<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 14, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LSI LOGIC CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 94-2712976
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
ORGANIZATION)
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1551 MCCARTHY BOULEVARD
MILPITAS, CALIFORNIA 95035
(408) 433-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DAVID E. SANDERS
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
LSI LOGIC CORPORATION
1551 MCCARTHY BOULEVARD
MILPITAS, CALIFORNIA 95035
(408) 433-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
JOHN A. FORE, ESQ.
WILSON SONSINI GOODRICH & ROSATI, PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304
(650) 493-9300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
- ---------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SECURITY(1) OFFERING PRICE(1) REGISTRATION FEE
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$345,000,000 4 1/4% Convertible
Subordinated Notes due 2004.......... $345,000,000 100% $345,000,000 $95,910
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Common stock, $0.01 par value.......... (2) (2) (2) (3)
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933.
(2) Includes 11,003,731 shares of common stock initially upon conversion of the
notes at the conversion price of $31.353 per share of common stock. Pursuant
to Rule 416 under the Securities Act, such number of shares of common stock
registered hereby shall include an indeterminate number of shares of common
stock that may be issued in connection with a stock split, stock dividend,
recapitalization or similar event.
(3) Pursuant to Rule 457(i), there is no additional filing fee with respect to
the shares of common stock issuable upon conversion of the notes because no
additional consideration will be received in connection with the exercise of
the conversion privilege.
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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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 IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JUNE 14, 1999
[LSI LOGIC LOGO]
$345,000,000
4 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES
We issued the notes in a private placement in March 1999. This prospectus
will be used by selling securityholders to resell their notes and the common
stock issuable upon conversion of their notes.
The notes are convertible prior to maturity into common stock at an initial
conversion price of $31.353 per share, subject to adjustment in certain events.
We will pay interest on the notes on March 15 and September 15 of each year,
beginning on September 15, 1999. The notes will mature on March 15, 2004, unless
earlier converted or redeemed.
We may redeem all or a portion of the notes on or after March 20, 2002. In
addition, the holders may require us to repurchase the notes upon a fundamental
change prior to March 15, 2004.
The reported last sales price of our common stock on the New York Stock
Exchange on June 11, 1999 was $44 per share. Our common stock is traded on the
New York Stock Exchange under the symbol "LSI."
-------------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 7.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus is dated , 1999
<PAGE> 3
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON
THE FRONT OF THIS PROSPECTUS.
TABLE OF CONTENTS
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PAGE
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Where You Can Find More Information......................... 3
Prospectus Summary.......................................... 4
Risk Factors................................................ 7
Use of Proceeds............................................. 17
Ratio of Earnings to Fixed Charges.......................... 17
Description of Notes........................................ 18
Description of Capital Stock................................ 24
Certain Federal Income Tax Considerations................... 28
Selling Securityholders..................................... 32
Plan of Distribution........................................ 39
Legal Matters............................................... 40
Experts..................................................... 40
</TABLE>
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<PAGE> 4
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the
Commission, in accordance with the Securities Exchange Act of 1934. You may read
and copy our reports, proxy statements and other information filed by us at the
public reference facilities of the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices; 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of
such materials can be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the Commission at 1-800-SEC-0330 for further information about the
public reference rooms. Our reports, proxy statements and other information
filed with the Commission are available to the public over the Internet at the
Commission's World Wide Web site at http://www.sec.gov.
The Commission allows us to "incorporate by reference" into this prospectus
the information we filed with the Commission. This means that we can disclose
important information by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus.
Information that we file later with the Commission will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made by us with the Commission under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act until our offering is complete.
- The description of the common stock in our Registration Statement on Form
8-A filed on August 29, 1989, under Section 12(g) of the Exchange Act.
- The description of our Amended and Restated Preferred Shares Rights
Agreement in our Registration Statement on Form 8-A-12G/A filed on
December 8, 1998, under Section 12(g) of the Exchange Act.
- Annual Report on Form 10-K filed on March 5, 1999 and 10-K/A filed on May
28, 1999 for the fiscal year ended December 31, 1998.
- Current Reports on Form 8-K/A filed on March 5, 1999, March 31, 1999 and
May 28, 1999.
- Current Reports on Form 8-K filed on March 15, 1999, March 23, 1999 and
June 2, 1999.
