aggregate (together with all other Transfers made pursuant to this paragraph (a)) of up to 45% of the aggregate number of Class A Common Shares beneficially owned by such Employee Covered Person as of the IPO Date; | |||
| (v) | commencing on the date that is five years after the IPO Date, Transfer an aggregate (together with all other Transfers made pursuant to this paragraph (a)) of up to 55% of the aggregate number of Class A Common Shares beneficially owned by such Employee Covered Person as of the IPO Date; | |||
| (vi) | commencing on the date that is six years after the IPO Date, Transfer an aggregate (together with all other Transfers made pursuant to this paragraph (a)) of up to 65% of the aggregate number of Class A Common Shares beneficially owned by such Employee Covered Person as of the IPO Date; and | |||
| (vii) | commencing on the date that is seven years after the IPO Date, Transfer an aggregate (together with all other Transfers made pursuant to this paragraph (a)) of up to 75% of the aggregate number of Class A Common Shares beneficially owned by such Employee Covered Person as of the IPO Date. | |||
| (b) | Notwithstanding Bye-Law 43.1, a Covered Person may Transfer any Class A Common Shares beneficially owned by such Covered Person as of the IPO Date commencing on the later of (i) the date that is eight years after the IPO Date and (ii) the date that such Covered Person ceases to be an employee of the Company. | |||
| (c) | Notwithstanding Bye-Law 43.1, an Employee Covered Person that retires (or has retired) at the age of 50 or older and is not in contravention of a Non- Competition Agreement (a “Retired Employee”) may: | |||
| (i) | if such Retired Employee retires (or has retired) at age 50, Transfer up to that number of Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date which is equal to the product of (x) the aggregate number of Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date multiplied by (y) the sum of (a) the percentage of Class A Common Shares eligible for sale at the date of such retirement pursuant to paragraph (a) of Bye-Law 43.2 (the “Base Eligible Sales”) and (b) the product of (A) (1 minus Base Eligible Sales) multiplied by (B) 0.25; | |||
| (ii) | if such Retired Employee retires (or has retired) at age 51, Transfer up to that number of Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date which is equal to the product of (x) the aggregate number of Class A Common Shares beneficially owned by | |||
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| such Retired Employee as of the IPO Date multiplied by (y) the sum of (a) the percentage of the Base Eligible Sales and (b) the product of (A) (1 minus Base Eligible Sales) multiplied by (B) 0.375; | ||||
| (iii) | if such Retired Employee retires (or has retired) at age 52, Transfer up to that number of Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date which is equal to the product of (x) the aggregate number of Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date multiplied by (y) the sum of (a) the percentage of the Base Eligible Sales and (b) the product of (A) (1 minus Base Eligible Sales) multiplied by (B) 0.50; | |||
| (iv) | if such Retired Employee retires (or has retired) at age 53, Transfer up to that number of Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date which is equal to the product of (x) the aggregate number of Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date multiplied by (y) the sum of (a) the percentage of the Base Eligible Sales and (b) the product of (A) (1 minus Base Eligible Sales) multiplied by (B) 0.625; | |||
| (v) | if such Retired Employee retires (or has retired) at age 54, Transfer up to that number of Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date which is equal to the product of (x) the aggregate number of Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date multiplied by (y) the sum of (a) the percentage of the Base Eligible Sales and (b) the product of (A) (1 minus Base Eligible Sales) multiplied by (B) 0.75; | |||
| (vi) | if such Retired Employee retires (or has retired) at age 55, Transfer up to that number of Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date which is equal to the product of (x) the aggregate number of Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date multiplied by (y) the sum of (a) the percentage of the Base Eligible Sales and (b) the product of (A) (1 minus Base Eligible Sales) multiplied by (B) 0.875; and | |||
| (vii) | if such Retired Employee retires (or has retired) at age 56 or above, Transfer 100% of the Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date. | |||
| A Retired Employee may also Transfer the Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date in accordance with paragraph (a) of this Bye-Law 43.2 as if such Retired Employee were an Employee Covered Person. | ||||
| A Retired Employee that reaches (or has reached) the age of 56 may also Transfer 100% of the Class A Common Shares beneficially owned by such Retired Employee as of the IPO Date. | ||||
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| (d) | Notwithstanding Bye-Law 43.1, a Covered Person that became disabled while an employee of the Company (a “Disabled Employee”) prior to June 15, 2001, may Transfer 100% of the Class A Common Shares beneficially owned by such Disabled Employee as of the IPO Date. A Covered Person that becomes (or has become) a Disabled Employee following June 15, 2001 may (i) if such Disabled Employee becomes (or has become) disabled prior to reaching the age of 50, Transfer Class A Common Shares beneficially owned by such Disabled Employee as of the IPO Date in accordance with the provisions of paragraph (a) of this Bye-Law 43.2 as if such Disabled Employee were an Employee Covered Person and (ii) if such Disabled Employee becomes disabled after reaching the age of 50, Transfer Class A Common Shares beneficially owned by such Disabled Employee as of the IPO Date in accordance with the provisions of paragraph (c) of this Bye-Law 43.2 as if such Disabled Employee were a Retired Employee. | |||
| (e) | Notwithstanding Bye-Law 43.1, a Covered Person may Transfer Class A Common Shares beneficially owned by such Covered Person as of the IPO Date pursuant to bona fide pledges of Class A Common Shares approved by the Company in writing and any foreclosures thereunder, provided that the pledgee has agreed in writing with the Company (any such agreement to be satisfactory to the Company in its sole discretion) that the Company shall have a right of first refusal to repurchase such Class A Common Shares at the market price prior to any sale of such Class A Common Shares by such pledgee. Notwithstanding Bye-Law 43.1, a Covered Person may also exchange Accenture Canada Exchangeco Exchangeable Shares for Class A Common Shares. | |||
| (f) | All Transfers of Class A Common Shares beneficially owned by a Covered Person as of or prior to the IPO Date made by such Covered Person before the adoption of Bye-Laws 43.1 through 43.7 shall be aggregated, for purposes of paragraphs (a) through (d) of this Bye-Law 43.2, with all Transfers of Class A Common Shares beneficially owned by such Covered Person as of or prior to the IPO Date made by such Covered Person after the adoption of Bye- Laws 43.1 through 43.7. | |||
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43.3
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(a) | Each Covered Person, at the request of the Company, will comply with any future restrictions on Transfer relating to Common Shares imposed by or with the consent of the Company and notified to such Covered Person from time to time in connection with any future offerings of securities of the Company, whether by the Company or by any securityholder of the Company and whether or not such restrictions on transfer refer to such Covered Person by name (such restrictions, collectively, “Future Restrictions”), provided that such Future Restrictions are no more onerous than restrictions agreed to by the Company. Notwithstanding the immediately preceding sentence, Covered Persons that are not Employee Covered Persons shall not be required to comply with such Future Restrictions on Transfer relating to Common Shares that are not Covered Shares. |
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| (b) | Each Covered Person, for so long as such Covered Person is an Employee Covered Person, will comply with any restrictions on Transfer relating to Common Shares imposed by the Company and notified to such Covered Person from time to time pursuant to the Company’s insider trading policies from time to time. | |||
| (c) | Notwithstanding Bye-Law 43.2, each Covered Person will not Transfer any Covered Shares until July 24, 2005, except (A) to participate in underwritten public offerings, share repurchases, sales or redemptions or other transactions, in each case as approved in writing by the Company and/or (B) to estate and/or tax planning vehicles, family members and charitable organizations that become bound by the provisions of this paragraph (c) by express agreement, in each case as approved in writing by the Company (which approval may be subject to other conditions, including upon the requirement that any transferee become bound by any other agreement, that the Company may require in its sole discretion). The preceding sentence shall not preclude any Transfer permitted under paragraph (e) of Bye-Law 43.2. | |||
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43.4
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(a) | All Covered Shares beneficially owned by a Covered Person (in each case other than Covered Shares held of record by a trustee in a compensation or benefit plan administered by the Company and other Covered Shares that have been pledged to the Company (or to a third party agreed to in writing by the Company) shall, at the sole discretion of the Board, be registered in the name of a nominee for such Covered Person and/or shall be held in the custody of a custodian until otherwise determined by the Board or until such time as such Covered Shares are released pursuant to paragraphs (e) or (f) of this Bye- Law 43.4. The form of the custody agreement and the identity of the custodian and/or nominee shall be as determined by the Board from time to time. |
| (b) | Whenever any nominee holder shall receive any dividend or other distribution in respect of any Covered Shares, satisfied otherwise than in Covered Shares, the Board will give or cause to be given notice or direction to the applicable nominee and/or custodian referred to in paragraph (a) of this Bye-Law 43.4 to permit the prompt distribution of such dividend or distribution to the beneficial owner of such Covered Shares, net of any tax withholding amounts required to be withheld by the nominee, unless the distribution of such dividend or distribution is restricted by the terms of another agreement between the Covered Person and the Company (or with any other person with respect to which the Company has expressly agreed in writing) known to the Board. | |||
| (c) | Any share certificate representing Covered Shares beneficially owned by a Covered Person, and any agreement or other instrument evidencing restricted share units, options or other rights to receive or acquire Covered Shares beneficially owned by such Covered Person, may bear a legend noted conspicuously on each such certificate, agreement or other instrument reading substantially as follows: | |||
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| “THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER RESTRICTIONS SET FORTH IN THE COMPANY’S BYE-LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE SOLD, EXCHANGED, TRANSFERRED, ASSIGNED, PLEDGED, PARTICIPATED, HYPOTHECATED OR OTHERWISE DISPOSED OF ONLY IN ACCORDANCE THEREWITH.” | ||||
| (d) | The Board may refuse to register, and stop transfer orders may be entered against, transfers of Covered Shares except in compliance with Bye-Laws 43.1 through 43.7. | |||
| (e) | All Covered Shares of each Covered Person who is not an Employee Covered Person which could then be Transferred without contravening any provisions of Bye-Laws 43.1 through 43.7 shall be released, pursuant to procedures to be developed by the Board, to or at the direction of such Covered Person free and clear of all restrictions and legends described in this Bye-Law 43.4. | |||
| (f) | A specified number of Covered Shares of an Employee Covered Person shall be released, pursuant to procedures to be developed by the Board, upon the request of such Employee Covered Person and to or at the direction of such Employee Covered Person (free and clear of all restrictions and legends described in this Bye-Law 43.4), provided that such request is accompanied by a certificate of such requesting Employee Covered Person (i) indicating such requesting Employee Covered Person’s intention to Transfer promptly such specified number of Covered Shares and (ii) establishing that such specified number of Covered Shares are then permitted to be Transferred without contravening any provisions of Bye-Laws 43.1 through 43.7 (which evidence must be satisfactory to the Board). | |||
| (g) | Each Covered Person shall be responsible for all expenses of such Covered Person incurred in connection with compliance by such Covered Person with his obligations under Bye-Laws 43.1 through 43.7, including expenses incurred by the Company in enforcing the provisions of Bye-Laws 43.1 through 43.7 relating to such obligations. | |||
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43.5
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(a) | In the event of any change in the outstanding Common Shares or Accenture Canada Exchangeco Exchangeable Shares by reason of stock dividends, stock splits, reverse stock splits, spin-offs, split-ups, recapitalizations, amalgamations, combinations, exchanges of shares and the like, the term “Covered Shares” shall refer to and include the securities received or resulting therefrom, but only to the extent such securities are received in exchange for or in respect of Covered Shares. Upon the occurrence of any event described in the immediately preceding sentence, the Board shall make such adjustments to or interpretations of the provisions of Bye-Laws 43.1 and 43.2 (and, if the Board so determines, any other provisions of Bye-Laws 43.3 through 43.7) as the Board shall deem necessary or desirable to carry out the intent of such provision(s). If the Board deems it advisable, any such adjustments may take effect from the record date, the “when issued trading date,” the “ex dividend date” or another appropriate date. |
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| (b) | The provisions of Bye-Laws 43.1 through 43.7 shall be binding upon the respective legatees, legal representatives, successors and assigns of the Covered Persons; provided, however, that a Covered Person may not assign any of its obligations under such provisions without the prior written consent of the Company and any assignment without such consent by a Covered Person shall be void. | |||
| (c) | If requested by the Company, each Covered Person shall execute such documents and take such further action as may be reasonably necessary to effect the provisions of Bye-Laws 43.1 through 43.7. | |||
43.6
The Board may waive any of the provisions of Bye-Laws 43.1 through 43.7 to permit
particular Covered Persons, a particular class of Covered Persons or all Covered
Persons to Transfer Covered Shares in particular situations (such as Transfers to
family members, partnerships or trusts) or generally. The Board may impose such
conditions as it may determine on the granting of such waivers. The Board’s
determination under this Bye-Law 43.6 shall be final and binding and need not be
uniform and may be made selectively among Covered Persons (whether or not such
Covered Persons are similarly situated).
43.7
For purposes of Bye-Laws 43.1 through 43.7, the following terms have the following
meanings:
(a)
“Accenture Canada Exchangeco Exchangeable Shares” shall mean the
exchangeable shares issued to the Company’s Canadian Partners by an indirect
Canadian subsidiary of Accenture Ltd which exchangeable shares are
exchangeable from time to time for Class A Common Shares.
(b)
A “beneficial owner” of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares: (i) voting power, which includes the power to vote,
or to direct the voting of, such security and/or (ii) investment power, which
includes the power to dispose, or to direct the disposition of, such security, but
for purposes of these Bye-Laws a person shall not be deemed a beneficial
owner of Common Shares (A) solely by virtue of the application of Securities
Exchange Act of 1934, as amended from time to time (the “Exchange Act”)
Rule 13d-3(d) or Exchange Act Rule 13d-5 as in effect on April 18, 2001,
(B) solely by virtue of the possession of the legal right to vote securities under
applicable law (such as by proxy, power of attorney or appointment as
corporate representative) or (C) held of record by a “private foundation”
subject to the requirements of Section 509 of the United States Internal
Revenue Code of 1986, as amended from time to time, and the applicable
rulings and regulations thereunder (or equivalent in other jurisdictions as
determined from time to time by the Board). “Beneficially own” and
“beneficial ownership” shall have correlative meanings. For purposes of the
definition of beneficial ownership only, the provisions of Bye-Laws 43.1
through 43.7 shall not be deemed to transfer the investment power with
respect to any Common Shares.
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| (c) | “Common Shares” shall mean Class A Common Shares and/or Class X Common Shares. | |||
| (d) | “Company” shall mean Accenture Ltd, together, as the case may be and if the context so requires, with its Subsidiaries from time to time. | |||
| (e) | “Covered Person” or “Covered Persons” shall mean those persons, other than the Company, who were parties to the Voting Agreement, as amended, on the date of adoption of Bye-Laws 43.1 through 43.7; provided that any Covered Person who was not also a party to that certain Common Agreement dated as of April 19, 2002 among the Company and the other parties thereto on the date of adoption of Bye-Laws 43.1 through 43.7 shall not be subject to the provisions of paragraph (c) of Bye-Law 43.3. | |||
| (f) | A Covered Person’s “Covered Shares” shall mean (1) any Class X Common Shares beneficially owned by such Covered Person at the time in question, (2) any Class A Common Shares beneficially owned by such Covered Person at the time in question that were also beneficially owned by such Covered Person as of or prior to the IPO Date and (3) any Class A Common Shares not falling within the preceding clause (2) that are or were acquired from the Company (including, without limitation, Class A Common Shares acquired from the Company in connection with the redemption or exchange of Accenture Canada Exchangeco Exchangeable Shares or other shares of any other Subsidiary of the Company) or, whether or not acquired from the Company, in order to comply with a written requirement of the Company (which may be a written policy), by such Covered Person while a Partner of the Company or in connection with becoming a Partner of the Company, and beneficially owned by such Covered Person at the time in question but, shall not include (i) unless such Common Shares are acquired in order to comply with a written requirement of the Company, Common Shares beneficially owned as a result of (A) an acquisition, directly or indirectly, from the Company in an underwritten public offering or (B) conversion of securities convertible into Common Shares, where beneficial ownership of the convertible securities was acquired in a transaction described in clause (A) above or (ii) any other Common Shares acquired under a deferred compensation or employee benefit plan and excluded from the definition of Covered Shares by action of the Partners Representatives prior to the adoption of Bye-Laws 43.1 through 43.7 or the Board after adoption of Bye-Laws 43.1 through 43.7. “Covered Shares” shall also include any Accenture Canada Exchangeco Exchangeable Shares beneficially owned by a Covered Person. “Covered Shares” shall also include the securities that are defined to be “Covered Shares” in Bye-Law 43.5. A Covered Person “acquires” Covered Shares when such Covered Person first acquires beneficial ownership over such Covered Shares. Notwithstanding the immediately preceding sentence, any Class A Common Shares received by a Covered Person upon exchange for Accenture Canada Exchangeco Exchangeable Shares shall, solely for purposes of Bye-Laws 43.1 through 43.7, be deemed to have been owned by such Covered Person as of the IPO Date. | |||
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| (g) | The term “disabled” shall mean “disabled” as defined (i) in any employment agreement then in effect between the employee and the Company, or (ii) if not defined therein, or if there shall be no such agreement, as defined in the Company’s long-term disability plan as in effect from time to time, or (iii) if there shall be no plan, the inability of an employee to perform in all material respects his duties and responsibilities to the Company for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twentyfour (24) consecutive month period by reason of a physical or mental incapacity. Any question as to the existence of a disability as to which the employee and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the employee and the Company. If the employee and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determinations in writing. The determination of disability made in writing to the Company and the employee shall be final and conclusive for all purposes of these Bye-Laws. | |||
| (h) | An “employee” shall include, without limitation, the owners and employees of partner personal service companies in certain countries with which the Company has personal service contracts (in each case as agreed by the Partners Representatives prior to the adoption of Bye-Laws 43.1 through 43.7 or the Board), and any other similarly situated person designated as an “employee” by the Partners Representatives prior to the adoption of Bye-Laws 43.1 through 43.7 or the Board. | |||
| (i) | “Employee Covered Person” shall mean a Covered Person that is an employee of the Company at the time in question, provided that if the Company has received notice that any Covered Person intends to terminate such Covered Person’s employment with the Company (except in the case of notice with respect to retirement or disability), such Covered Person shall be deemed not to be an Employee Covered Person. | |||
| (j) | “IPO Date” shall mean July 24, 2001. | |||
| (k) | “Non-Competition Agreement” shall mean, collectively, any Non-Competition Agreement, dated as of April 18, 2001, among the Company and the partners from time to time party thereto as such agreement may be amended from time to time or any agreement having a similar effect. | |||
| (l) | “Partner” shall mean those partners from time to time that are parties to the certain Partners Matters Agreement among the Company and the signatories thereto dated as of April 18, 2001 as such agreement may be amended from time to time or any agreement having a similar effect. | |||
| (m) | “Partners Representatives” shall have the meaning ascribed to such term in Section 4.4 of the Voting Agreement. | |||
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| (n) | “Permitted Basket Transaction” shall mean the purchase or sale of, or the establishment of a long or short position in, a basket or index of securities (or of a derivative financial instrument with respect to a basket or index of securities) that includes securities of the Company, in each case if such purchase, sale or establishment is permitted under the Company’s policy on hedging with respect to securities of the Company and other relevant policies, including insider trading policies, as announced from time to time. | |||
| (o) | “Sole Beneficial Owner” shall mean a person who is the beneficial owner of Covered Shares, who does not share beneficial ownership of such Covered Shares with any other person (other than pursuant to these Bye-Laws, the Non-Competition Agreement or applicable community property laws) and who is the only person (other than pursuant to applicable community property laws) with a direct economic interest in the Covered Shares. An economic interest of the Company (or of any other person with respect to which the Company has expressly agreed to in writing) as pledgee shall be disregarded for this purpose. A Covered Person that holds Covered Shares indirectly through a wholly-owned personal holding company shall be considered the “Sole Beneficial Owner” of such Covered Shares, provided that such personal holding company is a Covered Person hereunder. | |||
| (p) | “Subsidiary” shall mean any person in which the Company owns, directly or indirectly, at least a majority of the equity, economic or voting interest. | |||
| (q) | “Transfer” shall mean any sale, transfer, pledge, hypothecation or other disposition, whether direct or indirect, whether or not for value, and shall include any disposition of the economic or other risks of ownership of Covered Shares, including short sales of securities of the Company, option transactions (whether physical or cash settled) with respect to securities of the Company, use of equity or other derivative financial instruments relating to securities of the Company and other hedging arrangements with respect to securities of the Company, in each such case other than Permitted Basket Transactions and provided, however, that any exchange of Accenture Canada Exchangeco Exchangeable Shares for Class A Common Shares shall not constitute a Transfer or count toward any limit on Transfers set forth in Bye-Law 43.2. | |||
TRANSMISSION OF SHARES
| 44. | In the case of the death of a Shareholder, the survivor or survivors, where the deceased was a joint holder, or the estate representative, where he was sole holder, shall be the only person or persons recognised by the Company as having any title to his shares; but nothing in these Bye-Laws shall release the estate of a deceased holder from any liability in respect of any share held by him either solely or jointly with other persons. In this Bye-Law, estate representative means the person to whom probate or letters of administration or confirmation as executor has or have been granted under the laws applicable to the estate of the deceased Shareholder or, failing such person, such other person as the Board may in its absolute discretion determine to be the person recognised by the Company for the purpose of this Bye-Law. |
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| 45.1 | In the case of a person becoming entitled to a share in consequence of the death of a Shareholder or otherwise by operation of applicable law, the Board may require the production to the Company of such evidence of his entitlement as is prescribed by the Companies Acts or, to the extent that no such evidence is prescribed, as may from time to time be required by the Board. Upon production of such evidence the name and address of the person so entitled shall be noted in the Register. | |||
| 45.2 | Subject to Bye-Law 46.2, any person entitled by transmission to a share shall be entitled to receive (and may give a discharge for) any dividends or other moneys payable in respect of the share, to attend and vote in respect of the share at general meetings of the Company and of the relevant class of Shareholders and generally to exercise in respect of the share all of the rights or privileges of a Shareholder as if he were registered as the holder of the share. | |||
| 46.1 | Any person entitled by transmission to a share may elect either to be registered himself as the holder of the share or to have some person nominated by him registered as the transferee of the share. If he elects to be registered himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects. If he elects to have his nominee registered, he shall signify his election by signing an instrument of transfer of such share in favour of his nominee. All the provisions of these Bye-Laws relating to the right to transfer and the registration of transfer of shares shall apply to any such notice or instrument of transfer as if the death of the Shareholder or other event giving rise to the transmission had not occurred and the notice or instrument of transfer was an instrument of transfer signed by such Shareholder. | |||
| 46.2 | The Board may at any time give notice requiring a person entitled by transmission to a share to elect either to be registered himself or to transfer the share and if the notice is not complied with within 60 days the Board may withhold payment of all dividends and other moneys payable in respect of the share until the requirements of the notice have been complied with. | |||
| 47. | Subject to any directions of the Board from time to time in force, the Secretary may exercise the powers and discretions of the Board under Bye-Laws 44, 45 and 46. | |||
GENERAL MEETINGS
| 48.1 | The Board shall convene and the Company shall hold annual general meetings in accordance with the requirements of the Companies Acts. | |||
| 48.2 | The Board may, whenever it thinks fit, and shall, on the requisition in writing of Shareholders holding such number of shares as is prescribed by, and made in accordance with, the Companies Acts, convene a general meeting in the manner required by the Companies Acts. All general meetings other than annual general meetings shall be called special general meetings. | |||
| 48.3 | Each general meeting shall be held at such time and place as the Board decides. | |||
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NOTICE OF GENERAL MEETINGS
| 49. | An annual general meeting of the Company (other than an adjourned meeting) shall be called by at least 30 clear days’ notice and a special general meeting of the Company (other than an adjourned meeting) shall be called by at least 10 clear days notice. The notice of a general meeting shall specify the place, day and time of the meeting (including any satellite meeting place arranged for the purposes of Bye-Law 53.2) and, in the case of a special general meeting, the general nature of the business to be considered. Notice of every general meeting shall be given in any manner permitted by these Bye-Laws to all Shareholders (other than those who, under the provisions of these Bye-Laws or the terms of issue of the shares which they hold, are not entitled to receive such notice from the Company) and to each Director and to the Resident Representative. | |||
| 50. | The accidental omission to give notice of a meeting or (in cases where instruments of proxy are sent out with the notice) the accidental omission to send such instrument of proxy to, or the non-receipt of notice of a meeting or such instrument of proxy by, any person entitled to receive such notice shall not invalidate the proceedings at that meeting. A Shareholder present, either in person or by proxy, at any general meeting of the Company or of the holders of any class of shares in the Company, will be deemed to have received notice of that meeting and, where required, of the purpose for which it was called. | |||
PROCEEDINGS AT GENERAL MEETINGS
| 51.1 | The chairman of the Board or, in his absence, the president of the Board shall preside as chairman at every general meeting of the Company or of any class of Shareholders. If there is no such chairman or president, or if at any meeting neither the chairman nor the president is present within 5 minutes after the time appointed for holding the meeting, or if neither of them is willing to act as chairman, the Directors present shall appoint one of those Directors who is willing to act as chairman or, if only one Director is present, he shall preside as chairman, if willing to act. If none of the Directors present is willing to act as chairman, the Director or Directors present may appoint any other Officer who is present and willing to act as chairman. In default of any such appointment, the persons present and entitled to vote shall elect any Officer who is present and willing to act as chairman or, if no Officer is present or if none of the Officers present is willing to act as chairman, one of their number to be chairman. | |||
| 51.2 | Except in the case of the removal of auditors or Directors, anything which may be done by resolution in general meeting of all or any class or Shareholders may, without a meeting and without any previous notice being required, be done by resolution in writing, signed by all of the Shareholders or any class thereof or their proxies (or in the case of a Shareholder that is a corporation (whether or not a company within the meaning of the Companies Acts) on behalf of such Shareholder) being all of the Shareholders of the Company or any class thereof, who at the date of the resolution in writing would be entitled to attend a meeting and vote on the resolution. Such resolution in writing may be signed in as many counterparts as may be necessary. | |||
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| 51.3 | For the purposes of any written resolution under Bye-Law 51.2, the date of the resolution in writing is the date when the resolution is signed by, or on behalf of, the last Shareholder to sign and any reference in any enactment to the date of passing of a resolution is, in relation to a resolution in writing made in accordance with this section, a reference to such date. | |||
| 51.4 | A resolution in writing made in accordance with Bye-Law 51.2 is as valid as if it had been passed by the Company in general meeting or, if applicable, by a meeting of the relevant class of Shareholders of the Company, as the case may be. A resolution in writing made in accordance with this section shall constitute minutes for the purposes of the Companies Acts and these Bye-Laws. | |||
| 52.1 | No business shall be transacted at any general meeting or adjourned meeting unless a quorum is present when the meeting proceeds to business, but the absence of a quorum shall not preclude the appointment or election of a chairman, which shall not be treated as part of the business of the meeting. Except as otherwise provided by the Companies Acts or these Bye-Laws, two Shareholders present in person or by proxy and having the right to attend and vote at the meeting and holding shares representing more than 50 per cent of the votes that may be cast by all Shareholders at the relevant time shall be a quorum (provided that, if the Company shall have only one Shareholder, one Shareholder present in person or by proxy shall constitute the necessary quorum). | |||
| 52.2 | If within 5 minutes (or such longer time as the chairman of the meeting may determine to wait) after the time appointed for a meeting a quorum is not present, the meeting, if convened on the requisition of Shareholders, shall be dissolved. If within 15 minutes after the time appointed for a meeting, no shareholders are present, the meeting shall be dissolved. In any other case, it shall stand adjourned to such other day and such other time and place as the chairman of the meeting may determine. The Company shall give not less than 5 days notice of any meeting adjourned through want of a quorum and such notice shall state the quorum requirement from the adjourned meeting under Bye-Law 52.1. If within 5 minutes (or such longer time as the chairman of the meeting may determine to wait) after the time appointed for any adjourned meeting a quorum is not present, the meeting may be further adjourned to such other day and such other time and place as the chairman of the meeting may determine, but otherwise the meeting shall be dissolved. A meeting may not be adjourned under this Bye-Law 52.2 to a day which is more than 90 days after the day originally appointed for the meeting. | |||
| 52.3 | If it appears to the chairman of a general meeting that the place of the meeting specified in the notice convening the meeting is inadequate to accommodate all persons entitled and wishing to attend, the meeting is duly constituted and its proceedings are valid if the chairman is satisfied that adequate facilities are available, whether at the place of the meeting or elsewhere, to ensure that each such person who is unable to be accommodated at the place of the meeting is able to communicate simultaneously and instantaneously with the persons present at the place of the meeting, whether by the use of microphones, loud-speakers, audio-visual or other communications equipment or facilities. | |||
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| 53.1 | A meeting of the Shareholders or of any class of Shareholders may be held by such electronic means as the Board may from time to time approve and which permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting. | |||
| 53.2 | The Board may resolve to enable persons entitled to attend a general meeting of the Company or of any class of Shareholders to do so by simultaneous attendance and participation at a satellite meeting place anywhere in the world. The Shareholders present at any such satellite meeting place in person or by proxy and entitled to vote shall be counted in the quorum for, and shall be entitled to vote at, the general meeting in question if the chairman of the general meeting is satisfied that adequate facilities are available throughout the general meeting to ensure that Shareholders attending at all the meeting places are able to: | |||
| 53.2.1 | communicate simultaneously and instantaneously with the persons present at the other meeting place or places, whether by the use of microphones, loudspeakers, audio-visual or other communications equipment or facilities; and | |||
| 53.2.2 | have access to all documents which are required by the Companies Acts and these Bye-Laws to be made available at the meeting. | |||
| The chairman of the general meeting shall be present at, and the meeting shall be deemed to take place at, the principal meeting place. If it appears to the chairman of the general meeting that the facilities at the principal meeting place or any satellite meeting place are or become inadequate for the purposes referred to above, then the chairman may, without the consent of the meeting, interrupt or adjourn the general meeting. All business conducted at that general meeting up to the time of such adjournment shall be valid. |
| 54. | Each Director and the Resident Representative shall be entitled to attend and speak at any general meeting of the Company or of any class of Shareholders. | |||
| 55. | The Board may make any security arrangements which it considers appropriate relating to the holding of a general meeting of the Company or of any class of Shareholders including, without limitation, arranging for any person attending a meeting to be searched and for items of personal property which may be taken into a meeting to be restricted, and any person who fails to comply with any such arrangements may be refused entry to the meeting. | |||
| 56.1 | Subject to the Companies Acts, a resolution may only be put to a vote at a general meeting of the Company or of any class of Shareholders if: | |||
| 56.1.1 | it is proposed by or at the direction of the Board; or | |||
| 56.1.2 | it is proposed at the direction of the Court; or | |||
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56.1.3
it is proposed on the requisition in writing of such number of Shareholders as
is prescribed by, and is made in accordance with, the relevant provisions of the
Companies Acts; or
56.1.4
the chairman of the meeting in his absolute discretion decides that the
resolution may properly be regarded as within the scope of the meeting.
