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Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

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(1)	Each share of the registrants’ common stock being registered hereunder, if issued prior to the termination by the registrant of its preferred share rights agreement, includes Series A Participating Preferred Stock purchase rights. Prior to the occurrence of certain events, the Series A Participating Preferred Stock purchase rights will not be exercisable or evidenced separately from the registrant’s common stock and have no value except as reflected in the market price of the shares to which they are attached.

(2)	Includes 1,800,000 shares of Common Stock issuable upon exercise of the Underwriters’ over-allotment option.

(3)	Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(c) under the Securities Act of 1933 based upon the average of the high and low prices of the Common Stock as reported on the Nasdaq National Market on February 10, 2004.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and is not soliciting an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

We are offering 2,700,000 shares of our common stock and the selling shareholders are offering 9,300,000 shares of our common stock. We will receive no part of the proceeds from the sale of the shares by the selling shareholders.

Our common stock is traded on The Nasdaq National Market under the symbol “ASPT”. The last reported sales price of our common stock on The Nasdaq National Market on February 12, 2004 was $18.55 per share.

One of the selling shareholders has granted the underwriters a 30-day option to purchase up to an additional 1,800,000 shares of common stock on the same terms as set forth above to cover over-allotments, if any.

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 5 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Inside front cover art will consist of the Aspect logo in the center of the page, surrounded by screenshots of Aspect software with descriptive captions and pictures of contact center agents. The background is a stylized graphic showing a contact center agent and a globe. At the top of the page, text reads “Aspect is a leading provider of contact center solutions”

You should rely only on the information we have included or incorporated by reference in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representation. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. You should assume that the information in this prospectus is accurate only as of the date on the front of the document and that any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or any sale of a security.

Unless otherwise mentioned or unless the context requires otherwise, all references in this prospectus to “the Company,” “Aspect”, “we”, “us”, “our”, or similar references mean Aspect Communications Corporation.

Except as otherwise noted herein, all information in this prospectus, except the information incorporated by reference, assumes (i) the conversion into common stock of all shares of Series B convertible preferred stock held by Vista Equity Fund II, L.P., which, together with its affiliates, we refer to as Vista, immediately prior to completion of this offering; (ii) the issuance to Vista of 200,000 shares of our common stock; (iii) no exercise of the underwriters’ over-allotment option; and (iv) the payment of a $3 million transaction fee to Vista.

The following summary is not complete and does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully, particularly “Risk Factors” and our financial statements and related notes included elsewhere or incorporated by reference in this prospectus before making an investment decision.

We are a leading provider of software and services that enable businesses to manage and optimize contact center. Our comprehensive integrated suite of contact center software applications and related services support and manage customer communications, customer and contact center information and workforce productivity. Our contact center solutions allow businesses to better service their customers by connecting them to appropriate resources, functionalities or applications, regardless of user location or method of communication. We have a well-established global customer base, including more than two-thirds of the Fortune 50. We target our customers through a combination of sales channels, including our direct sales force, strategic technology alliances, system integrators and value-added resellers, or VARs.

The contact center has evolved into an essential component of business strategy, providing valuable customer information, enabling enterprises to understand customer buying trends, target markets more effectively and increase revenue. Technological advances and the increasing heterogeneity of communication infrastructures have outpaced the ability of proprietary contact center solution providers to offer a comprehensive end-to-end solution. These advances and the reduction of international communications costs have been driving a significant industry trend towards remote contact center solutions. In addition, the continued convergence of voice and data networks utilizing Voice over Internet Protocol, or VoIP, technologies requires contact centers to employ software-based switching applications that blend voice, e-mail and Web communications into a unified queue, and route them intelligently over a single data network.

Our integrated suite of software and hardware products and services connect the contact center with the enterprise and enable our customers to effectively manage communications over a variety of media. Our solutions integrate with third party applications, store and report data for business intelligence, and efficiently manage workforce and business relationships. Our solutions also reduce costs for our customers, while enabling them to effectively manage geographically dispersed contact centers. Our software solution is interoperable with a broad range of communications infrastructure hardware and enables an evolutionary upgrade from the Public Switched Telephone Network, or PSTN, to converged networks using VoIP.

Our objective is to extend our position as a leading provider of integrated contact center software and hardware solutions. Key elements for achieving this objective include:


	•	Growing our customer base

	•	Driving further growth in the global outsourcing market

	•	Further penetrating our existing customer base

	•	Leveraging our open, flexible technology platform

	•	Expanding relationships with technology and distribution partners and develop strategic alliances

	•	Pursuing strategic acquisitions

We were incorporated in California in August 1985. Our principal executive offices are located at 1320 Ridder Park Drive, San Jose, California 95131-2312, and our telephone number at that location is (408) 325-2200.

The number of shares of our common stock that will be outstanding after this offering is based upon the number of shares of our common stock outstanding as of January 30, 2004 and excludes:


	•	10,318,368 shares of common stock issuable upon exercise of outstanding options under our stock option plans as of January 30, 2004 at a weighted average exercise price of $7.39 per share;

	•	2,628,038 shares of common stock available for purchase as of January 30, 2004 under our 1990 Employee Stock Purchase Plan; and

	•	5,350,780 additional shares of common stock reserved for issuance under our stock option plans.

The following summary of our consolidated financial data should be read in conjunction with “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited historical consolidated financial statements, including related notes to these financial statements included and incorporated by reference in this prospectus.

The Series B convertible preferred stock that we issued to Vista contains certain participation rights. Emerging Issues Task Force, or EITF, Topic D-95, “Effect of Participating Convertible Securities on the Computation of Basic Earnings” requires those securities to be included in the computation of basic earnings per share using the two class method. Diluted earnings per share cannot be greater than basic earnings per share. As a result, reported diluted earnings per share and basic earnings per share for 2003 were the same.

We use pro forma diluted earnings per share in monitoring and evaluating our ongoing financial results and trends. We believe this information is useful for investors due to its non-recurring nature in light of the proposed conversion of the Series B convertible preferred stock. As a result, we believe a review of the financial results using this pro forma disclosure provides important insights into our operating results and trends.

Subject to the satisfaction of certain conditions, Vista has agreed to convert all of its Series B redeemable convertible preferred stock into 22,222,222 shares of our common stock immediately prior to the completion of this offering, of which 8,850,000 shares will be sold in this offering. Dividends on the Series B convertible preferred stock accreted at a rate of 10% per annum. In consideration for this voluntary conversion, we have agreed to issue Vista 200,000 additional shares of our common stock and pay Vista a $3 million transaction fee. The fair market value of the 200,000 shares and the $3 million transaction fee will be charged to earnings attributable to common stockholders in the quarter in which this offering closes, together with the $16.3 million unamortized balance of the beneficial conversion feature associated with the issuance of the preferred stock.

The following table presents our summary consolidated balance sheet data as of December 31, 2003. The “As Adjusted” column gives effect to (i) the net proceeds of our sale of 2,700,000 shares of common stock at an assumed public offering price of $18.55 per share; and (ii) the transactions described in the paragraph immediately above.

We operate in a rapidly changing environment that involves a number of risks, some of which are beyond our control. You should carefully consider the risks described below before making an investment decision. The risks described below are not the only ones facing our company. Additional risks not currently known to us or that we currently deem immaterial may also impair our business operations. You should also read the cautionary statements in this document, wherever they appear, as applying to all related forward-looking statements.

Our revenues and operating results may fluctuate significantly because of a number of factors, many of which are outside of our control. Some of these factors include:


	•	changes in demand for our products and services;

	•	a shift in the timing or shipment of a customer order from one quarter to another;

	•	product and price competition;

	•	our ability to develop and market new products and control costs;

	•	timing of new product introductions and product enhancements;

	•	failure by our customers to renew existing support or maintenance agreements in a timely manner, if at all;

	•	mix of products and services sold;

	•	delay or deferral of customer implementations of our products;

	•	size and timing of individual license transactions;

	•	length of our sales cycle;

	•	changes in domestic and foreign markets;

	•	success in growing our distribution channels;

	•	acquisitions by competitors; and

	•	performance by outsourced service providers, and the costs of the underlying contracts of these providers, that are critical to our operations.

One or more of the foregoing factors may cause our operating expenses to be disproportionately high during any given period or may cause our revenues and operating results to fluctuate significantly. Based upon the preceding factors, we may experience a shortfall in revenues or earnings or otherwise fail to meet public market expectations, which could materially and adversely affect our business, financial condition, results of operations and the market price of our common stock.

Our products typically represent substantial capital commitments by customers. As a result, customer purchase decisions may be significantly affected by a variety of factors, including trends in capital spending for telecommunications and enterprise software, competition and the availability or announcement of alternative technologies. Weakness in global economic conditions in recent periods and related reductions in Information Technology, or IT, spending have resulted in many of our customers delaying or substantially reducing their spending on contact center hardware, software and services. If the weakness in

Historically, we have supplied the hardware, software and associated support services for implementing contact center solutions. Contact center technology is undergoing a change in which voice and data networks are converging into a single integrated network. Our approach to this convergence has been to provide migration software permitting the integration of existing telephony environments with networks in which voice traffic is routed through data networks. This integration is provided by a software infrastructure that requires enterprise-level selling and deployment of enterprise-wide solutions, rather than selling and deployment efforts focused solely on telephone communication. This industry transition has caused us to change many aspects of our business and as a result we have had to:


	•	make changes in our management and technical personnel;

	•	change our sales and distribution models;

	•	expand relationships with our customers as sales are now often made throughout the organization;

	•	modify the pricing and positioning of our products and services;

	•	address new competitors; and

	•	increasingly rely on systems integrators to deploy our solutions.

If we fail to successfully address the changed conditions in which we operate, our business could be harmed.

Historically, sales of a small number of product lines have accounted for a substantial portion of our revenues. Demand for our products could be adversely affected by any of our products not meeting customer specifications or by problems with system performance, system availability, installation or service delivery commitments, or market acceptance. We need to continue to develop new products and manage product transitions in order to succeed. If we fail to introduce new versions and releases of products, or enhancements to our existing products, in a timely manner, customers may license competing products, we may suffer lost sales and we could fail to achieve anticipated results. Our future operating results will depend on the demand for our product suite, including new and enhanced releases that are subsequently introduced. If our competitors release new products that are superior to our products in performance or price, demand for our products may decline. Our products may not be released on schedule or may contain defects when released which could result in the rejection of our products, damage to our reputation, lost revenues, diverted development resources and increased customer service and support costs and warranty claims. Any of the foregoing results could harm our business.

We derive a significant portion of our revenues from support contracts. As a result, if we lose a major customer or if a support contract is delayed, reduced or cancelled, our revenues would be adversely affected. In addition, customers who have accounted for significant revenues in the past may not generate revenues in future periods. We also depend on our existing customers to purchase new products that we introduce to the market. We may not be able to obtain new customers to replace any existing customers that we lose.

The market for our products is intensely competitive, and competition is likely to intensify as companies in our industry consolidate to offer integrated solutions. Our principal competitors currently include companies in the contact center market and companies that market traditional telephony products and services. As the market develops for converged voice and data networks and products and the demand for traditional, telephony-based call centers diminishes, companies in these markets are merging, creating potentially larger and more significant competitors. Many current and potential competitors, including Avaya Inc., Cisco Systems, Genesys, a subsidiary of Alcatel and Nortel Networks, may have considerably greater resources, larger customer bases and broader international presence than us. Consequently, we expect to encounter substantial competition from these and other sources.

The market for our products and services is subject to rapid technological change and new product introductions. Current competitors or new market entrants may develop new, proprietary products with features that could adversely affect the competitive position of our products. We may not successfully anticipate market demand for new products or services or introduce them in a timely manner.

The convergence of voice and data networks, and of wired and wireless communications could require substantial modification and customization of our current products and business model, as well as the introduction of new products. Further, customer acceptance of these new technologies may be slower than we anticipate. We may not be able to compete effectively in these markets. In addition, our products must readily integrate with major third-party security, telephony, front-office and back-office systems. Any changes to these third-party systems could require us to redesign our products, and any such redesign might not be possible on a timely basis or achieve market acceptance.

The demand for and sales mix of our products and services depends on many factors and is difficult to forecast. If forecasted demand does not develop, we could have excess production and capacity resulting in higher inventories of finished products and components and underutilized personnel, which would use cash and could lead to write-offs of some or all of the excess inventories or returns, which could result in lower gross margins. In addition, we may also incur certain costs, such as fees for excess manufacturing capacity and cancellation of orders and charges associated with excess and obsolete materials and goods in our inventory, which could result in lower margins. If demand increases beyond what we forecast, we may have to increase production at our third-party manufacturers or increase our capacity to deliver products and services. We depend on our suppliers to provide additional volumes of components and those suppliers might not be able to increase production rapidly enough to meet unexpected demand or may choose to allocate capacity to other customers. Even if we are able to procure enough components, our third-party manufacturers might not be able to produce enough of our products to meet market demand. The inability of either our manufacturers or our suppliers to increase production rapidly enough or our inability to obtain qualified services personnel could cause us to fail to meet customer demand. Rapid increases or decreases in production levels could result in higher costs for manufacturing, supply of components and other expenses. These higher costs could reduce our margins. Furthermore, if production is increased rapidly, manufacturing yields could decline, which may also reduce our margins.

We have in the past and continue to be involved in litigation for a variety of matters. Any claims brought against us will likely have a financial impact, potentially affecting the market performance of our common stock, generating costs associated with the disruption of business and diverting management’s

attention. We are currently involved in a binding arbitration proceeding with Electronic Data Systems Corporation, or EDS, in which EDS is seeking $26 million in damages and we are counterclaiming for our damages. There can be no assurance as to the outcome of this arbitration. In addition, there has been extensive litigation regarding patents and other intellectual property rights in our industry, and we are periodically notified of such claims by third parties. We have been sued in the past for alleged patent infringement. We expect that software product developers and providers of software in markets similar to ours will increasingly be subject to infringement claims or demands for infringement indemnification as the number of products and competitors in our industry grows and the functionality of products overlap. Any claims, with or without merit, could be costly and time-consuming to defend, divert our management’s attention, cause product delays and have an adverse effect on our revenues and operating results. If any of our products were found to infringe a third party’s proprietary rights, we could be required to enter into royalty or licensing agreements to be able to sell our products, which may not be available on terms acceptable to us or at all. Moreover, even if we negotiate license agreements with a third party, future disputes with such parties are possible. If we are unable to resolve an intellectual property dispute through a license, settlement or successful litigation, we would be subject to pay damages and be prevented from making, using or selling certain products or services. In the future, we could become involved in other types of litigation, such as shareholder lawsuits for alleged violations of securities laws, claims by employees, and product liability claims.