- Quarterly Report on Form 10-Q/A for the fiscal quarter ended September
27, 1998, filed on April 8, 1999.
- Quarterly Report on Form 10-Q for the fiscal quarter ended March 28,
1999.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Investor Relations
LSI Logic Corporation
1551 McCarthy Boulevard
Milpitas, California 95035
(408) 433-6777
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume the
information in this prospectus is accurate as of any date other than the date on
the front of those documents.
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<PAGE> 5
PROSPECTUS SUMMARY
Because this is a summary, it may not contain all information that may be
important to you. You should read the entire prospectus, including the
information incorporated by reference and the financial data and related notes,
before making an investment decision. When used in this prospectus, the terms
"we," "our" and "us" refer to LSI Logic Corporation and not to the selling
securityholders.
LSI LOGIC CORPORATION
LSI Logic Corporation is a worldwide leader in the design, development,
manufacture and marketing of high performance application specific integrated
circuits and application specific standard products. Our submicron process
technologies, combined with our CoreWare design methodology, enable us to
integrate system level solutions on a single chip. We tailor our products to the
specific application requirements of original equipment manufacturers and other
customers in the following markets:
- networking,
- telecom/wireless,
- consumer,
- computer,
- storage components, and
- storage systems.
Our customers are also worldwide leaders in their end markets, and include:
- Cisco Systems, Inc.
- Compaq Computer Corporation
- Hewlett-Packard Company
- IBM Corporation
- NCR
- Sony Corporation
- Sun Microsystems, Inc.
Since our inception, we have based our technology and our business strategy
on integrating increasingly complex electronic building blocks onto a few chips
or a single chip. High-level, industry-standard building blocks of the type that
were previously independent chips, such as microprocessors, networking
controllers, digital signal processors and video compression engines, are used
as "cores" that are connected electronically, along with a customer's
proprietary logic and memory, to form an entire system on a single chip.
Consequently, our customers achieve higher system performance, lower system cost
and faster time-to-market with a differentiated product.
We operate our own manufacturing facilities in order to control our
deployment of advanced wafer fabrication technology, our manufacturing costs and
our response to customer delivery requirements. In December 1998, we began
production in a state-of-the-art facility in Gresham, Oregon. The new facility
is equipped for advanced manufacturing operations and designed to accommodate
our expansion requirements well into the foreseeable future. Our production
operations in the United States and Japan, as well as those of our assembly and
test subcontractors in Asia, are ISO certified, an important international
measure for quality.
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<PAGE> 6
We market our products and services worldwide through direct sales,
marketing and field technical staff and through independent sales
representatives and distributors. In addition, we specifically market our
storage system products to original equipment manufacturing and end users
through value added resellers.
We were originally incorporated in California in 1980. In 1987, we were
reincorporated in Delaware. Our principal offices are located at 1551 McCarthy
Boulevard, Milpitas, California 95035, and our telephone number is (408)
433-8000. Our home page on the Internet is at www.lsilogic.com.
5
<PAGE> 7
THE OFFERING
SECURITIES OFFERED......... $345,000,000 principal amount of 4 1/4% convertible
subordinated notes due 2004.
INTEREST................... 4 1/4% per year. We will pay interest on March 15
and September 15 of each year, beginning September
15, 1999.
CONVERSION................. The notes will be convertible into common stock at
the option of the holder at any time prior to
maturity at an initial conversion price of $31.353
per share, subject to adjustment in certain events.
SUBORDINATION.............. The notes are subordinated to all senior
indebtedness. As of March 31, 1999, we had $374
million of senior indebtedness. As of March 31,
1999, our subsidiaries had approximately $215
million of indebtedness and other liabilities to
which the notes were effectively subordinated.
Neither we nor our subsidiaries are limited from
incurring additional debt under the indenture.
OPTIONAL REDEMPTION........ On or after March 20, 2002, we may redeem the notes
at the redemption prices listed in this prospectus,
together with accrued interest.
FUNDAMENTAL CHANGE......... You have the right, at your option, in the event of
a fundamental change to require us to redeem your
notes at 100% of the principal amount of the notes
to be redeemed plus accrued interest.
SINKING FUND............... None.