56.2
No amendment may be made to a resolution, at or before the time when it is put to a
vote, unless the chairman of the meeting in his absolute discretion decides that the
amendment or the amended resolution may properly be put to a vote at that meeting.
56.3
If the chairman of the meeting rules a resolution or an amendment to a resolution
admissible or out of order (as the case may be), the proceedings of the meeting or on
the resolution in question shall not be invalidated by any error in his ruling. Any
ruling by the chairman of the meeting in relation to a resolution or an amendment to a
resolution shall be final and conclusive.
57.
The chairman of the meeting may, with the consent of any meeting at which a quorum
is present, adjourn the meeting from time to time (or
sine die
) and from place to place.
In addition to any other power of adjournment conferred by law, the chairman of the
meeting may at any time without the consent of the meeting adjourn the meeting
(whether or not it has commenced or a quorum is present) to another time and/or
place (or
sine die
) if, in his opinion, it would facilitate the conduct of the business of
the meeting to do so or if he is so directed (prior to or at the meeting) by the Board.
When a meeting is adjourned
sine die
the time and place for the adjourned meeting
shall be fixed by the Board.
58.
When a meeting is adjourned for three months or more or
sine die
, not less than 10
clear days’ notice of the adjourned meeting shall be given in the same manner as in
the case of the original meeting. Except as expressly provided by these Bye-Laws, it
shall not be necessary to give any notice of an adjourned meeting or of the business to
be transacted at an adjourned meeting. No business shall be transacted at any
adjourned meeting except business which might properly have been transacted at the
meeting from which the adjournment took place.
VOTING
| 59. | Except where a greater majority is required by the Companies Acts or these Bye- Laws, any question proposed for consideration at any general meeting of the Company or of any class of Shareholders shall be decided by a simple majority of the votes cast by Shareholders entitled to vote at such meeting and all resolutions put to the Shareholders will be decided on a poll vote. | |||
| 60. | Subject to any rights or restrictions for the time being attached to any class of shares, on any vote each Shareholder present in person or by proxy shall have one vote for each share held by him. | |||
| 61. | The Board may, before any meeting of Shareholders, determine the manner in which the poll vote is to be taken and the manner in which votes are to be counted, which | |||
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| may include provision for votes to be cast by electronic means by persons present in person or by proxy at the meeting and for the appointment of scrutineers. To the extent not so determined by the Board, such matters shall be determined by the chairman of the meeting. A person appointed to act as a scrutineer need not be a Shareholder. | ||||
| 62. | Votes may be cast on the poll vote either personally or by proxy. A person entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way. | |||
| 63. | The result of the poll vote shall be deemed to be the resolution of the meeting. | |||
| 64. | In the case of an equality of votes at a general meeting, the motion shall be deemed to be lost and the chairman of the meeting shall not be entitled to a second or casting vote. | |||
| 65. | In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register in respect of the joint holding. | |||
| 66. | Subject to Bye-Law 67, a Shareholder who is a patient for any purpose of any statute or applicable law relating to mental health or in respect of whom an order has been made by any court in Bermuda (or elsewhere having jurisdiction) for the protection or management of the affairs of persons incapable of managing their own affairs may vote, by his receiver, committee, curator bonis or other person in the nature of a receiver, committee or curator bonis appointed by such court, and such receiver, committee, curator bonis or other person may vote by proxy and may otherwise act and be treated as such Shareholder for the purpose of general meetings. | |||
| 67. | Evidence to the satisfaction of the Board of the authority of any person claiming the right to vote under Bye-Law 66 shall be produced at the Registered Office (or at such other place as may be specified for the deposit of instruments of proxy) not later than the last time by which an instrument appointing a proxy must be deposited in order to be valid for use at the meeting or adjourned meeting or on the holding of the poll at or on which that person proposes to vote and, in default, the right to vote shall not be exercisable. | |||
| 68. | No Shareholder shall, unless the Board otherwise determines, be entitled to vote at any general meeting of the Company or of any class of Shareholders in respect of any share held by him unless all calls or other sums presently payable by him in respect of that share have been paid. | |||
| 69. | No objection may be raised to the qualification of any voter or to the counting of, or failure to count, any vote except at the meeting at which the vote objected to is tendered. Any objection so raised shall be referred to the chairman of the meeting and shall only vitiate the decision of the meeting on any resolution if the chairman decides that it may have affected the decision of the meeting. The decision of the chairman on any such matter shall be final and conclusive. Except as otherwise decided by the | |||
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| chairman, every vote counted and not disallowed at the meeting shall be valid and every vote disallowed or not counted shall be invalid. |
PROXIES AND CORPORATE REPRESENTATIVES
| 70.1 | A Shareholder may appoint one or more persons as his proxy, with or without the power of substitution, to represent him and vote on his behalf in respect of all or some only of his shares at any general meeting (including an adjourned meeting). A proxy need not be a Shareholder. | |||
| 70.2 | A Shareholder which is a corporation may appoint any person (or two or more persons in the alternative) as its representative to represent it and vote on its behalf at any general meeting (including an adjourned meeting) and such a corporate representative may exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Shareholder. | |||
| 70.3 | A Shareholder which is a corporation may appoint more than one such corporate representatives (with or without appointing any persons in the alternative) at any such meeting provided that such appointment specifies the number of shares in respect of which each such appointee is authorised to act as representative, not exceeding in aggregate the number of shares held by the appointor and carrying the right to attend and vote at the relevant meeting. | |||
| 70.4 | The appointment of a proxy or a corporate representative in relation to a particular meeting shall, unless the contrary is stated, be valid for any adjournment of the meeting. | |||
| 71. | A Shareholder may appoint a standing proxy, with or without the power of substitution, or (if a corporation) a standing representative by delivery to the Registered Office (or at such other place as the Board may from time to time specify for such purpose) of evidence of such appointment. The appointment of such a standing proxy or representative shall be valid for every general meeting and adjourned meeting until such time as it is revoked by notice to the Company, but: | |||
| 71.1 | the appointment of a standing proxy or representative may be made on an irrevocable basis in which case the Company may recognise the vote of the proxy or representative given in accordance with the terms of the appointment, to the exclusion of the vote of the Shareholder, until such time as the appointment ceases to be effective in accordance with its terms. The Company will, in particular, recognise votes given by a proxy in accordance with the terms of any standing, irrevocable proxy given by a Shareholder pursuant to the terms of the Voting Agreement on this basis; | |||
| 71.2 | (subject to Bye-Law 71.1) the appointment of a standing proxy or representative shall be deemed to be suspended at any meeting or poll taken subsequently to any meeting at which the Shareholder is present or in respect of which the Shareholder has specifically appointed another proxy or representative; and | |||
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| 71.3 | the Board may from time to time require such evidence as it deems necessary as to the due execution and continuing validity of the appointment of any standing proxy (other than a standing, irrevocable proxy given pursuant to the terms of the Voting Agreement) or representative and, if it does so, the appointment of the standing proxy or representative shall be deemed to be suspended until such time as the Board determines that it has received the required evidence or other evidence satisfactory to it. |
72.1
A proxy may be appointed by an instrument in writing in any common form or in
such other form as the Board may approve, such instrument being executed under the
hand of the appointor or of his attorney or agent authorised by him in writing or, if the
appointor is a corporation, either under its seal or under the hand of an officer,
attorney or other person authorised to sign the same. A proxy may also be appointed
in such other manner as the Board may from time to time approve. The form of
standing, irrevocable proxy attached to the Voting Agreement will be regarded as
approved by the Board for all purposes of these Bye-Laws.
72.2
Any instrument or other form of communication appointing or evidencing the
appointment of a proxy or a corporate representative (other than a standing proxy or
representative), together with such evidence as to its due execution as the Board may
from time to time require, shall be delivered to the Registered Office (or to such other
place or places as may be specified in the notice convening the meeting or in any
notice of an adjourned meeting or, in either case, in any other information sent to
Shareholders by or on behalf of the Board in relation to the meeting or adjourned
meeting) by such time or times as may be specified in the notice of meeting or
adjourned meeting or in any such other information (which times may differ when
more than one place is so specified) or, if no such time is specified, at any time prior
to the holding of the relevant meeting or adjourned meeting at which the appointee
proposes to vote, and if not so delivered (but subject to Bye-Law 76) the appointment
shall not be treated as valid.
72.3
Subject to Bye-Law 76 and subject as mentioned in this Bye-Law, an instrument or
other form of communication appointing or evidencing the appointment of a standing
proxy or corporate representative shall not be treated as valid until 24 hours after the
time at which it, together with such evidence as to its due execution as the Board may
from time to time require, is delivered to the Registered Office (or to such other place
or places as the Board may from time to time specify for the purpose). Any standing,
irrevocable proxy delivered to the Company by any Shareholder pursuant to the
Voting Agreement will automatically be treated as valid and effective for all purposes
of these Bye-Laws.
72.4
If the terms of appointment of a proxy include a power of substitution, any proxy
appointed by substitution under such power shall be deemed to be the proxy of the
Shareholder who conferred such power. All the provisions of these Bye-Laws
relating to the execution and delivery of an instrument or other form of
communication appointing or evidencing the appointment of a proxy shall apply,
mutatis mutandis
, to the instrument or other form of communication effecting or
evidencing such an appointment by substitution.
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| 73. | The appointment of a proxy, whether a standing proxy or a proxy relating to a particular meeting, shall be deemed, unless the contrary is stated, to confer authority to vote on any amendment of a resolution and on any other resolution put to a meeting for which it is valid in such manner as the proxy thinks fit. | |||
| 74. | A vote given by proxy, whether a standing proxy or a proxy relating to a particular meeting, shall be valid notwithstanding the previous death or insanity of the principal, or revocation of the appointment of the proxy or of the authority under which it was executed, unless notice of such death, insanity or revocation was received by the Company at the Registered Office (or at any other place as may be specified for the delivery of instruments or other forms of communication appointing or evidencing the appointment of proxies in the notice convening the meeting or in any other information sent to Shareholders by or on behalf of the Board in relation to the meeting) at least one hour before the commencement of the meeting or adjourned meeting at which the vote is given or by such later time as the Board may decide, either generally or in any particular case. | |||
| 75. | Notwithstanding the preceding provisions of these Bye-Laws, the Board may decide, either generally or in any particular case, to treat an instrument or other form of communication appointing or evidencing the appointment of a proxy or a corporate representative as properly delivered for the purposes of these Bye-Laws if a copy or facsimile image of the instrument is sent by electronic means to the Registered Office (or to such place as may be specified in the notice convening the meeting or in any notice of any adjournment or, in either case, in any other information sent by or on behalf of the Board in relation to the meeting or adjourned meeting). | |||
| 76. | Subject to the Companies Acts, the Board may also at its discretion waive any of the provisions of these Bye-Laws relating to the execution and deposit of an instrument or other form of communication appointing or evidencing the appointment of a proxy or a corporate representative or any ancillary matter (including, without limitation, any requirement for the production or delivery of any instrument or other communication to any particular place or by any particular time or in any particular way) and, in any case in which it considers it appropriate, may accept such verbal or other assurances as it thinks fit as to the right of any person to attend and vote on behalf of any Shareholder at any general meeting. | |||
AMALGAMATIONS, DISCONTINUANCE AND SALES
| 77.1 | Any amalgamation of the Company and another company shall require the approval of (i) the Board by a resolution passed with the approval of a majority of those Directors then in office and eligible to vote on that resolution and (ii) a Resolution passed by a majority of votes cast, in addition to any other sanction required by the Companies Acts in respect of any variation of the rights of any class of Shareholders. | |||
| 77.2 | A discontinuance of the Company out of Bermuda under Section 132G of the Companies Act 1981 of Bermuda shall, for the purposes of that section, require the approval of (i) the Board by a resolution passed with the approval of a majority of those Directors then in office and eligible to vote on that resolution and (ii) a Resolution passed by a majority of votes cast. | |||
| 77.3 | Any sale, lease or exchange by the Company of all or substantially all of its property or assets, including its goodwill and its corporate franchises, will require the approval of (i) the Board by a resolution passed with the approval of a majority of those Directors then in office and eligible to vote on that resolution and (ii) a Resolution passed by a majority of votes cast. |
APPOINTMENT AND REMOVAL OF DIRECTORS
| 78.1 | At the date of adoption of these Bye-Laws on 12 April 2001, the Board consists of the following persons:- |
Name
Joe W. Forehand
Stephan A. James
Jackson L. Wilson, Jr.
| 78.2 | Joe W. Forehand is designated as a class I Director, Stephen A. James is designated as a class II Director and Jackson L. Wilson Jr. is designated as a class III Director for the purposes of these Bye-Laws. There is no distinction in the voting or other powers and authorities of Directors of different classes; the classifications are solely for the purposes of the retirement by rotation provisions set out in Bye-Law 79. All Directors will be designated as either class I, class II or class III Directors. The Board shall from time to time by resolution determine the respective numbers of class I Directors, class II Directors and class III Directors. | |||
| 78.3 | Upon the resignation or termination of office of any Director, if a new Director shall be appointed to the Board he will be designated to fill the vacancy arising and shall, for the purposes of these Bye-Laws, constitute a member of the class of Directors represented by the person that he replaces. | |||
| 79.1 | Each class I Director shall (unless his office is vacated in accordance with these Bye- Laws) serve initially until the conclusion of the annual general meeting of the Company held in the calendar year 2002 and subsequently shall (unless his office is vacated in accordance with these Bye-Laws) serve for three-year terms, each concluding at the third annual general meeting after the class I Directors together were last appointed or re-appointed. | |||
| 79.2 | Each class II Director shall (unless his office is vacated in accordance with these Bye- Laws) serve initially until the conclusion of the annual general meeting of the Company held in the calendar year 2003 and subsequently shall (unless his office is vacated in accordance with these Bye-Laws) serve for three-year terms, each concluding at the third annual general meeting after the class II Directors together were last appointed or re-appointed. | |||
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| 79.3 | Each class III Director shall (unless his office is vacated in accordance with these Bye-Laws) serve initially until the conclusion of the annual general meeting of the Company held in the calendar year 2004 and subsequently shall (unless his office is vacated in accordance with these Bye-Laws) serve for three-year terms, each concluding at the third annual general meeting after the class III Directors were last appointed or re-appointed. | |||
| 79.4 | Any Director retiring at an annual general meeting will be eligible for re-appointment and will retain office until the close of the meeting at which he retires or (if earlier) until a resolution is passed at that meeting not to fill the vacancy or the resolution to re-appoint him is put to a vote at the meeting and is lost. | |||
| 79.5 | If the Company, at the meeting at which a Director (of any class) retires by rotation or otherwise, does not fill the vacancy, the retiring Director shall, if willing to act, be deemed to have been re-appointed unless at the meeting it is resolved not to fill the vacancy or unless a resolution for the reappointment of the Director is put to the meeting and lost. | |||
| 80.1 | No person shall be appointed a Director, unless:- | |||
| 80.1.1 | in the case of an annual or special general meeting, such person is recommended by the Board; or | |||
| 80.1.2 | in the case of an annual general meeting, not less than 120 nor more than 150 days before the date of the Company’s proxy statement released to Shareholders in connection with the prior year’s annual general meeting, notice executed by a Shareholder (not being the person to be proposed) has been received by the Secretary of the Company of the intention to propose such person for appointment, setting forth as to each person whom the Shareholder proposes to nominate for election or re-election as a Director (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class, series and number of shares of the Company which are beneficially owned by such person, (iv) particulars which would, if he were so appointed, be required to be included in the Company’s register of Directors and Officers and (v) all other information relating to such person that is required to be disclosed in solicitations for proxies for the election of Directors pursuant to the Rules and Regulations of the Securities and Exchange Commission under Section 14 of the Securities Exchange Act of 1934 of the United States of America (as amended), together with notice executed by such person of his willingness to serve as a Director if so elected; provided, however, that no Shareholder shall be entitled to propose any person to be appointed, elected or re-elected Director at any special general meeting, | |||
| 80.2 | A Director need not be a Shareholder. Except as otherwise required by the Companies Acts, the appointment of any person proposed as a Director shall be effected by a separate resolution voted on at a general meeting as provided in these Bye-Laws. |
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| 80.3 | All Directors (other than the Directors referred to in Bye-Law 78.2), upon election or appointment (but not on re-appointment), must provide written acceptance of their appointment, in such form as the Board may think fit, by notice in writing to the Registered Office within 30 days of their appointment. | |||
| 81.1 | The Board may determine the number of Directors from time to time, which will be not less than 8 nor more than 15. | |||
| 81.2 | Subject to Bye-Law 79.5, the Directors shall be individuals appointed as follows: | |||
| 81.2.1 | the Company by Resolution at the annual general meeting in each year or at any special general meeting called for the purpose may appoint any eligible person as a Director (but not so as to exceed the maximum number of Directors permitted by these Bye-Laws); | |||
| 81.2.2 | if so authorised by the Company by Resolution at any general meeting, the Board may, by a resolution passed with the approval of a majority of the Directors then in office, appoint any persons as additional Directors (but not so as to exceed the maximum number of Directors permitted by these Bye- Laws); | |||
| 81.2.3 |
so long as there remains in office a sufficient number of Directors to constitute
a quorum of the Board in accordance with Bye-Law 99.1, the Board may, by a
resolution passed with the approval of a majority of the Directors then in
office, appoint any person as a Director to fill any vacancy occurring in the
Board;
and a Director so appointed shall (unless he is removed from office or his office is vacated in accordance with these Bye-Laws) hold office until he is required to retire under the following provisions of this Bye-Law 81. |
|||
| 81.3 | Subject to Bye-Law 78.3, the resolution appointing any Director must designate the Director as a class I, class II or class III Director. | |||
| 81.4 | A Director (other than a Director appointed by the Board prior to the completion by the Company of the initial public offering and listing of its Class A Common Shares, who will hold office until required to resign under Bye-Laws 79.1, 79.2 or 79.3, as relevant) appointed by the Board under Bye-Laws 81.2.2 or 81.2.3 will hold office only until the next following annual general meeting. If not re-appointed at that annual general meeting, the Director will vacate office at the end of that meeting. If re-appointed at that annual general meeting, the Director will subsequently hold office until required to retire by rotation under Bye-Laws 79.1, 79.2 or 79.3 as relevant. 81.5 Directors are not entitled to appoint alternate directors. | |||
| 81.5 | Directors are not entitled to appoint alternate directors. | |||
RESIGNATION AND DISQUALIFICATION OF DIRECTORS
| 82. | The office of a Director shall be vacated: |
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| 82.1 | if he resigns his office, on the date on which notice of his resignation is delivered to the Registered Office or tendered at a meeting of the Board or on such later date as may be specified in such notice; or | |||
| 82.2 | on his being prohibited by law from being a Director; | |||
| 82.3 | on his ceasing to be a Director by virtue of any provision of the Companies Acts; | |||
| 82.4 | if, at a time when the Employee Covered Shares which are subject to Article IV of the Voting Agreement carry the right to cast more than 50 per cent of all votes capable of being cast generally on resolutions of Shareholders, the Partners’ Representatives (as defined in the Voting Agreement, being the representatives of the Shareholders who are party from time to time to the Voting Agreement), having been authorised to do so by the affirmative vote of 66-2/3 per cent of the Employee Covered Shares (which vote shall be conducted pursuant to such procedures as the Partners’ Representatives shall determine, including (without limitation) the record date for that vote) give written notice to the Company that the office of any Director is terminated (such notice having effect upon delivery to the Company); or | |||
| 82.5 | if, at a time when the Employee Covered Shares which are subject to Article IV of the Voting Agreement do not carry the right to cast more than 50 per cent of all votes capable of being cast generally on resolutions of Shareholders, he is requested to resign in writing by not less than three quarters of the other Directors. | |||
| The provisions of section 93 of the Companies Act 1981 of Bermuda will not apply to the Company. |
DIRECTORS’ REMUNERATION AND EXPENSES
| 83. | Each Director (other than a Director who is also an employee of a Group Company) shall be entitled to receive such fees for his services as a Director, if any, as the Board may from time to time determine. Directors who are also employees of a Group Company will not be paid any such fees by the Company in addition to their remuneration as an employee. Each Director shall be paid all expenses properly and reasonably incurred by him in the conduct of the Company’s business or in the discharge of his duties as a Director, including (but without limitation) his reasonable travelling, hotel and incidental expenses in attending and returning from meetings of the Board or any committee of the Board or general meetings. | |||
| 84. | The Board may from time to time determine that, subject to the requirements of the Companies Acts, all or part of any fees or other remuneration payable to any nonemployee Director or other Officer of the Company shall be provided in the form of shares or other securities of the Company or any subsidiary of the Company, or options or rights to acquire such shares or other securities, on such terms as the Board may decide. | |||
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DIRECTORS’ INTERESTS
| 85. | A Director may hold any other office or place of profit with the Company (except that of auditor) in addition to his office of Director for such period and upon such terms as the Board may determine and may be paid such extra remuneration for so doing (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine, in addition to any remuneration or other amounts payable to a Director pursuant to any other Bye-Law. | |||
| 86. | A Director may act by himself or his firm in a professional capacity for the Company (otherwise than as auditor) and he or his firm shall be entitled to remuneration for professional services as if he were not a Director. | |||
| 87.1 | Subject to the Companies Acts, a Director notwithstanding his office (i) may be a party to, or otherwise interested in, any transaction or arrangement with the Company or in which the Company is otherwise interested and (ii) may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, any company or other person promoted by the Company or in which the Company is interested. The Board may also cause the voting power conferred by the shares in any other company or other person held or owned by the Company to be exercised in such manner in all respects as the Board thinks fit, including the exercise of votes in favour of any resolution appointing the Directors or any of them to be directors or officers of such other company or person or voting or providing for the payment of remuneration to any such Directors as the directors or officers of such other company or person. | |||
| 87.2 | A Director who is in any way, whether directly or indirectly, to his knowledge interested in a contract with the Company or any other Group Company shall declare the nature of his interest at the first opportunity at a meeting of the Board at which the question of entering into the contract is first taken into consideration, if he knows his interest then exists, or in any other case at the first meeting of the Board after he knows that he is or has become so interested. | |||
| 87.3 | Subject to the Companies Acts and any further disclosure required thereby, a general notice to the Directors by a Director or other Officer declaring that he is a director or officer of or has an interest in a person and is to be regarded as interested in any transaction or arrangement made with that person shall be a sufficient declaration of interest in relation to any transaction or arrangement so made. | |||
| 87.4 | So long as, where it is necessary, he declares the nature of his interest in accordance with Bye-law 87.2, a Director shall not by reason of his office be accountable to the Company for any benefit which he derives from any office or employment to which these Bye-Laws allow him to be appointed or from any transaction or arrangement in which these Bye-Laws allow him to be interested, and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit. | |||
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POWERS OF THE BOARD
| 88. | Subject to the provisions of the Companies Acts and these Bye-Laws, the Board shall manage the business and affairs of the Company and may exercise all the powers of the Company. No alteration of these Bye-Laws shall invalidate any prior act of the Board which would have been valid if that alteration had not been made. The powers given by this Bye-Law shall not be limited by any special power given to the Board by these Bye-Laws and, except as otherwise expressly provided in these Bye-Laws, a meeting of the Board at which a quorum is present shall be competent to exercise all the powers, authorities and discretions for the time being vested in or exercisable by the Board. So long as the Director acts honestly and in good faith with a view to the best interests of the Company in taking any action, including action that may involve or relate to a change or potential change in the control of the Company, a Director may consider, among other things, both the long-term interests of the Company and its Shareholders and the effects that the Company’s actions may have in the short term or long term upon any one or more of the following matters: |
| (i) | the prospects for potential growth, development, productivity and profitability of the Company; | |||
| (ii) | the employees, including “partner” level employees, of the Company and its subsidiaries; | |||