We market our products and services worldwide and anticipate entering additional foreign markets in the future. If we fail to enter certain major markets successfully, our competitive position could be impaired and we may be unable to compete on a global scale. The financial resources required to enter, establish and grow new and existing foreign markets may be substantial, and foreign operations are subject to additional risks which may negatively impact our business including:


	•	the cost and timing of the multiple governmental approvals and product modifications required by many countries;

	•	fluctuations in the value of foreign currencies;

	•	less effective protection of intellectual property;

	•	difficulties in staffing and managing foreign operations;

	•	global economic climate considerations including potentially negative tax and foreign and domestic trade legislation, which could result in the creation of trade barriers such as tariffs, duties, quotas, and other restrictions;

	•	longer payment cycles; and

	•	seasonal reductions in business activity in international locales, such as during the summer months in Europe.

Failure to establish or maintain relationships with systems integrators or VARs would significantly harm our ability to sell our products. Systems integrators and VARs market, sell, install and deploy our products, and perform custom integration of systems and applications. If these relationships fail, we will have to devote substantially more resources to the sales and marketing, implementation and support of our products than we would have had to otherwise. In addition, there could be channel conflict among our varied sales channels, which could harm our business, financial condition and results of operations.

We have historically sold our products and services through our direct sales force and a limited number of distributors. Changes in customer preferences, the markets we target, the competitive environment or other factors may require us to expand our third-party distributor, VARs, systems integrator, technology alliances, electronic and other alternative distribution channels, and we have continued to work on such expansion in recent periods. We may not be successful in expanding these distribution channels, and such failure could hurt our operating results by limiting our ability to increase or maintain our sales through these channels or by increasing our sales expenses faster than our revenues.

We have outsourced our manufacturing capabilities to third parties and rely on those suppliers to order components; build, configure and test systems and subassemblies; and ship products to meet our customers’ delivery requirements in a timely manner. Failure to ship product on time or failure to meet our quality standards would result in delays to customers, customer dissatisfaction or cancellation of customer orders.

Should we have performance issues with our manufacturing sub-contractors, the process to move from one sub-contractor to another is a lengthy and costly process that could affect our ability to execute customer shipment requirements and might negatively affect revenues and costs. We depend on certain critical components in the production of our products and services. Some of these components are obtained only from a single supplier and only in limited quantities. In addition, some of our major suppliers use proprietary technology and software code that could require significant redesign of our products in the case of a change in vendor. Further, suppliers could discontinue their products, or modify them in a manner incompatible with our current use, or use manufacturing processes and tools that could not be easily migrated to other vendors.

We also outsource certain of our information technology activities to third parties. We rely heavily on these vendors to provide day-to-day support. We may experience disruption in our business if these vendors or we have difficulty meeting our requirements, or if we need to transition the activities to other vendors or ourselves, which could negatively affect our revenues and costs.

The changes we have experienced in the past and which may occur in the future in our business may place a significant strain on our operational and financial resources. We may experience substantial disruption from changes and could incur significant expenses and write-offs. We must carefully manage accounts receivables to limit credit risks. We must also maintain inventories at levels consistent with product demand. Inaccurate data (for example, credit histories or supply/demand forecasts) could quickly result in excessive balances or insufficient reserves. These changes have in the past and may in the future also place strains on our financial and reporting systems and controls.

Our future success will depend to a significant extent on our ability to attract, retain and motivate highly qualified technical, marketing, sales and management personnel. Competition for these employees is intense and the process of recruiting personnel with the combination of skills and attributes required to operate our business can be time consuming and expensive. We have recently undergone significant changes in senior management and other personnel. For example, our Chief Executive Officer was appointed in January 2004 after having been named Interim Chief Executive Officer in August 2003. Our failure to recruit, retain and motivate qualified personnel could be disruptive to our operations, and could have a material adverse effect on our operating results.

We intend to upgrade or replace certain information systems that support our operations, including systems to manage order processing, shipping, support entitlement, accounting and internal computing operations. Many of these systems are proprietary to us and are very complex. We may not be successful in implementing these new systems and transitioning data from our old systems to the new systems. Any failure or significant downtime in our information systems could prevent us from taking customer orders, shipping products, providing services or billing customers and could harm our business. In addition, our information systems require the services of personnel with extensive knowledge of these information systems and the business environment in which we operate. In order to successfully implement and operate our systems, we must be able to attract and retain a significant number of highly skilled employees. If we fail to attract and retain the highly skilled personnel required to implement, maintain and operate our information systems, our business could suffer.

Our success depends in part upon our internally developed technology. Despite the precautions we take to protect our intellectual property, unauthorized third parties may copy or otherwise obtain and use our technology. In addition, third parties may develop similar technology independently. Unauthorized copying, use or reverse engineering of our products or independent development of technology similar to ours by competitors could materially adversely affect our business, financial condition and results of operations.

We depend on licenses for some of the technology used in our products from a number of third-party vendors. If we were unable to continue using the technology made available to us under these licenses on commercially reasonable terms or at all, we may have to discontinue, delay or reduce product shipments until we obtain equivalent replacement technology, which could hurt our business. In addition, if our vendors choose to discontinue support of the licensed technology in the future, we may not be able to modify or adapt our own products.

The electronic communications industry is subject to a wide range of regulations in the markets and countries in which we currently operate or may wish to operate in the future. In addition, new products and services may involve entering different or newly regulated areas. Changes in these environments may impact our business and could affect our ability to operate in certain markets or certain regions from time to time.

Revisions to generally accepted accounting principles or related rules of the Securities and Exchange Commission will require us to review our accounting and financial reporting procedures in order to ensure continued compliance. From time to time, such changes have an impact on our accounting and financial reporting, and these changes may impact market perception of our financial condition. Additionally, recently adopted or new legislation or regulations may lead to an increase in our costs related to audits in particular and regulatory compliance generally.

We have made a number of acquisitions in the past. Acquisitions or investments we make may experience significant fluctuations in market value or may result in significant write-offs or the issuance of


	•	inability to successfully integrate or commercialize acquired technologies or otherwise realize anticipated synergies or economies of scale on a timely basis;

	•	diversion of management attention;

	•	disruption of our ongoing business;

	•	inability to assimilate or retain key technical and managerial personnel for both companies;

	•	inability to establish and maintain uniform standards, controls, procedures and processes;

	•	governmental, regulatory or competitive responses to the proposed transactions;

	•	impairment of relationships with employees, vendors or customers including, in particular, acquired distribution and VAR relationships;

	•	permanent impairment of our equity investments;

	•	adverse impact on our annual effective tax rate; and

	•	dilution of existing equity holders.

Significant elements of our product development, manufacturing, information technology systems, corporate offices and support functions are concentrated in San Jose, California, Nashville, Tennessee and Chelmsford, Massachusetts. Significant sales, administrative and support functions and related infrastructure to support our international operations are also concentrated at our U.K. offices. In the event of a natural disaster, such as an earthquake or flood, or localized extended outages of critical utilities or transportation systems that affects us, our customers or our suppliers, we could experience a significant business interruption.

The threat of terrorist attacks and increased international political instability in various locations around the world have created uncertainty within the worldwide economic environment. Such uncertainty may halt or hinder our ability to do business, may increase our costs and may result in reduced spending by our customers.

As we expand our international operations, we expect that our international business will increasingly be conducted in foreign currencies. Fluctuations in the value of foreign currencies relative to the United States dollar have caused, and we expect such fluctuations to continue to increasingly cause, currency transaction gains and losses. We cannot predict the effect of exchange rate fluctuations upon future quarterly and annual operating results. We may experience currency losses in the future.

The market price of our common stock has been subject to significant fluctuations and may continue to fluctuate or decline. From January 1, 2003 to December 31, 2003, the closing price per share of our common stock has ranged from a low of $2.86 to a high of $16.55. The stock markets have experienced significant price and trading volume fluctuations. The market for technology has been extremely volatile

and frequently reaches levels that bear no relationship to the past or present operating performance of those companies. General economic conditions, such as recession or interest rate or currency rate fluctuations in the United States or abroad, could negatively affect the market price of our common stock. In addition, our operating results may be below the expectations of securities analysts and investors. If this were to occur, the market price of our common stock would likely significantly decrease. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted against that company. Such litigation could result in substantial cost and a diversion of management’s attention and resources.

The market price of our common stock may fluctuate in response to various factors, some of which are beyond our control. These factors include, but are not limited to, the following:


	•	changes in market valuations or earnings of our competitors or other technology companies;

	•	actual or anticipated fluctuations in our operating results;

	•	changes in financial estimates or investment recommendations by securities analysts who follow our business;

	•	technological advances or introduction of new products by us or our competitors;

	•	the loss of key personnel;

	•	our sale of common stock or other securities in the future;

	•	intellectual property or litigation developments;

	•	changes in business or regulatory conditions;

	•	the trading volume of our common stock; and

	•	disruptions in the geopolitical environment, including war in the Middle East or elsewhere or acts of terrorism in the United States or elsewhere.

Following this offering, Vista will own approximately 13,572,222 shares, or 16.5% of our common stock. This ownership, together with Vista’s contractual right to nominate two directors provides Vista with a substantial degree of control over our operations. Additionally, in connection with the conversion of the Series B convertible preferred stock, we have entered into an agreement with Vista which provides that, until Vista holds less than 4,500,000 shares of its originally purchased and converted common stock, many significant corporate matters will continue to require Vista’s consent, including the issuance of additional capital stock, a sale of all or substantially all of our assets, the consummation of any transaction the result of which is that any person becomes the beneficial owner of more than fifty percent of our voting securities, the incurrence of certain indebtedness, a voluntary liquidation or dissolution, acquisitions by us of any material interest in any company, business or joint venture, the consummation of certain related party transactions by us, the execution by us of any agreement which restricts our right to comply with certain of our obligations to Vista, the approval of our annual budget or any material deviations from our annual budget declare or pay any dividends or distributions on our common stock, or a change in the compensation paid to, the termination of the employment of, or the replacement of, certain of our executive officers including our Chief Executive Officer. If Vista viewed these matters differently from us, we might not be able to accomplish specific corporate actions, and this failure could harm our business.

Our articles of incorporation, our bylaws and our shareholder rights plan contain provisions that may inhibit potential acquisition bids for us and prevent changes in our management. Certain provisions of our charter documents could discourage potential acquisition proposals and could delay or prevent a change in control transactions. These provisions of our charter documents could have the effect of discouraging

We have not designated the amount of net proceeds we will use for any particular purpose. Accordingly, our management will have broad discretion as to the application of the net proceeds and could use them for purposes other than those contemplated at the time of this offering. Our shareholders may not agree with the manner in which our management chooses to allocate and spend the net proceeds. Moreover, our management may use the net proceeds for corporate purposes that may not increase our market value.

This prospectus (including the documents incorporated by reference herein) 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, including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies. All forward-looking statements included in this document are based on information available to us today, and we assume no obligation to update these statements. Actual results could differ materially from those projected in the forward-looking statements as a result of the risk factors set forth below, elsewhere in this prospectus and in the documents incorporated by reference herein. In evaluating our business, you should carefully consider the risk factors set forth above in addition to the other information contained or incorporated by reference herein.

Forward-looking statements are only predictions and involve various risks and uncertainties including, among others:


	•	the projected increase in business spending on contact center solutions;

	•	fluctuations in our quarterly results;

	•	our growth strategy and ability to accommodate growth;

	•	the loss of significant customers;

	•	our ability to anticipate and keep pace with technological changes;

	•	our ability to compete in the contact center solutions industry;

	•	decreased prices for our products and services;

	•	risks associated with our international business activities;

	•	our ability to protect our intellectual property and retain key personnel;

	•	our reliance on single or limited sources of supply;

	•	our response to general economic conditions; and

	•	our future financial position and sources of revenue.

We will retain broad discretion over the use of the net proceeds received by us. We currently anticipate using the net proceeds of $46.8 million to be received by us in this offering assuming a public offering price of $18.55 per share for working capital and general corporate purposes, which may include research and development, repayment of indebtedness, capital expenditures and general and administrative expenses. We may also use a portion of the net proceeds to acquire or invest in complementary businesses, products or technologies. We will not receive any proceeds from the sale of common stock offered by the selling shareholders.

Pending the application of the net proceeds, we intend to invest the net proceeds in interest-bearing, investment-grade securities.

We have never paid any cash dividends on our common stock. We presently intend to retain any earnings for use in our business and do not anticipate paying cash dividends in the foreseeable future. In addition, our credit agreements prohibit us from paying cash dividends without the consent of the bank, and pursuant to the terms of our agreement with Vista, we are prohibited from paying cash dividends without Vista’s consent until such time as Vista owns less than 4.5 million shares of our common stock.

Our common stock is quoted on The Nasdaq National Market under the symbol ASPT. The following table sets forth for the periods indicated the high and low closing prices per share for our common stock:

On February 12, 2004, the last reported sale price of our common stock as reported on The Nasdaq National Market was $18.55 per share. As of January 30, 2004, there were 1,056 holders of record of our common stock.

The following table sets forth our actual capitalization as of December 31, 2003. It also sets forth our capitalization on an as adjusted basis to reflect the conversion of the Series B convertible preferred stock held by Vista into 22,222,222 shares of our common stock, the issuance of 200,000 additional shares of our common stock to Vista, the payment of the $3 million transaction fee to Vista, the write-off of the $16.3 million unamortized balance of the beneficial conversion feature associated with the issuance of the preferred stock and the sale of 2,700,000 shares of our common stock by us at an assumed public offering price of $18.55 per share, less underwriting discounts and commissions and estimated offering expenses.

The table set forth above is based on shares of common stock outstanding as of January 30, 2004. This table excludes:


	•	10,318,368 shares of common stock issuable upon exercise of outstanding options under our stock option plans as of January 30, 2004 at a weighted average exercise price of $7.39 per share;

	•	2,628,038 shares of common stock available for purchase as of January 30, 2004 under our 1990 Employee Stock Purchase Plan; and

	•	5,350,780 additional shares of common stock reserved for issuance under our stock option plans.

You should read the capitalization information above together with the sections of this prospectus entitled “Selected Consolidated Financial Data,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes found elsewhere or incorporated by reference in this prospectus.


(1)	We have agreed to pay the offering expenses of the selling shareholders other than the underwriting discounts and commissions. Accordingly, the amount of those expenses, which are estimated to be approximately $600,000, have not been included as a reduction of additional paid-in capital, as adjusted, as they will be expensed.

The statement of operations and balance sheet data set forth below for the year ended December 31, 2003 is derived from our unaudited consolidated financial statements not included or incorporated by reference in this prospectus. The statement of operations data set forth below for the three years ended December 31, 2002 and the balance sheet data at December 31, 2002 and 2001 are derived from our audited consolidated financial statements incorporated by reference in this prospectus. The statement of operations data for the year ended December 31, 1999 and the balance sheet data at December 31, 2000 and 1999 are derived from our audited consolidated financial statements not included or incorporated by reference in this prospectus. The information presented below should be read in conjunction with our consolidated financial statements, the notes thereto and discussions thereof included in the documents incorporated by reference in this prospectus and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”


(a)	Upon adoption of Statement of Financial Accounting Standard, or SFAS, No. 142 Goodwill and Other Intangible Assets, we recorded a charge of $51 million as a cumulative effect of a change in accounting principle effective January 1, 2002, for the impairment charge of the goodwill related to the Products segment.