USE OF PROCEEDS............ We will not receive any of the proceeds from the
sale by any selling securityholder of the notes or
the underlying common stock.
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RISK FACTORS
Before you invest in the notes or shares of common stock underlying the
notes, you should be aware of various risks, including those described below.
You should carefully consider these risk factors, together with all of the other
information included or incorporated by reference in this prospectus, before you
decide whether to purchase the notes. The risks set out below are not the only
risks we face.
If any of the following risks occur, our business, financial condition and
results of operations could be materially adversely affected. In such case, the
trading price of the notes and common stock could decline, and you may lose all
or part of your investment.
Keep these risk factors in mind when you read "forward-looking" statements
elsewhere in this prospectus and in the documents incorporated herein by
reference. These are statements that relate to our expectations for future
events and time periods. Generally, the words "anticipate," "expect," "intend"
and similar expressions identify forward-looking statements. Forward-looking
statements involve risks and uncertainties, and future events and circumstances
could differ significantly from those anticipated in the forward-looking
statements.
IF WE ARE NOT ABLE TO IMPLEMENT NEW PROCESS TECHNOLOGIES SUCCESSFULLY, OUR
OPERATING RESULTS AND FINANCIAL CONDITION WILL BE ADVERSELY IMPACTED.
The semiconductor industry is intensely competitive and characterized by
constant technological change, rapid product obsolescence and evolving industry
standards. We believe that our future success depends, in part, on our ability
to improve on existing technologies and to develop and implement new ones in
order to continue to reduce semiconductor chip size and improve product
performance and manufacturing yields. We must also adopt and implement emerging
industry standards and adapt products and processes to technological changes. If
we are not able to implement new process technologies successfully or to achieve
volume production of new products at acceptable yields, our operating results
and financial condition will be adversely impacted.
In addition, we must continue to develop and introduce new products that
compete effectively on the basis of price and performance and that satisfy
customer requirements. We continue to emphasize engineering development and
acquisition of CoreWare building blocks, or cores, and integration of our
CoreWare libraries into our design capabilities. Our cores and ASSPs are
intended to be based upon industry standard functions, interfaces and protocols
so that they are useful in a wide variety of systems applications. Development
of new products and cores often requires long-term forecasting of market trends,
development and implementation of new or changing technologies and a substantial
capital commitment. We cannot assure you that ASSPs or cores that we select for
investment of our financial and engineering resources will be developed or
acquired in a timely manner or will enjoy market acceptance.
DISRUPTION OF OUR MANUFACTURING FACILITIES COULD CAUSE DELAYS IN SHIPMENTS OF
PRODUCTS TO OUR CUSTOMERS AND COULD RESULT IN CANCELLATION OF ORDERS OR LOSS OF
CUSTOMERS.
A variety of reasons, including work stoppages, fire, earthquake, flooding
or other natural disasters, or Year 2000 related problems could cause disruption
of operations at any of our primary manufacturing facilities or at any of our
assembly subcontractors. Although we carry business interruption insurance, the
disruption could result in delays in shipments of products to our customers. We
cannot assure you that alternate production capacity would be available if a
major disruption were to occur, or that if it were available, it could be
obtained on favorable terms. A disruption could result in cancellation of orders
or loss of customers. The loss would result in a material adverse impact on our
operating results and financial condition.
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OUR LACK OF LONG-TERM VOLUME PRODUCTION CONTRACTS WITH OUR CUSTOMERS COULD
RESULT IN INSUFFICIENT CUSTOMER ORDERS WHICH WOULD RESULT IN UNDERUTILIZATION OF
OUR MANUFACTURING FACILITIES.
We generally do not have long-term volume production contracts with our
customers. We cannot control whether and to what extent customers place orders
for any specific ASIC design or ASSPs and the quantities of products included in
those orders. Insufficient orders will result in underutilization of our
manufacturing facilities and would adversely impact our operating results and
financial condition.
BRINGING OUR NEW WAFER FABRICATION FACILITY TO FULL OPERATING CAPACITY COULD
TAKE LONGER AND COST MORE THAN ANTICIPATED.