| (iii) | the retired former partners and “partner” level employees of the Accenture group of businesses (as constituted prior to the adoption of these Bye-Laws); | |||
| (iv) | the customers and creditors of the Company and its subsidiaries; | |||
| (v) | the ability of the Company and its subsidiaries to contribute to the communities in which they do business, and | |||
| (vi) | such other additional factors as a Director may consider appropriate in such circumstances. | |||
| Nothing in this Bye-Law 88 shall create any duty owed by any Director to any person or entity to consider, or afford any particular weight to, any of the foregoing matters or to limit his consideration to the foregoing matters. No such employee, retired former partner of Accenture, former employee, beneficiary, customer, creditor or community or member thereof shall have any rights against any Director under this Bye-Law 88. | ||||
| 89. | The Board may exercise all the powers of the Company to borrow money and to mortgage or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any other person. | |||
| 90. | All cheques, promissory notes, drafts, bills of exchange and other instruments, whether negotiable or transferable or not, and all receipts for money paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as the Board shall from time to time determine. | |||
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| 91. | The Board may (subject to Bye-Law 83) exercise all the powers of the Company to grant or procure the grant or provision of benefits, including pensions, annuities or other allowances, to or for any person, including any Director or former Director, who has held any executive office or employment with, or whose services have directly or indirectly been of benefit to, the Company or any company which is or has been a subsidiary of the Company or otherwise associated with any of them or a predecessor in business of the Company or of any such other company, and to or for any relation or dependant of any such person, and to contribute to any fund and pay premiums for the purchase or provision of any such benefit, or for the insurance of any such person. | |||
| 92. | The Board may from time to time appoint one or more of its body to hold any executive office with the Company for such period and on such terms as the Board may determine and may revoke or terminate any such appointment. Any such revocation or termination shall be without prejudice to any claim for damages that such Director may have against the Company or the Company may have against such Director for any breach of any contract of service between him and the Company which may be involved in such revocation or termination. Any person so appointed shall receive such remuneration, if any (whether by way of salary, commission, participation in profits or otherwise), as the Board may (subject to Bye-Law 83) determine. | |||
DELEGATION OF THE BOARD’S POWERS
| 93. | The Board may by power of attorney or otherwise (including by a duly passed resolution) appoint any person, whether nominated directly or indirectly by the Board, to be the attorney or agent of the Company and may delegate to such person any of the Board’s powers, authorities and discretions (with power to sub-delegate) for such period and subject to such conditions as it may think fit. The Board may revoke or vary any such appointment or delegation, but no person dealing in good faith and without notice of such revocation or variation shall be affected by any such revocation or variation. Any such power of attorney or resolution or other document may contain such provisions for the protection and convenience of persons dealing with any such attorney or agent as the Board may think fit. | |||
| 94. | The Board may entrust to and confer upon any Officer any of its powers, authorities and discretions (with power to sub-delegate) on such terms and conditions with such restrictions as it thinks fit and either collaterally with, or to the exclusion of, its own powers and may from time to time revoke or vary all or any of such powers, but no person dealing in good faith and without notice of such revocation or variation shall be affected by any revocation or variation. | |||
| 95.1 | The Board may delegate any of its powers, authorities and discretions (with power to sub-delegate) to any committee, consisting of such person or persons (whether Directors or not) as it thinks fit. The Board may make any such delegation on such terms and conditions with such restrictions as it thinks fit and either collaterally with, or to the exclusion of, its own powers and may from time to time revoke or vary such delegation, but no person dealing in good faith and without notice of such revocation or variation shall be affected by any revocation or variation. Any committee so formed shall, in the exercise of the powers, authorities and discretions so delegated, conform | |||
| to any regulations which may be imposed on it by the Board. The power to delegate to a committee extends to all the powers, authorities and discretions of the Board generally (including, but without limitation, those conferred by Bye-Law 88) and shall not be limited by the fact that in certain provisions of these Bye-Laws, but not in others, express reference is made to a committee or to particular powers, authorities or discretions being exercised by the Board or by a committee of the Board. | ||||
| 95.2 | The meetings and proceedings of any committee of the Board consisting of two or more members shall be governed by the provisions contained in these Bye-Laws for regulating the meetings and proceedings of the Board so far as they are capable of applying and are not superseded by any regulations imposed by the Board except that, unless otherwise determined by the Board, the quorum necessary for the transaction of business at any committee meeting shall be two members. | |||
PROCEEDINGS OF THE BOARD
| 96. | The Board may meet for the despatch of business, adjourn and otherwise regulate its meetings as it thinks fit. Except where a greater majority is required by these Bye- Laws, questions arising at any meeting shall be determined by a majority of the votes cast. In the case of an equality of votes the motion shall be deemed to be lost and the chairman of the meeting shall not be entitled to a second or casting vote. | |||
| 97. | A meeting of the Board may at any time be summoned by the Chairman or, if there is no Chairman, by the chief executive officer, if he is a Director. The Secretary shall also summon a meeting of the Board on the requisition of any two or more of the Directors for the time being in office. | |||
| 98. | Notice of a meeting of the Board shall be deemed to be duly given to a Director if it is given to him personally or by word of mouth or sent to him by post, facsimile or other electronic means at his last known address or any other address given by him to the Company for this purpose. A Director may waive notice of any meeting either prospectively or retroactively or at the meeting in question. | |||
| 99.1 | The quorum necessary for the transaction of business at any meeting of the Board shall be two Directors or a majority of the Directors then in office, whichever is the higher number, but in determining the majority of the Directors then in office for the purpose of ascertaining a quorum for the transaction of any particular business at a meeting there shall be disregarded any Director who is not permitted to vote on that business. | |||
| 99.2 | A Director shall not vote (or be counted in the quorum at a meeting) in respect of any resolution concerning his own appointment (including fixing or varying its terms), or the termination of his own appointment, as the holder of any office or place of profit with the Company or any other company in which the Company is interested but, where proposals are under consideration concerning the appointment (including fixing or varying its terms), or the termination of the appointment, of two or more Directors to offices or places of profit with the Company or any other company in which the Company is interested, those proposals may be divided and a separate resolution be put in relation to each Director and in that case each of the Directors concerned shall | |||
| be entitled to vote (and be counted in the quorum) in respect of each resolution unless it concerns his own appointment or the termination of his own appointment. | ||||
| 99.3 | Subject to Bye-Law 99.2, a Director who has in accordance with Bye-Law 87.2 disclosed his interest in a contract or arrangement with the Company, or in which the Company is otherwise interested, may vote (and be counted in the quorum at any meeting) in respect of any resolution concerning such contract or arrangement. | |||
| 99.4 | If any question arises at any meeting as to the entitlement of any Director (including the chairman of the meeting) to vote and the question is not resolved by his voluntarily agreeing to abstain from voting, the question shall be referred to the decision of a vote of the other Directors present at the meeting (for which purpose the interested Director shall be counted in the quorum but shall not vote on the matter) and their ruling in relation to the Director concerned shall be final and conclusive except in a case where the nature or extent of the interest of the Director concerned, so far as known to him, has not been fairly disclosed. | |||
| 99.5 | The Resident Representative shall, upon delivering written notice of an address for the purposes of receiving notice to the Registered Office, be entitled to receive notice of and to attend and be heard at and to receive minutes of all meetings of the Board. | |||
| 99.6 | The Company may by Resolution suspend or relax the provisions of this Bye-Law 99 to any extent or ratify any transaction not duly authorised by reason of a contravention of it. | |||
| 100. | So long as at least two Directors remain in office, the continuing Directors may act notwithstanding any vacancy in the Board, but, if less than two Directors remain in office, the sole continuing Director may act only for the purposes of calling a general meeting for such purposes as he thinks fit and of nominating a person or persons for appointment to the Board. | |||
| 101. | The chairman of the Board or, in his absence, any Director holding the office of president shall preside as chairman at every meeting of the Board. If there is no such chairman or president, or if at any meeting the chairman or the president is not present within 5 minutes after the time appointed for holding the meeting or is not willing to act as chairman, the Directors present may choose one of their number to be chairman of the meeting. | |||
| 102. | A resolution in writing signed or approved by all the Directors shall be as valid and effectual as a resolution passed at a meeting of the Board duly called and constituted. Such a resolution may be contained in one document or in several documents in like form each signed or approved by one or more of the Directors. | |||
| 103. | A meeting of the Board may be held by such electronic means as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting. Such a meeting will be deemed to take place where the largest group of those participating in the meeting are physically present together or, if there is no such group, where the chairman of the meeting then is. | |||
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| 104. | All acts done in good faith by the Board or by any committee or by any person acting as a Director or member of a committee or any person authorised by the Board or any committee shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any member of the Board or such committee or person acting as aforesaid or that they or any of them were disqualified or had vacated their office, be as valid as if every such person had been duly appointed and was qualified and had continued to be a Director, member of such committee or person so authorised. |
OFFICERS
| 105.1 | The Company shall have either a chairman and a deputy chairman or a president and vice-president, as the Board may from time to time determine, who shall be Directors and shall be elected by the Board. A person appointed to any such office shall vacate that office if he vacates his office as a Director (otherwise than by retirement at a general meeting of the Company at which he is re-appointed). | |||
| 105.2 | The Company may have such other Officers in addition to the Directors and the Secretary, as the Board may from time to time determine. Without limiting the foregoing, such other Officers may include a chairman and deputy chairman (if a president and vice-president are appointed under Bye-Law 105.1) or a president and one or more vice-presidents (if a chairman and deputy chairman are appointed under Bye-Law 105.1), to the extent that such Officers are not appointed pursuant to Bye- Law 105.1. A person appointed to any such other office need not be a Director and the same person may hold more than one office. | |||
| 105.3 | Any person elected or appointed pursuant to this Bye-Law 105 shall hold office for such period and on such terms as the Board may determine and the Board may revoke or vary any such election or appointment at any time by resolution of a majority of the Directors then in office. Any such revocation or variation shall be without prejudice to any claim for damages that such Officer may have against the Company or the Company may have against such Officer for any breach of any contract of service between him and the Company which may be involved in such revocation or variation. If any such office becomes vacant for any reason, the vacancy may be filled by the Board. | |||
| 105.4 | Except as provided in the Companies Acts or these Bye-Laws, the powers and duties of any Officer elected or appointed pursuant to this Bye-Law 105 shall be such as are determined from time to time by the Board. | |||
MINUTES
| 106.1 | The Board shall cause minutes to be made and books kept for the purpose of recording all the proceedings at meetings of the Board and of any committee of the Board and at general meetings of the Company and of any class of Shareholders of the Company. |
| 106.2 | The minutes of general meetings of the Company and of any class of Shareholders of the Company (but not minutes of meetings of the Board or any committee of it) shall be open to inspection in the manner prescribed by the Companies Acts between 10:00 a.m. and 12:00 noon (or between such other times as the Board from time to time determines) on every working day. |
SECRETARY AND RESIDENT REPRESENTATIVE
| 107. | The Secretary and, if required by the Companies Acts, the Resident Representative shall be appointed by the Board at such remuneration (if any) and on such terms as it may think fit and any Secretary and Resident Representative so appointed may be removed by the Board. The duties of the Secretary and those of the Resident Representative shall be those prescribed by the Companies Acts, together with such other duties as shall from time to time be prescribed by the Board. | |||
| 108. | A provision of the Companies Acts or these Bye-Laws requiring or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as, or in the place of, the Secretary. | |||
THE SEAL
| 109.1 | The Seal shall consist of a circular metal device with the name of the Company around its outer margin and the details of its registration across its centre. The Company may also have for use in any territory outside Bermuda one or more additional Seals, each of which shall be a duplicate of the Seal except, in the case of a Seal for use in sealing documents creating or evidencing securities issued by the Company, for the addition on its face of the word “Securities”. | |||
| 109.2 | The Board shall provide for the custody of every Seal. A Seal shall only be used by authority of the Board or of a committee of the Board. Subject to the Companies Acts and except as provided in Bye-Law 21, any instrument to which a Seal is affixed shall be signed by an Officer or by any person who has been authorised by the Board either generally or specifically to attest to the use of a Seal. | |||
DIVIDENDS AND OTHER PAYMENTS
| 110. | Subject to the Companies Acts, the Board may from time to time declare cash dividends to be paid to the Shareholders, according to their respective rights and interests, and may fix the time for the payment of such dividends. | |||
| 111. | Except insofar as the rights attaching to, or the terms of issue of, any shares otherwise provide: | |||
| 111.1 | all dividends shall be declared and paid according to the amounts paid up on the shares in respect of which the dividend is paid, but no amount paid up on a share in advance of a call may be treated for the purpose of this Bye-Law 111 as paid up on the share; and | |||
| 111.2 | dividends shall be apportioned and paid pro rata according to the amounts paid up on the shares during any portion or portions of the period in respect of which the dividend is paid. | |||
| 112. | The Board may deduct from any dividend or other moneys payable to a Shareholder (either alone or jointly with another) by the Company on or in respect of any shares all sums of money (if any) due from him (either alone or jointly with another) to the Company on account of calls or otherwise in respect of shares of the Company. | |||
| 113. | No dividend or other moneys payable by the Company on or in respect of any share shall bear interest against the Company, unless the terms of issue of that share otherwise expressly provide. | |||
| 114.1 | Any dividend or other sum payable in cash to the holder of a share may be paid by cheque, warrant or other means approved by the Board and, in the case of a cheque or warrant, may be sent through the post addressed to the holder at his address in the Register (or, in the case of joint holders, addressed to the holder whose name stands first in the Register in respect of the share at his registered address as appearing in the Register) or addressed to such person at such address as the holder or joint holders may in writing direct. | |||
| 114.2 | Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of one or more of the holders and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. | |||
| 114.3 | In addition, any dividend or other sum payable to the holder of a share may be paid by a bank or other funds transfer system or by such other means as may be approved by the Board and to or through such person as the holder or joint holders may direct in writing, and the Company shall have no responsibility for any sums lost or delayed in the course of any such transfer or when it has acted on any such direction. | |||
| 114.4 | Any one of two or more joint holders may give an effectual receipt for any dividend or other moneys payable or property distributable in respect of the shares held by such joint holders. | |||
| 115.1 | If (i) a payment for a dividend or other sum payable in respect of a share sent by the Company to the person entitled to it in accordance with these Bye-Laws is left uncashed or is returned to the Company and, after reasonable enquiries, the Company is unable to establish any new address or, with respect to a payment to be made by a funds transfer system, a new account, for that person or (ii) such a payment is left uncashed or returned to the Company on two consecutive occasions, the Company shall not be obliged to send any dividends or other sums payable in respect of that share to that person until he notifies the Company of an address or, where the payment is to be made by a funds transfer system, details of the account, to be used for the purpose. | |||
| 115.2 | Any dividend or other distribution in respect of a share which is unclaimed for a period of 6 years from the date on which it became payable shall be forfeited and shall revert to the Company. The payment by the Company of any unclaimed dividend or other distribution payable on or in respect of a share into a separate account shall not constitute the Company a trustee in respect of it. | |||
| 116. | The Board may direct payment or satisfaction of any dividend or other distribution wholly or in part by the distribution of specific assets and, in particular, of fully or partly paid up shares or debentures of any other company; and, where any difficulty arises in regard to such dividend or distribution, the Board may settle it as it thinks expedient, and in particular may authorise any person to sell and transfer any fractions, or may ignore fractions altogether, and may fix the value for distribution or dividend purposes of any such specific assets, and may determine that cash payments shall be made to any Shareholders upon the footing of the values so fixed in order to secure equality of distribution, and may vest any such specific assets in trustees as may seem expedient to the Board. | |||
RESERVES
| 117. | The Board may, before declaring any dividend or other distribution, set aside such sums as it thinks proper as reserves which shall, at the discretion of the Board, be applicable for any purpose of the Company and pending such application may, also at such discretion, either be employed in the business of the Company or be invested in such manner as the Board may from time to time think fit. The Board may also without placing the same to reserves carry forward any sums which it may think it prudent not to distribute. |
CAPITALISATION OF RESERVES
| 118.1 | The Board may, at any time and from time to time, resolve that it is desirable to capitalise all or any part of any amount for the time being standing to the credit of any reserve or fund which is available for distribution or to the credit of any share premium account and accordingly that such amount be set free for distribution amongst the Shareholders or any class of Shareholders who would be entitled to it if distributed by way of dividend and in the same proportions, on the footing that the same is not paid in cash but is applied either in or towards paying up amounts for the time being unpaid on any shares in the Company held by such Shareholders respectively or in payment up in full of unissued shares, debentures or other obligations of the Company, to be allotted, distributed and credited as fully-paid amongst such Shareholders, or partly in one way and partly in the other; provided that, for the purpose of this Bye-Law, a share premium account may be applied only in paying up of unissued shares to be issued to such Shareholders credited as fully-paid and provided further than any sum standing to the credit of a share premium account may only be applied in crediting as fully-paid shares of the same class as that from which the relevant share premium was derived. | |||
| 118.2 | Where any difficulty arises in regard to any distribution under this Bye-Law 118, the Board may settle the same as it thinks expedient and, in particular, may make such provision as it thinks fit in the case of securities becoming distributable in fractions | |||
| (including provision for the whole or part of the benefit of fractional entitlements to accrue to the Company) and may authorise any person to sell and transfer any fractions or may resolve that the distribution should be as nearly as may be practicable in the correct proportion but not exactly so or may ignore fractions altogether, and may determine that cash payments should be made to any Shareholders in lieu of any fractional entitlements, as may seem expedient to the Board. The Board may appoint any person to sign on behalf of the persons entitled to participate in the distribution any contract necessary or desirable for giving effect to it, and such appointment shall be effective and binding upon the Shareholders. | ||||
| 119.1 | Whenever the Board decides to make a capitalisation issue of shares under Bye-Law 118 it may, subject to the rights attached to any particular class of shares, also decide to offer any Shareholder the right to elect to forego his entitlement to receive additional shares under such capitalisation issue (or such part of his entitlement as the Board may determine) and to receive instead a payment in cash (a “cash option”) in accordance with the following provisions of this Bye-Law 119. | |||
| 119.2 | The amount payable under and all other terms of the cash option shall be decided by the Board, which may fix a limit on the extent to which an election for the cash option shall be effective (whether by reference to a part of any Shareholder’s total entitlement to additional shares or to the total number of additional shares in respect of which all such elections may be made on any occasion). | |||
| 119.3 | The Board shall give notice to the Shareholders of their rights of election in respect of the cash option and shall specify the procedure to be followed in order to make an election. | |||
| 119.4 | Payments to those Shareholders who elect to receive cash instead of their entitlement to further shares under such a capitalisation issue (“cash electors”) may be made either (i) out of profits or reserves of the Company available for the payment of dividends or (ii) out of the net proceeds of sale of the shares to which the cash electors would have been entitled under such capitalisation issue but for their election to receive cash, or partly in one way and partly in the other, as the Board determines. To the extent that the Board determines that payment is to be made as in (ii) above, the Board shall be entitled to sell the additional shares to which the cash electors would have been entitled, to appoint some person to transfer those shares to the purchaser (who shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale). The net proceeds of sale shall be applied in or towards payment of the amounts due to cash electors in respect of their cash entitlement and, to the extent that they exceed that entitlement, may be retained by the Company for its benefit. | |||
| 119.5 | The Board may decide that Shareholders resident in territories where, in the opinion of the Board, compliance with local laws or regulations would be unduly onerous if those Shareholders were to receive additional shares, shall be deemed to have exercised rights of election to receive cash. | |||
| 119.6 | The Board may determine that any sums due in respect of a cash option to all or some of those Shareholders whose registered addresses are in a particular territory shall be paid in a currency or currencies other than US dollars and, if it does so, the Board may fix or otherwise determine the basis of conversion into the other currency or currencies and payment of that converted amount in that currency shall be in full satisfaction of the entitlement to such sum. | |||
| 120.1 | The Board may, subject to the rights attached to any particular class of shares, offer any Shareholder the right to elect to receive further shares, credited as fully paid, instead of cash in respect of all (or some part) of any dividend (a “scrip dividend”) in accordance with the following provisions of this Bye-Law 120. | |||
| 120.2 | The basis of allotment of the further shares shall be decided by the Board so that, as nearly as may be considered convenient, the value of the further shares, including any fractional entitlement, is equal to the amount of the cash dividend which would otherwise have been paid. For these purposes the value of the further shares shall be calculated in such manner as may be determined by the Board, but the value shall not in any event be less than the par value of a share. | |||
| 120.3 | The Board shall give notice to the Shareholders of their rights of election in respect of the scrip dividend and shall specify the procedure to be followed in order to make an election. | |||
| 120.4 | The dividend or that part of it in respect of which an election for the scrip dividend is made shall not be paid and instead further shares shall be allotted in accordance with elections duly made and the Board shall capitalise a sum equal to not less than the aggregate par value of, nor more than the aggregate “value” (as determined under Bye-Law 120.2) of, the shares to be allotted, as the Board may determine out of such sums available for the purpose as the Board may consider appropriate. | |||
| 120.5 | The Board may decide that the right to elect for any scrip dividend shall not be made available to Shareholders resident in any territory where, in the opinion of the Board, compliance by the Company with local laws or regulations would be unduly onerous. | |||
| 120.6 | The Board may do all acts and things considered necessary or expedient to give effect to the provisions of a scrip dividend election and the issue of any shares in accordance with the provisions of this Bye-Law 120, and may make such provisions as it thinks fit for the case of shares becoming distributable in fractions (including provisions under which, in whole or in part, the benefit of fractional entitlements accrues to the Company rather than to the Shareholders concerned). | |||
| 120.7 | The Board may from time to time establish or vary a procedure for election mandates, under which a holder of shares may, in respect of any future dividends for which a right of election pursuant to this Bye-Law 120 is offered, elect to receive further shares in lieu of such dividend on the terms of such mandate. | |||
| Bye-Laws of Accenture Ltd | Page 50 of 57 |
RECORD DATES
| 121.1 | Notwithstanding any other provision of these Bye-Laws, the Company by Resolution or the Board may fix any date as the record date for any dividend, distribution, allotment or issue and for the purpose of identifying the persons entitled to receive notices of general meetings of the Company or of any class of Shareholders or other documents. Any such record date may be on or at any time before or after any date on which such dividend, distribution, allotment or issue is declared, paid or made or such notice or other document is dispatched. | |||
| 121.2 | In relation to any general meeting of the Company or of any class of Shareholders or to any adjourned meeting of which notice is given, the Board may specify in the notice of meeting or adjourned meeting or in any document sent to Shareholders by or on behalf of the Board in relation to the meeting, a time and date (a “record date”) which is not more than 60 days before the date fixed for the meeting (the “meeting date”) and, notwithstanding any provisions in these Bye-Laws to the contrary, in any such case: | |||
121.2.1
each person entered in the Register at the record date as a Shareholder,
or a Shareholder of the relevant class, (a “record date holder”) shall be
entitled to attend and to vote at the relevant meeting and to exercise all
of the rights or privileges of a Shareholder, or a Shareholder of the
relevant class, in relation to that meeting in respect of the shares, or the
shares of the relevant class, registered in his name at the record date;
and
121.2.2
accordingly, a holder of relevant shares at the meeting date shall not be
entitled to attend or to vote at the relevant meeting, or to exercise any
of the rights or privileges of a Shareholder, or a Shareholder of the
relevant class, in respect of the relevant shares at that meeting.