	During 2002, we recorded an impairment charge of $39 million to write off certain acquired intangible assets relating to previous acquisitions, a restructuring charge of $22 million, gains of $7 million on extinguishment of debt, an impairment of $9 million to write-down a long-term investment and a $27 million tax benefit related to a refund from tax law changes.


(b)	During 2001, we recorded a restructuring charge of $44 million.

(c)	In February 2000, we acquired PakNetX Corporation. The transaction was accounted for as a purchase and a charge of $5 million was recorded for purchased in-process technology that had no alternative uses.


	During 2000, we recorded a gain on the sale of appreciated equity securities of $20 million.

(d)


	Pro forma diluted earnings per share is calculated as net income divided by the diluted weighted average shares outstanding for 2003 assuming the Series B convertible preferred stock was converted to common stock on the preferred stock issuance date.

	We use pro forma diluted earnings per share in monitoring and evaluating our ongoing financial results and trends. We believe this information is useful for investors due to its non-recurring nature in light of the proposed conversion of the Series B convertible preferred stock. As a result, we believe a review of the financial results using this pro forma disclosure provides important insights into our operating results and trends.

(a)

Long-term debt as of December 31, 2003 included long-term borrowings of $39 million and the long-term portion of capital lease obligations of $50,000. Long-term debt as of December 31, 2002 included long-term borrowings of $41 million and the long-term portion of capital lease obligations of $189,000. Long-term debt as of December 31, 2001 included convertible subordinated debentures of $184 million, long- term borrowings of $25 million and the long-term portion of capital lease obligations of $299,000. Amounts in 2000 included capital lease obligations of $852,000. Included in 2000 and 1999 are balances relating to the convertible subordinated debentures.


	The convertible subordinated debentures could have been put to us on August 10, 2003. Accordingly, we classified the debentures as current liabilities as of December 31, 2002. During 2003, we repurchased the remaining outstanding convertible subordinated debentures.

We are a leading provider of enterprise communication solutions that manage and optimize the contact center by integrating the applications that drive customer communications, customer and contact center information and workforce productivity. Our solutions allow businesses to better service their customers by connecting them to appropriate resources, functionalities or applications, regardless of user location or method of communication. We understand the importance of unifying the applications that support customer communications, collect customer information and enhance workforce productivity, and we have focused exclusively on contact center solutions since our inception in 1985. We have a well established customer base, including more than two-thirds of the Fortune 50.

The economic climate in which we operate has been difficult over the last three years, and capital spending has decreased dramatically. This has had a pronounced effect on our ability to generate new license fees, as IT budgets have been frozen and large capital expenditures like those required to purchase some of our products have been quite limited. Additionally, competition for these more limited sales opportunities has increased, and we have seen intense price competition both for new licenses and for support services. While we believe our installed base continues to represent a solid recurring revenue opportunity and a significant cash flow generator, we cannot provide any assurance that these pressures on IT spending will ease, or that the general economic climate will improve. Continued competitive pressure and a weak economy could have a continuing pronounced effect on our operating results. We have undertaken a variety of cost reduction measures designed to bring our operating expenses into line with our perceptions of the business climate. Some of the measures taken include outsourcing of manufacturing, renegotiation of contracts, and global workforce reductions.

During 2003, we generated $99 million in cash flow from operations, completed a private placement of preferred stock which generated net proceeds of $43 million and repaid $129 million of convertible subordinated debenture liabilities. In addition, we substantially lowered our days sales outstanding.

Our revenues are derived from license fees for software products and, to a lesser extent, sales of hardware products. We also generate a substantial portion of our revenues from fees for services complementing such products, including software license updates and product support (maintenance), installation, professional consulting and education. We typically license our products on a per user basis with the price per user varying based on the selection of products licensed. Our software license update support fees are generally based on the level of support selected and the number of users licensed to use our products. Our professional service fees are generally based on a fixed price or time and materials basis. Our education services are generally billed on a per person basis.

We currently expect that services and support revenues will continue to account for a significant portion of our revenues for the foreseeable future.

To date, revenues from license fees have been derived from direct sales of software products to end users through our direct sales force and from our channel and other alliance partners. Our ability to achieve revenue growth and improved operating margins, as well as increased worldwide sales, in the future will depend in large part upon our success in expanding and maintaining these indirect sales channels worldwide.

We recognize revenue from the sale of software licenses and hardware when persuasive evidence of an arrangement exists, the product has been delivered, title and risk of loss have transferred to the customer, the fee is fixed or determinable and collection of the resulting receivable is probable. Delivery generally occurs when the product is delivered to a common carrier.

For multiple element arrangements, we defer the fair market value of revenue associated with each undelivered element until such time as delivery occurs. Deferred revenue is allocated to each element using vendor specific objective evidence of fair market value. Fair market value is established through separate sales of each element to third parties.

A key part of our overall strategy is to increase sales through indirect channels such as distributors and VARs, and partnering with system integrators and technology alliances. In any sales transaction through a distributor or reseller, we recognize revenues when the distributor or reseller sells to the end user.

Note 1 of the Notes to the Consolidated Financial Statements incorporated by reference in this prospectus includes a summary of the significant accounting policies and methods used in the preparation of our Consolidated Financial Statements.

Our critical accounting policies include revenue recognition described above as well as revenue reserves, allowance for doubtful accounts, accounting for income taxes, excess and obsolete inventory, impairment of long-lived assets and restructuring reserves.

The preparation of financial statements in conformity with accounting standards generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant estimates and assumptions relate to the allowance for doubtful accounts, revenue reserves as described above, excess and obsolete inventory, impairment of long-lived assets, valuation allowance and realization of deferred income taxes, and restructuring reserves. Actual amounts could differ significantly from these estimates. The following is a brief discussion of the critical accounting policies and methods that we use.

Revenue reserves: An estimate of the revenue reserve from customer returns is recorded as a reduction in revenues. In determining our revenue reserve estimate, and in accordance with internal policy, we rely on historical data, known returned goods in transit and direct feedback from our internal business units. Our revenue reserve can vary from what actually occurs in that more or less product may be returned from what was originally estimated. These factors and unanticipated changes in the economic and industry environment could make our return estimates differ from actual. The revenue reserve was $1.2 million as of December 31, 2003.

Allowance for doubtful accounts: Our management must make estimates of the collectibility of accounts receivable. Management specifically analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. The key factors we use in assessing this allowance are the individual judgments on specific customer balances and the overall aging of the total receivables. Assumptions and judgments regarding collectibility of accounts could differ from actual events. The accounts receivable balance was $40 million, net of allowance for doubtful accounts of $4.8 million as of December 31, 2003.

Accounting for income taxes: As part of the process of preparing consolidated financial statements, we are required to estimate our income taxes in each of the tax jurisdictions in which we operate. This process involves management’s estimation of our actual current tax exposure together with an assessment

of temporary differences resulting from different treatments in tax and accounting of certain items. These differences result in net deferred tax assets and liabilities, which are included within the consolidated balance sheet. We must then assess the likelihood that the deferred tax assets will be recovered from future taxable income and to the extent we believe that recovery is not likely, we must establish a valuation allowance. To the extent we establish a valuation allowance or adjust this allowance in a period, we must include a tax expense or benefit within the tax provision in the statement of operations.

Significant management judgment is required in determination of the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. We have a valuation allowance of $79 million as of December 31, 2003, due to uncertainties related to our ability to utilize all of our deferred tax assets, primarily consisting of certain net operating losses carried forward and research tax credits, before they expire. The valuation allowance is based on estimates of taxable income by jurisdiction in which we operate and the period over which the deferred tax assets will be recoverable. In the event that actual results differ from these estimates or we adjust these estimates in future periods, we may need to adjust our valuation allowance, which could favorably impact our results of operations.

Excess and obsolete inventory: We value inventory at the lower of the actual cost or the current estimated net realizable value of the inventory. Management regularly reviews inventory quantities on hand and records a write-down for excess and obsolete inventory based primarily on production and supply requirements. Management’s estimates of future production and supply requirements may prove to be inaccurate, in which case inventory may be understated or overstated. In the future, if the carrying value of the inventory were not realizable, we would be required to recognize write-downs to net realizable value as additional cost of goods sold at the time of such determination. Although management makes every effort to ensure the accuracy of its forecast of future production requirements and supply, any unanticipated changes in technological developments could have a significant impact on the value of our inventory and our reported operating results.

Impairment of long-lived assets: Our long-lived assets include property and equipment, long term investments, goodwill and other intangible assets. The fair value of the long-term investments is dependent on the performance of the companies in which we have invested, as well as volatility inherent in the external markets for these investments. In assessing potential impairment for these investments, we consider these factors as well as the forecasted financial performance of our investees. We record an investment impairment charge when we believe an investment has experienced a decline in value that is other than temporary. During 2002, we recognized $9 million of impairment losses related to our long-term investments. As of December 31, 2003, the carrying value of our long-term investments was $150,000.

In assessing the recoverability of our property and equipment, goodwill and other intangible assets, we must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. If these estimates or their related assumptions change in the future, we may be required to record impairment charges for these assets.

Restructuring reserve: In 2002 and 2001, we reduced our workforce by 22% and 28%, respectively, and consolidated selected facilities in our continuing effort to better optimize operations. In connection with the workforce adjustments, a restructuring reserve was established based on estimated costs for severance and outplacement, consolidation of facilities and legal and other costs. Due to the decline in the commercial real estate market, it was expected that abandoned leased facilities would be vacant for several quarters or through the end of the lease term. If the facilities were subleased, it would be at rates below current contractual requirements. We recorded a charge related to the facilities abandonment, based on the difference between the expected cash outflows and the expected cash inflows related to these vacated properties. We periodically review factors such as further declines in the commercial real estate markets and our ability to terminate leases, and based on these reviews we adjust our restructuring reserve as necessary. The remaining restructuring reserve as of December 31, 2003 relates to consolidation of facilities costs and will be reduced going forward by lease payments offset by minimal sublease income. The restructuring reserve balance was $16.9 million as of December 31, 2003.

The following table sets forth statements of operations data for the three years ended December 31, 2003 expressed as a percentage of total revenues:

Net revenues declined by 8% in 2003 as compared to 2002 and 11% in 2002 as compared to 2001. The general decline in revenues resulted from unfavorable global economic conditions. These conditions led to decreased growth in contact center operations and decreased capital spending by our customers.

Software license revenues declined by 14% to $71 million in 2003 as compared to $83 million in 2002 and 22% in 2002 from $107 million in 2001. Hardware revenues declined by 35% to $43 million in 2003 as compared to $66 million in 2002 and 15% in 2002 from $77 million in 2001. The decrease in software license and hardware revenues was primarily due to the continuing economic downturn experienced in both 2003 and 2002. As a result of the continued worldwide economic downturn, customers remained reluctant to increase capital spending on information technology.

Software license updates and product support revenues for 2003 resulted in an increase of 5% to $216 million as compared to 2002 with a slight decline as compared to 2001. The increase in revenue in 2003 was primarily attributable to support on new product purchases, overall improvements to the support renewal process and customers reinstating support on previously purchased products.

Professional services and education revenues for 2003 declined by 21% as compared to 2002 and 25% in 2002 as compared to 2001. Professional services and education revenues consist primarily of installation of product, consulting services, and education fees. The decreases in service revenues resulted primarily from lower installation revenues due to the decline in hardware sales.

Revenues derived from North America constituted 67%, 67% and 72% of total revenues in 2003, 2002 and 2001, respectively. Revenues derived from Europe and Asia Pacific constituted 33%, 33% and 27% of total revenues in 2003, 2002 and 2001, respectively.

Gross software license margin. Cost of software license revenues includes fees paid to various third parties and amortization of intangible assets. Our decreased margin in 2002 resulted from a $38 million charge related to an impairment of intangible assets incurred in the third quarter.

Gross hardware margin. Cost of hardware revenues includes labor, materials, overhead, and other directly allocated costs involved in manufacture and delivery of our products. The decrease in gross margin for 2003 was primarily due to higher contract manufacturing costs. Increased hardware gross margin for 2002 was primarily due to the increased efficiencies gained from reducing headcount and outsourcing manufacturing activities to contract manufacturers.

Gross services margin. Cost of service revenues consists primarily of employee salaries and benefits, facilities, systems costs to support maintenance, consulting and education. The increase in 2003 and 2002 services margins was due to continued reductions in headcount and related allocations.

Research and development, or R&D, expenses relate to the development of new products, enhancements of existing products and quality assurance activities. These costs consist primarily of employee salaries and benefits, facilities, IT costs, and consulting expenses. R&D expenses decreased by 13% in 2003, mainly due to continued workforce reductions in the latter part of 2002, reduced facilities costs due to restructuring of leased facilities, reduced contractor and consulting expense and decreased depreciation expense due to reduced capital spending. As a percentage of net revenues, R&D expenses were 14% in 2003 and 2002. We anticipate that R&D expenses will remain relatively flat in absolute dollars in 2004.

R&D expenses decreased by 41% in 2002 mainly due to continued workforce reduction, reduced contractor and consulting expense and the exclusion of the amortization of certain acquired intangible assets from R&D expenses. We reduced our R&D workforce by 43% in 2001 and by a further 9% in 2002. As a percentage of net revenues, R&D expenses were 14% in 2002 and 21% in 2001.

Selling, general and administrative, or SG&A, expenses consist primarily of employee salaries and benefits, commissions, facilities, information technology costs and administrative support. SG&A decreased by 29% in 2003 mainly due to continued workforce reduction, reduced facilities costs due to restructuring of leased facilities and lower discretionary spending. In addition, depreciation, amortization and bad debt expenses decreased in 2003. Bad debt expense decreased $12.1 million in 2003 which was the result of the collection of previously reserved receivables and improvement of receivables aging. SG&A expenses as a percentage of net revenues were 29% in 2003 and 38% in 2002. We anticipate that SG&A expenses in absolute dollars will remain relatively flat in 2004.

SG&A decreased by 33% in 2002. The decrease was primarily due to a 27% reduction in headcount and the adoption of SFAS 142, which eliminated goodwill amortization beginning in 2002. SG&A expenses as a percentage of net revenues were 38% in 2002 and 50% in 2001.

Restructuring charges consist of costs related to severance, outplacement and consolidation of facilities related to workforce adjustments. In 2003, there was a net restructuring charge of $3.8 million as a result of our revising our estimate upward for future facility related obligations by $4.3 million and reducing our estimate of remaining severance and outplacement costs by $0.5 million

In 2002, we reduced our workforce by 22% and consolidated selected facilities in our continuing effort to optimize operations. The workforce adjustment resulted in the termination of 407 employees. These activities resulted in a restructuring charge of $22 million, which consisted of consolidation of facilities costs of $14 million, severance and outplacement costs of $6 million and other restructuring costs of $2 million. In 2001 we reduced our workforce by 28%, or 740 employees. These workforce adjustments and the consolidation of selected facilities resulted in restructuring charges of $44 million.