Our new wafer fabrication facility in Gresham, Oregon, began production in
December 1998. The Gresham facility is a sophisticated, highly complex,
state-of-the-art factory. Actual production rates depend upon the reliable
operation and effective integration of a variety of hardware and software
components. We cannot assure you that all of these components will be fully
functional or successfully integrated within the currently projected schedule or
that the facility will achieve the forecasted yield targets. Our inability to
achieve and maintain acceptable production capacity and yield levels could have
a material adverse impact on our operating results and financial condition.
In addition, the amount of capital expenditures required to bring the
facility to full operating capacity could be greater than we currently
anticipate. Higher costs to bring the facility to full operating capacity will
reduce margins and could have a material adverse impact on our results of
operations and financial condition. As of March 31, 1999, we have spent
approximately $781 million in capital expenditures on the Gresham facility. We
plan to spend approximately $200 million in capital expenditures in 1999,
approximately $67 million of which relate to the Gresham facility.
OUR LACK OF GUARANTEED SUPPLY ARRANGEMENTS WITH OUR SUPPLIERS COULD RESULT IN
OUR INABILITY TO OBTAIN SUFFICIENT RAW MATERIALS FOR USE IN THE PRODUCTION OF
OUR PRODUCTS.
We use a wide range of raw materials in the production of our
semiconductors, host adapter boards and storage systems products, including
silicon wafers, processing chemicals, and electronic and mechanical components.
We generally do not have guaranteed supply arrangements with our suppliers and
do not maintain an extensive inventory of materials for manufacturing. Some of
these materials we purchase from a limited number of vendors, and some we
purchase from a single supplier. On occasion, we have experienced difficulty in
securing an adequate volume and quality of materials. We cannot assure you that
if we have difficulty in obtaining materials or components in the future
alternative suppliers will be available, or that available suppliers will
provide materials and components in a timely manner or on favorable terms. If we
cannot obtain adequate materials for manufacture of products, there could be a
material impact on our operating results and financial condition.
HIGH CAPITAL REQUIREMENTS AND HIGH FIXED COSTS CHARACTERIZE OUR BUSINESS, AND WE
FACE A RISK THAT REQUIRED CAPITAL MIGHT BE UNAVAILABLE WHEN WE NEED IT.
In order to remain competitive, we must continue to make significant
investments in new facilities and capital equipment. We spent $329 million in
1998 and $10 million in the first fiscal quarter of 1999, net of retirements and
refinancings, on investments in new facilities and capital equipment, not
including facilities and capital equipment acquired with Symbios. We expect to
spend up to $200 million during 1999. We expect to continue to make significant
investments in new facilities and capital equipment. We believe that we will be
able to meet our operating and capital requirements and obligations for the
foreseeable future using existing liquid resources, funds generated from our
operations and our ability to borrow funds. We believe that our level of liquid
resources is
8
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important, and we may seek additional equity or debt financing from time to
time. However, we cannot assure you that additional financing will be available
when needed or, if available, will be on favorable terms. Moreover, any future
equity or convertible debt financing will decrease existing stockholders'
percentage equity ownership and may result in dilution, depending on the price
at which the equity is sold or the debt is converted. In addition, the high
level of capital expenditures required to remain competitive results in
relatively high fixed costs. If demand for our products does not absorb
additional capacity, the fixed costs and operating expenses related to increases
in our production capacity could have a material adverse impact on our operating
results and financial condition.
THE NATURE OF OUR INDUSTRY COULD CREATE FLUCTUATIONS IN OUR OPERATING RESULTS
WHICH COULD RESULT IN A SUDDEN AND SIGNIFICANT DROP IN THE PRICE OF OUR STOCK
AND OTHER SECURITIES, PARTICULARLY ON A SHORT-TERM BASIS.
Future operating results will continue to be subject to quarterly
variations based upon a wide variety of factors including:
- The cyclical nature of both the semiconductor industry and the markets
addressed by our products;
- The availability and extent of utilization of manufacturing capacity;
- Erosion in the price of our products; and
- The timing of new product introductions, the ability to develop and
implement new technologies and other competitive factors.
Operating results could also be impacted by sudden fluctuations in customer
requirements, currency exchange rate fluctuations and other economic conditions
affecting customer demand and the cost of operations in one or more of the
global markets in which we do business.