ACCOUNTING RECORDS
| 122. | The Board shall cause accounting records of the Company to be kept in accordance with the requirements of the Companies Acts. | |||
| 123. | The records of account shall be kept at the Registered Office or at such other place or places as the Board thinks fit; provided that, if the records of account are kept at some place outside Bermuda, there shall be kept at an office of the Company in Bermuda such records as are required by the Companies Acts to be so kept. The records of account shall at all times be open to inspection by the Directors and, to the extent prescribed by the Companies Acts, by the Resident Representative. No Shareholder (other than an Officer) shall have any right to inspect any accounting record or book or document of the Company except as conferred by law or authorised by the Board or by Resolution. | |||
| 124. | The Board shall procure that financial statements of the Company are prepared and audited in respect of each year or other period from time to time fixed by the Board and that those financial statements are made available to Shareholders and laid before | |||
| Bye-Laws of Accenture Ltd | Page 51 of 57 |
| the Company in general meeting in accordance with the requirements of the Companies Acts. |
AUDITORS
| 125 | Auditors shall be appointed and their duties regulated in accordance with the Companies Acts, any other applicable law and such requirements not inconsistent with the Companies Acts as the Board may from time to time determine. |
UNTRACED SHAREHOLDERS
| 126.1 | The Company shall be entitled to sell at the best price reasonably obtainable at the time of sale the shares of a Shareholder or the shares to which a person is entitled by transmission if and provided that: |
| 126.1.1 | during a period of 6 years no dividend in respect of those shares has been claimed and at least 3 cash dividends have become payable on the shares in question; | |||
| 126.1.2 | on or after expiry of that period of 6 years the Company has inserted an advertisement in a newspaper circulating in the area of the last-registered address at which service of notices upon the Shareholder or person entitled by transmission may be effected in accordance with these Bye-Laws and in a national newspaper published in the relevant country, giving notice of its intention to sell such shares; | |||
| 126.1.3 | during that period of 6 years and the period of 3 months following the publication of such advertisement the Company has not received any communication from such Shareholder or person entitled by transmission; and | |||
| 126.1.4 | if so required by the rules of any securities exchange upon which the shares in question are listed for the time being, notice has been given to that exchange of the Company’s intention to make such sale. | |||
| 126.2 | The Company’s power of sale shall extend to any share which, on or before the date or first date on which any such advertisement appears, is issued in right of a share to which Bye-Law 126.1 applies. | |||
| 126.3 | To give effect to any such sale the Board may authorise some person to transfer the shares to the purchaser who shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale. The net proceeds of sale shall belong to the Company which shall be obliged to account to the former Shareholder or person entitled by transmission for an amount equal to such proceeds and shall enter the name of such former Shareholder or person entitled by transmission in the books of the Company as a creditor for such amount. No trust shall be created in respect of the debt, no interest shall be payable in respect of the same and the Company shall not be required to account for any money earned on the net proceeds, which may be | |||
| Bye-Laws of Accenture Ltd | Page 52 of 57 |
| employed in the business of the Company or invested in such investments as the Board may from time to time think fit. |
SERVICE OF NOTICES AND OTHER DOCUMENTS
| 127.1 | Any notice or other document (including a share certificate) may be served on or delivered to any Shareholder by the Company either personally or by sending it through the post (by air mail where applicable) in a pre-paid letter addressed to such Shareholder at his address as appearing in the Register or by delivering it to or leaving it at such registered address. Any notice may also be served on any Shareholder by the Company by sending it to him by electronic means to such addressee (including any appropriate identification name or number) as he may from time to time notify to the Company for this purpose or as the Companies Acts may permit. | |||
| 127.2 | Any notice or other document which is sent by post (or air mail) shall be deemed to have been served or delivered on the second day after it was put in the post and, in proving such service or delivery, it shall be sufficient to prove that the notice or document was properly addressed, stamped and put in the post. Any notice or other document not sent by post but left at a registered address shall be deemed to have been served or delivered on the day it was so left. Any notice sent by electronic means during normal business hours on any business day shall be deemed to have been served on the day on which it is sent and any notice so sent at any other time shall be deemed to have been served on the next day which is a normal business day (normal business hours and business days being ascertained for this purpose by reference to such hours and days in the place or territory to which the notice is so sent). | |||
| 128. | If at any time, by reason of the suspension or curtailment of postal services within Bermuda or any other territory, the Company is unable effectively to convene a general meeting by notices sent through the post, a general meeting may be convened by a notice advertised in at least one national newspaper published in the territory concerned and such notice shall be deemed to have been duly served on each person entitled to receive it in that territory on the day, or on the first day, on which the advertisement appears. In any such case the Company shall send confirmatory copies of the notice by post if at least five clear days before the meeting the posting of notices to addresses throughout that territory again becomes practicable. | |||
| 129. | In the case of joint holders of a share, service or delivery of any notice or other document on or to one of the joint holders shall for all purposes be deemed as sufficient service on or delivery to all the joint holders. | |||
| 130. | In the case of a person entitled by transmission to a share, any notice or other document shall be served on or delivered to him as if he were the holder of that share and his address noted in the Register were his registered address. In any other case, any notice or other document delivered, sent or given to a Shareholder in any manner permitted by these Bye-Laws shall, notwithstanding that the Shareholder is then dead or bankrupt or that any other event has occurred, and whether or not the Company has notice of the death or bankruptcy or other event, be deemed to have been duly served | |||
| Bye-Laws of Accenture Ltd | Page 53 of 57 |
| or delivered in respect of any share registered in the name of such Shareholder as sole or joint holder. | ||||
| 131. | A Shareholder shall not be entitled to receive any communication from the Company if two consecutive communications addressed to him, and properly served under these Bye-Laws, have been returned to the Company undelivered, but he shall again become entitled to receive communications following written notice from him to the Company of a new or corrected registered address. For the purposes of this Bye- Law, references to a communication include (without limitation) notices of general meetings and any cheque or other instrument of payment or attempted payment by a funds transfer system; but nothing in this Bye-Law shall entitle the Company to cease sending any cheques, warrants or orders or otherwise to cease making any payments for dividends or other monies payable in respect of shares, unless it is so entitled under Bye-Law 115.1. | |||
DESTRUCTION OF DOCUMENTS
| 132.1 | The Board may authorise or arrange the destruction of documents held by the Company as follows: |
| 132.1.1 | at any time after the expiration of six years from the date of registration, all instruments of transfer of shares and all other documents transferring or purporting to transfer shares or representing or purporting to represent the right to be registered as the holder of shares on the faith of which entries have been made in the Register; | |||
| 132.1.2 | at any time after the expiration of one year from the date of cancellation, all registered share certificates which have been cancelled; | |||
| 132.1.3 | at any time after the expiration of two years from the date of recording them, all dividend mandates and notifications of change of address; | |||
| 132.1.4 | at any time after the expiration of one year from the date of actual payment, all paid dividend warrants and cheques | |||
| 132.1.5 | at any time after the expiration of one year from the general meeting at which it last could be used, any form of proxy. | |||
| 132.2 | It shall conclusively be presumed in favour of the Company that: |
132.2.1
every entry in the register purporting to have been made on the basis of
an instrument of transfer or other document so destroyed was duly and
properly made;
132.2.2
every instrument of transfer so destroyed was a valid and effective
instrument duly and properly registered;
| 132.2.3 | every share certificate so destroyed was a valid certificate duly and properly cancelled; | |||
| 132.2.4 | every other document mentioned in Bye-Law 132.1 above so destroyed was a valid and effective document in accordance with the particulars of it recorded in the books and records of the Company; and | |||
| 132.2.5 | every paid dividend warrant and cheque so destroyed was duly paid. | |||
| 132.3 | The provisions of Bye-Law 132.2 shall apply only to the destruction of a document in good faith and without notice of any claim (regardless of the parties to it) to which the document might be relevant. | |||
| 132.4 | Nothing in this Bye-Law 132 shall be construed as imposing on the Company or the Board any liability in respect of the destruction of any document earlier than as stated in Bye-Law 132.1 above or in any other circumstances in which liability would not attach to the Company or the Board in the absence of this Bye-Law 132. | |||
| 132.5 | References in this Bye-Law 132 to the destruction of any document include references to its disposal in any manner. | |||
WINDING UP
| 133. | If the Company is wound up, the liquidator may, with the sanction of a Resolution and any other sanction required by the Companies Acts: |
| 133.1 | divide among the Shareholders in cash or in kind the whole or any part of the assets of the Company (whether they consist of property of the same kind or not) and for such purposes set such value as he deems fair on any property to be so divided and determine how such division shall be carried out as between the Shareholders or different classes of Shareholders; and | |||
| 133.2 | vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as the liquidator, with the like sanction, thinks fit, but so that no Shareholder shall be compelled to accept any shares or other assets upon which there is any liability. | |||
EXEMPTION AND INDEMNIFICATION OF OFFICERS
| 134.1 | Subject always to Bye-Law 134.5, no Officer shall be liable for the acts, receipts, neglects or defaults of any other Officer nor, so long as he has acted honestly and in good faith with a view to the best interests of the Company, shall any Officer be liable in respect of any negligence, default or breach of duty on his own part in relation to the Company or any subsidiary of the Company, or for any loss, misfortune or damage which may happen, in or arising out of the actual or purported execution or discharge of his duties or the exercise or purported exercise of his powers or otherwise in relation to or in connection with his duties, powers or office. |
| 134.2 | Subject always to Bye-Law 134.5, every Officer shall be indemnified out of the funds of the Company against all liabilities, losses, damages or expenses (including but not limited to liabilities under contract, tort and statute or any applicable foreign law or regulation and all legal and other costs and expenses properly payable) arising out of the actual or purported execution or discharge of his duties or the exercise or purported exercise of his powers or otherwise in relation to or in connection with his duties, powers or office (including but not limited to liabilities attaching to him and losses arising by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the Company or any subsidiary of the Company). | |||
| 134.3 | The Board shall have power to purchase and maintain insurances for the benefit of any persons who are or were at any time Officers or employees of the Company, or of any other company which is its holding company or of any other company which is a subsidiary of the Company or such holding company or in which the Company or such holding company has any direct or indirect interest, including (without limitation) insurance against any liability incurred by such persons in respect of any act or omission in the actual or purported performance of their duties or powers or offices in relation to the Company or such other company. | |||
| 134.4 | In this Bye-Law 134, (i) the term “Officer” includes, in addition to the persons specified in the definition of that term in Bye-Law 1, the Resident Representative, a member of a committee constituted under Bye-Law 95 and any person acting as an Officer or committee member in the reasonable belief that he has been so appointed or elected, notwithstanding any defect in such appointment or election, and (ii) where the context so admits, references to an Officer include the estate and personal representatives of a deceased Officer or any such other person. | |||
| 134.5 | The provisions for exemption from liability and indemnity contained in this Bye-Law shall have effect to the fullest extent permitted by law, but shall not extend to any matter which would render any of them void pursuant to the Companies Acts. | |||
| 135.1 | To the extent that any person is entitled to claim an indemnity pursuant to these Bye- Laws in respect of an amount paid or discharged by him, the relevant indemnity shall take effect as an obligation of the Company to reimburse the person making such payment (including advance payments of fees or other costs) or effecting such discharge. | |||
| 135.2 | The rights to indemnification and reimbursement of expenses provided by these Bye- Laws are in addition to any other rights to which a person may be entitled. | |||
ALTERATION OF BYE-LAWS
| 136.1 | These Bye-Laws may be revoked or amended only by the Board, which may from time to time revoke or amend them in any way by a resolution of the Board passed by a majority of the Directors then in office and eligible to vote on that resolution, but no such revocation or amendment shall be operative unless and until it is approved at a subsequent general meeting of the Company by a Resolution approved by (subject to Bye-Law 136.2) majority vote of the Shareholders. |
| 136.2 | Unless the Board has, by a resolution passed by a majority of the Directors then in office and eligible to vote on that resolution, approved a revocation or amendment of Bye-Laws 77, 78, 79, 80, 81, 82, or this Bye-Law 136 the revocation or amendment will not be effective unless approved by a Resolution in favour of which Shareholders holding not less than 80 per cent of the issued shares of the Company carrying the right to vote at general meetings at the relevant time have voted. |
| Bye-Laws of Accenture Ltd | Page 57 of 57 |
Exhibit 9.1
VOTING AGREEMENT
AMONG
ACCENTURE LTD
and
THE COVERED PERSONS SIGNATORY HERETO
Amended and Restated as of February 3, 2005
TABLE OF CONTENTS
|
ARTICLE I DEFINITIONS AND OTHER MATTERS
|
1 | |||
|
Section 1.1. Definitions
|
1 | |||
|
Section 1.2. Gender
|
6 | |||
|
|
||||
|
ARTICLE II LIMITATIONS ON TRANSFER OF SHARES
|
6 | |||
|
Section 2.1. [RESERVED]
|
6 | |||
|
Section 2.2. [RESERVED]
|
6 | |||
|
Section 2.3. [RESERVED]
|
6 | |||
|
Section 2.4. [RESERVED]
|
6 | |||
|
Section 2.5. [RESERVED]
|
6 | |||
|
|
||||
|
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PARTIES
|
6 | |||
|
|
||||
|
ARTICLE IV VOTING AGREEMENT
|
8 | |||
|
|
||||
|
Section 4.1. [RESERVED]
|
8 | |||
|
Section 4.2. [RESERVED]
|
8 | |||
|
Section 4.3. [RESERVED]
|
8 | |||
|
Section 4.4. Partners Representatives
|
8 | |||
|
|
||||
|
ARTICLE V OTHER AGREEMENTS OF THE PARTIES
|
9 | |||
|
|
||||
|
Section 5.1. [RESERVED]
|
9 | |||
|
Section 5.2. Redemption and Transfer of Class X Common Shares
|
9 | |||
|
Section 5.3. Indemnification and Expenses
|
9 | |||
|
Section 5.4. Filing of Schedule 13D or 13G
|
10 | |||
|
Section 5.5. Adjustment upon Changes in Capitalization; Adjustments upon Changes of Control; Representatives, Successors and Assigns
|
11 | |||
|
Section 5.6. Further Assurances
|
12 | |||
|
|
||||
|
ARTICLE VI MISCELLANEOUS
|
12 | |||
|
|
||||
|
Section 6.1. Term of the Agreement; Termination of Certain Provisions
|
12 | |||
|
Section 6.2. Amendments
|
13 | |||
|
Section 6.3. Waivers
|
14 | |||
|
Section 6.4. GOVERNING LAW
|
15 | |||
|
Section 6.5. Resolution of Disputes
|
15 | |||
|
Section 6.6. Relationship of Parties
|
16 | |||
|
Section 6.7. Notices
|
17 | |||
|
Section 6.8. Severability
|
18 | |||
|
Section 6.9. Right to Determine Tender Confidentially
|
18 |
|
Section 6.10. No Third-Party Rights
|
18 | |||
|
Section 6.11. Section Headings
|
18 | |||
|
Section 6.12. Execution in Counterparts
|
18 | |||
|
|
||||
|
Appendix A – Covered Persons
|
This Voting Agreement, dated as of April 18, 2001 1 (as amended, supplemented, waived or otherwise modified from time to time in accordance with its terms, this “Agreement”), among Accenture Ltd, an exempted company limited by shares organized under the laws of Bermuda (registered number EC30090) (“Accenture Ltd”), and the Covered Persons (hereinafter defined).
WITNESSETH:
WHEREAS, the Covered Persons may in the future become beneficial owners of Class A Common Shares of Accenture Ltd (the “Class A Common Shares”) and/or Class X Common Shares of Accenture Ltd (the “Class X Common Shares” and, together with the Class A Common Shares, the “Common Shares”).
WHEREAS, the Covered Persons desire to address herein certain relationships among themselves with respect to the voting and disposition of their Common Shares and various other matters and desire to give to the Partners Representatives (hereinafter defined) the power to enforce their agreements with respect thereto on their behalf.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements, covenants and provisions herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND OTHER MATTERS
Section 1.1. Definitions . The following words and phrases as used herein shall have the following meanings, except as otherwise expressly provided or unless the context otherwise requires:
(a) “Accenture Canada Exchange co Exchangeable Shares” shall mean the exchangeable shares issued to the Company’s Canadian Partners by an indirect Canadian subsidiary of Accenture Ltd which exchangeable shares are exchangeable from time to time for Class A Common Shares.
(b) “Accenture Ltd” shall have the meaning ascribed to such term in the preamble hereto.
(c) “Accenture SCA” shall mean Accenture SCA, a Luxembourg société en commandite par actions .
(d) “Accenture SCA Common Shares” shall mean Class I Common Shares, par value 1.25 euro per share, of Accenture SCA.
| 1 | This Voting Agreement is amended and restated as of February 3, 2005. |
1
(e) This “Agreement” shall have the meaning ascribed to such term in the preamble hereto.
(f) “Base Eligible Sales” shall have the meaning ascribed to such term in Section 2.2 hereof.
(g) A “beneficial owner” of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares: (i) voting power, which includes the power to vote, or to direct the voting of, such security and/or (ii) investment power, which includes the power to dispose, or to direct the disposition of, such security, but for purposes of this Agreement a person shall not be deemed a beneficial owner of Common Shares (A) solely by virtue of the application of Exchange Act Rule 13d-3(d) or Exchange Act Rule 13d-5 as in effect on the date hereof, (B) solely by virtue of the possession of the legal right to vote securities under applicable law (such as by proxy, power of attorney or appointment as corporate representative) or (C) held of record by a “private foundation” subject to the requirements of Section 509 of the Code (or equivalent in other jurisdictions as determined from time to time by the Partners Representatives). “Beneficially own” and “beneficial ownership” shall have correlative meanings. For purposes of the determination of beneficial ownership only, the provisions of Article IV hereof shall not be deemed to transfer the voting power with respect to any Common Shares from any person that would otherwise be the beneficial owner of such Common Shares and the provisions of Article II hereof shall not be deemed to transfer the investment power with respect to any Common Shares.
(h) “Board of Directors” shall mean the Board of Directors of Accenture Ltd.
(i) “Class A Common Shares” sha ll have the meaning ascribed to such term in the recitals hereto.
(j) “Class X Common Shares” shall have the meaning ascribed to such term in the recitals hereto.
(k) “Code” shall mean the United States Internal Revenue Code of 1986, as amended from time to time, and the applicable rulings and regulations thereunder.
(l) “Common Shares” shall have the meaning ascribed to such term in the recitals hereto.
(m) “Company” shall mean Accenture Ltd, together with its Subsidiaries from time to time.
(n) “Continuing Provisions” shall have the meaning ascribed to such term in Section 6.1(b) hereof.
2
(o) “Covered Persons” shall mean those persons, other than Accenture Ltd, who are from time to time parties to this Agreement and whose names are, or are required to be, listed on Appendix A hereto, in each case in accordance with the terms hereof.
(p) A Covered Person’s “Covered Shares” shall mean (1) any Class X Common Shares beneficially owned by such Covered Person at the time in question, (2) any Class A Common Shares beneficially owned by such Covered Person at the time in question that were also beneficially owned by such Covered Person as of or prior to the IPO Date and (3) any Class A Common Shares not falling within the preceding clause (2) that are acquired from the Company (including, without limitation, Class A Common Shares acquired from the Company in connection with the redemption or exchange of Accenture SCA Common Shares or Accenture Canada Exchangeco Exchangeable Shares) or, whether or not acquired from the Company, in order to comply with a written requirement of the Company (which may be a written policy), by such Covered Person while an employee of the Company, a Partner of the Company or in connection with becoming a Partner of the Company, and beneficially owned by such Covered Person at the time in question but, shall not include (i) unless such Common Shares are acquired in order to comply with a written requirement of the Company, Common Shares beneficially owned as a result of (A) an acquisition, directly or indirectly, from the Company in an underwritten public offering or (B) conversion of securities convertible into Common Shares, where beneficial ownership of the convertible securities was acquired in a transaction described in clause (A) above, (ii) any other Common Shares excluded from the definition of Covered Shares by action of the Partners Representatives prior to the IPO Date or (iii) any other Common Shares acquired under a deferred compensation or employee benefit plan and excluded from the definition of Covered Shares by action of the Partners Representatives after the IPO Date. “Covered Shares” shall also include any Accenture Canada Exchangeco Exchangeable Shares beneficially owned by a Covered Person. “Covered Shares” shall also include Class A Common Shares acquired pursuant to Section 2.4 hereof. “Covered Shares” shall also include the securities that are defined to be “Covered Shares” in Section 5.5 hereof. A Covered Person “acquires” Covered Shares when such Covered Person first acquires beneficial ownership over such Covered Shares.
(q) The term “disabled” shall mean “disabled” as defined (i) in any employment agreement then in effect between the employee and the Company, or (ii) if not defined therein, or if there shall be no such agreement, as defined in the Company’s long-term disability plan as in effect from time to time, or (iii) if there shall be no plan, the inability of an employee to perform in all material respects his duties and responsibilities to the Company for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty- four (24) consecutive month period by reason of a physical or mental incapacity. Any question as to the existence of a disability as to which the employee and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the employee and the Company. If the employee and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determinations in writing. The determination of disability made in writing to
3
the Company and the employee shall be final and conclusive for all purposes of this Agreement.
(r) “Disabled Employee” shall have the meaning ascribed to such term in Section 2.2 hereof.
(s) An “employee” shall include, without limitation, the owners and employees of partner personal service companies in certain countries with which the Company has personal service contracts (in each case as agreed by the Partners Representatives), and any other similarly situated person designated as an “employee” by the Partners Representatives.
(t) “Employee Covered Person” shall mean a Covered Person that is an employee of the Company at the time in question, provided that if the Company has received notice that any Covered Person intends to terminate such Covered Person’s employment with the Company (except in the case of notice with respect to retirement or disability), such Covered Person shall be deemed not to be an Employee Covered Person.
(u) “Employee Covered Shares” shall have the meaning ascribed to such term in Section 4.1 hereof.
(v) “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended to date and as further amended from time to time.
(w) A reference to an “Exchange Act Rule” shall mean such rule or regulation of the United States Securities and Exchange Commission under the Exchange Act, as in effect from time to time or as replaced by a successor rule thereto.
(x) “Future Restrictions” shall have the meaning ascribed to such term in Section 2.3 hereof.
(y) “IPO Date” shall mean the closing date of the initial public offering of the Class A Common Shares.
(z) “Non-Competition Agreement” shall mean, collectively, any Non- Competition Agreement, dated as of the date hereof, among the Company and the partners from time to time party thereto.
(aa) “Partner” shall have the meaning ascribed to such term in the Partner Matters Agreement.
(bb) “Partner Matters Agreement” shall mean the Partner Matters Agreement, dated as of the date hereof, among Accenture Ltd and the partners from time to time party thereto.
4
(cc) “Partners Representatives” shall have the meaning ascribed to such term in Section 4.4 hereof.
(dd) “Permitted Basket Transaction” shall mean the purchase or sale of, or the establishment of a long or short position in, a basket or index of securities (or of a derivative financial instrument with respect to a basket or index of securities) that includes securities of the Company, in each case if such purchase, sale or establishment is permitted under the Company’s policy on hedging with respect to securities of the Company and other relevant policies, including insider trading policies, as announced from time to time.
(ee) A “person” shall include, as applicable, any individual, estate, trust, corporation, partnership, limited liability company, unlimited liability company, foundation, association or other entity.
(ff) “Preliminary Vote” shall have the meaning ascribed to such term in Section 4.1 hereof.
(gg) “Restricted Person” shall mean any person that is not (i) an Employee Covered Person or (ii) a director, officer or employee of the Company acting in such person’s capacity as a director, officer or employee.
(hh) “Retired Employee” shall have the meaning ascribed to such term in Section 2.2 hereof.
(ii) “Sole Beneficial Owner” shall mean a person who is the beneficial owner of Covered Shares, who does not share beneficial ownership of such Covered Shares with any other person (other than pursuant to this Agreement, the Non-Competition Agreement or applicable community property laws) and who is the only person (other than pursuant to applicable community property laws) with a direct economic interest in the Covered Shares. An economic interest of the Company (or of any other person with respect to which the Company has expressly agreed to in writing) as pledgee shall be disregarded for this purpose. A Covered Person that holds Covered Shares indirectly through a wholly-owned personal holding company shall be considered the “Sole Beneficial Owner” of such Covered Shares, provided that such personal holding company is a Covered Person hereunder.
(jj) “Subsidiary” shall mean any person in which Accenture Ltd owns, directly or indirectly, at least a majority of the equity, economic or voting interest.
(kk) “Transfer” shall mean any sale, transfer, pledge, hypothecation or other disposition, whether direct or indirect, whether or not for value, and shall include any disposition of the economic or other risks of ownership of Covered Shares, including short sales of securities of the Company, option transactions (whether physical or cash settled) with respect to securities of the Company, use of equity or other derivative financial instruments relating to securities of the Company and other hedging
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arrangements with respect to securities of the Company, in each such case other than Permitted Basket Transactions.
(ll) “Transfer Restrictions” shall have the meaning ascribed to such term in Section 2.1 hereof.
(mm) “vote” shall include, without limitation, actions taken or proposed to be taken by written consent.
Section 1.2. Gender . For the purposes of this Agreement, the words “he,” “his” or “himself” shall be interpreted to include the masculine, feminine and corporate, other entity or trust form.
ARTICLE II
LIMITATIONS ON TRANSFER OF SHARES
Section 2.1. [RESERVED]
Section 2.2. [RESERVED]
Section 2.3. [RESERVED]
Section 2.4. [RESERVED]
Section 2.5. [RESERVED]
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Each Covered Person severally represents and warrants that:
(i) such Covered Person has (and with respect to Covered Shares to be acquired in the future, will have) good, valid and marketable title to the Covered Shares, free and clear of any pledge, lien, security interest, charge, claim, equity or encumbrance of any kind, other than pursuant to this Agreement, another agreement with the Company, or any other agreement with another person with respect to which the Company has expressly agreed to in writing, by which such Covered Person is bound and to which the Covered Shares are subject;
(ii) each of this Agreement and the Partner Matters Agreement constitutes the legal, valid and binding obligation of such Covered Person, enforceable against such Covered Person in accordance with its terms (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally and to general equitable principles (whether considered in a proceeding in equity or at law));
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(iii) there are no actions, suits or proceedings pending, or, to the knowledge of such Covered Person, threatened against or affecting such Covered Person or such Covered Person’s assets in any court or before or by any federal, state, municipal or other domestic or foreign governmental department, commission, board, bureau, agency or instrumentality which, if adversely determined, would impair the ability of such Covered Person to perform or comply with this Agreement or the Partner Matters Agreement;
(iv) such Covered Person understands that his ability to transfer the Covered Shares is subject to legal and contractual restrictions and that the Covered Shares may not have been registered under the United States Securities Act of 1933, and that he is holding the Covered Shares for his own account, for investment, and not for distribution, assignment or resale to others, and no other person has any direct or indirect beneficial interest in such shares (other than the Company or at the express written consent of the Company and other than with respect to any Employee Covered Shares the Transfer of which has been approved by the Partners Representatives pursuant to paragraph (a) of Section 4.1); and
(v) no statement, representation or warranty made by such Covered Person in this Agreement or the Partner Matters Agreement, nor any information provided by such Covered Person for inclusion in a report filed pursuant to Section 5.4 hereof or in a registration statement filed by the Company contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements, representations or warranties contained herein or information provided therein not misleading.
Each Covered Person that is not a natural person additionally severally represents and warrants that:
(i) such Covered Person is duly organized and validly existing in good standing under the laws of the jurisdiction of such Covered Person’s formation;
(ii) such Covered Person has full right, power and authority to enter into and perform this Agreement and the Partner Matters Agreement; and
(iii) the execution and delivery of this Agreement and the Partner Matters Agreement and the performance of the transactions contemplated herein and therein have been duly authorized, and no further proceedings on the part of such Covered Person are necessary to authorize the execution, delivery and performance of this Agreement or the Partner Matters Agreement; and each of this Agreement and the Partner Matters Agreement has been duly executed by such Covered Person.
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Each Covered Person severally agrees that the foregoing provisions of this Article III shall be continuing representations and warranties of such Covered Person during the period that such person shall be a Covered Person and Common Shares of such person shall be Covered Shares, and such Covered Person shall take all actions as shall from time to time be necessary to cure any breach or violation and to obtain any authorizations, consents, approvals and clearances in order that such representations and warranties shall be true and correct during such period.
ARTICLE IV
VOTING AGREEMENT
Section 4.1. [RESERVED]
Section 4.2. [RESERVED]
Section 4.3. [RESERVED]
Section 4.4. Partners Representatives .
(a) The “Partners Representatives”, as of any time, shall consist of the members of the Board of Directors who are also Partners of the Company and who agree to serve as members of the Partners Representatives. If there are less than three individuals who are both Partners and members of the Board of Directors and who agree to serve as members of the Partners Representatives, the Partners Representatives shall consist of each such individual plus such additional individuals who are Partners and who are selected pursuant to procedures established by the Partners Representatives as shall ensure that the Partners Representatives contain not less than three members who are Partners. The members of the Partners Representatives from time to time will be party to this Agreement in their capacities both as Covered Persons and as members of the Partners Representatives.