Interest income decreased by $0.7 million from 2002 to 2003 and by $1.7 million from 2001 to 2002 primarily due to lower rates of return on short-term investments.

Interest expense decreased by $4.7 million from 2002 to 2003 primarily due to a decrease in our outstanding debt of $132 million. Interest expense increased by $1.0 million from 2001 to 2002 primarily due to higher debt levels throughout 2002.

Other income (expense) for 2003 includes fees charged for bank services of $0.7 million and debt issuance cost amortization of $0.7 million offset by $0.8 million in net gains recognized on the sale of investments. Other expense for 2002 includes a $9 million charge for the write-down of long-term investments, for which we determined a decline in value that was other than temporary. The write-down was mainly offset by a $7 million gain on extinguishment of debt resulting from the repurchase of convertible subordinated debentures. Other income for 2001 includes insurance recoveries of $3 million, which was offset by a $1 million charge for the write-down of long-term investments for a decline that was determined to be other than temporary.

In 2003, we recorded an income tax provision at an effective rate of 15.9%. The 2003 tax rate varies from the statutory rate primarily due to our having a full valuation allowance against our U.S. based deferred tax assets. This results in a tax provision based on current tax calculations in foreign jurisdictions and only nominal amounts in federal and state jurisdictions due to our substantial U.S. net operating losses. Our 2003 tax rate further varies from the statutory rate as a result of nondeductible expenses and the effect of different tax rates in foreign jurisdictions. We reassess the necessity of our valuation allowance on a periodic basis.

In the loss years of 2002 and 2001, we recorded income tax benefits at effective tax rates of 32.5% and 2.8%, respectively. During the first quarter of 2002, there was a change in the tax law that increased the years to which we could carry back our 2001 tax loss from two to five years, resulting in a tax refund and tax benefit of $27 million. In addition, our 2002 tax rate varies from the statutory rate due to a valuation allowance being imposed on current year net losses and the write-off of nondeductible intangible assets during the year. Our 2001 tax rate differs from the statutory rate due to a valuation allowance being imposed on 2001 net losses, foreign losses for which no tax benefit may be realized, nondeductible goodwill amortization and research and development credits.

Accrued Preferred Stock Dividend and Accretion of Redemption Premium and Amortization of Beneficial Conversion Feature

Due to the issuance of $50 million of our convertible Series B preferred stock in the first quarter of 2003 we accrued dividends at 10% compounded daily per annum, accreted the 125% redemption premium and amortized the beneficial conversion feature.

The Series B convertible preferred stock that we issued to Vista contains certain participation rights, EITF Topic D-95, “Effect of Participating Convertible Securities on the Computation of Basic Earnings” requires those securities to be included in the computation of basic earnings per share using the two class method. Diluted earnings per share cannot be greater than basic earnings per share. Therefore, reported diluted earnings per share and basic earnings per share for 2003 were the same.

Pro forma diluted earnings per share is calculated as net income divided by the diluted weighted average shares outstanding for 2003 assuming the Series B convertible preferred stock was converted into common stock on the preferred stock issuance date. We use pro forma diluted earnings per share in monitoring and evaluating our ongoing financial results and trends. We believe this information is useful for investors due to its non-recurring nature in light of the proposed conversion of the Series B convertible preferred stock. As a result, we believe a review of the financial results using this pro forma disclosure provides important insights to our operating results and trends.

Basic earnings per share for the year ended December 31, 2003 is calculated using the two class method as follows:

Pro forma diluted earnings per share for the year ended December 31, 2003 is calculated as follows:

The following table sets forth our unaudited quarterly results of operations data for the eight quarters ended December 31, 2003, as well as such data expressed as a percentage of our total revenue for the periods presented. Our quarterly operating results have varied substantially in the past and may vary substantially in the future. You should not draw any conclusions about our future results from the results of operations for any particular quarter.

The following table presents certain statement of operations items expressed as a percentage of total revenue for each of the eight quarters set forth below:

As of December 31, 2003, cash, cash equivalents, and short-term investments totaled $164 million, representing 53% of total assets and our principal source of liquidity. In addition, we had restricted cash of $6 million related to various loan and letter of credit agreements.

Net cash provided by operating activities was $99 million in 2003, as compared to $74 million in 2002. The main contributor to the increase in net cash provided by operating activities was our significantly improved profitability. Cash collections from customers during 2003 were $432 million. In addition, we reduced our days sales outstanding during the year by 11 days to a days sales outstanding of 34 days as of December 31, 2003.

Net cash used in investing activities was $15 million in 2003 compared to $28 million in 2002. Net cash used in investing activities in 2003 related primarily to net purchases of short-term investments of $9 million as well as property and equipment purchases of $6 million. We currently anticipate 2004 capital expenditures to be approximately $16 million, which is expected to be funded from working capital.

Net cash used in financing activities was $76 million in 2003 compared to $53 million in 2002. Net cash used in financing activities in 2003 resulted from net repurchases of convertible debentures of $129 million, preferred stock proceeds of $43 million, common stock issuances relating to various stock purchase and option plans of $17 million and net payments on borrowings of $7 million.

Net cash provided by operating activities was $74 million in 2002, while net cash used in operating activities was $35 million in 2001. This increase was mainly driven by an improvement in our net loss position. In addition, cash collections from customers during 2002 were $450 million. Days sales outstanding during the year decreased by 19 days to a days sales outstanding of 45 days as of December 31, 2002. In addition, we received a $27 million federal income tax refund due to a change in the tax law which increased the number of years to which we could carryback our 2001 loss from two years to five years.

Net cash used in investing activities was $28 million in 2002 compared to $24 million in 2001. Net cash used in investing activities in 2002 related primarily to net purchases of short-term investments of $17 million as well as property and equipment purchases of $11 million.

The net cash used in financing activities was $53 million in 2002 compared to net cash provided by financing activities of $48 million in 2001. Net cash used in financing activities in 2002 resulted from net repurchases of convertible debentures of $60 million, net borrowings of $5 million, and common stock issuances relating to various stock purchase and option plans of $3 million.

We incurred $150 million of principal indebtedness ($490 million principal at maturity) from the sale of zero coupon convertible subordinated debentures in August 1998. During 2002, we repurchased $176 million principal at maturity utilizing $60 million of cash. In the first quarter of 2003, we paid $5.6 million to repurchase convertible debentures in the open market. This repurchase reduced the principal amount of the convertible debentures due at maturity from $314 million to $300 million. Pursuant to the terms of the debentures, we were obligated to re-purchase all debentures properly tendered on August 11, 2003 at a repurchase price of $412 for each $1,000 principal amount at maturity. In connection with the repurchase, we paid $122.8 million in cash to repurchase $298 million in principal amount at maturity, which represented 99% of the outstanding convertible subordinated debentures. On December 29, 2003, we paid $956,000 to repurchase the final 1% of the outstanding convertible subordinated debentures. As of December 31, 2003, we had retired the entire balance of the convertible subordinated debentures.

On August 9, 2002, we entered into a Credit Agreement with Comerica Bank-California as administrative agent, and CIT Business Credit as collateral agent, which provides us with a $25 million three-year revolving loan facility and a $25 million senior secured four-year term loan. As of December 31, 2003, we had $17 million outstanding under the term loan with the applicable interest rate at 4.15%, no amounts outstanding under the revolver and had utilized $1.1 million in letters of credit. The term loan

has a four-year term. During the first quarter of 2003, we signed Amendment No. 1 to the Credit Agreement. This amendment clarified the accounting for the convertible preferred stock in the covenant computations, revised the liquidity ratio and the tangible net worth covenant requirements, and gave bank consent for the repurchase of 100% of the convertible subordinated debentures with cash. During the second quarter of 2003, we signed Amendment No. 2 to the Credit Agreement. The agreement extended the deadline by which the stock of certain of our subsidiaries was required to be pledged as collateral. We were in compliance with all related covenants and restrictions as of December 31, 2003.

In October 2001, we entered into a five-year loan with Fremont Bank in the amount of $25 million and we currently have $23.8 million outstanding. During the third quarter of 2003, we signed a letter agreement to amend the Loan and Security Agreement to reduce the floor rate to 7% effective September 1, 2003. The loan is secured by a security interest in our buildings in San Jose and the bank also required that we supply a $3 million letter of credit, which is recorded as restricted cash on the balance sheet as of December 31, 2003.

In addition to the line of credit, we have two outstanding bank guarantees with a European bank that are required for daily operations such as payroll, import/export duties and facilities. As of December 31, 2003, approximately $3.1 million was recorded as restricted cash in other current assets on the balance sheet related to these bank guarantees.

On November 14, 2002, we entered into a Preferred Stock Purchase Agreement with Vista pursuant to which Vista agreed to purchase $50 million of our Series B convertible preferred stock, which represented approximately 30% of our outstanding shares on a fully diluted basis, assuming conversion at the initial conversion price. We received $43 million in net proceeds from this transaction. This equity entitled the holders to receive cumulative dividends, which accrued daily at 10% per annum. On or after the tenth anniversary of the closing, we had an obligation to redeem each share of unconverted Series B convertible preferred stock for cash at a redemption price equal to 125% of the original purchase price plus accrued and unpaid dividends. Additionally, in the event that we declared a dividend or distribution to the holders of common stock, the holders of Series B convertible preferred stock would have been entitled to equivalent participation on an as-if-converted basis in such dividend or distribution. In conjunction with the completion of this offering, Vista will convert all of its Series B convertible preferred stock into common stock. Consequently, after the completion of this offering, Vista will no longer be entitled to receive the cumulative dividends or to exercise the redemption rights which were associated with the Series B convertible preferred stock.

We believe that cash, cash equivalents, and short-term investments will be sufficient to meet our operating cash needs for at least the next twelve months. However, we continually evaluate opportunities to improve our cash position by selling additional equity, debt securities, obtaining and re-negotiating credit facilities, and restructuring our long-term debt. The sale of additional equity or convertible debt securities could result in additional dilution to our stockholders. In addition, we will, from time to time, consider the acquisition of or investment in complementary businesses, products, services and technologies, and the retirement of debt, which might affect our liquidity requirements or cause us to issue additional equity or debt securities. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all.


(a)	Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancellable without penalty.

We have no material off-balance sheet arrangements other than operating leases that are discussed in the consolidated financial statements.

Vista has agreed to convert all of its Series B convertible preferred stock into 22,222,222 shares of our common stock immediately prior to the completion of this offering, of which 8,850,000 shares will be sold in this offering. The Series B convertible preferred stock accreted dividends at 10% per annum and had a 125% liquidation value. In consideration for this voluntary conversion, we have agreed to issue Vista 200,000 additional shares of our common stock and pay Vista a $3 million transaction fee. Additionally, Vista will retain the right to nominate two directors to serve on our board and to have an approval right over certain significant corporate matters until such time as its share ownership falls below 4,500,000 shares of its originally purchased and converted common stock. The fair market value of the 200,000 shares issuable to Vista and the $3 million transaction fee will be expensed in the quarter in which this offering closes, together with the $16.3 million unamortized balance of the beneficial conversion feature associated with the issuance of the preferred stock.

We are exposed to financial market risk from fluctuations in foreign currency exchange rates and interest rates. We manage our exposure to these and other risks through our regular operating and financing activities and, when appropriate, through our hedging activities. Our policy is not to use hedges or other derivative financial instruments for speculative purposes. We deal with a diversified group of major financial institutions to limit the risk of non-performance by any one institution on any financial instrument. Separate from our financial hedging activities discussed below, material changes in foreign exchange rates, interest rates, and, to a lesser extent, commodity prices could cause significant changes.

Our outstanding line of credit of $41 million under the Credit Agreement with Comerica Bank — California and CIT Business Credit is sensitive to changes in interest rates. A sensitivity analysis assuming a hypothetical 10% movement in interest rates applied to our outstanding line of credit balance as of December 31, 2003, indicated that such market movement would not have a material effect on our operating results. The interest rate on our $23.8 million loan that is secured by our San Jose, California buildings is re-measured semi-annually at the LIBOR rate plus 3.75% subject to a floor of 7% and a ceiling of 14%. As a hypothetical 10% movement in the LIBOR rate would not increase the sum of the LIBOR rate plus 3.75% above the floor rate of 7%, the interest expense relating to this loan would not be materially impacted by a hypothetical 10% movement in interest rates.

Foreign Currency Exchange: Revenues generated from international operations are generally denominated in foreign currencies. We enter into outright forward foreign exchange contracts to hedge against fluctuations of significant intercompany account balances and monetary assets and liabilities denominated in a non-functional currency. In general, these contracts have maturities of one month or less. Market value gains and losses on these hedge contracts are substantially offset by fluctuations in the underlying balances being hedged, and the net financial impact has not been material in any of the three years presented. As of December 31, 2003, our primary net foreign currency market exposures included Euros, British pounds, and Australian dollars.

A sensitivity analysis assuming a hypothetical 10% movement in foreign exchange rates applied to our hedging contracts as of December 31, 2003, indicated that these market movements would not have a material effect on our business, operating results, or financial condition. Actual gains or losses in the future may differ materially from this analysis, depending on actual changes in the timing and amount of interest rate and foreign currency exchange rate movements and our actual balances and hedges. Foreign currency rate fluctuations can impact the U.S. dollar translation of our foreign operations in our consolidated financial statements. In 2003, these fluctuations have not been material to our operating results.

Interest and Investment Income: Our exposure to market rate risk for changes in interest rates relates primarily to our investment portfolio. We do not use derivative financial instruments in our investment portfolio. Our investments are in debt instruments of the U.S. Government and its agencies, and in high-quality corporate issuers and, by policy, limit the amount of credit exposure to any one issuer. These investments are subject to interest rate risk, and could decline in value if interest rates increase. The average duration of our investment portfolio as of December 31, 2003 was 1.3 years. Due to the short duration and conservative nature of these instruments, we believe an immediate 10% change in interest rates would be immaterial to our operating results.

We are a leading provider of software and services that enable businesses to manage and optimize enterprise communications. We develop, market, license and support an end-to-end, integrated suite of contact center software applications that supports and manages customer communications, customer and contact center information and workforce productivity. Our solutions allow businesses to better service their customers by connecting them to appropriate resources, functionalities or applications, regardless of user location or method of communication. We have focused exclusively on contact center solutions since our inception in 1985. We have a well established global customer base including more than two-thirds of the Fortune 50, in a broad range of industries including transportation, financial services, insurance, telecommunications and outsourcing.

The contact center has become an important component of business strategy, evolving from an organizational outpost to a vital strategic resource. Historically, call centers were viewed as a necessary expense for providing customer support. Today, contact centers provide valuable customer information that enables enterprises to understand customer buying trends, target markets more effectively, and increase revenue. Therefore, contact centers are now increasingly perceived as profit centers instead of cost centers.

