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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 10, 2004
Euronet Worldwide, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-22167 74-2806888
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
4601 College Boulevard
Leawood, Kansas 66211
(Address of principal executive office)(Zip Code)
(913) 327-4200
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement
On December 10, 2004, Euronet Worldwide, Inc. ("Euronet") entered into a
purchase agreement with Bank of America Securities LLC (the "Initial
Purchaser"). Pursuant to the Purchase Agreement, Euronet agreed to sell $125
million aggregate principal amount of its 1.625% Convertible Senior Debentures
Due 2024 (the "Debentures") to the Initial Purchaser. In addition, the Initial
Purchaser was granted an option to purchase up to $15 million aggregate
principal amount of additional Debentures. On December 13, 2004, Euronet
received notice of the Initial Purchaser's exercise of the option in full.
The closing of the sale of the Debentures, including the Debentures issued under
the option granted to the Initial Purchaser, occurred on December 15, 2004. The
Debentures were not registered under the Securities Act of 1933, as amended (the
"Securities Act"), and were sold to the Initial Purchaser in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act. The
Initial Purchaser of the Debentures then sold the Debentures to qualified
institutional buyers pursuant to the exemption from registration provided by
Rule 144A under the Securities Act. Euronet relied on these exemptions from
registration based on representations made by the Initial Purchaser in the
Purchase Agreement.
The Debentures are governed by the terms of an Indenture, dated December 15,
2004, between Euronet and U.S. Bank National Association, as trustee.
The Debentures will bear interest at a rate of 1.625% per year. Euronet will pay
interest on the Debentures on June 15 and December 15 of each year, beginning
June 15, 2005. Liquidated damages are payable if Euronet fails to comply with
certain obligations under the Registration Rights Agreement as described below.
Euronet will pay contingent interest to the holders of Debentures, commencing
with the period beginning December 20, 2009 to June 14, 2010 and for any
six-month period from June 15 to December 14 and December 15 to June 14
thereafter, if the average trading price of a Debenture for the five trading
days ending on the second trading day immediately preceding the relevant
contingent interest period equals or exceeds 120% of the principal amount of the
Debentures.
The amount of contingent interest payable per Debenture in respect of any
contingent interest period will equal 0.30% per annum calculated on the average
trading price of a Debenture for the five trading-day period referred to above.
Such payments will be paid on the interest payment date immediately following
the last day of the relevant contingent interest period.
Holders may convert their Debentures at any time prior to stated maturity, at
their option, only under the following circumstances:
o during any fiscal quarter commencing after December 31, 2004 (and only
during such fiscal quarter), if the closing price of Euronet's common
stock for at least 20 trading days in the 30 trading-day period ending on
the last trading day of the preceding fiscal quarter was 130% or more of
the conversion price of the Debentures on that 30th trading day;
o during the five business day period after any five consecutive trading
day period (the "measurement period") in which the trading price per
Debenture for each day of such measurement period was less than 98% of the
product of the closing price of Euronet's common stock and the conversion
rate for the Debentures; provided, however, holders may not convert their
Debentures in reliance on this provision after December 15, 2019 if on any
trading day during such measurement period the closing price of shares of
Euronet's common stock was between 100% and 130% of the conversion price
of the Debentures;
o if Euronet has called the Debentures for redemption; or
o upon the occurrence of specified corporate transactions.
For each $1,000 principal amount of Debentures surrendered for conversion, a
holder will receive 29.7392 shares, equal to an initial conversion price of
approximately $33.63, subject to adjustment. Upon conversion, holders will not
receive any cash payment representing accrued interest, including contingent
interest, if any. Instead, any such amounts will be deemed paid by the common
stock or cash received by holders on conversion. Upon conversion, Euronet will
have the right to deliver, in lieu of its common stock, cash or a combination of
cash and shares of its common stock. If holders elect to convert their
debentures in connection with a change of control that occurs on or prior to
December 15, 2009, Euronet will increase the conversion rate by a number of
additional shares of common stock upon conversion or, in lieu thereof, Euronet
may in certain circumstances elect to adjust the conversion rate and related
conversion obligation so that the Debentures are convertible into shares of the
acquiring or surviving company.
Euronet may redeem some or all of the Debentures for cash at any time on or
after December 20, 2009 at 100% of their principal amount, plus accrued and
unpaid interest, including contingent interest, if any, and liquidated damages,
if any.
Holders of Debentures may require Euronet to repurchase all or a portion of
their Debentures on December 15, 2009, December 15, 2014 and December 15, 2019
at 100% of their principal amount plus accrued and unpaid interest, including
contingent interest, if any, and liquidated damages, if any, to but excluding
the repurchase date. Upon a change of control of Euronet, holders may require
Euronet to repurchase all or a portion of their Debentures. Euronet will pay a
change of control repurchase price equal to the principal amount of such
Debentures plus accrued and unpaid interest, including contingent interest, if
any, and liquidated damages, if any, to but excluding the change of control
repurchase date.
The Debentures will be Euronet's general unsecured and unsubordinated
obligations and will rank equally in right of payment with all of its existing
and future unsecured and unsubordinated obligations and senior in right of
payment to all of its future subordinated indebtedness. The Debentures will be
effectively subordinated to any of Euronet's existing and future secured
indebtedness, including indebtedness under its credit facilities with respect to
any collateral securing such indebtedness. The Debentures will not be guaranteed
by any of Euronet's subsidiaries and, accordingly, the Debentures are
effectively subordinated to the indebtedness and other liabilities of Euronet's
subsidiaries, including trade creditors.
Euronet intends to use the net proceeds of the offering to repay approximately
$54.3 million of its outstanding debt and the remainder for general corporate
purposes, which may include share repurchases, acquisitions or other strategic
investments.
In connection with the sale of the Debentures, Euronet also entered into a
registration rights agreement, dated December 15, 2004, with the Initial
Purchaser. Pursuant to the Registration Rights Agreement, Euronet has agreed to
file a shelf registration statement with the Securities and Exchange Commission
covering resales of the Debentures and Euronet's common stock issuable upon
conversion of the Debentures. If Euronet fails to comply with certain of its
obligations under the Registration Rights Agreement, it will be required to pay
liquidated damages to the holders of the Debentures.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
See Item 1.01, which is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities
See Item 1.01, which is incorporated herein by reference.
Signature(s)
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Euronet WORLDWIDE, INC.
By: /s/ Daniel R. Henry
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Daniel R. Henry
Chief Operating Officer
Date: December 16, 2004.