(b) (i) Except as otherwise provided herein, all determinations necessary or advisable under this Agreement (including determinations of beneficial ownership) shall be made by the Partners Representatives, whose determinations shall be final and binding. The Partners Representatives’ determinations under this Agreement and actions (including waivers) hereunder need not be uniform and may be made selectively among Covered Persons (whether or not such Covered Persons are similarly situated). (ii) Each Covered Person recognizes and agrees that each of the members of the Partners Representatives in acting hereunder shall at all times be acting in their individual capacities and not as directors or officers of the Company and in so acting or failing to act shall not have any fiduciary duties to the Company or the Covered Persons as a member of the Partners Representatives by virtue of the fact that one or more of such members may also be serving as a director or officer of the Company or otherwise. Each Covered Person consequently recognizes that for a member of the Partners Representatives to also serve as a director or officer of the Company does not constitute a conflict. (iii) The Partners Representatives shall act through a majority vote of its
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members. Such actions may be taken in person at a meeting or by a written instrument signed by all of the members. Meetings of the Partners Representatives may be held by such telephonic or other electronic means as the Partners Representatives may from time to time approve and which permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously and participation in such a meeting shall constitute presence in person at such a meeting.
(c) [RESERVED]
ARTICLE V
OTHER AGREEMENTS OF THE PARTIES
Section 5.1. [RESERVED]
Section 5.2. Redemption and Transfer of Class X Common Shares
(a) Accenture Ltd agrees with each Covered Person that it shall not exercise its right pursuant to its bye-laws to redeem any Class X Common Shares of a holder if such redemption would reduce the number of Class X Common Shares held by such holder to a number that is less than the sum of (i) the number of Accenture SCA common shares held by such holder and (ii) the number of Accenture Canada Exchangeco Exchangeable Shares held by such holder.
(b) The Board of Directors shall irrevocably delegate to the Partners Representatives Accenture Ltd’s authority under its bye- laws to consent to proposed transfers of Class X Common Shares by their holders.
Section 5.3. Indemnification and Expenses .
(a) Accenture Ltd agrees that it will indemnify and hold harmless each member of the Partners Representatives against any judgments, fines, losses, claims, damages or liabilities incurred by them in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of matters that pertain to this Agreement or the transactions contemplated hereby. Accenture Ltd need not indemnify any member of the Partners Representatives against any judgments, fines, losses, claims, damages or liabilities incurred by the Partners Representatives through the Partners Representatives own gross negligence, bad faith or willful misconduct.
(b) Accenture Ltd shall be responsible for all expenses of the Partners Representatives incurred in the operation and administration of this Agreement, including expenses of proxy solicitation for and the taking of any Preliminary Vote, expenses incurred in preparing appropriate filings and correspondence with the United States Securities and Exchange Commission or other securities regulators, lawyers’, accountants’, agents’, consultants’, experts’, investment banking and other professionals’ fees, expenses incurred in enforcing the provisions of this Agreement, expenses incurred
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in maintaining any necessary or appropriate books and records relating to this Agreement and expenses incurred in the preparation of amendments to and waivers of provisions of this Agreement.
(c) Each Covered Person shall be responsible for all expenses of such Covered Person incurred in connection with the compliance by such Covered Person with his obligations under this Agreement, including expenses incurred by the Partners Representatives or Accenture Ltd in enforcing the provisions of this Agreement relating to such obligations.
Section 5.4. Filing of Schedule 13D or 13G.
(a) In the event that a Covered Person is required to file a report of beneficial ownership on Schedule 13D or 13G with respect to the Common Shares beneficially owned by him (for this purpose as determined by Exchange Act Rule 13d-3 and Exchange Act Rule 13d-5), such Covered Person agrees for the benefit of every other Covered Person that, unless otherwise directed by the Partners Representatives, such Covered Person will not file a separate such report, but will file a report together with the other Covered Persons, containing the information required by the Exchange Act, and such Covered Person understands and agrees that such report shall be filed on his behalf by the Partners Representatives or any member or designee thereof. Such Covered Person shall cooperate fully with the other Covered Persons and the Partners Representatives to achieve the timely filing of any such report and any amendments thereto as may be required, and such Covered Person agrees that any information concerning such Covered Person which such Covered Person furnishes in connection with the preparation and filing of such report will be complete and accurate.
By his signature hereto, each Covered Person appoints the Partners Representatives and each member thereof from time to time individually, with full power of substitution and resubstitution, his true and lawful attorney- in-fact to execute such reports and any and all amendments thereto and to file such reports with all exhibits thereto and other documents in connection therewith with the United States Securities and Exchange Commission and, if necessary, foreign regulators, granting to such attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that such attorney or attorneys may deem necessary, advisable or appropriate to carry out fully the intent of this Section 5.4 as such Covered Person might or could do personally, hereby ratifying and confirming all acts and things that such attorney or attorneys may do or cause to be done by virtue of this power of attorney. Each Covered Person hereby further designates such attorneys as such Covered Person’s agents authorized to receive notices and communications with respect to such reports and any amendments thereto. It is understood and agreed by each such Covered Person that this appointment, empowerment and authorization may be exercised by the aforementioned persons for the period beginning on the date hereof and ending on the date such Covered Person is no longer subject to the provisions of this Agreement (and shall extend thereafter for such time as is required to reflect that such Covered Person is no longer a party to this Agreement).
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Section 5.5. Adjustment upon Changes in Capitalization; Adjustments upon Changes of Control; Representatives, Successors and Assigns .
(a) In the event of any change in the outstanding Common Shares or Accenture Canada Exchangeco Exchangeable Shares by reason of stock dividends, stock splits, reverse stock splits, spin-offs, split-ups, recapitalizations, amalgamations, combinations, exchanges of shares and the like, the term “Covered Shares” shall refer to and include the securities received or resulting therefrom, but only to the extent such securities are received in exchange for or in respect of Covered Shares. Upon the occurrence of any event described in the immediately preceding sentence, the Partners Representatives shall make such adjustments to or interpretations of the provisions of Section 2.1 and 2.2 (and, if they so determine, any other provisions hereof) as they shall deem necessary or desirable to carry out the intent of such provision(s). If the Partners Representatives deem it desirable, any such adjustments may take effect from the record date, the “when issued trading date”, the “ex dividend date” or another appropriate date.
(b) In the event of any business combination, amalgamation, restructuring, recapitalization or other extraordinary transaction directly or indirectly involving the Company or any of its securities or assets as a result of which the Covered Persons shall hold voting securities of a different entity, the Covered Persons agree that this Agreement shall also continue in full force and effect with respect to such voting securities of such other entity formerly representing or distributed in respect of Common Shares, and the terms “Class A Common Shares,” “Covered Shares,” “Common Shares”, “Employee Covered Shares,” and “Accenture Ltd” and “Company,” shall refer to such voting securities formerly representing or distributed in respect of Common Shares and such entity, respectively. Upon the occurrence of any event described in the immediately preceding sentence, the Partners Representatives shall make such adjustments to or interpretations of the restrictions of Section 2.1 (and, if it so determines, any other provisions hereof) as they shall deem necessary or desirable to carry out the intent of such provision(s). If the Partners Representatives deem it desirable, any such adjustments may take effect from the record date or another appropriate date.
(c) In the event of any business combination, amalgamation, restructuring, recapitalization or other extraordinary transaction directly or indirectly involving Accenture SCA or the issuer of the Accenture Canada Exchangeco Exchangeable Shares or any of their respective securities or assets as a result of which the holders of Accenture SCA common shares or Accenture Canada Exchangeco Exchangeable Shares shall hold voting securities of an entity other than Accenture SCA or the issuer of the Accenture Canada Exchangeco Exchangeable Shares, the holders of Accenture SCA common shares and Accenture Canada Exchangeco Exchangeable Shares agree that the terms “Accenture SCA common shares,” and “Accenture Canada Exchangeco Exchangeable Shares” shall refer to such voting securities formerly representing or distributed in respect of Accenture SCA common shares and Accenture Exchangeco Exchangeable Shares. Upon the occurrence of any event described in the immediately preceding sentence, the Partners Representatives shall make such adjustments to or interpretations of the restrictions of Section 2.1 (and, if they so determine, any other provisions hereof) as they shall deem
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necessary or desirable to carry out the intent of such provision(s). If the Partners Representatives deem it desirable, any such adjustments may take effect from the record date or another appropriate date.
(d) This Agreement shall be binding upon and inure to the benefit of the respective legatees, legal representatives, successors and assigns of the Covered Persons (and Accenture Ltd in the event of a transaction described in Section 5.5(b) hereof); provided, however, that a Covered Person may not assign this Agreement or any of his rights or obligations hereunder without the prior written consent of Accenture Ltd, and any assignment without such consent by a Covered Person shall be void; and, provided, further, that no assignment of this Agreement by Accenture Ltd or to a successor of Accenture Ltd (by operation of law or otherwise) shall be valid unless such assignment is made to a person which succeeds to the business of Accenture Ltd substantially as an entirety.
Section 5.6 . Further Assurances . Each Covered Person agrees for the benefit of every other Covered Person to execute such additional documents and take such further action as may be reasonably necessary to effect the provisions of this Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Term of the Agreement; Termination of Certain Provisions .
(a) The term of this Agreement shall continue until the first to occur of the date that is 50 years after the date hereof and the date this Agreement is terminated by the affirmative vote of not less than 66 2/3% of the votes represented by the Employee Covered Shares. The Partners Representatives may, and upon the written application of the holders of not less than 10%, in the aggregate, of the votes represented by the Employee Covered Shares shall, hold a vote of the Employee Covered Shares to terminate this Agreement. If this Agreement is terminated prior to the expiration or termination of the Transfer Restrictions referred to in Section 2.1, such restrictions on transfer shall continue to apply in accordance with the provisions of such Section unless waived or terminated as provided in paragraph (b) or (e) of Section 6.3. If this Agreement is terminated prior to the expiration or termination of the restrictions on transfer referred to in paragraph (a) of Section 2.3, such restrictions on transfer shall continue to apply in accordance with the provisions of the Underwriting Agreement referred to in paragraph (a) of Section 2.3 unless waived or terminated as provided in such Underwriting Agreement.
Not less than once every four years following the IPO Date, the Partners Representatives shall consider whether to propose to the Employee Covered Persons any amendments to, or the termination of, this Agreement.
(b) Unless this Agreement is theretofore terminated pursuant to Section 6.1(a) hereof, any Covered Person who ceases to be an employee for any reason other than death shall continue to be bound by all the provisions of this Agreement until such time
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as such Covered Person holds all Covered Shares free from Transfer Restrictions. Thereafter, such Covered Person shall no longer be bound by the provisions of this Agreement other than Sections 4.4, 5.3, 5.4, 5.5, 5.6, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10 and 6.11 (the “Continuing Provisions”), and such Covered Person’s name shall be removed from Appendix A to this Agreement.
(c) Unless this Agreement is theretofore terminated pursuant to Section 6.1(a) hereof, the estate of any Covered Person who dies shall from and after the date of such death be bound only by the restrictions on transfer imposed by Section 2.3(a) hereof and the Continuing Provisions; and upon the expiration of the restrictions in Section 2.3(a), the estate of such Covered Person shall no longer be bound by the provisions of this Agreement (other than the Continuing Provisions), and such Covered Person’s name shall be removed from Appendix A to this Agreement.
Section 6.2. Amendments.
(a) Except as provided in Section 5.5 or this Section 6.2, provisions of this Agreement may be amended only by the affirmative vote of 66 2/3% of the votes represented by the Employee Covered Shares. The Partners Representatives may, and upon the written application of the holders of not less than 10%, in the aggregate, of the votes represented by the Employee Covered Shares shall, hold a vote of the Employee Covered Shares to amend this Agreement.
(b) In addition to any other vote or approval that may be required under this Section 6.2, any amendment of this paragraph (b), Section 4.4, Section 5.3, paragraph (e) of Section 6.3 or any other provision the amendment (or addition) of which has the effect of materially changing the rights or obligations of the Partners Representatives hereunder shall require the approval of the Partners Representatives.
(c) In addition to any other vote or approval that may be required under this Section 6.2, any amendment to the Transfer Restrictions that would make such Transfer Restrictions materially more onerous to a Covered Person will not be enforceable against that Covered Person unless that Covered Person has consented to such amendment.
(d) In addition to any other vote or approval that may be required under this Section 6.2, any amendment of this Agreement that has the effect of changing the obligations of Accenture Ltd hereunder to make such obligations materially more onerous to Accenture Ltd shall require the approval of Accenture Ltd.
(e) In addition to any other vote or approval that may be required under this Section 6.2, any amendment that has the effect of amending the provisions of Section 2.1 or paragraphs (a), (b) or (c) of Section 2.3 shall require the approval of Accenture Ltd.
(f) Each party hereto understands that it is intended that each Partner of the Company will be a Covered Person under this Agreement or will become a Covered Person upon his appointment to such position, and each party hereto further understands
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that from time to time certain other persons may become Covered Persons and certain Covered Persons will cease to be bound by the provisions of this Agreement pursuant to the terms hereof. Accordingly, this Agreement may be amended by action of the Partners Representatives from time to time and without the approval of any other person, but solely for the purposes of (i) adding to Appendix A such persons as shall be made party to this Agreement pursuant to the terms hereof or shall (A) be elected Partners of the Company in accordance with applicable procedures and (B) execute a counterpart of the signature page of this Agreement, such addition to be effective as of the time of such action or election and (ii) removing from Appendix A such persons as shall cease to be bound by the provisions of this Agreement pursuant to Sections 6.1(b) or (c) hereof, which additions and removals shall be given effect from time to time by appropriate changes to Appendix A.
(g) Any amendment to this Agreement approved in accordance with the terms hereof by the Employee Covered Persons as of an applicable record date shall be binding upon all persons who subsequently become a party hereto.
Section 6.3. Waivers .
(a) Except as provided in this Section 6.3, provisions of this Agreement may be waived only by the affirmative vote of 66 2/3% of the votes represented by the outstanding Employee Covered Shares. The Partners Representatives may, and upon the written application of the holders of not less than 10%, in the aggregate, of the votes represented by the Employee Covered Shares shall, hold a vote to waive certain provisions of this Agreement.
(b) In addition to any other action that may be required under paragraph (a) of this Section, any waiver that has the effect of waiving the provisions of Section 2.1 or paragraphs (a), (b) or (c) of Section 2.3 shall require the approval of Accenture Ltd.
(c) In addition to any other vote or approval that may be required under this Section 6.3, any waiver of this paragraph (c), Section 4.4, Section 5.3, paragraph (e) of this Section 6.3 or any other provision the waiver (or alteration) of which has the effect of materially changing the rights or obligations of the Partners Representatives hereunder shall require the approval of the Partners Representatives.
(d) In addition to any other vote or approval that may be required under this Section 6.3, any waiver of this Agreement that has the effect of changing the obligations of Accenture Ltd hereunder to make such obligations materially more onerous to Accenture Ltd shall require the approval of Accenture Ltd.
(e) Notwithstanding the foregoing, the Partners Representatives may waive the Transfer Restrictions and the other provisions of this Agreement to permit (A) Covered Persons to participate as sellers in underwritten public offerings of, and share repurchase programs and tender offers by the Company for, Common Shares; (B) Transfers of Covered Shares to organizations described in Section 501(c)(3) of the Code, including
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gifts to “private foundations” subject to the requirements of Section 509 of the Code or comparable provisions of the laws of other countries; (C) Transfers of Covered Shares held in employee benefit plans of the Company either generally or in particular situations; and (D) particular Covered Persons, a particular class of Covered Persons or all Covered Persons to Transfer Covered Shares in particular situations (such as Transfers to family members, partnerships or trusts), but not generally; provided that in each of (A) through (D), waivers of the restrictions imposed by paragraphs (a), (b) and (c) of Section 2.3 shall also require the prior written consent of the Company.
(f) In connection with any waiver granted under this Agreement, the Partners Representatives or the Employee Covered Persons proposing the waiver pursuant to this Section 6.3, as the case may be, may impose such conditions as they determine on the granting of such waivers.
(g) The failure of Accenture Ltd or the Partners Representatives at any time or times to require performance of any provision of this Agreement shall in no manner affect the rights at a later time to enforce the same. No waiver by Accenture Ltd or the Partners Representatives of the breach of any term contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such breach or the breach of any other term of this Agreement.
Section 6.4. GOVERNING LAW . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF BERMUDA.
Section 6.5. Resolution of Disputes .
(a) The Partners Representatives shall have the sole and exclusive power to enforce the provisions of this Agreement. The Partners Representatives may in their sole discretion direct Accenture Ltd to pursue such enforcement, and Accenture Ltd agrees to pursue such enforcement as directed by the Partners Representatives.
(b) Any and all disputes which cannot be settled amicably, including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision) shall be finally settled by arbitration conducted by a single arbitrator in New York in accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce, except that the parties may select an arbitrator who is a national of the same country as one of the parties. If the parties to the dispute fail to agree on the selection of an arbitrator within thirty (30) days of the receipt of the request for arbitration, the International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language.
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Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings.
(c) Notwithstanding the provisions of paragraph (b), the Partners Representatives may bring, or may cause Accenture Ltd to bring, on behalf of the Partners Representatives or on behalf of one or more Covered Persons, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (c), each Covered Person (i) expressly consents to the application of paragraph (d) of this Section 6.5 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate, and (iii) irrevocably appoints the General Counsel of Accenture Ltd, c/o Accenture Ltd, 1661 Page Mill Road, Palo Alto, CA 94304 (or, if different, the then-current principal business address of the duly appointed General Counsel of Accenture Ltd) as such Covered Person’s agent for service of process in connection with any such action or proceeding and agrees that service of process upon such agent, who shall promptly advise such Covered Person of any such service of process, shall be deemed in every respect effective service of process upon the Covered Person in any such action or proceeding.
(d) (i) EACH COVERED PERSON HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, UNITED STATES FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (C) OF THIS SECTION 6.5, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the fora designated by this paragraph (d) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.
(ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (d)(i) of this Section 6.5 and such parties agree not to plead or claim the same.
Section 6.6. Relationship of Parties . The terms of this Agreement are not intended to create a separate entity for United States federal or state income tax purposes or under the laws of any other jurisdiction. Nothing in this Agreement shall be read to create any partnership, joint venture or separate entity among the parties or to create any trust or other fiduciary relationship between them.
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Section 6.7. Notices .
(a) Any communication, demand or notice to be given hereunder will be duly given (and shall be deemed to be received) when delivered in writing by hand or first class mail or by telecopy to a party at its address as indicated below:
If to a Covered Person,
c/o Accenture Ltd
1661 Page Mill Road
Palo Alto, CA 94304
Telecopy: (650) 213-2956
Attention: General Counsel
(or, if different, the then-current principal business address of the duly
appointed General Counsel of Accenture Ltd)
If to the Partners Representatives,
c/o Accenture Ltd
1661 Page Mill Road
Palo Alto, CA 94304
Telecopy: (650) 213-2956
Attention: General Counsel
(or, if different, the then-current principal business address of the duly
appointed General Counsel of Accenture Ltd)
and
If to Accenture Ltd,
Accenture Ltd
1661 Page Mill Road
Palo Alto, CA 94304
Telecopy: (650) 213-2956
Attention: General Counsel
(or, if different, the then-current principal business address of the duly
appointed General Counsel of Accenture Ltd)
Accenture Ltd shall be responsible for notifying each Covered Person of the receipt of a communication, demand or notice under this Agreement relevant to such Covered Person, in writing, at the address of such Covered Person then in the records of Accenture Ltd (and each Covered Person shall notify Accenture Ltd of any change in such address for communications, demands and notices) or by electronic mail to the principal electronic address of such person maintained by the Company.
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(b) Unless otherwise provided to the contrary herein, any notice which is required to be given in writing pursuant to the terms of this Agreement may be given by telecopy.
Section 6.8. Severability. If any provision of this Agreement is finally held to be invalid, illegal or unenforceable, the remaining terms and provisions hereof shall be unimpaired.
Section 6.9. Right to Determine Tender Confidentially . In connection with any tender or exchange offer for all or any portion of the outstanding Common Shares, subject to compliance with all applicable restrictions on Transfer in this Agreement or any other agreement with the Company, each Covered Person shall have the right to determine confidentially whether such Covered Person’s Covered Shares will be tendered in such tender or exchange offer.
Section 6.10. No Third-Party Rights . Nothing expressed or referred to in this Agreement will be construed to give any person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors and permitted assigns.
Section 6.11. Section Headings . The headings of sections in this Agreement are provided for convenience only and will not affect its construction or interpretation.
Section 6.12. Execution in Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed or caused to be duly executed this Voting Agreement as of the date first above written.
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[Signature blocks of Covered Persons set forth separately.]
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APPENDIX A
Covered Persons
Exhibit 10.1
ACCENTURE SCA
Société en commandite par actions partnership limited by shares
Siège social: 1, rue Guillaume Kroll, L-1882 Luxembourg
Registre de Commerce Luxembourg n° B 79 874
STATUTS COORDONNES
à la date du 17 janvier 2005
CONSOLIDATED UPDATED ARTICLES OF ASSOCIATION
as at January 17th, 2005
ARTICLES OF ASSOCIATION
Article 1 — Form
There exists among Accenture Ltd, a company limited by shares organised under the laws of Bermuda, being the general partner (gérant commandité) (the “General Partner” or “Accenture Ltd”) of Accenture SCA , a partnership limited by shares (société en commandité par actions) (hereinafter referred to as the “Company”) and Accenture Minority IV, Ltd, a Gibraltar company being the current limited shareholder (associé commanditaire) of the Company and all those persons who shall become limited shareholders (associés commanditaires) (the “Limited Shareholders”) of the Company.
Hereinafter the Limited Shareholders and the General Partner will be referred to individually as a Shareholder and collectively as the Shareholders.
Article 2 — Term
The Company is incorporated for an unlimited period of time. However, the Company shall come to an end in the event of a resolution to dissolve the Company adopted at a general meeting of Shareholders deciding in compliance with the conditions of quorum and majority required for amendments to the articles of association of the Company (the “Articles of Association”). The Company shall not end in the event of the resignation, dissolution, bankruptcy or insolvency of the General Partner.
Article 3 — Purposes
The Company shall have as its business purpose the holding of participations, in any form whatsoever, in Luxembourg and foreign companies, the acquisition by purchase, subscription, or in any other manner as well as the transfer by sale, exchange or otherwise of stock, bonds, debentures, notes and other securities of any kind, and the ownership, administration, development and management of its participations and of its asset portfolio.
The Company may carry on any commercial, industrial and/or financial activity or maintain a commercial establishment open to the public. The Company may participate directly or indirectly in the establishment and development of any financial, industrial or commercial enterprises in Luxembourg and abroad and it may render them every assistance, whether of a financial nature or not, such as, without limitation, the granting of loans or advances, guarantees for their benefit or other forms of assistance. The Company may borrow in any form and proceed to the issuance of bonds and notes whether or not convertible or exchangeable in shares of the Company or into shares of other companies.
The Company may enter into and perform under global alliances and marketing arrangements and any other contracts aimed at promoting and furthering the development and the operation of the Accenture group, including but not limited to actions involving or relating to staff of any and all affiliated group companies.
In general, it may take any controlling and supervisory measures and carry out any operation which it may deem useful for the accomplishment and development of its purposes.
Article 4 — Registered office
The registered office of the Company is established in Luxembourg City, Grand Duchy of Luxembourg. The General Partner may establish branches or other offices either in Luxembourg or abroad.
In the event that the General Partner determines that extraordinary political, economic or social developments have occurred or are imminent that interfere or are likely to interfere with the normal activities of the Company at its registered office, or with the ease of communication between such office and persons abroad, the registered office may be temporarily transferred abroad until the complete cessation of these extraordinary circumstances; such temporary measures shall have no effect on the nationality of the Company which, notwithstanding the temporary transfer of its registered office, will remain a Luxembourg partnership limited by shares.
Article 5 — Capital
The Company has a subscribed, issued and fully paid nominal share capital of EUR 1,802,814,702.75 (one billion eight hundred and two million eight hundred and fourteen thousand seven hundred and two
Euro and seventy-five Cents)
divided into shares
(actions de commandité)
held by the General
Partner and having a par value of one Euro and twenty-five cents (EUR 1.25) each and shares
(actions de commanditaires)
held by the Limited Shareholder(s) having a par value of one Euro and
twenty-five cents (EUR 1.25) each. The Shares are divided into
766,591,027
(seven hundred sixty-six
million five hundred and ninety-one thousand twenty-seven) Class I Common Shares (“Class I Common
Shares”),
5,000,000
(five million) Class I-A Common
Shares (“Class I-A Common Shares”),
5,000,000
(five million) Class I-B Common Shares (“Class I-B
Common Shares”),
10,000,000
(ten million) Class
I-C Common Shares (“Class I-C Common Shares”),
10,000,000
(ten million) Class I-D Common Shares
(“Class I-D Common Shares”),
15,000,000
(fifteen million) Class I-E Common Shares (“Class I-E
Common Shares”),
15,000,000
(fifteen million) Class I-F Common Shares (“Class I-F Common Shares”),
20,000,000
(twenty million) Class I-G Common Shares
(“Class I-G Common Shares”),
25,000,000
(twenty-five million) Class I-H Common Shares
(“Class I-H Common Shares”),
5,000,000
(five million)
Class I-I Common Shares (“Class I-I Common
Shares”),
5,000,000
(five million) Class I-J Common
Shares (“Class I-J Common Shares”),
16,050,000
(sixteen million fifty thousand)
Class I-K Common
Shares (“Class I-K Common Shares”),
5,025,720
(five million twenty-five thousand seven hundred and
twenty) Class I-L Common Shares (“Class I-L Common
Shares”),
68,626,707
(sixty-eight million six
hundred and twenty-six thousand seven hundred seven) Class I-M Common Shares (“Class I-M Common
Shares”),
12,747,835
(twelve million seven hundred forty-seven thousand eight hundred and
thirty-five) Class I-N Common Shares (“Class I-N
Common Shares”) and
470,958,308
(four hundred
seventy million nine hundred fifty-eight thousand three hundred eight) Class II Common Shares
(“Class II Common Shares”) having the same characteristics and rights save as to those differences
outlined in these articles of association. The Class I-A Common Shares, the Class I-B Common
Shares, the Class I-C Common Shares, the Class I-D Common Shares, the Class I-E Common Shares, the
Class I-F Common Shares, the Class I-G Common Shares, the Class I-H Common Shares, the Class I-I
Common Shares, the Class I-J Common Shares, the Class I-K Common Shares, the Class I-L Common
Shares, the Class I-M Common Shares and the Class I-N Common Shares are individually referred to as
a “Class I Letter Share” and collectively as the “Class I Letter Shares”. Unless otherwise noted in
these articles of association, all the references to a Class I Common Share or the Class I Common
Shares shall include a Class I Letter Share or the Class I Letter Shares, respectively. The Class I
Common Shares and the Class II Common Shares are individually referred to as a “Share” and
collectively as the “Shares”. The Class I Common Shares and the Class II Common Shares are issued
as redeemable shares in accordance with the terms of article 49-8 of the law of 10 August 1915, on
commercial companies, as amended (the
Law
), and the redemption features laid down in Article 7
hereof shall apply thereto.
An extraordinary meeting of Shareholders, resolving in the manner required for the amendment of these Articles of Association, and with the consent of the General Partner, may increase the subscribed and issued capital.