Evolution of Contact Center Technology. In the mid-1980s, call center technology was limited to the distribution of voice calls to customer service representatives using automatic call distributors, or ACDs. This technology grew to encompass inbound and outbound calls and the coordinated management of multiple call centers. Computer telephony integration, or CTI, routed customer information along with voice calls to customer service representatives, enabling them to more efficiently service customers. The development of text-to-speech and speech recognition technologies allowed interactive voice response technology, or IVR, to service customers without employing live customer service representatives. The development of workforce management software helped companies automate the complex task of scheduling large workforces with varied skills and responsibilities. Quality monitoring and recording technology also became a critical call center component that enabled companies to constantly evaluate their interactions and processes. The widespread adoption of the Internet in the late 1990s required companies to manage a broader variety of customer contact channels, including e-mail and the Web. Also, large numbers of enterprises implemented customer relationship management, or CRM, software systems to record and track front-office customer interactions and it became necessary to integrate contact center solutions with these systems. Contact center applications are also converging as key contact center functionalities such as those of ACDs, CTI, and IVR are integrated.

Increased Demand for Open, Standards-Based Solutions. As call center infrastructure technology was developing, call center hardware and software solutions were typically purchased from a single vendor which had its own proprietary architecture and offered limited support for and interoperability with third-party applications and systems. While such systems may have initially provided a complete contact center solution, technological advances and the increasing heterogeneity of technology infrastructures have outpaced the ability of individual proprietary platform vendors to offer a comprehensive end-to-end solution. As a result, there is an increasing demand for open standards-based solutions that can address the full range of contact center needs.

The Trend Towards Remote Contact Center Solutions. Advances in contact center technology and the reduction of international communications costs have been driving a significant industry trend towards remote call center solutions. Companies save substantial labor costs and are able to more cost-effectively provide around the clock customer support by off-shoring, or moving contact centers to international or other off-site locations, or by outsourcing contact center services to a third party. For example, many companies have been moving or outsourcing their contact centers to countries such as India and the Philippines that have large, educated workforces at lower labor costs. According to a November 2003 IDC report, the offshore component of IT services in the U.S. could rise from 5% to 23% by 2007, representing a $46 billion market and a 55% compounded annual growth rate. The outsourcing and off-shoring of

contact center operations and the globalization of customer bases will increase the demand for contact center solutions that can function seamlessly across global data networks and manage the related security and quality control challenges. Many companies are exploring options to centralize the management of contact centers while geographically dispersing agents with the aim of reducing costs while simplifying administration, reporting and analysis.

Workforce Management and Optimization Challenge. The most significant cost in operating a contact center is personnel and related expenses. The complexity of contact center operations and the related demands being placed on contact center managers create the need for effective tools for forecasting, scheduling, staffing, managing and optimizing contact center operations. Workforce management software allows supervisors to efficiently and effectively manage the challenges of contact center labor. An optimal workforce management solution should help forecast customer demand based on changing business and customer requirements, schedule staff according to agent skill level and customer demand, and plan employee schedules. Also, it should accommodate new communication media as they are added and integrate with training applications so agent training on new products or skills is part of the overall schedule consideration. By matching the contact center operation needs with the individual agent’s schedule preferences and skill sets, contact center managers can improve employee retention and job satisfaction and increase productivity in a cost-effective manner. The market for workforce management software in the U.S. alone is expected to grow from approximately $139 million in 2002 to $819 million in 2007, which represents a compounded annual growth rate of 45%, according to a November 2003 report by Saddletree Research, an independent market research firm.

Analytics and Consolidated Reporting. Multiple communications media, geographically dispersed sites and increasing pressures to increase operational efficiency are generating demand for applications that enable users to capture and view data in dynamic and immediate ways. These applications must gather data from a variety of media and contact center applications into an open-standards based repository against which standard tools can be applied for analytics and reporting. They should be dynamic enough to allow users to view high-level operational metrics as well as allow them to view details specific to particular agents. This would enable users to make informed decisions and rapid changes to how customer interactions are being handled based on the depth and breadth of information they can access.

The Emergence of VoIP. VoIP, together with other Internet technologies is anticipated to be the next major advance in communications. VoIP permits the movement of voice traffic over the Internet using Internet Protocol, improving the performance of a converged system, and typically lowering transmission costs relative to PSTN by enabling the consolidation of networks and the bypass of toll charges for long distance voice. Instead of two separate networks for voice and data, voice calls flow over the data network similar to other communications such as email. Therefore, in order to support VoIP, contact centers will have to employ software-based applications that blend voice, email and Web communications into a single queue and route them intelligently over a data network to the optimal destination. Convergence of voice and data networks in the contact center has been and will continue to be evolutionary due to its mission critical role in business. This will drive the need for a migration strategy which is not disruptive to businesses and which offers support for legacy and converged networks.

We believe that a significant opportunity exists for a comprehensive and integrated contact center solution that addresses the needs of businesses to better service and support customers in the most cost-effective manner. Such a solution must be able to facilitate interactions with customers over a variety of communication protocols. At the same time, the solution must help optimize workforce forecasting and scheduling to match the right personnel to each customer inquiry. Finally, the solution must integrate with a broad range of industry standard hardware and emerging technologies through an open architecture.

We are a leading provider of contact center solutions that drive customer communication, customer and contact center information and workforce productivity. Our solutions are delivered through an integrated suite of software and hardware products and services developed around our Uniphi business communications architecture. Our solutions unify the contact center and the enterprise and enable our customers to effectively manage communications in a variety of media while integrating third-party applications, storing and reporting data for business intelligence and efficiently managing workforce and business relationships. Our solutions allow customers to increase revenue, improve customer satisfaction and reduce costs while enabling them to effectively manage geographically disperse contact centers.

Improved Contact Center Productivity and Customer Satisfaction. Our advanced call-routing software can be integrated with various information sources such as enterprise databases where critical information about customers is stored, including such data as customer entitlements, buying histories, service case histories and account balances. This integrated solution helps identify callers, access data about them and make an informed decision about which resource is best suited to answer the call, thereby saving time, reducing toll charges and boosting customer satisfaction. An integrated routing application also brings customer information to agent desktops when the contact arrives or is transferred, dramatically reducing customer wait time, enhancing the agent’s ability to deliver effective service and making the selling of additional products and services to the customer easier. Our self-service application also improves productivity and customer satisfaction by allowing companies to let customers handle routine interactions and inquiries on their own. This reduces the queue for live agents, allowing them the time to focus on more complex or non-routine issues.

Effective Management of Multiple Communication Channels. Our solutions allow enterprises to support customer inquiries from traditional and non-traditional communication channels. Our solutions’ multi-channel capabilities allow companies to manage telephone, e-mail and Web contacts in a virtual queue, helping them to ensure a consistent and high-quality response for all contact channels, maximizing the use of agent skills, increasing agent productivity and providing selling opportunities.

Decreased Costs of Operating Contact Centers. Our business communications solutions enable our customers to lower the total cost of operating their contact centers. We employ skills-based routing to transfer calls across sites efficiently, reducing phone charges by getting contacts to the most appropriate resource quickly and reducing the number of transfer operations. In addition, our intelligent network-level management solutions employ pre-call routing techniques to reduce toll charges that companies pay to service carriers. Our self-service application enables our customers to let their customers handle many of their own transactions around the clock, reducing the amount of live service required and thereby decreasing costs. Our workforce management software forecasts workloads, optimizes agent scheduling, and minimizes labor costs. Our interoperable products enable our customers to run our software platform on a wide variety of communications hardware, thereby permitting them to utilize existing hardware, or upgrade to converged VoIP networks, which reduces the costs of managing multiple networks.

Powerful Analytics and Reporting. Our integrated contact management software suite provides in depth information that can be reported and analyzed. Key performance indicators, such as hold times and dropped calls, can be tracked across globally distributed contact centers. Other indicators related to corporate data such as amount of revenue can also be tracked. Our solution provides reports in real-time, allowing our customers to respond quickly to critical customer service issues and to track their customers’ behavior and responses.

Integrated, Scaleable and Interoperable Architecture. Our Uniphi architecture offers a number of advantages that enable us to improve integration and interoperability with multiple contact center environments and third-party hardware and software offerings as well as accelerate the time to develop and release new applications and functionality and reduce support costs. Our software solutions are flexible and scaleable to allow our customers to incorporate complementary software applications, whether designed by

us or a third party, in a cost efficient manner and our use of widely accepted industry standards makes our products easy to implement. Because customers can continue to use their pre-existing contact center infrastructure, they can preserve their legacy investments while adding functionality from newer technologies such as VoIP. The open and modular Uniphi architecture reduces the risks and time associated with changes such as product migration or addition of new applications. As new standards and technologies emerge, we plan to integrate these standards and features into our technology.

Accelerated Implementation Through Our Service Offerings. Our professional services, education and support services provide our customers with access to experienced personnel who specialize in the complex multi-vendor contact center environments. Our service organization’s expertise in developing and implementing contact center solutions across industries, coupled with expertise in the application of our solutions to specific business strategies, enables our customers to extend the standard capabilities of our products and help transform traditional call centers into integrated multi-channel contact centers. Our education personnel help train our customers’ personnel to effectively utilize the capabilities of our solutions. Our support services help ensure that our systems continue to operate in complex multi-vendor environments.

Our objective is to extend our position as a leading provider of integrated contact center software and hardware solutions. Our strategy includes the following key elements:

Grow Our Customer Base. We intend to grow our customer base by further penetrating our existing markets and by addressing high growth opportunities such as the demand for integrated inbound/ outbound solutions, the small and medium sized enterprise market, and the trend toward contact center outsourcing. We recently released our Iphinity integrated product suite to address the small to medium sized business market and we have established a relationship with SER Systems to target the integrated inbound/outbound market. We have many leading U.S. and international outsourcing companies as our customers and we intend to further expand our presence in this growing market. We also intend to grow our enterprise customer base by continuing to add new functionality and emerging communication protocols to our Uniphi product suite.

Drive Further Growth in the Global Outsourcing Market. We believe that the global trends toward moving contact centers off-shore, consolidating contact centers and outsourcing call centers, both domestically and internationally, represent large and growing market opportunities. Our solutions allow our customers to take advantage of global labor opportunities, centralized administration, and expanded call-handling capacity. In addition, our solutions enable customers to transfer contact center workload, business rules and workflow conventions to new locations without business disruption. Our VoIP solutions enable customers to centralize infrastructure while deploying agents globally. We plan to continue to grow our remote solutions business.

Further Penetrate Our Existing Customer Base. We have a large, established customer base, including more than two-thirds of the Fortune 50. The strategic importance to the contact center of our infrastructure and application platform facilitates long-term relationships with our customers. We intend to continue to sell additional products and services, such as analytics and workforce management, to our existing customer base.

Continue to Develop Our Open, Flexible Technology Platform. We will continue to develop and sell products that customers can use with their existing contact center infrastructure, while enabling the migration to newer technologies such as VoIP. We believe our platform-agnostic architecture is a competitive advantage and continues to play a major role in customer buying decisions.

Expand Relationships with Technology and Distribution Partners and Develop Strategic Alliances. We plan to extend, enhance and develop relationships with leading services and technology companies, including system integrators, hardware vendors, and other independent software vendors. We intend to leverage our relationships to integrate complementary technologies with our solutions, ensure access to

Pursue Strategic Acquisitions. In addition to our internal research and development efforts, we evaluate acquisitions of companies that could extend our product offerings, technology expertise, industry knowledge, and global customer base. Since 1995, we have completed six acquisitions that have expanded our product suite and customer base. We intend to selectively pursue additional acquisitions in the future as opportunities arise.

We develop, market and support software and hardware products designed to enable organizations to provide a high level of service to their customers. Our solutions are based on our Uniphi architecture, which connects the contact center to the enterprise by integrating the applications that drive customer communications, customer and contact center information, and workforce productivity. We offer our software products as integrated suites or separate modules, depending on customer requirements. Our applications work together to optimize contact center performance and simplify administration and management. The following diagram of our contact center solution illustrates how individual applications support communications, information and workforce management:

The following table summarizes our software product suites, their individual applications and their capabilities within the contact center:


Product Suite		Description



Aspect Call Center — Automated Call Distribution Platform		Customer call-handling system processes up to 200,000 peak inbound and outbound calls an hour, routes calls according to agent skills, simultaneously queues calls across multiple sites, provides tools for reporting real-time and historical data

Call Center Accessories		Headsets, telephones and wall displays

Hardware		Servers, cards, racks and other hardware installed as part of a customer implementation

We developed our enterprise communication solutions based upon our extensive experience in building innovative leading contact center solutions. Our Uniphi business communications architecture extends the contact center across the enterprise by integrating the complex applications that drive customer communications, customer and contact center information, and workforce productivity.

Our open architecture is modular, flexible and interoperable within multi-vendor environments. We incorporate open standards into the design of our products to optimize the integration and interoperability with third-party contact center technologies and applications such as quality monitoring and recording, outbound dialing and analytics. In addition, we offer integration modules that make connecting to a wide range of applications in the contact center and the enterprise less costly than developing customized interfaces to proprietary systems. We offer connectivity to key customer relationship management applications from leading vendors such as Oracle, PeopleSoft, SAP and Siebel Systems. By integrating with these applications, our solutions deliver valuable customer information to any live or self-service resource serving any given customer. We were an early advocate of open standards-based call center technology and continue to advocate, develop and incorporate open standards into our industry solutions.

Standards-based products are a critical part of our Uniphi solutions and product roadmap. As such, we continue to incorporate standards into our product roadmap as evidenced by the standards that we currently support in our range of communications, workforce and information solutions. In addition to incorporating standards, we support common operating systems, languages, hardware, networking protocols, database and data storage mediums and front office applications.

We continuously evaluate and invest in research and development to expand our product roadmap to consider emerging standards. We developed our open architecture to easily accommodate the integration of emerging technologies such as Web services and Voice Extensible Mark-up Language, or VXML, and support our customer’s choice of standards. In addition, we enable our customers to create and quickly modify business rules to drive live and self-service communications between them and their customers. Our open architecture provides a flexible and low-cost solution that scales to address the evolving communication and infrastructure demands of our customers.

We believe that superior customer service and support is critical to retaining and expanding our customer base. Our customer service group provides technical support and maintenance, consulting and education services to help our customers successfully implement, upgrade and utilize our products.

Our technical support and maintenance services are provided primarily by support centers located around the world and include telephone support and remote field support. In addition, our eServices online support enables our customers to download software updates and technical information and open and track support cases on the Web. We offer various levels of support, ranging from basic support to 24 by 7 mission critical support. Pricing of support services is generally based on the level of support selected and the number of users authorized to access our products. Our contracts generally include update rights for licensed products.