We operate in a technologically advanced, rapidly changing and highly
competitive environment, and we predominantly sell custom products to customers
operating in a similar environment. Accordingly, changes in the conditions of
any of our customers may have a greater impact on our operating results and
financial condition than if we predominantly offered standard products that
could be sold to many purchasers. While we cannot predict what effect these
various factors may have on our financial results, their aggregate effect could
result in significant volatility in future performance and the trading prices of
our common stock and the notes. Our failure to meet the performance expectations
published by external sources could result in a sudden and significant drop in
the price of our common stock, the notes and other securities, particularly on a
short-term basis.
IF WE ARE UNABLE TO COMPETE EFFECTIVELY WITH EXISTING OR NEW COMPETITORS,
RESULTING LOSS OF COMPETITIVE POSITION COULD RESULT IN PRICE REDUCTIONS, FEWER
CUSTOMER ORDERS, REDUCED REVENUES, REDUCED GROSS MARGINS AND LOST MARKET SHARE.
We compete in markets that are intensely competitive, and which exhibit
both rapid technological changes and continued price erosion. Our competitors
include many large domestic and foreign companies that have substantially
greater financial, technical and management resources than us. Several major
diversified electronics companies offer ASIC products and/or other products that
are competitive with our product lines. Other competitors are smaller,
specialized and emerging companies attempting to sell products in particular
markets that we also target. In addition, we face competition from some
companies whose strategy is to provide a portion of the products and services
that we offer. For example, these competitors may offer semiconductor design
services, license design tools, and/or provide support for obtaining products at
an independent foundry. Some of our large customers, some of whom may have
licensed elements of our process and product technologies, may
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<PAGE> 11
develop internal design and production operations to produce their own ASICs,
thereby displacing our products. Therefore, we cannot assure you that we will be
able to continue to compete effectively with our existing or new competitors.
Loss of competitive position could result in price reductions, fewer customer
orders, reduced revenues, reduced gross margins, and loss of market share, any
of which would affect our operating results and financial condition.
To remain competitive, we continue to evaluate our worldwide manufacturing
operations, looking for additional cost savings and technological improvements.
If we are not able to implement successfully new process technologies and to
achieve volume production of new products at acceptable yields, our operating
results and financial condition may be affected.
Our future competitive performance depends on a number of factors,
including our ability to:
- Accurately identify emerging technological trends and demand for product
features and performance characteristics;
- Develop and maintain competitive products;
- Enhance our products by adding innovative features that differentiate our
products from those of our competitors;
- Bring products to market on a timely basis at competitive prices;
- Properly identify target markets;
- Respond effectively to new technological changes or new product
announcements by others;
- Reduce semiconductor chip size, increase device performance and improve
manufacturing yields;
- Adapt products and processes to technological changes; and
- Adopt and/or set emerging industry standards.
We cannot assure you that our design, development and introduction
schedules for new products or enhancements to our existing and future products
will be met. In addition, we cannot assure you that these products or
enhancements will achieve market acceptance, or that we will be able to sell
these products at prices that are favorable to us.
OUR SIGNIFICANT INVESTMENTS IN RESEARCH AND DEVELOPMENT BEFORE WE CONFIRM THE
TECHNICAL FEASIBILITY AND COMMERCIAL VIABILITY OF A PRODUCT PRESENT RISKS THAT
WE WILL BE UNABLE TO RECOVER THE DEVELOPMENT COSTS ASSOCIATED WITH SUCH PRODUCT.
We must continue to make significant investments in research and
development in order to continually enhance the performance and functionality of
our products, to keep pace with competitive products and to satisfy customer
demands for improved performance, features and functionality. Technical
innovations are inherently complex and require long development cycles and
appropriate professional staffing. We must complete development of such
innovations before they are obsolete, and make them sufficiently compelling to
attract customers. Also, we must incur substantial research and development
costs before we confirm the technical feasibility and commercial viability of a
product. Therefore, we spend substantial resources determining the feasibility
of certain innovations that may not lead to a product but may instead result in
numerous dead ends and sunk costs. We cannot assure you that revenues from
future products or product enhancements will be sufficient to recover the
development costs associated with such products or enhancements. Moreover, we
may not be able to secure the financial resources necessary to fund future
development.
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<PAGE> 12
CHANGES IN FOREIGN CURRENCY EXCHANGE RATES COULD AFFECT OUR OPERATIONS OR CASH
FLOWS.