Notwithstanding the preceding paragraph, the General Partner of the Company is authorised and empowered to render effective an increase of the subscribed and issued capital, in whole or in part, from time to time, within a period starting as of 19 December 2001, and expiring on the fifth anniversary of such date, by issuing shares representing such whole or partial increase of the capital up to the total amount of the authorised share capital and for the number and classes of Shares being the object of the authorisation. The General Partner shall accept subscriptions for such shares.
In connection with this authorisation to increase the capital and in compliance with article 32-3 (5) of the Law, the General Partner of the Company is authorised, at its discretion, to waive entirely or partially or to limit, or to set conditions in respect of any preferential subscription rights of the existing Shareholders for the same period of five years and to determine the amount of issue premium (if any) which will have to be paid by the subscriber(s) in the context of this capital increase.
Class I Common Shares are convertible into Class II Common Shares by a resolution of an extraordinary meeting of Shareholders resolving in the manner required for amendments of these Articles of Association. The conversion ratio shall be 1 Class I Common Share for 10 Class II Common Shares. Upon such resolution, the nominal capital shall be increased by EUR 11.25 per Class I Common Share so converted and Class II Common Shares shall be issued in accordance with the conversion ratio in replacement of the Class I Common Shares so converted.
Class II Common Shares are convertible into Class I Common Shares (excluding the Class I Letter Shares) by a resolution of an extraordinary meeting of shareholders resolving in the manner required for amendments of these Articles of Association. The conversion ratio shall be 10 Class II Common Shares for 1 Class I Common Share (excluding the Class I Letter Share). Upon such resolution, the nominal capital shall be reduced by EUR 11.25 per 10 Class II Common Shares so converted and the amount of the nominal share capital reduction shall be allocated to the share premium reserve of the Company. In addition, additional Class I Common Shares (excluding the Class I Letter Shares) shall be issued in accordance with the conversion ratio in replacement of the Class II Common Shares so converted.
The authorised capital of the Company is set at EUR 50,000,000,000 consisting of 19,868,950,000 Class I Common Shares (excluding the Class I Letter Shares) of a par value of one euro and twenty-five cents (EUR 1.25) each, 5,000,000 Class I-A Common Shares of a par value of one euro and twenty-five cents (EUR 1.25) each, 5,000,000 Class I-B Common Shares of a par value of one euro and twenty-five cents (EUR 1.25) each, 10,000,000 Class I-C Common Shares of a par value of one euro and twenty-five cents (EUR 1.25) each, 10,000,000 Class I-D Common Shares of a par value of one euro and twenty-five cents (EUR 1.25) each, 15,000,000 Class I-E Common Shares of a par value of one euro and twenty-five cents (EUR 1.25) each, 15,000,000 Class I-F Common Shares of a par value of one euro and twenty-five cents (EUR 1.25) each, 20,000,000 Class I-G Common Shares of a par value of one euro and twenty-five cents (EUR 1.25) each, 25,000,000 Class I-H Common Shares of a par value of one euro and twenty-five cents (EUR 1.25) each, 5,000,000 Class I-I Common Shares of a par value of one euro and twenty-five cents (EUR 1.25) each, 5,000,000 Class I-J Common Shares of a par value of one euro and twenty-five cents (EUR 1.25) each, 16,050,000 Class I-K Common Shares of a par value of one euro and twenty-five cents (EUR 1.25) each and of 20,000,000,000 Class II Common Shares of a par value of one euro and twenty-five cents (EUR 1.25) each.
The General Partner is authorised and empowered to issue Class I Common Shares and/or Class II Common Shares and/or new classes of shares from time to time in one or several series bearing different numbers or letters in order to identify them.
The authorisation granted to the General Partner includes the authorisation to issue Shares to itself.
The General Partner is hereby authorised and empowered to determine the conditions attaching to any subscription of Shares, and it may, from time to time, effect such whole or partial increase upon the conversion of any net profit of the Company into capital and the attribution of fully-paid Shares to Shareholders in lieu of dividends.
The General Partner is further authorised to cause the Company to issue warrants, convertible bonds or assimilated instruments or bonds with warrants or subscription rights or to issue any financial instruments convertible into Shares under the terms and conditions to be set by the General Partner.
Each time the General Partner shall act to render effective the increase of capital, as authorised, Article 5 of the Articles of Association of the Company shall be amended so as to reflect the result of such action and the General Partner shall take or authorise any person to take any necessary steps for the purpose of the recording and publication of such increase and such amendment.
The Company recognises only one holder per Share; in case a Share is held by more than one person, the Company has the right to suspend the exercise of all rights attached to that Share until one person is appointed or designated by the joint holders as the sole owner in relation to the Company.
The Shares of the Company are and they continue to stay in registered form. The Shares are not certificated, but a certificate (certificat d’inscription nominative) witnessing the registration of the relevant Shareholder in the share register of the Company and the number of Shares held by it shall be issued by the Company on request of the Shareholder.
A share register shall be kept at the registered office of the Company and, to the extent the General Partner shall so decide, with a transfer agent and registrar. Such register shall set forth the name of each Shareholder, its residence or elected notice address, the number of Shares held by it, the class of Shares, the amounts paid in on each such Share, the transfers of Shares and the dates of such transfers.
Unpaid amounts, if any, on issued and outstanding Shares may be called at any time at the discretion of the General Partner, provided however that calls shall be made on all the Shares in the same proportion
and at the same time. Any sum, the payment of which is in arrear, automatically attracts interest in favour of the Company at the rate of ten per cent (10%) per year or such other rate as may be determined by the General Partner from time to time calculated from the date when the payment was due until the date of the actual payment.
Article 6 — Transfer of Shares
Except for a redemption made pursuant to Article 7, no Transfer (as defined below) of Shares of the Company by a Limited Shareholder shall be made unless the Supervisory Board of the Company or its delegate shall have given its prior approval to a contemplated Transfer.
If a Limited Shareholder wants to transfer or dispose of all or part of its shares in the Company or of all or part of the rights attached thereto, in any form whatsoever, including, without limitation, via a sale, gift, pledge or some other form of encumbrance or otherwise (a “Transfer”), it must submit a written application beforehand to the Supervisory Board or its delegate by registered mail with acknowledgement of receipt or any other means approved by the Supervisory Board or its delegate. A Transfer application shall contain the name of the contemplated transferee, the contemplated sale price or consideration as well as any other relevant information.
The decision of the Supervisory Board will be made known to the applicant as soon as reasonably practicable after it shall have been taken. The Supervisory Board or its delegate’s decision in respect of the application must be made known to the Limited Shareholder by registered mail with acknowledgement of receipt or any other means approved by the General Partner.
Any Transfer not made in compliance with the terms hereof shall, with respect to the Company, be deemed to be null and void and the Company shall not proceed with the registration of any transferee in the share register unless (i) the Transfer to such transferee has been approved in writing by the Supervisory Board or its delegate and (ii) the transferee shall have signed any and all relevant documents as may be required by the Supervisory Board or its delegate.
Article 7 — Redemption of Shares
The Company is authorised to redeem Class II Common Shares or any series thereof at the request of the General Partner and upon the written approval of the Supervisory Board in accordance with the procedures laid down in Article 16 hereto. If the redemption of the Class II Common Shares or of a series thereof will be done in the context of or accompanied by a share capital reduction of the Company, the redemption of Class II Common Shares or a series thereof must in addition be approved by a resolution at a meeting of Shareholders passed by a two thirds majority of those present and voting including the consent of the General Partner.
Subject to any contractual restrictions on Transfer by a holder set forth in any contract or agreement to which the Company or any of its affiliates is a party or set forth in Article 8 of these Articles of Association, Class I Common Shares shall be redeemable for cash at the option of the holder by giving irrevocable notice of an election for redemption to the Company.
Notwithstanding the preceding paragraph, at the option of the Company represented by the General Partner, the redemption price payable to any Limited Shareholder that becomes a Limited Shareholder after May 31, 2001 (or such other date that the Supervisory Board shall declare to be the date of the consummation of the Accenture group of companies’ transition to a corporate structure) (a “Subsequent Limited Shareholder”) in connection with any redemption under this Article 7 may be paid in cash or in Accenture Ltd Class A Common Shares and any holder and the Company may agree that the Company may redeem such holder’s Class I Common Shares for different consideration.
At the request of the General Partner, the Company is authorised to redeem any Class I Common Share or any series held by any Subsequent Limited Shareholder for Accenture Ltd Class A Common Shares if the Company receives a satisfactory opinion from an internationally recognized counsel or professional tax advisor that such redemption should be tax-free with respect to such Subsequent Limited Shareholder. If the redemption of the Class I Common Share will be done in the context of or accompanied by a share capital reduction of the Company, the redemption must in addition be approved by a resolution at a meeting of Shareholders passed by a two-thirds majority of those present and voting, including the consent of the General Partner.
The redemption price for a Class I Common Share to be paid in Accenture Ltd Class A Common Shares shall equal a number of Accenture Ltd Class A Common Shares equal to the Valuation Ratio (as defined below). The redemption price for a Class I Common Share to be paid in cash shall equal the Valuation Ratio multiplied by the Market Price of an Accenture Ltd Class A Common Share (as defined below) as of the U.S. trading day following the United States trading day on which the Company receives a notice of an election for redemption with respect to such Class I Common Share.
Notwithstanding anything to the contrary, (i) no redemption at the option of a holder may be made prior to the time that the Accenture Ltd Class A Common Shares shall have been listed for trading on the New York Stock Exchange and (ii) the Company may refuse to honor a request for redemption at any time or during any period, including, without limitation, during a so-called “blackout period” (and the Class I Common Shares shall not be redeemable at such time or during such period), if the Company determines, based on the advice of counsel (which may be inside counsel), that there is material non-public information that may affect the Average Price Per Share (as defined below) at such time or during such period.
For the purposes of the Articles of Association a Luxembourg business day shall mean a day on which banks are ordinarily open for business in the City of Luxembourg, Luxembourg.
The Company may adopt reasonable procedures for the implementation of the redemption provisions set forth in this Article 7, including, without limitation, procedures for the giving of notice of an election for redemption.
Article 8 — Transfer Restrictions Applicable to Covered Shares
1. Each Covered Person shall at all times be the Sole Beneficial Owner of all Covered Shares beneficially owned by such Covered Person as of or prior to the IPO Date, except as provided herein. Any Covered Shares Transferred in compliance with this Article 8 shall no longer be subject to such provisions. Capitalized terms used in this Article 8 shall have the meanings ascribed to such terms in paragraph 24 of this Article 8.
2. Notwithstanding paragraph 1, an Employee Covered Person may:
(i) on or prior to the date that is four years after the IPO Date, Transfer an aggregate of up to 35% of the aggregate number of Covered Shares beneficially owned by such Employee Covered Person as of the IPO Date;
(ii) commencing on the date that is four years after the IPO Date, Transfer an aggregate (together with all other Transfers made pursuant to this paragraph 2) of up to 45% of the aggregate number of Covered Shares beneficially owned by such Employee Covered Person as of the IPO Date;
(iii) commencing on the date that is five years after the IPO Date, Transfer an aggregate (together with all other Transfers made pursuant to this paragraph 2) of up to 55% of the aggregate number of Covered Shares beneficially owned by such Employee Covered Person as of the IPO Date;
(iv) commencing on the date that is six years after the IPO Date, Transfer an aggregate (together with all other Transfers made pursuant to this paragraph 2) of up to 65% of the aggregate number of Covered Shares beneficially owned by such Employee Covered Person as of the IPO Date; and
(v) commencing on the date that is seven years after the IPO Date, Transfer an aggregate (together with all other Transfers made pursuant to this paragraph 2) of up to 75% of the aggregate number of Covered Shares beneficially owned by such Employee Covered Person as of the IPO Date.
3. Notwithstanding paragraph 1, a Covered Person may Transfer any Covered Shares beneficially owned by such Covered Person as of the IPO Date commencing on the later of (i) the date that is eight years after the IPO Date and (ii) the date that such Covered Person ceases to be an employee of the Company.
4. Notwithstanding paragraph 1, an Employee Covered Person that retires (or has retired) at the age of 50 or older and is not in contavention of the Non-Competition Agreement (a “Retired Employee”) may:
(i) if such Retired Employee retires (or has retired) at age 50, Transfer up to that number of Covered Shares beneficially owned by such Retired Employee as of the IPO Date which is equal to the product of (x) the aggregate number of Covered Shares beneficially owned by such Retired Employee as of the IPO Date multiplied by (y) the sum of (a) the percentage of Covered Shares eligible for sale at the date of such retirement pursuant to paragraph 2 of this Article 8 (the “Base Eligible Sales”) and (b) the product of (A) (1 minus Base Eligible Sales) multiplied by (B) 0.25;
(ii) if such Retired Employee retires (or has retired) at age 51, Transfer up to that number of Covered Shares beneficially owned by such Retired Employee as of the IPO Date which is equal to the product of (x) the aggregate number of Covered Shares beneficially owned by such Retired Employee as of the IPO Date multiplied by (y) the sum of (a) the percentage of the Base Eligible Sales and (b) the product of (A) (1 minus Base Eligible Sales) multiplied by (B) 0.375;
(iii) if such Retired Employee retires (or has retired) at age 52, Transfer up to that number of Covered Shares beneficially owned by such Retired Employee as of the IPO Date which is equal to the product of (x) the aggregate number of Covered Shares beneficially owned by such Retired Employee as of the IPO Date multiplied by (y) the sum of (a) the percentage of the Base Eligible Sales and (b) the product of (A) (1 minus Base Eligible Sales) multiplied by (B) 0.50;
(iv) if such Retired Employee retires (or has retired) at age 53, Transfer up to that number of Covered Shares beneficially owned by such Retired Employee as of the IPO Date which is equal to the product of (x) the aggregate number of Covered Shares beneficially owned by such Retired Employee as of the IPO Date multiplied by (y) the sum of (a) the percentage of the Base Eligible Sales and (b) the product of (A) (1 minus Base Eligible Sales) multiplied by (B) 0.625;
(v) if such Retired Employee retires (or has retired) at age 54, Transfer up to that number of Covered Shares beneficially owned by such Retired Employee as of the IPO Date which is equal to the product of (x) the aggregate number of Covered Shares beneficially owned by such Retired Employee as of the IPO Date multiplied by (y) the sum of (a) the percentage of the Base Eligible Sales and (b) the product of (A) (1 minus Base Eligible Sales) multiplied by (B) 0.75;
(vi) if such Retired Employee retires (or has retired) at age 55, Transfer up to that number of Covered Shares beneficially owned by such Retired Employee as of the IPO Date which is equal to the product of (x) the aggregate number of Covered Shares beneficially owned by such Retired Employee as of the IPO Date multiplied by (y) the sum of (a) the percentage of the Base Eligible Sales and (b) the product of (A) (1 minus Base Eligible Sales) multiplied by (B) 0.875; and
(vii) if such Retired Employee retires (or has retired) at age 56 or above, Transfer 100% of the Covered Shares beneficially owned by such Retired Employee as of the IPO Date.
5. A Retired Employee may also Transfer the Covered Shares beneficially owned by such Retired Employee as of the IPO Date in accordance with paragraph 2 of this Article 8 as if such Retired Employee were an Employee Covered Person.
6. Following the first anniversary of the IPO Date, a Retired Employee that reaches (or has reached) the age of 56 may also Transfer 100% of the Covered Shares beneficially owned by such Retired Employee as of the IPO Date.
7. Notwithstanding paragraph 1, a Covered Person that became disabled while an employee of the Company (a “Disabled Employee”) prior to June 15, 2001, may Transfer 100% of Covered Shares beneficially owned by such Disabled Employee as of the IPO Date. A Covered Person that becomes (or has become) a Disabled Employee following June 15, 2001 may (i) if such Disabled Employee becomes disabled (or has become disabled) prior to reaching the age of 50, Transfer Covered Shares beneficially owned by such Disabled Employee as of the IPO Date in accordance with the provisions of paragraph 2 of this Article 8 as if such Disabled Employee were an Employee Covered Person and (ii) if such Disabled Employee becomes (or has become) disabled after reaching the age of 50, Transfer Covered Shares beneficially owned by such Disabled Employee as of the IPO Date in accordance with the provisions of paragraph 4 of this Article 8 as if such Disabled Employee were a Retired Employee.
8. Notwithstanding paragraph 1, a Covered Person may Transfer Covered Shares beneficially owned by such Covered Person as of the IPO Date pursuant to bona fide pledges of Covered Shares approved by the Supervisory Board or its delegate in writing and any foreclosures thereunder, provided that the pledge has agreed in writing with the Supervisory Board or its delegate (any such agreement to be satisfactory to the Supervisory Board or its delegate in its sole discretion) that the Company shall have a right of first refusal to purchase such Covered Shares at the market price prior to any sale of such Covered Shares by such pledgee.
9. Notwithstanding paragraph 1, commencing on June 15, 2004, the Covered Shares are redeemable at the option of the Covered Person for a redemption price per share equal to the lower of (i) the Valuation Ratio multiplied by the Market Price of an Accenture Ltd Class A Common Share and (ii) one United States dollar.
10. Each Covered Person, for so long as such Covered Person is an Employee Covered Person, will comply with any restrictions on Transfer relating to Class I Common Shares imposed by the Company pursuant to the Company’s insider trading policies from time to time and notified to such Covered Person from time to time.
11. All Transfers of Covered Shares beneficially owned by a Covered Person as of or prior to the IPO Date made by such Covered Person before the adoption of this Article 8 shall be aggregated, for purposes of paragraphs 2 through 4, with all Transfers of Covered Shares beneficially owned by such Covered Person as of or prior to the IPO Date made by such Covered Person after the adoption of this Article 8.
12. Notwithstanding paragraph 2, each Covered Person will not Transfer any Covered Shares until July 24, 2005, except (A) to participate in underwritten public offerings, share repurchases, sales or redemptions or other transactions, in each case as approved in writing by the Company and/or (B) to estate and/or tax planning vehicles, family members and charitable organizations that become bound to the terms of Article 8 of these Articles of Association by express agreement in writing, in each case as approved in writing by the Company (which approval may be subject to other conditions, including upon the requirement that any transferee become bound by any other agreement, that the Company may require in its sole discretion). The preceding sentence shall not preclude any Transfer permitted under paragraph 8 or 9 of this Article 8.
13. All Covered Shares beneficially owned by a Covered Person (in each case other than Covered Shares held of record by a trustee in a compensation or benefit plan administered by the Company and other Covered Shares that have been pledged to the Company (or to a third party agreed to in writing by the Company) shall, at the sole discretion of the Company, be registered in the name of a nominee for such Covered Person and/or shall be held in the custody of a custodian until otherwise determined by the Company or until such time as such Covered Shares are released pursuant to paragraph 17 or 18 of this Article 8. The form of the custody agreement and the identity of the custodian and/or nominee shall be as determined by the Supervisory Board or its delegate from time to time.
14. Whenever any nominee holder shall receive any dividend or other distribution in respect of any Covered Shares, satisfied otherwise than in Covered Shares, the Company will give or cause to be given notice or direction to the applicable nominee and/or custodian referred to in paragraph 13 to permit the prompt distribution of such dividend or distribution to the beneficial owner of such Covered Shares, net of any tax withholding amounts required to be withheld by the nominee, unless the distribution of such dividend or distribution is restricted by the terms of another agreement between the Covered Person and the Company (or with any other person with respect to which the Company has expressly agreed in writing) known to the Company.
15. Any share certificate representing Covered Shares beneficially owned by a Covered Person, and any agreement or other instrument evidencing restricted share units, options or other rights to receive or acquire Covered Shares beneficially owned by such Covered Person, may bear a legend noted conspicuously on each such certificate, agreement or other instrument reading substantially as follows:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER RESTRICTIONS SET FORTH IN THE COMPANY’S ARTICLES OF ASSOCIATION. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE SOLD, EXCHANGED, TRANSFERRED, ASSIGNED, PLEDGED, PARTICIPATED, HYPOTHECATED OR OTHERWISE DISPOSED OF ONLY IN ACCORDANCE THEREWITH.”
16. The Company shall refuse to register the transfer of Covered Shares not made in compliance with these Articles of Association and it may enter stop transfer orders against the transfer of Covered Shares not made in compliance with these Articles of Association.
17. All Covered Shares of each Covered Person who is not an Employee Covered Person which could be Transferred without contravening any provision of this Article 8 shall be released from the custody of the custodian pursuant to procedures to be developed by the Company to or at the direction of such Covered Person free and clear of all restrictions and legends described above.
18. A specified number of Covered Shares of an Employee Covered Person shall be released from the custody of the custodian, pursuant to procedures to be developed by the Company, upon the request of such Employee Covered Person and to or at the direction of such Employee Covered Person (free and clear of all restrictions and legends described in this Article 8), provided that such request is accompanied by a certificate of such requesting Employee Covered Person (i) indicating such requesting Employee Covered Person’s intention to Transfer promptly such specified number of Covered Shares and (ii) establishing that such specified number of Covered Shares are then permitted to be Transferred without contravening any Transfer Restrictions (which evidence must be satisfactory to the Company).
19. Each Covered Person shall be responsible for all expenses of such Covered Person incurred in connection with compliance by such Covered Person with its obligations under this Article 8, including expenses incurred by the Company in enforcing the provisions of Article 8 relating to such obligations.
20. In the event of any change in the outstanding Class I Common Shares by reason of stock dividends, stock splits, reverse stock splits, recapitalizations, combinations, exchanges of shares and the like, the term “Covered Shares” shall refer to and include the securities received or resulting therefrom, but only to the extent such securities are received in exchange for or in respect of Covered Shares. Upon the occurrence of any event described in the immediately preceding sentence, the Company shall make such adjustments to or interpretations of the provisions of this Article 8 as the Company shall deem necessary or desirable to carry out the intent of such provisions. If the Company deems it advisable, any such adjustments may take effect from the record date, the “when issued trading date,” the “ex dividend date” or another appropriate date.
21. The provisions of this Article 8 shall be binding upon the respective legatees, legal representatives, successors and assigns of the Covered Persons; provided, however, that a Covered Person may not assign or otherwise transfer any of its obligations under such provisions without the prior written consent of the Supervisory Board or its delegate and any assignment or other transfer of rights and/or obligations under this Article 8 by a Covered Person without such consent of the Supervisory Board or its delegate shall be void.
22. If requested by the Supervisory Board or its delegate, each Covered Person shall execute such documents and take such further action as may be reasonably necessary to effect the provisions of this Article 8.
23. The Supervisory Board or its delegate may waive any of the provisions of this Article 8 to permit particular Covered Persons, a particular class of Covered Persons or all Covered Persons to Transfer Covered Shares in particular situations (such as Transfers to family members, partnerships or trusts) or generally. The Supervisory Board or its delegate may impose such conditions as the Supervisory Board or its delegate determines on the granting of such waivers. The determinations of the Supervisory Board or its delegate under this paragraph 23 shall be final and binding and need not to be uniform and may be made selectively among Covered Persons (whether or not such Covered Persons are similarly situated).
24. For purposes of this Article 8, the following terms have the following meanings:
A “beneficial owner” of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares: (i) voting power, which includes the power to vote, or to direct the voting of, such security and/or (ii) investment power, which includes the
power to dispose, or to direct the disposition of, such security, but for purposes of these Articles of Association a person shall not be deemed a beneficial owner of Covered Shares (A) solely by virtue of the application of the United States Securities Exchange Act of 1934, as amended from time to time (the “Exchange Act”) Rule 13d-3(d) or Exchange Act Rule 13d-5 as in effect on April 18, 2001, (B) solely by virtue of the possession of the legal right to vote securities under applicable law (such as by proxy, power of attorney or appointment as corporate representative) or (C) held of record by a “private foundation” subject to the requirements of Section 509 of the United States Internal Revenue Code of 1986, as amended from time to time, and the applicable rulings and regulations thereunder (or equivalent in other jurisdictions as determined from time to time by the Supervisory Board or its delegate). “Beneficially own” and “beneficial ownership” shall have correlative meanings. For purposes of the determination of beneficial ownership only, the provisions of Article 8 shall not be deemed to transfer the investment power with respect to any Class I Common Shares.
“Covered Person” or “Covered Persons” shall mean those persons, other than the Company, who were Shareholders on the IPO Date; provided that any Covered Person who was not also a party to that certain Common Agreement dated as of April 19, 2002 among the Company and the other parties thereto on the date of adoption of this Article 8 shall not be subject to paragraph 12 of this Article 8.
“Company means Accenture SCA, together, as the case may be and if the context so requires, with its Subsidiaries from time to time.
A Covered Person’s “Covered Shares” shall mean any Class I Common Shares beneficially owned by such Covered Person at the time in question. “Covered Shares” shall also include the securities that are defined to be “Covered Shares” in paragraph 20 of this Article 8. A Covered Person “acquires” Covered Shares when such Covered Person first acquires beneficial ownership over such Covered Shares.
The term “disabled” shall mean “disabled” as defined (i) in any employment agreement then in effect between the employee and the Company, or (ii) if not defined therein, or if there shall be no such agreement, as defined in the Company’s long-term disability plan as in effect from time to time, or (iii) if there shall be no plan, the inability of an employee to perform in all material respects his duties and responsibilities to the Company for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period by reason of a physical or mental incapacity. Any question as to the existence of a disability as to which the employee and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the employee and the Company. If the employee and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determinations in writing. The determination of disability made in writing to the Company and the employee shall be final and conclusive for all purposes of this Article 8.
An “employee” shall include, without limitation, the owners and employees of partner personal service companies in certain countries with which the Company has personal service contracts (in each case as agreed by the Supervisory Board or its delegate), and any other similarly situated person designated as an “employee” by the Supervisory Board or its delegate.
“Employee Covered Person” shall mean a Covered Person that is an employee of the Company at the time in question, provided that if the Company has received notice that any Covered Person intends to terminate such Covered Person’s employment with the Company (except in the case of notice with respect to retirement or disability), such Covered Person shall be deemed not to be an Employee Covered Person.
“IPO Date” shall mean July 24, 2001, the date of completion of Accenture Ltd’s initial public offering.
“Non-Competition Agreement” shall mean, collectively, any Non-Competition Agreement, dated as of April 18, 2001, among the Company and the partners from time to time party thereto as such agreement may be amended from time to time or any agreement having a similar effect.
“Permitted Basket Transaction” shall mean the purchase or sale of, or the establishment of a long or short position in, a basket or index of securities (or of a derivative financial instrument with respect to a basket or index of securities) that includes securities of the Company, in each case if such purchase, sale or establishment is permitted under the Company’s policy on hedging with respect to securities of the
Company and other relevant policies, including insider trading policies, as announced from time to time.