Our Global Professional Services group provides services that include the installation and implementation of our products. Our end-to-end consulting services include project design, requirements analysis, implementation, and closure. These services are generally billed on a fixed price or time and materials basis. We also partner with third-party systems integrators to provide additional coverage and complementary technical skills.

Our education services include training courses, which are provided in our training centers or at customer sites around the world. These services are generally billed on a per person, per class basis.

We have a well established global customer base including more than two-thirds of the Fortune 50, with customer deployments worldwide across a broad range of industries and markets including transportation, financial services, insurance, telecommunications and outsourcing. No customer accounted for 10 percent or more of revenue in 2003. The following table lists many of our largest customers by 2003 revenue:

We sell and market our products and services in the U.S. primarily through our direct sales force and internationally through our direct sales force and VARs. Our direct sales force is comprised of inside sales and field sales personnel. Our sales people are located in more than 20 major cities worldwide. Our sales efforts target companies of varying sizes across diversified industries. A key aspect of our sales strategy is to increase sales through indirect channels including VARs, technology alliances and SIs. In addition, we plan to continue to develop alliances with key technology partners who integrate their products or services with our products or services to offer customers a complete solution.

We have a variety of marketing programs designed to create global brand recognition and market awareness for our product and service offerings. We market our products and services through our Web site, direct mail and online and print advertising. In addition, our marketing initiatives include hosting user conferences and active participation in tradeshows and industry events, cooperative marketing efforts with our customers and partners, publication of technical and education articles in industry journals, sales training, product and strategy updates with industry analysts, speaking engagements, and preparation of competitive analyses. Our marketing organization also produces materials in support of sales to prospective customers that include programs and materials, brochures, data sheets, white papers, presentations, demonstrations and other marketing tools.

Our product development efforts are focused on improving and enhancing our existing products as well as developing new products to broaden our offering and market opportunity. These efforts are largely driven by current and anticipated customer and strategic partner needs. Excluding restructuring charges, our research and development expenditures for 2003, 2002 and 2001 were $49 million, $57 million and $96 million, respectively, which represented 14.0%, 14.0% and 21.5% of total revenues, respectively.

We invest a vast majority of our research and development budget to increase the functionality and interoperability of our software solutions.

We outsource our manufacturing operations to third-party suppliers. We order materials with different lead times, generally 30 to 90 days ahead of the required date of delivery. Because this is a longer time frame than the average customer order to shipment cycle, we authorize our third-party suppliers to acquire materials and build standard sub-assemblies based on forecasted production requirements. Upon receipt of firm orders from our customers, we instruct our third-party suppliers to assemble, configure, test and ship systems to meet our customers’ request dates. We have established manufacturing procedures with our third-party suppliers that are designed to achieve rapid response to customer orders.

The markets in which we operate are intensely competitive and rapidly changing. Our competition includes workforce management software vendors such as Blue Pumpkin and IEX, a subsidiary of Tekelec, and certain product lines of diversified communications equipment companies, including Avaya; Cisco Systems; Genesys, a subsidiary of Alcatel; and Nortel Networks. The principal competitive factors in our industry include quality, reliability, performance, price, level of customer support, reputation, timely introduction of new products, functionality and market presence.

Our future anticipated growth and success will depend on our ability to develop superior, cost-effective products, provide superior customer service and support, and expand our market reach relative to our competitors. Many of our competitors have greater name recognition, larger installed customer bases, longer operating histories and significantly greater financial, technical, sales, marketing and other resources than we do. Our competitors could introduce products with superior features, scalability and functionality at lower prices than our products, and could also bundle existing or new products with other more established products in order to compete with us. Our competitors could also gain market share by acquiring or forming strategic alliances with our other competitors.

Our headquarters currently occupy three office buildings, totaling approximately 285,000 square feet, in San Jose, California. Two of the buildings are owned and the third one is leased. The owned buildings are approximately 209,000 square feet in total. We occupy approximately 90,000 square feet in facilities located in Tennessee that are leased through 2006. We also occupy 105,000 square feet in facilities located in Massachusetts that are leased through 2009. Other North American sales and support functions operate from various leased multi-tenant offices nationwide covering a total of 61,000 square feet with leases expiring as late as 2010. Additionally, we lease approximately 244,000 square feet of space in North America that is currently unoccupied, of which we sublease approximately 39,000 square feet as of December 31, 2003.

We have several facilities to support our European operations. Our principal UK operations are located near London in facilities totaling approximately 30,000 square feet and are leased through 2023. Other significant European facilities are located in Germany and the Netherlands. In Asia, we occupy sales and support offices in Japan, Singapore, Hong Kong and Australia.

We rely on a combination of patent, trademark, copyright and trade secret laws and restrictions on disclosure to protect our intellectual property rights. We file patent applications to protect inventions and improvements that are significant to the development of our business. As of January 31, 2004, we held 96 issued United States patents and a lesser number of issued foreign patents and have pending 54 United States patent applications and a lesser number of corresponding foreign patent applications that cover various components of our technology. Our United States issued patents expire on dates ranging from 2004 through 2022. There can be no assurance that any of the claims in the pending applications will be allowed, that any issued patents will be upheld, that competitors will not circumvent our patents, or that any patents or licenses will provide competitive advantages for us or our products.

We believe that customer perception of our brand and trademarks is important to our success. We have eight trademarks registered in various jurisdictions globally.

We generally enter into non-disclosure agreements with our employees, consultants, customers and vendors, and generally control access to and distribution of our software, documentation and other proprietary information. We provide our proprietary software to customers under license agreements. Despite these precautions, unauthorized third parties may copy or otherwise obtain and use our technology. In addition, third parties may develop similar technology independently.

We hold licenses from various third parties regarding rights to certain technology that we incorporate in our products. We have also entered into standard commercial agreements with several suppliers of operating systems, databases and other software used for development and implementation of our products. We believe that the licensing of complementary technologies and software from parties with specific expertise is an effective means of expanding the features and functionality of our products. These licenses are ongoing and generally involve the payment of a fixed license fee or royalties based on the volume of systems we ship over periods of time.

Despite our efforts to protect our intellectual property, we cannot assure you that the steps we take will be adequate to prevent misappropriation of our technology or that our competitors will not independently develop technologies that are substantially equivalent or superior to our technology. The laws of many countries do not protect proprietary technology to as great an extent as do the laws of the United States. Moreover, the market for our products is subject to rapid technological change and therefore we also believe that factors such as the technological and creative skills of our personnel and new product developments and enhancements are essential to establishing and maintaining a technology leadership position.

As of December 31, 2003, we had 1,291 full-time employees. None of our employees is represented by a labor union. We have never experienced a work stoppage and believe that our relationship with our employees is good.

We are subject to various legal proceedings and claims that arise in the normal course of business. While the outcome of these proceedings and claims cannot be predicted with certainty, we do not believe that the outcome of any of these legal matters will have a material adverse effect on our business, operating results or financial condition. However, litigation in general, and intellectual property litigation in particular, can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict.

On May 20, 2003, Electronic Data Systems Corporation, or EDS, made a demand for arbitration with the American Arbitration Association in connection with the Master Services Agreement entered into by us and EDS in December 2000 in which we outsourced certain of our IT needs to EDS. A dispute arose between us and EDS over the services and charges to be performed and paid under the Master Services Agreement and we terminated the Master Services Agreement for EDS’ breach of the agreement. EDS alleges that we breached the Master Services Agreement and implied warranties associated with the Master Services Agreement, committed fraud, engaged in negligent misrepresentation and that EDS is entitled to approximately $26 million in damages plus reasonable attorneys’ fees. On June 11, 2003, we filed our answer and counterclaims in which we denied every allegation made by EDS, denied that EDS is owed any amount in damages, and counterclaimed that EDS breached the Master Services Agreement, committed fraud, engaged in fraudulent and unfair business practices and therefore we are entitled to damages, restitution and disgorgement in an amount to be proven in the arbitration. The arbitration hearing is currently scheduled to begin February 17, 2004.

The names of our directors, their ages, and certain other information about them as of January 30, 2004 are set forth below:

Except as set forth below, each of the directors has been engaged in his occupation set forth above during the past five years.

Messrs. Ariko, Casey, Fogelsong and Smith comprise the Compensation Committee of the Board. Messrs. Peth, Rand, Weatherford and Wright comprise the Audit Committee of the Board. Messrs. Casey, Fogelsong and Peth comprise the Nominating Committee of the Board.

Mr. Ariko has been a director since January 2002. Since November 2003, Mr. Ariko has been President and Chief Executive Officer of Mirapoint, Inc., a private company manufacturing messaging systems. From May 2001 to October 2003, he did independent consulting on software distribution strategies and operations. From January 2000, until it was acquired by Peregrine Systems in May 2001, he served as Chairman, Chief Executive Officer and President of Extricity, Inc., a provider of software for the management of inter-company transactions and workflow. Before joining Extricity, Mr. Ariko served as Senior Vice President of America Online, Inc., which had acquired Netscape Communications Corp., where he was Executive Vice President and Chief Operating Officer with primary responsibility for the enterprise software business since August 1998. From April 1994 to August 1998, Mr. Ariko was Executive Vice President in charge of the Americas operations for Oracle Corporation and was a member of the Executive Management Committee. Mr. Ariko is a member of the Board of Directors of Autonomy Systems Ltd. and Incyte Genomics, Inc.

Mr. Casey has been a director since February 2001. He is currently a consultant on information technology strategy and operations. Prior to establishing his consulting business, Mr. Casey served as President and Chief Operating Officer of Exodus Communications, Inc. from June 2000 until April 2001. Prior to Exodus, Mr. Casey was Chief Technology Officer and President of U.S. Services of Wang Global, Inc. He joined Wang in October 1991 as a member of a turnaround management team. Mr. Casey

Mr. Fogelsong has been a director since September 1985. Since March 1989, Mr. Fogelsong has been a General Partner and Managing Director of Institutional Venture Partners, a venture capital investment firm. Between March 1980 and February 1989, Mr. Fogelsong was a venture capitalist with Mayfield Fund, a venture capital investment firm. Mr. Fogelsong is also a member of the Board of Directors of Concur Technologies, Inc.

Mr. Peth has been a director since May 1992. Mr. Peth is currently the President and Chief Executive Officer of Business Resource Group, a provider of office workspace products and services. He has also served on the Board of Directors of Business Resource Group since June 1995. From April 1991 through March 1997, Mr. Peth served as an executive officer of TAB Products Company, an office filing and furniture systems manufacturer and distributor. He served on the Board of Directors of TAB from April 1991 through January 1997. From December 1989 to April 1991, Mr. Peth served as the Office Managing Partner, San Jose Region, for Deloitte & Touche LLP, a public accounting firm.

Mr. Rand has been a director since January 2003 and has served as Interim Chairman of the Board of Directors since August 2003. Mr. Rand is currently Chairman and Chief Executive Officer of Equitant Limited, a provider of Order-to-Cash management services. From 1999 to 2001, Mr. Rand was the Chairman and Chief Executive Officer of The Avis Group following a thirty-year career with Xerox Corporation where he served most recently as Executive Vice President of Worldwide Operations. Mr. Rand also serves on the Board of Directors of AT&T Wireless Services, Abbott Laboratories, and Agilent Technologies.

Mr. Smith has been a director since January 2003. Mr. Smith is the Managing Principal Partner of Vista Equity Partners, which he founded in 2000. From 1994 to 2000, Mr. Smith was Co-Head of the Enterprise Systems and Storage Business within the Technology Group for Goldman Sachs. Prior to that, he was the Technical Supervisor in the Food Service Division at Kraft General Foods, responsible for product, equipment and process development. Mr. Smith also currently serves on the boards of several privately held companies.

Mr. Weatherford has been a director since January 2004. Mr. Weatherford recently retired as Executive Vice President and Chief Financial Officer of Business Objects S.A., a provider of business intelligence software, from 1997 to 2002. Mr. Weatherford has held senior financial positions at NETCOM On-Line Communication Services, Logitech, Texas Instruments, Schlumberger, and Tandem Computers. Mr. Weatherford also serves on the boards of ILOG S.A., Saba Software, Inc., Synplicity, Inc. and is affiliated with several private companies.

Mr. Wright has been a director since February 2001. Since October 2003, Mr. Wright has served as an Executive Vice President of EMC Corporation, a provider of information storage systems, software, networks and services, and President of EMC’s Legato Systems Division. From October 2000 until its acquisition by EMC in October 2003, Mr. Wright previously served as President and Chief Executive Officer of Legato Systems, Inc. from 1997 to 2000. Mr. Wright joined Amdahl in 1987 as Vice President for Sales and Service in the Northeast region of the United States. Mr. Wright is a member of the Board of Directors of VA Software Corporation.

The names of our executive officers, their ages and certain other information about them as of January 30, 2004 are set forth below:

Mr. Barnett has served as our President and Chief Executive Officer since February 2004 and has served as an executive officer since April 2000. In August 2003, Mr. Barnett was appointed by the Board of Directors as our Interim President and Chief Executive Officer and in January 2004 was appointed by the Board of Directors as the President and Chief Executive Officer. He has previously served as Executive Vice President, Products and Chief Technology Officer, Executive Vice President eCRM Applications, Senior Vice President eCRM Applications, Vice President, Portal & Enterprise Applications Division and Vice President Portal Software Division. Prior to joining Aspect, Mr. Barnett was a founding engineer at Octel Communications. He left Octel to become a founding engineer at Aspect in 1985. In 1987, Mr. Barnett left Aspect to found and lead Prospect Software, Inc., a provider of computer-telephony integration products, and returned to Aspect in 1996 when it acquired Prospect.

Mr. Wetsel has served as our Executive Vice President, Finance, Chief Financial Officer, and Chief Administrative Officer since April 2002. Prior to joining Aspect, Mr. Wetsel served as Chief Financial Officer at Zhone Technologies, a telecommunications vendor, from 2000 to 2002. From 1998 to 2000, Mr. Wetsel served as Chief Executive Officer of WarpSpeed Communications. From 1996 to 1998, Mr. Wetsel was Executive Vice President and Chief Operating Officer at Wyse Technology. Earlier, from 1994 to 1996, Mr. Wetsel was President, Chief Executive Officer, and Director of Borland International. Prior to joining Borland, Mr. Wetsel was Chief Financial Officer at Octel Communications from 1990 to 1994.

Mr. Flatley has served as our President of Worldwide Sales and Service since April 2003. From July 1999 to April 2003, Mr. Flatley served as Vice President of Worldwide Field Operations at Plumtree Software, a provider of World Wide Web software solutions for enterprises. From March 1999 to June 1999, Mr. Flatley served as Vice President of Vertical Industry Sales at Siebel Systems. From November 1990 to January 1999, Mr Flatley served as Vice President of Americas Operations at Network Associates (previously Network General). From June 1988 to November 1990, Mr. Flatley was a Marketing and Sales Manager at AT&T. Prior to joining AT&T, Mr. Flatley was an Account Marketing Manager at IBM from September 1982 to June 1988.