We have international subsidiaries that operate and sell our products
globally. Our international sales totaled approximately US$559.6 million in 1998
and US$183.1 million in the first fiscal quarter of 1999. Further, we purchase a
substantial portion of our raw materials and equipment from foreign suppliers,
and we incur labor and other operating costs in foreign currencies, particularly
in our Japanese manufacturing facilities. As a result, we are exposed to changes
in foreign currency exchange rates or weak economic conditions in the other
countries.
Our debt obligations in Japan totaled approximately 8.68 billion yen,
approximately US$74.1 million, at March 31, 1999. These obligations expose us to
exchange rate fluctuations for the period of time from the start of the
transaction until it is settled. In recent years, the yen has fluctuated
substantially against the U.S. dollar. We use forward exchange, currency swap,
interest rate swap and option contracts to manage our exposure to currency
fluctuations and changes in interest rates. There were no interest rate swap or
currency swap outstanding as of March 31, 1999. We cannot assure you, however,
that such hedging transactions will eliminate exposure to currency rate
fluctuations and changes in interest rates. Notwithstanding our efforts to
foresee and mitigate the effects of changes in fiscal circumstances,
fluctuations in currency exchange rates in the future could affect our
operations and/or cash flows. In addition, high inflation rates in foreign
countries could affect our future results.
IF WE DO NOT SUCCESSFULLY AND TIMELY COMPLETE MODIFICATIONS TO OUR SYSTEMS AND
COMMERCIAL ARRANGEMENTS TO ACCOMMODATE THE NEW EUROPEAN CURRENCY, MATERIAL
DISRUPTION OF OUR BUSINESS COULD OCCUR.
A new European currency was implemented in January 1999 to replace the
separate currencies of eleven western European countries. In response, we are
changing our operations as we modify systems and commercial arrangements to deal
with the new currency. Modifications are necessary in operations such as
payroll, benefits and pension systems, contracts with suppliers and customers,
and internal financial reporting systems. We expect a three-year transition
period during which transactions may also be made in the old currencies. This
requires dual currency processes for our operations. We have identified issues
involved and are developing and implementing solutions. The cost of this effort
is not expected to have a material effect on our business or results of
operations. We cannot assure you, however, that all problems will be foreseen
and corrected or that no material disruption of our business will occur.
CHANGES IN INTERNATIONAL TRADE AND ECONOMIC CONDITIONS COULD ADVERSELY IMPACT
OUR ABILITY TO MANUFACTURE OR SELL IN FOREIGN MARKETS AND COULD RESULT IN A
DECLINE IN CUSTOMER ORDERS.
We have substantial business activities in Europe and the Pan-Asia region.
Both manufacturing and sales of our products may be adversely impacted by
changes in political and economic conditions abroad. A change in the current
tariff structures, export compliance laws or other trade policies, in either the
United States or foreign countries could adversely impact our ability to
manufacture or sell in foreign markets.
The economic crisis in Asia has affected business conditions and pricing in
the region. We subcontract test and assembly functions to subcontractors in
Asia. A significant reduction in the number or capacity of qualified
subcontractors or a substantial increase in pricing could cause longer lead
times, delays in the delivery of customer orders or increased costs. Such
conditions could have an adverse impact on our operating results. Additionally,
our customers sell products, especially consumer products, into the Pan-Asia
region. A significant decrease in sales to end-users and consumers in the area
could result in a decline in orders and have an impact on our operating results
and financial condition.
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<PAGE> 13
OUR MARKETING STRATEGY CREATES RISKS ASSOCIATED WITH CUSTOMER CONCENTRATION.
We expect that we will become increasingly dependent on a limited number of
customers for a substantial portion of our net revenues. This is as a result of
our strategy to direct our marketing and selling efforts toward selected
customers. During 1998, Sony Corporation accounted for 12% of net revenues. We
fill Sony's orders as they are placed and accepted. We do not have a supply
contract with Sony and Sony is not obligated to purchase LSI's products.
Our operating results and financial condition could be affected if:
- We do not win new product designs from major customers;
- Major customers cancel their business with us;
- Major customers make significant changes in scheduled deliveries; or
- Prices of products that we sell to these customers are decreased.