“Sole Beneficial Owner” shall mean a person who is the beneficial owner of Covered Shares, who does not share beneficial ownership of such Covered Shares with any other person (other than pursuant to these Articles of Association, the Non-Competition Agreement or applicable community property laws) and who is the only person (other than pursuant to applicable community property laws) with a direct economic interest in the Covered Shares. An economic interest of the Company (or of any other person with respect to which the Company has expressly agreed to in writing) as pledgee shall be disregarded for this purpose. A Covered Person that holds Covered Shares indirectly through a wholly-owned personal holding company shall be considered the “Sole Beneficial Owner” of such Covered Shares, provided that such personal holding company is a Covered Person hereunder. In respect of Covered Shares held a personal holding company or a trust structure, the share register shall refer both to the legal entity or trust, respectively, as the legal owner and record owner of the Covered Shares and the beneficial owner(s) of the legal entity or trust, respectively.
“Subsidiary” shall mean any person in which Accenture SCA owns, directly or indirectly, at least a majority of the equity, economic or voting interest.
“Transfer” shall mean any sale, transfer, pledge, hypothecation or other disposition, whether direct or indirect, whether or not for value, and shall include any disposition of the economic or other risks of ownership of Covered Shares, including short sales of securities of the Company, option transactions (whether physical or cash settled) with respect to securities of the Company, use of equity or other derivative financial instruments relating to securities of the Company and other hedging arrangements with respect to securities of the Company, in each such case other than Permitted Basket Transaction.
Article 9 — Liability of Shareholders
The Limited Shareholders are only liable up to the amount of their capital contribution made to the Company.
The General Partner’s liability is and shall be unlimited.
Article 10 — Meetings of Shareholders
The annual general meeting of Shareholders shall be held, in accordance with Luxembourg law, in Luxembourg at the registered office of the Company, or at such other place in Luxembourg as may be specified in the notice of meeting, on 15th January, at 12:00 noon. If such day is not a Luxembourg business day, the annual general meeting shall be held on the next following Luxembourg business day.
Other meetings of Shareholders may, subject to applicable law, be held at such place and at such time as may be specified by the General Partner in the respective notices of meeting.
All general meetings shall be chaired by the General Partner.
Article 11 — Notice, quorum, proxies, majority
The notice periods and quorum rules required by the Law shall apply with respect to the meetings of Shareholders of the Company, as well as with respect to the conduct of such meetings, unless otherwise provided herein.
Each Share is entitled to one vote. A Shareholder may act at any meeting of Shareholders by appointing another person in writing (whether in original or by telefax, cable, telegram or telex), whether a Shareholder or not, as its proxy.
Except as otherwise required by law or by these Articles of Association, resolutions at a meeting of Shareholders will be passed by a simple majority of those Shares represented and voting at the meeting and with the consent of the General Partner.
The following matters shall require a quorum (if and when required as a matter of the Law) of half of the Company’s issued and outstanding Shares and a two-thirds majority vote of those Shares represented and voting at the meeting:
(i) amendment of these Articles of Association;
(ii) dissolution and the liquidation of the Company;
(iii) setting of the authorised share capital and the authorisation given to the General Partner to increase the Company’s share capital within the limits of the authorisation;
(iv) decrease of the Company’s share capital; and
(v) sale of all or substantially all of the Company’s assets.
The following matters shall require a unanimous resolution of all the Shareholders of the Company:
(i) the redomestication of the Company (i.e. its migration) by the change of the nationality of the Company; and
(ii) the assessment of the Shareholders.
The Shares shall, as a rule, vote as a single class. Matters adversely affecting the rights of the holders of a specific share class only shall require a quorum (if and when required as a matter of the Law) of half of the class’ issued and outstanding Shares and a two-thirds majority vote of the Shares of that share class and, in respect of such matters but only in respect of such matters, the holders shall vote as a separate class.
Article 12 — Convening notice
Shareholders’ meetings shall be convened by the General Partner or by the Supervisory Board, pursuant to a notice setting forth the agenda and sent by registered mail at least eight days prior to the meeting to each Shareholder at the Shareholder’s notice address on record or, failing which, its residence address on record in the share register of the Company or by two publications in each of the Luxembourg press and in the Luxembourg Official Gazette (Mémorial), whereby the first publication shall be made so that the second publication shall be made at least eight days prior to the meeting and with there being at least an eight-day interval between the first and the second publications for the meeting.
If all the Shareholders are present or represented at a meeting of Shareholders, and if they state that they have been informed of the agenda of the meeting, the meeting may be held without prior notice.
The General Partner may determine all reasonable conditions that must be fulfilled by Shareholders for them to participate in any meeting of Shareholders.
Article 13 — Powers of the meeting of Shareholders
Any regularly constituted meeting of Shareholders of the Company shall represent the entire body of Shareholders of the Company. The meeting of Shareholders may resolve on any item only with the consent of the General Partner.
Article 14 — Management
The Company shall be managed by the General Partner who shall be the liable partner (associé — gérant — commandité) and who shall be personally, jointly and severally liable with the Company for all liabilities which cannot be met out of the assets of the Company.
The General Partner is vested with the broadest powers to perform all acts of administration and disposition in the Company’s interest which are not expressly reserved by the Law or by these Articles of Association to the meeting of Shareholders or to the Supervisory Board.
The General Partner shall have the sole authority to institute and direct court proceedings and to negotiate, settle and compromise disputes on behalf of the Company and may delegate this authority to such persons or committees as it may designate, provided the Supervisory Board shall have approved the persons to whom the delegation by the General Partner of such authority is made.
The General Partner shall have the power on behalf and in the name of the Company to carry out any and all of the purposes of the Company and to perform all acts and enter into and perform all contracts and other undertakings that it may deem necessary, advisable or useful or incidental thereto. Except as otherwise expressly provided, the General Partner has, and shall have full authority in its discretion to exercise, on behalf of and in the name of the Company, all rights and powers necessary or convenient to carry out the purposes of the Company.
Article 15 — Authorised signature
The Company shall be bound by the corporate signature of the General Partner as made by the individual or joint signatures of any other persons to whom authority shall have been delegated by the General Partner as the General Partner shall determine in its discretion, provided the Supervisory Board shall have approved the persons to whom the delegation by the General Partner of such authority is made.
Article 16 — Remuneration of General Partner; Expenses
The General Partner shall receive no remuneration from the Company for its duties. To the largest extent permitted by applicable law, but without prejudice to the second paragraph of Article 8, the Company shall bear, and reimburse for, the costs and expenses incurred by the General Partner resulting from the performance of its duties and/or actions taken on behalf of and/or for the benefit of the Company and may make advances to the General Partner in connection therewith (including, without limitation, losses, damages and defense costs resulting from actual or threatened third party claims).
Article 17 — Supervisory Board
The affairs of the Company and its financial situation including particularly its books and accounts shall be supervised by a supervisory board composed of at least three board members (herein referred to as the “Supervisory Board”).
The Supervisory Board shall be consulted by the General Partner on such matters as the General Partner may determine, and it shall authorise any actions of the General Partner that may, pursuant to the Law or under these Articles of Association, exceed the powers of the General Partner.
The Supervisory Board shall approve those individuals put forth from time to time by the General Partner to exercise the General Partner’s powers with respect to the management of the Company, and the General Partner shall act only through such individuals.
The Supervisory Board shall be elected by a simple majority vote of the general meeting of Shareholders for a maximum term of six years, which shall be renewable.
The general meeting of Shareholders shall determine the remuneration of the Supervisory Board, if any.
The Supervisory Board shall be convened by its chairman (as appointed by the Supervisory Board from the Board members) or by the General Partner.
Written notice of any meeting of the Supervisory Board shall be given to all members of the Supervisory Board with at least eight days prior notice, except in circumstances of emergency, in which case the nature of such circumstances shall be set forth in the notice of the meeting. This notice may be waived by the consent in writing, whether in original or by cable, telegram, telefax or telex of each member. Separate notice shall not be required for individual meetings held at times and places prescribed in a schedule previously adopted by resolution of the Supervisory Board. If all the members of the Supervisory Board are present or represented at a meeting of Supervisory Board, and if they state that they have been informed of the agenda of the meeting, the meeting may be held without prior notice.
Any member may act at any meeting of the Supervisory Board by appointing in writing, whether in original or by cable, telegram, telex, telefax or other electronic transmission another member as his proxy.
The Supervisory Board can deliberate or act validly only if at least the majority of its members are present or represented. Resolutions shall be approved if taken by a majority of the votes of the members present or represented at such meeting. Resolutions may also be taken in one or several written instruments signed by all the members.
No member of the Supervisory Board shall be liable in respect of any negligence, default or breach of duty on his own part in relation to the Company and each member of the Supervisory Board shall be indemnified out of the funds of the Company against all liabilities, losses, damages or expenses arising out of the actual or purported execution or discharge of his duties or the exercise of his powers or otherwise in relation to or in connection with his duties, powers or office; provided that this exemption from liability and indemnity shall not extend to any matter which would render them void pursuant to Luxembourg law.
Article 18 — Accounting year — Accounts
The accounting year of the Company shall begin on 1st September and it shall terminate on 31st August of each year.
The accounts of the Company shall be stated in euro and/or United States dollars or in any other fungible currency as decided by the General Partner.
Article 19 — Allocation of profits
From the annual net profits of the Company, five per cent (5 %) shall be allocated to the legal reserve as required by the Law. This allocation shall cease to be required as soon as such legal reserve amounts to ten per cent (10 %) of the nominal issued share capital of the Company as stated in Article 5 hereof as increased or reduced from time to time.
The General Partner shall determine how the annual net profits shall be disposed of, and it shall decide to pay dividends from time to time, as it, in its discretion, believes to suit best the corporate purpose and policy of the Company. A general meeting of Shareholders shall have to approve the General Partner’s decision to pay dividends as well as the profit allocation proposed by the General Partner.
Each Shareholder shall have dividend rights corresponding to its share. Each Class II common Share shall entitle its holder to receive a dividend equal to 10% of any dividend to which a Class I Common Share entitles its holder, whether in cash or in kind.
The dividends may be paid in Euro or in United States Dollars or in any other currency determined by the General Partner and they may be paid at such places and times as shall be determined by the General Partner.
The General Partner may decide to pay interim dividends under the conditions and within the limits laid down in the Law.
Article 20 — Dissolution and liquidation
The Company may be voluntarily dissolved by a resolution passed at a general meeting of Shareholders with the consent of the General Partner.
The liquidation shall be carried out by one or several liquidators (who may be physical persons or legal entities) named by a general meeting of Shareholders which shall also determine their powers and their remuneration.
Each holder of Shares of the Company shall be entitled (to the extent of the availability of funds or assets in sufficient amount), to the repayment of the nominal share capital amount corresponding to its Share holdings. The liquidation proceeds (if any), including the return of nominal share capital, shall be paid so that each Class II Common Share shall entitle its holder to receive a liquidation payment equal to 10% of any liquidation payment to which a Class I Common Share entities its holder.
Article 21 — Amendments
These Articles of Association may be amended from time to time by a general meeting of Shareholders, subject to the quorum and majority requirements provided by the laws of Luxembourg, and subject to the consent of the General Partner.
Article 22 — Tax Matters
The General Partner may, in its sole discretion, make any tax elections with respect to the Company, provided that the General Partner reasonably determines that any such election would not have an adverse tax impact on any Shareholder.
Article 23 — Applicable law
All matters not governed by these Articles of Association shall be determined by application of the provisions of Luxembourg law, and, in particular, of the Law.
Article 24 — Definitions
The “Average Price Per Share” as of any day shall equal the average of the high and low sales prices of Accenture Ltd Class A Common Shares as reported on the New York Stock Exchange (or if the Accenture Ltd Class A Common Shares are not listed or admitted to trading on the New York Stock
Exchange, on the American Stock Exchange, or if the Accenture Ltd Class A Common Shares are not listed or admitted to trading on the American Stock Exchange, on the Nasdaq National Market, or if the Accenture Ltd Class A Common Shares are quoted on the Nasdaq National Market, on the over-the-counter market as furnished by any nationally recognized New York Stock Exchange member firm selected by Accenture Ltd for such purpose), net of customary brokerage and similar transaction costs as determined with respect to the Company and by the Company.
The “Market Price of an Accenture Ltd Class A Common Share” as of any day shall equal the Average Price Per Share as of such day, unless Accenture Ltd sells (i.e. trade date) shares of its Class A Common Shares on such day for cash other than in a transaction with any employee or an affiliate and other than pursuant to a preexisting obligation; in which case the “Market Price of an Accenture Ltd Class A Common Share” as of such day shall be the weighted average sale price per share, net of brokerage and similar costs.
The “Valuation Ratio” at any time shall equal 1.00, provided that the Valuation Ratio shall be subject to adjustment from time to time pursuant to the following provisions of this Article 23. If at any time:
| (i) | Accenture Ltd acquires or otherwise holds more than a de miminis amount of assets other than: |
| (a) | its shareholding in the Company, | |||
| (b) | any direct or indirect interest in its own shares (provided that such shares would not be treated as an asset of Accenture Ltd on a consolidated balance sheet of Accenture Ltd prepared in accordance with generally accepted accounting principles in the United States of America) or | |||
| (c) | any assets that it holds only transiently prior to contributing or loaning such assets to the Company (provided that any such transiently held assets are so contributed or loaned prior to the end of the then current fiscal quarter of Accenture Ltd), | |||
| (i) | Accenture Ltd incurs or otherwise is liable for more than a de miminis amount of liabilities other than any liability for which it is the obligee under a corresponding liability of the Company or |
| (ii) | circumstances otherwise require, then |
| (1) | the General Partner shall promptly inform the Supervisory Board and those members of the Supervisory Board that are also Limited Shareholders (in such capacity, the “Limited Shareholders Committee”) of such fact, | |||
| (2) | the General Partner shall provide the Limited Shareholders Committee with such other information, including financial information or statements, as the Limited Shareholders Committee may reasonably require in connection with the determinations contemplated by the following clause (3) of this sentence and | |||
| (3) | each of the General Partner and the Limited Shareholders Committee shall use their best efforts to promptly: | |||
| (x) | determine whether an adjustment to the Valuation Ratio is required in order to reflect the relative fair market values of an Accenture Ltd Class A Common Share and a Class I Common Share and | |||
| (y) | if such an adjustment is so required, determine a process for equitable adjustment of the Valuation Ratio (whether based on the financial statements of Accenture Ltd or otherwise and whether a process for a one-time adjustment or recurring adjustments). | |||
If the General Partner and the Limited Shareholders Committee determine that an adjustment in the Valuation Ratio is so required and determine a process for equitable adjustment of the Valuation Ratio, then the Valuation Ratio shall be adjusted by such process. If no agreement can be reached promptly (but in any event within 45 days) between the General Partner and the Limited Shareholders Committee as to whether any such adjustment is so required or as to a process for equitable adjustment, then the General Partner and the Limited Shareholders Committee shall choose an independent arbitrator (which may be a leading international investment bank) who is a recognized expert in the field of company valuation to (x) determine whether an adjustment to the Valuation Ratio is required in order to reflect the relative fair market values of an Accenture Ltd Class A Common Share and a Class I Common Share
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and (y) if such an adjustment is so required, determine a process for equitable adjustment of the Valuation Ratio (whether based on the financial statements of Accenture Ltd or otherwise and whether a process for a one-time adjustment or recurring adjustments). If the arbitrator determines that an adjustment in the Valuation Ratio is so required and determines a process for equitable adjustment of the Valuation Ratio, then the Valuation Ratio shall be adjusted by such process.
If Accenture Ltd:
| (i) | pays a dividend or makes a distribution on its Accenture Ltd Class A Common Shares in Accenture Ltd Class A Common Shares, | |||
| (ii) | subdivides its outstanding Accenture Ltd Class A Common Shares into a greater number of shares, | |||
| (iii) | combines its outstanding Accenture Ltd Class A Common Shares into a smaller number of shares, | |||
| (iv) | makes a distribution on its Accenture Ltd Class A Common Shares in shares of its share capital other than Accenture Ltd Class A Common Shares or | |||
| (v) | issues by reclassification of its Accenture Ltd Class A Common Shares any shares of its share capital, | |||
then the Valuation Ratio in effect immediately prior to such action shall be adjusted so that the holder of Class I Common Shares thereafter redeemed may receive the redemption price or number of shares of share capital of Accenture Ltd, as the case may be, which it would have owned immediately following such action if it had redeemed immediately prior to such action (after taking into account any corresponding action taken by the Company).
In the event of any business combination, amalgamation, restructuring, recapitalization or other extraordinary transaction directly or indirectly involving Accenture Ltd or any of its securities or assets as a result of which the holders of Accenture Ltd Class A Common Shares shall hold voting securities of an entity other than Accenture Ltd, the terms “Accenture Ltd Class A Common Shares” and “Accenture Ltd” shall refer to such voting securities formerly representing or distributed in respect of Accenture Ltd Class A Common Shares and such entity, respectively.
Exhibit 10.2
TRANSFER RIGHTS AGREEMENT
AMONG
ACCENTURE SCA
and
THE COVERED PERSONS SIGNATORY HERETO
Amended and Restated as of February 3, 2005
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND OTHER MATTERS
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Section 1.1. Definitions
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Section 1.2. Gender
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ARTICLE II LIMITATIONS ON TRANSFER OF SHARES
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Section 2.1. [RESERVED]
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5 | |||
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Section 2.2. [RESERVED]
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5 | |||
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Section 2.3. Certain Additional Restrictions
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5 | |||
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Section 2.4. [RESERVED]
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5 | |||
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PARTIES
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ARTICLE IV OTHER AGREEMENTS OF THE PARTIES
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Section 4.1. Redemption Price
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7 | |||
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Section 4.2. Accenture SCA Partners Committee
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Section 4.3. Indemnification and Expenses
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8 | |||
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Section 4.4. Adjustment upon Changes in Capitalization; Adjustments upon Changes of Control; Representatives, Successors and Assigns
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9 | |||
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Section 4.5. Filing of Schedule 13D or 13G
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Section 4.6. Further Assurances
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ARTICLE V MISCELLANEOUS
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Section 5.1. Term of the Agreement; Termination of Certain Provisions
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11 | |||
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Section 5.2. Amendments
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12 | |||
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Section 5.3. Waivers
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13 | |||
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Section 5.4. GOVERNING LAW
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Section 5.5. Resolution of Disputes
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Section 5.6. Relationship of Parties
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Section 5.7. Notices
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Section 5.8. Severability
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Section 5.9. Right to Determine Tender Confidentially
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Section 5.10. No Third-Party Rights
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Section 5.11. Section Headings
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Section 5.12. Execution in Counterparts
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Appendix A – Covered Persons
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This Transfer Rights Agreement, amended and restated as of April 18, 2001 1 (as amended, supplemented, waived or otherwise modified from time to time in accordance with its terms, this “Agreement”), among Accenture SCA, a Luxembourg société en commandite par actions (“Accenture SCA”), and the Covered Persons (hereinafter defined).
WITNESSETH:
WHEREAS, the Covered Persons may in the future become beneficial owners of Class I Common Shares, par value 1.25 euro per share, of Accenture SCA (the “Common Shares”).
WHEREAS, the Covered Persons desire to address herein certain relationships among themselves with respect to the disposition of their Common Shares and various other matters and desire to give to the Accenture SCA Partners Committee (hereinafter defined) the power to enforce their agreements with respect thereto on their behalf.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements, covenants and provisions herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND OTHER MATTERS
Section 1.1. Definitions . The following words and phrases as used herein shall have the following meanings, except as otherwise expressly provided or unless the context otherwise requires:
(a) “Accenture Ltd Class A Common Shares” shall mean the Class A Common Shares of Accenture Ltd, an exempted company limited by shares organized under the laws of Bermuda.
(b) “Accenture SCA” shall have the meaning ascribed to such term in the preamble hereto.
(c) “Accenture SCA Partners Committee” shall have the meaning ascribed to such term in Section 4.2 hereof.
(d) This “Agreement” shall have the meaning ascribed to such term in the preamble hereto.
(e) “Base Eligible Sales” shall have the meaning ascribed to such term in Section 2.2 hereof.
| 1 | This Transfer Rights Agreement is amended and restated as of February 3, 2005. |
1
(f) A “beneficial owner” of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has, or shares: (i) voting power, which includes the power to vote, or to direct the voting of, such security and/or (ii) investment power, which includes the power to dispose, or to direct the disposition of, such security, but for purposes of this Agreement a person shall not be deemed a beneficial owner of Common Shares (A) solely by virtue of the Application of Exchange Act Rule 13d-3(d) or Exchange Act Rule 13d-5 as in effect on the date hereof, (B) solely by virtue of the possession of the legal right to vote securities under applicable law (such as by proxy, power of attorney or appointment as corporate representative) or (C) held of record by a “private foundation” subject to the requirements of Section 509 of the Code (or equivalent in other jurisdictions as determined from time to time by the Accenture SCA Partners Committee). “Beneficially own” and “beneficial ownership” shall have correlative meanings. For purposes of the determination of beneficial ownership only, the provisions of Article II hereof shall not be deemed to transfer the investment power with respect to any Common Shares.
(g) “Code” shall mean the United States Internal Revenue Code of 1986, as amended from time to time, and the applicable rulings and regulations thereunder.
(h) “Common Shares” shall have the meaning ascribed to such term in the recitals hereto.
(i) “Company” shall mean Accenture SCA, together with its general partner and its Subsidiaries from time to time.
(j) “Continuing Provisions” shall have the meaning ascribed to such term in Section 5.1(b) hereof.
(k) “Covered Persons” shall mean those persons, other than Accenture SCA, who are from time to time parties to this Agreement and whose names are, or are required to be, listed on Appendix A hereto, in each case in accordance with the terms hereof.
(l) A Covered Person’s “Covered Shares” shall mean any Common Shares beneficially owned by such Covered Person at the time in question but, shall not include any Common Shares excluded from the definition of Covered Shares by action of the Accenture SCA Partners Committee prior to the IPO Date. “Covered Shares” shall also include the securities that are defined to be “Covered Shares” in Section 4.4 hereof. A Covered Person “acquires” Covered Shares when such Covered Person first acquires beneficial ownership over such Covered Shares.
(m) The term “disabled” shall mean “disabled” as defined (i) in any employment agreement then in effect between the employee and the Company, or (ii) if not defined therein, or if there shall be no such agreement, as defined in the Company’s long-term disability plan as in effect from time to time, or (iii) if there shall be no plan, the inability of an employee to perform in all material respects his duties and responsibilities to the
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Company for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty- four (24) consecutive month period by reason of a physical or mental incapacity. Any question as to the existence of a disability as to which the employee and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the employee and the Company. If the employee and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determinations in writing. The determination of disability made in writing to the Company and the employee shall be final and conclusive for all purposes of this Agreement.
(n) “Disabled Employee” shall have the meaning ascribed to such term in Section 2.2 hereof.
(o) An “employee” shall include, without limitation, the owners and employees of partner personal service companies in certain countries with which the Company has personal service contracts (in each case as agreed by the Accenture SCA Partners Committee), and any other similarly situated person designated as an “employee” by the Accenture SCA Partners Committee.
(p) “Employee Covered Person” shall mean a Covered Person that is an employee of the Company at the time in question, provided that if the Company has received notice that any Covered Person intends to terminate such Covered Person’s employment with the Company (except in the case of notice with respect to retirement or disability), such Covered Person shall be deemed not to be an Employee Covered Person.
(q) “Employee Covered Shares” shall have the meaning ascribed to such term in Section 5.1 hereof.
(r) “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended to date and as further amended from time to time.
(s) A reference to an “Exchange Act Rule” shall mean such rule or regulation of the United States Securities and Exchange Commission under the Exchange Act, as in effect from time to time or as replaced by a successor rule thereto.
(t) “IPO Date” shall mean the closing date of the initial public offering of the Accenture Ltd Class A Common Shares.
(u) “Market Price of an Accenture Ltd Class A Common Share” shall have the meaning ascribed to such term in the Articles of Association of Accenture SCA, as such term may be amended from time to time pursuant to the Articles of Association of Accenture SCA.
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(v) “Non-Competition Agreement” shall mean, collectively, any Non- Competition Agreement, dated as of the date hereof, among the Company and the partners from time to time party thereto.
(w) “Permitted Basket Transaction” shall mean the purchase or sale of, or the establishment of a long or short position in, a basket or index of securities (or of a derivative financial instrument with respect to a basket or index of securities) that includes securities of the Company, in each case if such purchase, sale or establishment is permitted under the Company’s policy on hedging with respect to securities of the Company and other relevant policies, including insider trading policies, as announced from time to time.
(x) A “person” shall include, as applicable, any individual, estate, trust, corporation, partnership, limited liability company, unlimited liability company, foundation, association or other entity.
(y) “Retired Employee” shall have the meaning ascribed to such term in Section 2.2 hereof.
(z) “Securities Act” shall mean the United States Securities Act of 1933, as amended from time to time.
(aa) “Sole Beneficial Owner” shall mean a person who is the beneficial owner of Covered Shares, who does not share beneficial ownership of such Covered Shares with any other person (other than pursuant to this Agreement, the Non-Competition Agreement or applicable community property laws) and who is the only person (other than pursuant to applicable community property laws) with a direct economic interest in the Covered Shares. An economic interest of the Company (or of any other person with respect to which the Company has expressly agreed to in writing) as pledgee shall be disregarded for this purpose. A Covered Person that holds Covered Shares indirectly through a wholly-owned personal holding company shall be considered the “Sole Beneficial Owner” of such Covered Shares, provided that such personal holding company is a Covered Person hereunder.
(bb) “Subsidiary” shall mean any person in which Accenture SCA owns, directly or indirectly, at least a majority of the equity, economic or voting interest.
(cc) “Transfer” shall mean any sale, transfer, pledge, hypothecation or other disposition, whether direct or indirect, whether or not for value, and shall include any disposition of the economic or other risks of ownership of Covered Shares, including short sales of securities of the Company, option transactions (whether physical or cash settled) with respect to securities of the Company, use of equity or other derivative financial instruments relating to securities of the Company and other hedging arrangements with respect to securities of the Company, in each such case other than Permitted Basket Transactions.
(dd) “Transfer Restrictions” shall have the meaning ascribed to such term in Section 2.1 hereof.
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(ee) “Valuation Ratio” shall have the meaning ascribed to such term in the Articles of Association of Accenture SCA, as such ratio may be adjusted from time to time pursuant to the Articles of Association of Accenture SCA.
(ff) “vote” shall include, without limitation, actions taken or proposed to be taken by written consent.
Section 1.2. Gender . For the purposes of this Agreement, the words “he,” “his” or “himself” shall be interpreted to include the masculine, feminine and corporate, other entity or trust form.
ARTICLE II
LIMITATIONS ON TRANSFER OF SHARES
Section 2.1. [RESERVED]
Section 2.2 [RESERVED]
Section 2.3. Certain Additional Restrictions .
Each Covered Person agrees for the benefit of every other Covered Person that for so long as such Covered Person is an Employee Covered Person, such Covered Person will comply with any restrictions on Transfer relating to Common Shares imposed by the Company and notified to such Covered Person from time to time to enable the Company or any party to an agreement with the Company to (i) account for a business combination by the pooling of interests method or (ii) pursuant to the Company’s insider trading policies from time to time.