The following table sets forth certain information known to us regarding the beneficial ownership of our common stock as of January 30, 2004 with respect to:


	•	each selling shareholder,

	•	each person who is known by us to beneficially own 5% or more of our common stock,

	•	each of our directors,

	•	each of our named executive officers, and

	•	all of our directors and executive officers as a group.

Percentages prior to the offering are based on 79,567,869 shares outstanding at January 30, 2004 and assume conversion of the Series B convertible preferred stock. Percentages after the offering also include an additional 2,700,000 shares of common stock issued by Aspect as well as 200,000 shares of common stock issued to Vista. Except as otherwise noted, the address of each person listed in the table is care of Aspect Communications, 1320 Ridder Park Drive, San Jose, California 95131-2312. It is currently expected that certain executive officers will sell up to an additional 100,000 shares in this offering.


	(1)	Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock.

	(2)	Assumes the receipt of 200,000 additional shares of common stock issued to Vista.

	(3)	Columbia Wanger Asset Management, L.P., WAM Acquisition GP, Inc. and Columbia Acorn Trust together have voting and dispositive power over 4,967,800 shares owned. This information is based solely on information as of December 31, 2003, set forth in a Schedule 13G dated February 12, 2004, as filed by Columbia Wanger Asset Management, L.P. with the Securities and Exchange Commission.

	(4)	Represents shares issuable pursuant to options that are exercisable by Mr. Ariko within 60 days of January 30, 2004.

	(5)	Includes 22,500 shares issuable pursuant to options that are exercisable by Mr. Casey within 60 days of January 30, 2004.

	(6)	Includes 1,124,226 shares held by the Fogelsong Family Trust. Also includes 250,000 shares held of record by Institutional Venture Partners, for which Mr. Fogelsong works as a venture capitalist, as to which Mr. Fogelsong disclaims beneficial ownership except to the extent of his pecuniary interest therein. Also includes 21,000 shares issuable pursuant to options that are exercisable by Mr. Fogelsong within 60 days of January 30, 2004.

	(7)	Includes 21,000 shares issuable pursuant to options that are exercisable by Mr. Peth within 60 days of January 30, 2004.

	(8)	Includes 6,000 shares issuable pursuant to options that are exercisable by Mr. Rand within 60 days of January 30, 2004.

	(9)	Includes 6,000 shares issuable pursuant to options that are exercisable by Mr. Smith within 60 days of January 30, 2004. Also includes 22,222,222 shares of common stock held by Vista Equity Fund II, L.P. Mr. Smith is the managing member of VEFIIGP, an entity which acts as the general partner for Vista Equity Fund II, L.P. and which entity may be deemed the beneficial owner of such shares of common stock. Mr. Smith disclaims beneficial ownership of all such shares except to the extent of his pecuniary interest therein.


(10)	Includes 22,500 shares issuable pursuant to options that are exercisable by Mr. Wright within 60 days of January 30, 2004.

(11)	Includes 344,853 shares issuable pursuant to options that are exercisable by Mr. Barnett within 60 days of January 30, 2004.

(12)	Includes 200,520 shares issuable pursuant to options that are exercisable by Mr. Wetsel within 60 days of January 30, 2004.

(13)	Includes 394,470 shares issuable pursuant to options that are exercisable by Ms. Infante within 60 days of January 30, 2004. Ms. Infante resigned as our Chairman, President and Chief Executive Officer in August 2003 and resigned from Aspect in October 2003. Ms. Infante shares voting and investment power with respect to 5,000 of these shares with her husband Sheldon Finkelstein.

(14)	Includes 69,791 shares issuable pursuant to options that are exercisable by Mr. Butters within 60 days of January 30, 2004. Mr. Butters resigned as our Group President, World Wide Market Development, Sales and Services in February 2003 and resigned from Aspect in March 2003.

(15)	Includes 657,873 shares issuable pursuant to options that are exercisable by all directors and executive officers within 60 days of January 30, 2004. Also includes shares beneficially owned by Vista (see footnote (9) above).

Under the terms and subject to the conditions contained in an underwriting agreement dated , 2004, we and the selling shareholders have agreed to sell to the underwriters named below, for whom Credit Suisse First Boston LLC, UBS Securities LLC and Banc of America Securities LLC are acting as representatives, the following respective numbers of shares of common stock:

The underwriting agreement provides that the underwriters are obligated to purchase all of the shares of common stock in this offering if any are purchased, other than those shares covered by the over-allotment option described below. The underwriting agreement also provides that if an underwriter defaults the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated.

One of the selling shareholders has granted to the underwriters a 30-day option to purchase on a pro rata basis up to 1,800,000 additional shares from Vista at the public offering price less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of common stock.

The underwriters propose to offer the shares of common stock initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $ per share. The underwriters and the selling group members may allow a discount of $ per share on sales to other broker/dealers. After the initial public offering, the representatives may change the public offering price and concession and discount to brokers/dealers.

The following table summarizes the discounts and commissions and estimated expenses that we and the selling shareholders will pay.

We have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act of 1933 relating to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of Credit Suisse First Boston LLC and UBS Securities LLC for a period

of 90 days after the date of this prospectus, except for grants of employee stock options to purchase shares of common stock under the plans disclosed in this prospectus and existing on the date of this prospectus and issuances of shares of common stock pursuant to our employee stock plans; and the issuance of shares having a value of $50 million as consideration for an acquisition provided the recipients agree to be bound by the foregoing lock-up agreement.

Our executive officers, directors and the selling shareholders have agreed that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, whether any of these transactions are to be settled by delivery of our common stock or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of Credit Suisse First Boston LLC and UBS Securities LLC for a period of 90 days after the date of this prospectus.

We and the selling shareholders have agreed to indemnify the underwriters against liabilities under the Securities Act, or contribute to payments which the underwriters may be required to make in that respect.

Our shares of common stock are listed on The Nasdaq Stock Market’s National Market under the symbol “ASPT.”

Certain of the underwriters and their respective affiliates may have from time to time performed and may in the future perform various financial advisory, commercial banking and investment banking services for us in the ordinary course of business, for which they received or will receive customary fees.

In connection with the offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions, penalty bids and passive market making in accordance with Regulation M under the Securities Exchange Act of 1934.


	•	Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

	•	Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing shares in the open market.

	•	Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. If the underwriters sell more shares than could be covered by the over- allotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.

	•	Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by such syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.


	•	In passive market making, market makers in the common stock who are underwriters or prospective underwriters may, subject to limitations, make bids for or purchasers of our common stock until the time, if any, at which a stabilizing bid is made.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of the common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on The Nasdaq Stock Market’s National Market or otherwise and, if commenced, may be discontinued at any time.

A prospectus in electronic format may be made available on the web sites maintained by one or more of the underwriters, or selling group members, if any, participating in this offering and one or more underwriters or selling group members participating in this offering may distribute prospectuses electronically. The representatives may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations.

The distribution of the common stock in Canada is being made only on a private placement basis exempt from the requirement that we and the selling shareholders prepare and file a prospectus with the securities regulatory authorities in each province where trades of common stock are made. Any resale of the common stock in Canada must be made under applicable securities laws which will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the common stock.

By purchasing common stock in Canada and accepting a purchase confirmation a purchaser is representing to us, the selling shareholders and the dealer from whom the purchase confirmation is received that:


	•	the purchaser is entitled under applicable provincial securities laws to purchase the common stock without the benefit of a prospectus qualified under those securities laws,

	•	where required by law, that the purchaser is purchasing as principal and not as agent, and

	•	the purchaser has reviewed the text above under “— Resale Restrictions.”

Under Ontario securities legislation, a purchaser who purchases a security offered by this prospectus during the period of distribution will have a statutory right of action for damages, or while still the owner of the shares, for rescission against us and the selling shareholders in the event that this prospectus contains a misrepresentation. A purchaser will be deemed to have relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years from the date on which payment is made for the shares. The right of action for rescission is exercisable not later than 180 days from the date on which payment is made for the shares. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against us or the selling shareholders. In no case will the amount recoverable in any action exceed the price at which the shares were offered to the purchaser and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we and the selling shareholders, will have no liability. In the case of an action for damages, we and the selling shareholders, will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of the shares as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory provisions.

All of our directors and officers as well as the experts named herein and the selling shareholders may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

Canadian purchasers of common stock should consult their own legal and tax advisors with respect to the tax consequences of an investment in the common stock in their particular circumstances and about the eligibility of the common stock for investment by the purchaser under relevant Canadian legislation.

The validity of the shares of common stock offered hereby will be passed upon by Heller Ehrman White & McAuliffe LLP, Menlo Park, California, counsel to Aspect. Certain legal matters in connection with the offering will be passed upon for the underwriters by Davis Polk & Wardwell, Menlo Park, California.

The consolidated financial statements of Aspect Communications Corporation as of December 31, 2002 and for the year then ended have been incorporated by reference herein in reliance upon the report of KPMG LLP, independent auditors, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The report of KPMG LLP covering the December 31, 2002 consolidated financial statements refers to a change in the method of accounting for goodwill and other intangible assets.

The consolidated financial statements for the years ended December 31, 2001 and 2000 incorporated in the prospectus by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference (which report expresses an unqualified opinion and includes an explanatory paragraph regarding the restatement of the Company’s 2001 and 2000 financial statements and a revision to its Statement of Financial Accounting Standards No. 123 pro forma calculation). Such financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith file annual, quarterly, current reports, proxy statements and other information with the Securities and Exchange Commission. Our filings are available to the public over the Internet at the Securities and Exchange Commission’s website at http://www.sec.gov. You may also read and copy, at prescribed rates, any document we file with the Securities and Exchange Commission at the Public Reference Room of the Securities and Exchange Commission located at 450 Fifth Street, N.W., Washington D.C. 20549. Please call the Securities and Exchange Commission at (800) SEC-0330 for further information on the Securities and Exchange Commissions’ Public Reference Room.

The following documents filed by us with the Commission are hereby incorporated by reference in this Prospectus:


	(1) Our Annual Report on Form 10-K for the year ended December 31, 2002;

	(2) Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2003, June 30, 2003 and September 30, 2003, each as amended to date;

	(3) Our Current Reports on Form 8-K filed October 16, 2003, October 31, 2003, January 22, 2004 and February 2, 2004; and

	(4) The description of our capital stock contained in our Registration Statements on Forms 8-A as filed with the Commission on March 22, 1990, June 25, 1999 and November 20, 2002 including any further amendment thereto or report filed for the purpose of updating such description.

All reports and other documents subsequently filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of this offering shall be deemed to be incorporated by reference herein, to the extent required, and to be a part hereof from the date of filing of such reports and documents. Any statement incorporated herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus.

We hereby undertake to provide without charge to each person, including any beneficial owner, to whom a copy of this Prospectus has been delivered, upon written or oral request of such person, a copy of any or all of the foregoing documents incorporated herein by reference (other than exhibits to such documents, unless such exhibits are specifically incorporated by reference into such documents). Requests for such documents should be submitted in writing to Gary A. Wetsel, Chief Financial Officer, Aspect Communications Corporation, 1320 Ridder Park Drive, San Jose, California 95131-2312 or by telephone at (408) 325-2200.

The following table sets forth the various expenses payable by us in connection with the sale and distribution of the securities being registered, other than underwriting discounts and commissions. The Registrant will bear no expenses in connection with any sale or other distribution by the Selling Shareholders of the shares being registered other than the expenses of preparation and distribution of this Registration Statement and the Prospectus included in this Registration Statement and up to $50,000 in fees of legal counsel to the Selling Stockholders. Such expenses are set forth in the following table. All of the amounts shown are estimates except the Securities and Exchange Commission (“SEC”) registration fee, the NASD filing fee and The Nasdaq National Market listing fee.

Section 317 of the California Corporations Code allows for the indemnification of officers, directors, and other corporate agents in terms sufficiently broad to indemnify such persons under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act of 1933, as amended (the “Securities Act”). Article IV of the Registrant’s Articles of Incorporation and Article VI of the Registrant’s Bylaws provides for indemnification of the Registrant’s directors, officers, employees and other agents to the extent and under the circumstances permitted by the California Corporations Code. The Registrant has also entered into agreements with its directors and officers that will require the Registrant, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors to the fullest extent not prohibited by law.

In connection with this offering, the Selling Shareholders have agreed to indemnify the Registrant, its directors and officers and each such person who controls the Registrant, against any and all liability arising from inaccurate information provided to the Registrant by the Selling Shareholders and contained herein.


(1)	Incorporated by reference to the Registrant’s Registration Statement on Form 8-A filed June 25, 1999.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.


	(1) For purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

	(2) For purpose of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of a registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the registration statement as of the time it was declared effective.

	(3) For purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Pursuant to the requirements of the Securities Act of 1933, Aspect Communications Corporation certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Jose, State of California, on February 13, 2004.


	BY:	/s/ GARY A. WETSEL



	Gary A. Wetsel
	Executive Vice President, Finance,
	Chief Financial Officer, and
	Chief Administrative Officer

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Gary E. Barnett and Gary A. Wetsel, and each of them acting individually, his or her true and lawful attorneys-in-fact, each with full power of substitution, for him or her in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact or any of them, or his or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.


(1)	Incorporated by reference to the Registrant’s Registration Statement on Form 8-A filed June 25, 1999.

II-5 EX-5.1 3 f96361orexv5w1.txt EXHIBIT 5.1 EXHIBIT 5.1 February 13, 2004 Aspect Communications Corporation 1320 Ridder Park Drive San Jose, CA 95131-2313 REGISTRATION STATEMENT ON FORM S-3 (FILE NO. 333- ) Ladies and Gentlemen: We have examined the Registration Statement on Form S-3 to be filed by you with the Securities and Exchange Commission on or about February 13, 2004 (the "Registration Statement") in connection with the registration under the Securities Act of 1933 of shares of your common stock (the "Shares") to be sold by you and by certain shareholders listed in the Registration Statement. As your legal counsel in connection with this transaction, we have examined the proceedings taken and are familiar with the proceedings proposed to be taken by you in connection with the sale of the Shares. It is our opinion that the Shares, when sold by you and the selling shareholders in the manner described in the Registration Statement, will be legally and validly issued, fully paid and nonassessable. We consent to the use of this opinion as an exhibit to the Registration Statement and further consent to the use of our name wherever it appears in the Registration Statement and in any amendment to it. Sincerely, Heller Ehrman White & McAuliffe LLP /s/ Heller Ehrman White & McAuliffe LLP EX-23.1A 4 f96361orexv23w1a.txt EXHIBIT 23.1A EXHIBIT 23.1a INDEPENDENT AUDITORS' CONSENT To the Shareholders and the Board of Directors Aspect Communication Corporation: We consent to the use of our report dated January 23, 2003, except for Note 22, which is as of January 31, 2003, with respect to the consolidated balance sheet of Aspect Communications Corporation and its subsidiaries as of December 31, 2002, and the related consolidated statements of operations, shareholders' equity, and cash flows for the year then ended, incorporated herein by reference. Our report refers to a change in accounting for goodwill and other intangible assets effective January 1, 2002. We also consent to the reference to our firm under the heading "Experts" in this registration statement. /s/ KPMG LLP Mountain View, California February 12, 2004 EX-23.1B 5 f96361orexv23w1b.txt EXHIBIT 23.1B EXHIBIT 23.1b INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Aspect Communications Corporation on Form S-3 of our report dated January 21, 2002 (November 14, 2002 as to Note 21 and March 26, 2003 as to the last paragraph of the section "Stock-Based Compensation" in Note 1), which includes an explanatory paragraph regarding the restatement of Aspect Communications Corporation's 2000 and 2001 financial statements and a revision to its Statement of Financial Accounting Standards No. 123 pro forma calculation, which report is included in the Annual Report to Form 10-K of Aspect Communications Corporation for the year ended December 31, 2002. We also consent to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. /s/ DELOITTE & TOUCHE LLP San Jose, California February 12, 2004 GRAPHIC 6 f96361orf9636100.gif GRAPHIC begin 644 f96361orf9636100.gif M1TE&.#EA,0%*`/?_````````,P``9@``F0``S```_P`S```S,P`S9@`SF0`S MS``S_P!F``!F,P!F9@!FF0!FS`!F_P"9``"9,P"99@"9F0"9S`"9_P#,``#, M,P#,9@#,F0#,S`#,_P#_``#_,P#_9@#_F0#_S`#__S,``#,`,S,`9C,`F3,` MS#,`_S,S`#,S,S,S9C,SF3,SS#,S_S-F`#-F,S-F9C-FF3-FS#-F_S.9`#.9 M,S.99C.9F3.9S#.9_S/,`#/,,S/,9C/,F3/,S#/,_S/_`#/_,S/_9C/_F3/_ MS#/__V8``&8`,V8`9F8`F68`S&8`_V8S`&8S,V8S9F8SF68SS&8S_V9F`&9F M,V9F9F9FF69FS&9F_V:9`&:9,V:99F:9F6:9S&:9_V;,`&;,,V;,9F;,F6;, MS&;,_V;_`&;_,V;_9F;_F6;_S&;__YD``)D`,YD`9ID`F9D`S)D`_YDS`)DS M,YDS9IDSF9DSS)DS_YEF`)EF,YEF9IEFF9EFS)EF_YF9`)F9,YF99IF9F9F9 MS)F9_YG,`)G,,YG,9IG,F9G,S)G,_YG_`)G_,YG_9IG_F9G_S)G__\P``,P` M,\P`9LP`FNW"N+'CQY`A2VV9N++EF%U]RIR\\K+GH*Q"BQZ=E:KFF9R5SAP=^J=H M*[!CPP[4FB/KV[=!XM[-^W3(T+*#"Z>MF97PX\B3RPXTU3=JN*N#.R_)*I!R MX1N-7Q=>>^/VZ].S6___?MRG=O+H92<-OYER].6KQZ?GF!Y^]OK2?^/G/O'\ M_N^%L>1;:@S15%Y,_LE6VVNRV3;<:/+QEU&"];%7$87+===?=0I.E.%N$<;& M6X0!"GA29S,=:!*%M$TXGH.Q!3*ABA@%]U%U%O:'G(83:F=>CM!R-L%H8H8T8VWA0BE"+AF&5^'15I8D4$(C33E5B2%"*0-W9X MGYH755G3E5,V):1'7GY)49@&):D<27/6Y!^0(5+9X)M-RLDE1RV!]1-G1_Z% M8(Q]ZC>HGVQZ5RE%;NIYZ%.;:L22HD`M=%H7#LFD8()Q@A0AFKI=FE&$J6+_ M.NFCG3I5*T8K@0H4D0EI1JJC3,8F4*`BW0K3GQXE6..L,)VIE;$6J:0K:`M1 M]&N!S8HX$+2":FL3LAYE*JNPFL:X%;<4J139NNRR>QJO!UE;:K"PC4LN2,'% M6JX5K(KK(;,E87>NJ[C6B="T01HVT;75TIMJI.&BNZ6W'?DKD,434YR5Q`(9 MG!#"#,L++$F7YAO2E:QV!.Z3];8)\$C$#JRQITGAF6M%(2\\+Y\`0\SRS/3R MFZQ]%F$@PCI6O.`C6M,,E`7X/T1SN^5R9'JRY[+W5*#Z4T4A)) M?93(>>H\LJ0M6Q3ST#0&/:2Q1G_T]K,$7W342V;S_X1V`W\K5))\^FZ;]ZO( M%^I M2[YXH6GFS:*E_[W[^>K0IZO3ZU%[]7?SSJML.T4^VZUK/0S\`,Z&@)"J&.X&HKWS0>5^+,G?_MS3/_Y5 MKX"Y(G0@".:3AN MC&/D"+E!30I%D0U@9!XQ!\E(KHF3F?3D)M=H.%2FT9788^4#Z[@046JN*Z4T MI1PM^4A><@^6_:0BPG[90OI47/VH5W4C'Z%FU'L.:919&P8Z MF6*5>,;9W<^6RE*_#B]E#$*G=-@#G#>*M4M/=.I>F5G,H&;LFH,4+`Y!N$7# M_DN-/PT2`D44R#;"D+#'4XE>)YNVB\#J)TW"T&T(:"&MOJ[R=&AJ[.E"V]"[ MMLY(%@FHDF$U3-7W>%R?;A MIU]7O5!OQLL:ZD3W.,1Y2D]<,T6YC"9QT_V,?*W;$JCB$(CSS:]^Z5M?0*YP MOP#V#&O_&^`"(V;`^#6P@@.#X/8N^,%T:7!Q(4SAN$C8D17.L%HN?)22:OC# M6C$(9V_@I79"J62-RXQX+)2`` !.S\_ ` end GRAPHIC 7 f96361orf9636101.gif GRAPHIC begin 644 f96361orf9636101.gif M1TE&.#EA>`%$`>8``-;6UC(R,K*RLN+BXL+"PKJZNN#@X-34U-K:VH^/C\S, MS).3D[6UM7IZ>KBXN,C(R%%144Q,3+"PL,#`P*NKJZRLK,7%Q;Z^OJ.CHRLK M*TA(2,K*RA86%JZNKD1$1%]?7U=75T!`0(2$A(J*BGY^?GQ\?(>'AX&!@79V M=HB(B"(B(H*"@FIJ:CT]/7AX>'1T=')RGJ6EI?O[^Y"0D/W]_>OKZ]W= MW:BHJ-[>WIR7E^3DY/GY M^6%A8:"@H+>WM_7U]?CX^/?W]_;V]J&AH8R,C//S\_'Q\?#P\*2DI.;FYNKJ MZNCHZ._O[]S(B8J+C(V.CY"1DI.4E9:7F)F:FYR=GI^@ MH:*CI*6FIZBIJJ-@9*U@J[&RL[2UMK)3=@1-/4H+"5H23%>WQ<;'R,FT:D=Z M-!HM(2'1TR$T?@_*VMOEA` M\!`$@?( `,I7ZB`1980.`OH(*\OW],`Z10'Q:3`;`"L9T46#):PQR!."$C"$Q1&UT-Q_\4H8R,! 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California		94-2974062
(State of incorporation)		(I.R.S. Employer Identification No.)






		Proposed Maximum	Proposed Maximum	Amount of
Title of Each Class of	Amount to be	Offering Price	Aggregate Offering	Registration
Securities to be registered	Registered (2)	Per Unit (3)	Price (3)	Fee


Common Stock, par value $0.01(1)	13,800,000	$18.69	$257,922,000	$32,678.72


	Per Share		Total

Public offering price		$		$
Underwriting discount		$		$
Proceeds, before expenses, to Aspect		$		$
Proceeds, before expenses, to selling shareholders		$		$


PROSPECTUS SUMMARY
The Offering
Summary Consolidated Financial Information
RISK FACTORS
	Risks Related to our Business
	Risks Related to this Offering and our Common Stock
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
USE OF PROCEEDS
DIVIDEND POLICY
PRICE RANGE OF COMMON STOCK
CAPITALIZATION
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	Overview
	Revenue Recognition Policy
	Other Critical Accounting Policies and Estimates
	Results of Operations
	Quarterly Results of Operations
	Off-Balance Sheet Arrangements
	Quantitative and Qualitative Disclosures About Market Risk
BUSINESS
	Industry Overview
	Our Solution
	Our Strategy
	Products
	Technology and Architecture
	Customer Service and Support
	Customers
	Sales and Marketing
	Research and Development
	Manufacturing
	Competition
	Properties
	Intellectual Property
	Employees
	Legal Proceedings
MANAGEMENT
	Executive Officers
UNDERWRITING
NOTICE TO CANADIAN RESIDENTS
	Resale Restrictions
	Representations of Purchasers
	Rights of Action -- Ontario Purchasers Only
	Enforcement of Legal Rights
	Taxation and Eligibility for Investment
LEGAL MATTERS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS
	Item 14. Other Expenses of Issuance and Distribution.
	Item 15. Indemnification of Directors and Officers.
	Item 16. Exhibits.
	Item 17. Undertakings.
SIGNATURES
EXHIBIT INDEX
EXHIBIT 5.1
EXHIBIT 23.1A
EXHIBIT 23.1B


	Page

PROSPECTUS SUMMARY		1
RISK FACTORS		5
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS		13
USE OF PROCEEDS		14
DIVIDEND POLICY		14
PRICE RANGE OF COMMON STOCK		14
CAPITALIZATION		15
SELECTED CONSOLIDATED FINANCIAL DATA		16
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		18
BUSINESS		32
MANAGEMENT		42
PRINCIPAL AND SELLING SHAREHOLDERS		45
UNDERWRITING		47
NOTICE TO CANADIAN RESIDENTS		50
LEGAL MATTERS		51
EXPERTS		51
WHERE YOU CAN FIND MORE INFORMATION		51
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE		52


Jon E. Gavenman Heller Ehrman White & McAuliffe LLP 2775 Sand Hill Road Menlo Park, California 94025 (650) 854-4488		Alan F. Denenberg Davis Polk & Wardwell 1600 El Camino Real Menlo Park, California 94025 (650) 752-2000		John L. Savva Sullivan & Cromwell LLP 1870 Embarcadero Road Palo Alto, California 94303 (650) 461-5610


Banc of America Securities LLC	Thomas Weisel Partners LLC


Common stock offered by Aspect		2,700,000 shares

Common stock offered by the selling shareholders		9,300,000 shares

Common stock to be outstanding after the offering		82,467,869 shares

Over-allotment option granted by Vista		1,800,000 shares

Use of proceeds		We estimate that the net proceeds to us from the offering will be approximately $46.8 million, which we intend to use for working capital and other general corporate purposes. We may also use a portion of the net proceeds to acquire complementary businesses, products or technologies. We will not receive any of the proceeds from the sale of common stock by the selling shareholders. See “Use of Proceeds.”

Nasdaq National Market Symbol		ASPT

Risk Factors		See “Risk Factors” for a discussion of factors you should carefully consider before deciding to invest in shares of our common stock.



	Year ended December 31,

	2003		2002			2001			2000			1999

	Unaudited

	(In thousands, except per share data)
Consolidated Statement of Operations Data:
Total revenue	$	363,848	$	396,061		$	445,773		$	589,306		$	488,285
Gross margin		208,799		155,043			207,113			305,081			245,116
Operating expense		159,561		229,974			364,486			349,902			285,940
Income (loss) from operations		49,238		(74,931	)		(157,373	)		(44,821	)		(40,824	)
Net income (loss) before cumulative effect of change in accounting principle		37,502		(56,868	)		(156,250	)		(37,288	)		(29,934	)
Net income (loss)		36,725		(108,299	)		(156,250	)		(37,288	)		(29,934	)
Net income (loss) attributable to common shareholders	$	29,025	$	(108,299	)	$	(156,250	)	$	(37,288	)	$	(29,934	)
Basic and diluted earnings (loss) per share	$	0.39	$	(2.06	)	$	(3.03	)	$	(0.73	)	$	(0.62	)
Pro forma diluted earnings per share	$	0.47



	As of
	December 31, 2003

	Actual		As Adjusted

	(Unaudited and in
	thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents, short-term investments and marketable securities	$	163,992	$	207,823
Total current assets		228,874		272,705
Total current liabilities		139,431		139,431
Long-term borrowings		39,436		39,436
Redeemable convertible preferred stock		34,820		—
Total shareholders’ equity	$	85,877	$	164,537


	We may experience a shortfall in revenues or earnings or otherwise fail to meet public market expectations in any particular quarter, which could materially and adversely affect our business and the market price of our common stock.


	*Reductions in Information Technology spending could continue to harm our business.*


	*The convergence of voice and data networks has led to industry changes that we may not address successfully.*


	*Our product revenues are dependent on the success of a small number of product lines.*


	Because we rely on our installed customer base for support contract renewals and much of our future revenues, those revenues could be significantly impaired if our existing customers do not continue to purchase and use our products and services.


Credit Suisse First Boston		UBS Investment Bank


	*We operate in an intensely competitive market that includes companies that have greater financial, technical and marketing resources than we do.*


	*We may not be able to adapt our products and services quickly or efficiently enough to respond to technological change.*


	*We may experience difficulty anticipating demand for our products and services, which may cause our operating results to suffer.*


	*We are involved in litigation which could be expensive and divert our resources.*


	*We are subject to risks inherent in doing business internationally.*


	*Our failure to grow and maintain our relationships with systems integrators or VARs could impact our ability to market and implement our products and reduce future revenues.*


	*We may experience difficulty expanding our distribution channels.*


	*We are highly dependent on third-party suppliers and underperformance by our suppliers could impair our business.*


	*We may experience difficulty managing changes in our business.*


	*If we fail to attract, motivate and retain highly qualified key personnel, our ability to operate our business could be impaired.*


	*We intend to upgrade or replace certain parts of our information systems and may not be successful in implementing the changes.*


	*Our intellectual property may be copied, obtained or developed by third parties.*


	We depend on licenses from third parties for rights to the technology used in several of our products. If we are unable to continue these relationships and maintain our rights to this technology, our business could suffer.


	*Regulatory changes and future changes to generally accepted accounting principles may negatively impact our business.*


	*We may engage in future acquisitions or investments that could prove difficult to integrate with our business and which may impair our operations.*


	*Our operations are geographically concentrated and we are subject to business interruption risks*.


	*Acts of terrorism and international political instability may impact our business.*


	*Fluctuations in the value of foreign currencies could result in currency transaction losses.*


	*The market price for our common stock may be particularly volatile, and our shareholders may be unable to resell their shares at a profit.*


	*Vista has been granted certain veto rights as to particular corporate actions and owns a significant percentage of our common stock.*