Section 2.4. [RESERVED]
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Each Covered Person severally represents and warrants that:
(i) such Covered Person has (and with respect to Covered Shares to be acquired in the future, will have) good, valid and marketable title to the Covered Shares, free and clear of any pledge, lien, security interest, charge, claim, equity or encumbrance of any kind, other than pursuant to this Agreement, another agreement with the Company, or any other agreement with another person with respect to which the Company has expressly agreed to in writing, by which such Covered Person is bound and to which the Covered Shares are subject;
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(ii) this Agreement constitutes the legal, valid and binding obligation of such Covered Person, enforceable against such Covered Person in accordance with its terms (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally and to general equitable principles (whether considered in a proceeding in equity or at law));
(iii) there are no actions, suits or proceedings pending, or, to the knowledge of such Covered Person, threatened against or affecting such Covered Person or such Covered Person’s assets in any court or before or by any federal, state, municipal or other domestic or foreign governmental department, commission, board, bureau, agency or instrumentality which, if adversely determined, would impair the ability of such Covered Person to perform or comply with this Agreement;
(iv) such Covered Person understands that his ability to transfer the Covered Shares is subject to legal and contractual restrictions and that the Covered Shares have not been registered under the United States Securities Act of 1933, and that he is holding the Covered Shares for his own account, for investment, and not for distribution, assignment or resale to others, and no other person has any direct or indirect beneficial interest in such shares (other than the Company or at the express written consent of the Company); and
(v) no statement, representation or warranty made by such Covered Person in this Agreement, nor any information provided by such Covered Person for inclusion in a report filed pursuant to Section 4.5 hereof or in a registration statement filed by the Company contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements, representations or warranties contained herein or information provided therein not misleading.
Each Covered Person that is not a natural person additionally and severally represents and warrants that:
(i) such Covered Person is duly organized and validly existing in good standing under the laws of the jurisdiction of such Covered Person’s formation;
(ii) such Covered Person has full right, power and authority to enter into and perform this Agreement; and
(iii) the execution and delivery of this Agreement and the performance of the transactions contemplated herein have been duly authorized, and no further proceedings on the part of such Covered Person are necessary to authorize the execution, delivery and performance of this Agreement; and this Agreement has been duly executed by such Covered Person.
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Each Covered Person severally agrees that the foregoing provisions of this Article III shall be continuing representations and warranties of such Covered Person during the period that such person shall be a Covered Person and Common Shares of such person shall be Covered Shares, and such Covered Person shall take all actions as shall from time to time be necessary to cure any breach or violation and to obtain any authorizations, consents, approvals and clearances in order that such representations and warranties shall be true and correct during such period.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
Section 4.1. Redemption Price
Each Covered Person agrees that the redemption price payable in connection with any redemption of such Covered Person’s Common Shares (i) under Article 7 of the Articles of Association of Accenture SCA, as such redemption price is calculated in accordance with such Article 7, or (ii) under paragraph (f) of Section 2.2 hereof, as such redemption price is calculated in accordance with Section 2.2 hereof, may, at the option of Accenture SCA, be paid in cash or in Accenture Ltd Class A Common Shares.
Section 4.2. Accenture SCA Partners Committee .
(a) The “Accenture SCA Partners Committee”, as of any time, shall consist of the members of the Supervisory Board of Accenture SCA who are also employees of the Company that hold the “Partner” title and who agree to serve as members of the Accenture SCA Partners Committee. If there are less than three individuals who are both Partners and members of the Supervisory Board of Accenture SCA and who agree to serve as members of the Accenture SCA Partners Committee, the Accenture SCA Partners Committee shall consist of each such individual plus such additional individuals who are Partners and who are selected pursuant to procedures established by the Accenture SCA Partners Committee as shall ensure that the Accenture SCA Partners Committee contains not less than three members who are Partners. The members of the Accenture SCA Partners Committee from time to time will be party to this Agreement in their capacities both as Covered Persons and as members of the Accenture SCA Partners Committee. Any member of the Accenture SCA Partners Committee that is not a Covered Person hereunder shall be deemed to be a party hereto solely in their capacity as a member of the Accenture SCA Partners Committee.
(b) (i) Except as otherwise provided herein, all determinations necessary or advisable under this Agreement (including determinations of beneficial ownership) shall be made by the Accenture SCA Partners Committee, whose determinations shall be final and binding. The Accenture SCA Partners Committee’s determinations under this Agreement and actions (including waivers) hereunder need not be uniform and may be made selectively among Covered Persons (whether or not such Covered Persons are similarly situated).
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(ii) Each Covered Person recognizes and agrees that each of the members of the Accenture SCA Partners Committee in acting hereunder shall at all times be acting in their individual capacities and not as directors or officers of the Company and in so acting or failing to act shall not have any fiduciary duties to the Company or the Covered Persons as a member of the Accenture SCA Partners Committee by virtue of the fact that one or more of such members may also be serving as a director or officer of the Company or otherwise. Each Covered Person consequently recognizes that for a member of the Accenture SCA Partners Committee to also serve as a director or officer of the Company does not constitute a conflict.
(iii) The Accenture SCA Partners Committee shall act through a majority vote of its members. Such actions may be taken in person at a meeting or by a written instrument signed by all of the members. Meetings of the Accenture SCA Partners Committee may be held by such telephonic or other electronic means as the Accenture SCA Partners Committee may from time to time approve and which permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously and participation in such a meeting shall constitute presence in person at such a meeting.
(c) To the extent not addressed herein, actions to be taken pursuant to this Agreement shall be governed by procedures to be developed by the Accenture SCA Partners Committee.
Section 4.3. Indemnification and Expenses .
(a) Accenture SCA agrees that it will indemnify and hold harmless each member of the Accenture SCA Partners Committee against any judgments, fines, losses, claims, damages or liabilities incurred by them in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of matters that pertain to this Agreement or the transactions contemplated hereby. Accenture SCA need not indemnify any member of the Accenture SCA Partners Committee against any judgments, fines, losses, claims, damages or liabilities incurred by the Accenture SCA Partners Committee through the Accenture SCA Partners Committee’s own gross negligence, bad faith or willful misconduct.
(b) Accenture SCA shall be responsible for all expenses of the Accenture SCA Partners Committee incurred in the operation and administration of this Agreement, including expenses incurred in preparing appropriate filings and correspondence with the United States Securities and Exchange Commission or other securities regulators, lawyers’, accountants’, agents’, consultants’, experts’, investment banking and other professionals’ fees, expenses incurred in enforcing the provisions of this Agreement, expenses incurred in maintaining any necessary or appropriate books and records relating to this Agreement and expenses incurred in the preparation of amendments to and waivers of provisions of this Agreement.
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(c) Each Covered Person shall be responsible for all expenses of such Covered Person incurred in connection with the compliance by such Covered Person with his obligations under this Agreement, including expenses incurred by the Accenture SCA Partners Committee or Accenture SCA in enforcing the provisions of this Agreement relating to such obligations.
Section 4.4. Adjustment upon Changes in Capitalization; Adjustments upon Changes of Control; Representatives, Successors and Assigns .
(a) In the event of any change in the outstanding Common Shares by reason of stock dividends, stock splits, reverse stock splits, spin-offs, split-ups, recapitalizations, combinations, exchanges of shares and the like, the term “Covered Shares” shall refer to and include the securities received or resulting therefrom, but only to the extent such securities are received in exchange for or in respect of Covered Shares. Upon the occurrence of any event described in the immediately preceding sentence, the Accenture SCA Partners Committee shall make such adjustments to or interpretations of the provisions of Sections 2.1, 2.2 and 4.1 (and, if they so determine, any other provisions hereof) as they shall deem necessary or desirable to carry out the intent of such provision(s). If the Accenture SCA Partners Committee deems it desirable, any such adjustments may take effect from the record date, the “when issued trading date”, the “ex dividend date” or another appropriate date.
(b) In the event of any business combination, amalgamation, restructuring, recapitalization or other extraordinary transaction directly or indirectly involving Accenture SCA, its Subsidiaries or any of their respective securities or assets as a result of which the Covered Persons shall hold voting securities of an entity other than Accenture SCA, the Covered Persons agree that this Agreement shall also continue in full force and effect with respect to such voting securities of such other entity formerly representing or distributed in respect of Covered Shares of Accenture SCA, and the terms “Covered Shares,” “Common Shares”, “Employee Covered Shares,” and “Accenture SCA” and “Company,” shall refer to such voting securities formerly representing or distributed in respect of Covered Shares of Accenture SCA and such entity, respectively. Upon the occurrence of any event described in the immediately preceding sentence, the Accenture SCA Partners Committee shall make such adjustments to or interpretations of the restrictions of Section 2.1 (and, if it so determines, any other provisions hereof) as they shall deem necessary or desirable to carry out the intent of such provision(s). If the Accenture SCA Partners Committee deems it desirable, any such adjustments may take effect from the record date or another appropriate date.
(c) In the event of any business combination, amalgamation, restructuring, recapitalization or other extraordinary transaction directly or indirectly involving the Company or any of its securities or assets as a result of which the holders of Accenture Ltd Class A Common Shares shall hold voting securities of a different entity, the Covered Persons agree that the term “Accenture Ltd Class A Common Shares” shall refer to such voting securities formerly representing or distributed in respect of Accenture Ltd Class A Common Shares. Upon the occurrence of any event described in the immediately
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preceding sentence, the Accenture SCA Partners Committee shall make such adjustments to or interpretations of Section 2.2 or 4.1 (and, if it so determines, any other provisions hereof) as it shall deem necessary or desirable to carry out the intent of such provision(s). If the Accenture SCA Partners Committee deems it desirable, any such adjustments may take effect from the record date or another appropriate date.
(d) This Agreement shall be binding upon and inure to the benefit of the respective legatees, legal representatives, successors and assigns of the Covered Persons (and Accenture SCA in the event of a transaction described in Section 4.4(b) hereof); provided, however, that a Covered Person may not assign this Agreement or any of his rights or obligations hereunder without the prior written consent of Accenture SCA, and any assignment without such consent by a Covered Person shall be void; and, provided, further, that no assignment of this Agreement by Accenture SCA or to a successor of Accenture SCA (by operation of law or otherwise) shall be valid unless such assignment is made to a person which succeeds to the business of Accenture SCA substantially as an entirety.
Section 4.5. Filing of Schedule 13D or 13G .
(a) In the event that a Covered Person is required to file a report of beneficial ownership on Schedule 13D or 13G with respect to the Common Shares beneficially owned by him (for this purpose as determined by Exchange Act Rule 13d-3 and Exchange Act Rule 13d-5), such Covered Person agrees for the benefit of every other Covered Person that, unless otherwise directed by the Accenture SCA Partners Committee, such Covered Person will not file a separate such report, but will file a report together with the other Covered Persons, containing the information required by the Exchange Act, and such Covered Person understands and agrees that such report shall be filed on his behalf by the Accenture SCA Partners Committee or any member or designee thereof. Such Covered Person shall cooperate fully with the other Covered Persons and the Accenture SCA Partners Committee to achieve the timely filing of any such report and any amendments thereto as may be required, and such Covered Person agrees that any information concerning such Covered Person which such Covered Person furnishes in connection with the preparation and filing of such report will be complete and accurate. By his signature hereto, each Covered Person appoints the Accenture SCA Partners Committee and each member thereof from time to time individually, with full power of substitution and resubstitution, his true and lawful attorney- in-fact to execute such reports and any and all amendments thereto and to file such reports with all exhibits thereto and other documents in connection therewith with the United States Securities and Exchange Commission and, if necessary, other regulators, granting to such attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that such attorney or attorneys may deem necessary, advisable or appropriate to carry out fully the intent of this Section 4.5 as such Covered Person might or could do personally, hereby ratifying and confirming all acts and things that such attorney or attorneys may do or cause to be done by virtue of this power of attorney. Each Covered Person hereby further designates such attorneys as such Covered Person’s agents authorized to receive notices and communications with respect to such reports and
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any amendments thereto. It is understood and agreed by each such Covered Person that this appointment, empowerment and authorization may be exercised by the aforementioned persons for the period beginning on the date hereof and ending on the date such Covered Person is no longer subject to the provisions of this Agreement (and shall extend thereafter for such time as is required to reflect that such Covered Person is no longer a party to this Agreement).
Section 4.6. Further Assurances . Each Covered Person agrees for the benefit of every other Covered Person to execute such additional documents and take such further action as may be reasonably necessary to effect the provisions of this Agreement.
ARTICLE V
MISCELLANEOUS
Section 5.1. Term of the Agreement; Termination of Certain Provisions .
(a) The term of this Agreement shall continue until the first to occur of the date that is 50 years after the date hereof and the date this Agreement is terminated by the affirmative vote of not less than 66 2/3% of the votes represented by the Covered Shares beneficially owned by Employee Covered Persons (such Covered Shares at any such time, the “Employee Covered Shares”). The Accenture SCA Partners Committee may, and upon the written application of the holders of not less than 10%, in the aggregate, of the votes represented by the Employee Covered Shares shall, hold a vote of the Employee Covered Shares to terminate this Agreement. If this Agreement is terminated prior to the expiration or termination of the Transfer Restrictions referred to in Section 2.1, such restrictions on transfer shall continue to apply in accordance with the provisions of such Section unless waived or terminated as provided in paragraph (b) or (e) of Section 5.3.
Not less than once every four years following the IPO Date, the Accenture SCA Partners Committee shall consider whether to propose to the Employee Covered Persons any amendments to, or the termination of, this Agreement.
(b) Unless this Agreement is theretofore terminated pursuant to Section 5.1(a) hereof, any Covered Person who ceases to be an employee for any reason other than death shall continue to be bound by all the provisions of this Agreement until such time as such Covered Person holds all Covered Shares free from Transfer Restrictions. Thereafter, such Covered Person shall no longer be bound by the provisions of this Agreement other than Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7, 5.8, 5.9, 5.10 and 5.11 (the “Continuing Provisions”), and such Covered Person’s name shall be removed from Appendix A to this Agreement.
(c) Unless this Agreement is theretofore terminated pursuant to Section 5.1(a) hereof, the estate of any Covered Person who dies shall from and after the date of such death be bound only by the Continuing Provisions; and such Covered Person’s name shall be removed from Appendix A to this Agreement.
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Section 5.2. Amendments .
(a) Except as provided in Section 4.4 or this Section 5.2, provisions of this Agreement may be amended only by the affirmative vote of 66⅔% of the votes represented by the Employee Covered Shares. The Accenture SCA Partners Committee may, and upon the written application of the holders of not less than 10%, in the aggregate, of the votes represented by the Employee Covered Shares shall, hold a vote of the Employee Covered Shares to amend this Agreement.
(b) In addition to any other vote or approval that may be required under this Section 5.2, any amendment of this paragraph (b), Section 4.2, Section 4.3, paragraph (e) of Section 5.3 or any other provision the amendment (or addition) of which has the effect of materially changing the rights or obligations of the Accenture SCA Partners Committee hereunder shall require the approval of the Accenture SCA Partners Committee.
(c) In addition to any other vote or approval that may be required under this Section 5.2, any amendment to the Transfer Restrictions that would make such Transfer Restrictions materially more onerous to a Covered Person will not be enforceable against that Covered Person unless that Covered Person has consented to such amendment.
(d) In addition to any other vote or approval that may be required under this Section 5.2, any amendment of this Agreement that has the effect of changing the obligations of Accenture SCA hereunder to make such obligations materially more onerous to Accenture SCA shall require the approval of Accenture SCA.
(e) In addition to any other vote or approval that may be required under this Section 5.2, any amendment that has the effect of amending the provisions of Section 2.1, Section 2.3 or Section 4.1 shall require the approval of Accenture SCA.
(f) Each party hereto understands that from time to time certain other persons may become Covered Persons and certain Covered Persons will cease to be bound by the provisions of this Agreement pursuant to the terms hereof. Accordingly, this Agreement may be amended by action of the Accenture SCA Partners Committee from time to time and without the approval of any other person, but solely for the purposes of (i) adding to Appendix A such persons as shall be made party to this Agreement pursuant to the terms hereof and (ii) removing from Appendix A such persons as shall cease to be bound by the provisions of this Agreement pursuant to Sections 5.1(b) or (c) hereof, which additions and removals shall be given effect from time to time by appropriate changes to Appendix A.
(g) Any amendment to this Agreement approved in accordance with the terms hereof by the Employee Covered Persons as of an applicable record date shall be binding upon all persons who subsequently become a party hereto.
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Section 5.3. Waivers .
(a) Except as provided in this Section 5.3, provisions of this Agreement may be waived only by the affirmative vote of 66⅔% of the votes represented by the outstanding Employee Covered Shares. The Accenture SCA Partners Committee may, and upon the written application of the holders of not less than 10%, in the aggregate, of the votes represented by the Employee Covered Shares shall, hold a vote to waive certain provisions of this Agreement.
(b) In addition to any other action that may be required under paragraph (a) of this Section, any waiver that has the effect of waiving the provisions of Section 2.1 or Section 2.3 shall require the approval of Accenture SCA.
(c) In addition to any other vote or approval that may be required under this Section 5.3, any waiver of this paragraph (c), Section 4.2, Section 4.3, paragraph (e) of this Section 5.3 or any other provision the waiver (or alteration) of which has the effect of materially changing the rights or obligations of the Accenture SCA Partners Committee hereunder shall require the approval of the Accenture SCA Partners Committee.
(d) In addition to any other vote or approval that may be required under this Section 5.3, any waiver of this Agreement that has the effect of changing the obligations of Accenture SCA hereunder to make such obligations materially more onerous to Accenture SCA shall require the approval of Accenture SCA.
(e) Notwithstanding the foregoing, the Accenture SCA Partners Committee may waive the Transfer Restrictions and the other provisions of this Agreement to permit (A) Covered Persons to participate as sellers in underwritten public offerings of, and share repurchase programs and tender offers by the Company for, Common Shares; (B) Transfers of Covered Shares to organizations described in Section 501(c)(3) of the Code, including gifts to “private foundations” subject to the requirements of Section 509 of the Code or comparable provisions of the laws of other countries; (C) Transfers of Covered Shares held in employee benefit plans of the Company either generally or in particular situations; and (D) particular Covered Persons, a particular class of Covered Persons or all Covered Persons to Transfer Covered Shares in particular situations (such as Transfers to family members, partnerships or trusts), but not generally; provided that in each of (A) through (D), waivers of the restrictions imposed by Section 2.3 shall also require the prior written consent of the Company.
(f) In connection with any waiver granted under this Agreement, the Accenture SCA Partners Committee or the Employee Covered Persons proposing the waiver pursuant to this Section 5.3, as the case may be, may impose such conditions as they determine on the granting of such waivers.
(g) The failure of Accenture SCA or the Accenture SCA Partners Committee at any time or times to require performance of any provision of this Agreement shall in no
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manner affect the rights at a later time to enforce the same. No waiver by Accenture SCA or the Accenture SCA Partners Committee of the breach of any term contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such breach or the breach of any other term of this Agreement.
Section 5.4. GOVERNING LAW . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF LUXEMBOURG.
Section 5.5. Resolution of Disputes .
(a) The Accenture SCA Partners Committee shall have the sole and exclusive power to enforce the provisions of this Agreement. The Accenture SCA Partners Committee may in their sole discretion direct Accenture SCA to pursue such enforcement, and Accenture SCA agrees to pursue such enforcement as directed by the Accenture SCA Partners Committee.
(b) Any and all disputes which cannot be settled amicably, including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision) shall be finally settled by arbitration conducted by a single arbitrator in New York in accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce, except that the parties may select an arbitrator who is a national of the same country as one of the parties. If the parties to the dispute fail to agree on the selection of an arbitrator within thirty (30) days of the receipt of the request for arbitration, the International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings.
(c) Notwithstanding the provisions of paragraph (b), the Accenture SCA Partners Committee may bring, or may cause Accenture SCA to bring, on behalf of the Accenture SCA Partners Committee or on behalf of one or more Covered Persons, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (c), each Covered Person (i) expressly consents to the application of paragraph (d) of this Section 5.5 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate, and (iii) irrevocably appoints the General Partner of Accenture SCA 398 Route d’Esch, L-1471, Luxembourg (or, if different, the then-current corporate seat of Accenture SCA) as such Covered Person’s agent for service of process in connection with any such action or proceeding and agrees that service of process upon such agent, who shall promptly advise such Covered Person
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of any such service of process, shall be deemed in every respect effective service of process upon the Covered Person in any such action or proceeding.
(d) (i) EACH COVERED PERSON HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, UNITED STATES FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (C) OF THIS SECTION 5.5, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the fora designated by this paragraph (d) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.
(ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (d) (i) of this Section 5.5 and such parties agree not to plead or claim the same.
Section 5.6. Relationship of Parties . The terms of this Agreement are not intended to create a separate entity for United States federal or state income tax purposes or under the laws of any other jurisdiction. Nothing in this Agreement shall be read to create any partnership, joint venture or separate entity among the parties or to create any trust or other fiduciary relationship between them.
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Section 5.7. Notices .
(a) Any communication, demand or notice to be given hereunder will be duly given (and shall be deemed to be received) when delivered in writing by hand or first class mail or by telecopy to a party at its address as indicated below:
If to a Covered Person,
c/o Accenture SCA
398 Route d’Esch
L-1471
Luxembourg
Telecopy: (352) 48 18 28 3419
Attention: General Partner
(or, if different, the then-current corporate seat of Accenture SCA)
If to the Accenture SCA Partners Committee,
c/o Accenture SCA
398 Route d’Esch
L-1471
Luxembourg
Telecopy: (352) 48 18 28 3419
Attention: General Partner
(or, if different, the then-current corporate seat of Accenture SCA)
And
If to Accenture SCA,
398 Route d’Esch
L-1471
Luxembourg
Telecopy: (352) 48 18 28 3419
Attention: General Partner
(or, if different, the then-current corporate seat of Accenture SCA)
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Accenture SCA shall be responsible for notifying each Covered Person of the receipt of a communication, demand or notice under this Agreement relevant to such Covered Person, in writing, at the address of such Covered Person then in the records of Accenture SCA (and each Covered Person shall notify Accenture SCA of any change in such address for communications, demands and notices) or by electronic mail to the principal electronic address of such person maintained by the Company.
(b) Unless otherwise provided to the contrary herein, any notice which is required to be given in writing pursuant to the terms of this Agreement may be given by telecopy.
Section 5.8. Severability . If any provision of this Agreement is finally held to be invalid, illegal or unenforceable, the remaining terms and provisions hereof shall be unimpaired.
Section 5.9. Right to Determine Tender Confidentially . In connection with any tender or exchange offer for all or any portion of the outstanding Common Shares, subject to compliance with all applicable restrictions on Transfer in this Agreement or any other agreement with the Company, each Covered Person shall have the right to determine confidentially whether such Covered Person’s Covered Shares will be tendered in such tender or exchange offer.
Section 5.10. No Third-Party Rights . Nothing expressed or referred to in this Agreement will be construed to give any person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors and permitted assigns.
Section 5.11. Section Headings . The headings of sections in this Agreement are provided for convenience only and will not affect its construction or interpretation.
Section 5.12. Execution in Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed or caused to be duly executed this Transfer Rights Agreement as of the date first above written.
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ACCENTURE SCA
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[Signature blocks of Covered Persons set forth separately.]
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APPENDIX A
Covered Persons
Exhibit 31.1
CHIEF EXECUTIVE OFFICER CERTIFICATION
I, William D. Green, Chief Executive Officer of Accenture Ltd (the “Registrant”), certify that:
Dated: April 8, 2005
1.
I have reviewed the Registrant’s Quarterly Report on Form 10-Q for the period ended February
28, 2005 as filed with the Securities and Exchange Commission on the date hereof;
2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with respect to the
period covered by this quarterly report;
3.
Based on my knowledge, the financial statements, and other financial information included in
this quarterly report, fairly present in all material respects the financial condition,
results of operations and cash flows of the Registrant as of, and for, the period presented in
this quarterly report;
4.
The Registrant’s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the Registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared;
b)
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and
presented in this quarterly report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this quarterly
report based on such evaluation; and
c)
Disclosed in this quarterly report any change in the Registrant’s internal control over
financial reporting that occurred during the Registrant’s most recent fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the Registrant’s
internal control over financial reporting; and
5.
The Registrant’s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Registrant’s auditors and the
audit committee of Registrant’s board of directors (or persons performing the equivalent
functions):
a)
All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the Registrant’s ability to record, process, summarize and report financial information;
and
b)
Any fraud, whether or not material, that involves management or other employees who
have a significant role in the Registrant’s internal controls over financial reporting.
/s/ William D. Green
William D. Green
Chief Executive Officer of Accenture
Ltd
(principal executive officer)
Exhibit 31.2
CHIEF FINANCIAL OFFICER CERTIFICATION
I, Michael G. McGrath, Chief Financial Officer of Accenture Ltd (the “Registrant”), certify that:
Dated: April 8, 2005
1.
I have reviewed the Registrant’s Quarterly Report on Form 10-Q for the period ended February
28, 2005 as filed with the Securities and Exchange Commission on the date hereof;
2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with respect to the
period covered by this quarterly report;
3.
Based on my knowledge, the financial statements, and other financial information included in
this quarterly report, fairly present in all material respects the financial condition,
results of operations and cash flows of the Registrant as of, and for, the period presented in
this quarterly report;
4.
The Registrant’s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the Registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared;
b)
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and
presented in this quarterly report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this quarterly
report based on such evaluation; and
c)
Disclosed in this quarterly report any change in the Registrant’s internal control over
financial reporting that occurred during the Registrant’s most recent fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the Registrant’s
internal control over financial reporting; and
5.
The Registrant’s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Registrant’s auditors and the
audit committee of Registrant’s board of directors (or persons performing the equivalent
functions):
a)
All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the Registrant’s ability to record, process, summarize and report financial information;
and
b)
Any fraud, whether or not material, that involves management or other employees who
have a significant role in the Registrant’s internal controls over financial reporting.
/s/ Michael G. McGrath
Michael G. McGrath
Chief Financial Officer of Accenture
Ltd
(principal financial officer)
Exhibit 32.1
Certification of the Chief Executive Officer
In connection with the Quarterly Report of Accenture Ltd (the “Company”) on Form 10-Q for the
period ended February 28, 2005 as filed with the Securities and Exchange Commission on the date
hereof (the “Report”), I, William D. Green, Chief Executive Officer of Accenture Ltd, certify,
pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.
Dated: April 8, 2005
/s/ William D. Green
William D. Green
Chief Executive Officer of Accenture Ltd
Exhibit 32.2
Certification of the Chief Financial Officer
In connection with the Quarterly Report of Accenture Ltd (the “Company”) on Form 10-Q for the
period ended February 28, 2005 as filed with the Securities and Exchange Commission on the date
hereof (the “Report”), I, Michael G. McGrath, Chief Financial Officer of Accenture Ltd, certify,
pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.
Dated: April 8, 2005
/s/ Michael G. McGrath
Michael G. McGrath
Chief Financial Officer of Accenture Ltd