OUR BUSINESS AS A HIGH TECHNOLOGY COMPANY PRESENTS RISKS OF INTELLECTUAL
PROPERTY OBSOLESCENCE, INFRINGEMENT AND LITIGATION.
Our success is dependent in part on our technology and other proprietary
rights. We believe that there is value in the protection afforded by our
patents, patent applications and trademarks. However, the semiconductor industry
is characterized by rapidly changing technology. Our future success depends
primarily on the technical competence and creative skills of our personnel,
rather than on patent and trademark protection.
As is typical in the semiconductor industry, from time to time we have
received communications from other parties asserting that they possess patent
rights, mask work rights, copyrights, trademark rights or other intellectual
property rights which cover certain of our products, processes, technologies or
information. We are evaluating several such assertions. We are considering
whether to seek licenses with respect to certain of these claims. Based on
industry practice, we believe that licenses or other rights, if necessary, could
be obtained on commercially reasonable terms for existing or future claims.
Nevertheless, we cannot assure you that licenses can be obtained, or if obtained
will be on acceptable terms or that litigation or other administrative
proceedings will not occur. Litigation of such claims or the inability to obtain
certain licenses or other rights or to obtain such licenses or rights on
favorable terms could have an impact on our operating results and financial
condition.
CYCLICAL FLUCTUATIONS IN OUR MARKETS COULD CAUSE A DOWNTURN IN DEMAND FOR OUR
PRODUCTS AND RESULT IN LOWER REVENUES.
We may experience period-to-period fluctuations or a decline as a result of
the following:
- Rapid technological change, rapid product obsolescence, and price erosion
in our products;
- Fluctuations in supply and demand in the semiconductor or storage markets
for our products;
- Maturing product cycles in our products or products produced by our
customers; and
- Fluctuations or declines in general economic conditions, which often
produce abrupt fluctuations or declines in our products or the products
or services offered by our suppliers and customers.
Significant industry-wide fluctuations or a downturn as a result of these
factors could affect our operating results and financial condition.
The semiconductor industry also has experienced periods of rapid expansion
of production capacity. Even if our customers' demand were not to decline, the
availability of additional excess
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<PAGE> 14
production capacity in our industry creates competitive pressure that can
degrade pricing levels, which can also depress our revenues. Also, during such
periods, customers who benefit from shorter lead times may delay some purchases
into future periods, which could affect our demand and revenues for the short
term. We cannot assure you that we will not experience such downturns or
fluctuations in the future, which could affect our operating results and
financial condition.
OUR ACQUISITION AND INVESTMENT ALLIANCES ACTIVITIES COULD DISRUPT OUR ONGOING
BUSINESS.
We intend to continue to make investments in companies, products and
technologies, either through acquisitions or investment alliances. Although we
evaluate potential acquisition and investment alliances on an ongoing basis, we
do not currently have any commitments for a material acquisition or investment
alliance. Acquisitions and investment activities often involve risks, including:
- We may experience difficulty in assimilating the acquired operations and
employees;
- We may be unable to retain the key employees of the acquired operation;
- The acquisition or investment may disrupt our ongoing business;
- We may not be able to incorporate successfully the acquired technology
and operations into our business and maintain uniform standards,
controls, policies and procedures; and
- We may lack the experience to enter into new markets, products or
technologies.
Some of these factors are beyond our control. Failure to manage growth
effectively and to integrate acquisitions would affect our operating results or
financial condition.
WE DEPEND ON KEY EMPLOYEES AND FACE COMPETITION IN HIRING AND RETAINING
QUALIFIED EMPLOYEES.
Our employees are vital to our success. Moreover, our key management,
engineering and other employees are difficult to replace. We generally do not
have employment contracts with our key employees. Further, we do not maintain
key person life insurance on any of our employees. The expansion of high
technology companies in Silicon Valley and Colorado has increased demand and
competition for qualified personnel. We may not be able to attract, assimilate
or retain additional highly qualified employees in the future. These factors
could affect our business, financial condition and results of operations.
IF WE, OUR SUPPLIERS OR OUR CUSTOMERS DO NOT SUCCESSFULLY, TIMELY OR ADEQUATELY
ADDRESS THE YEAR 2000 ISSUE, WE COULD EXPERIENCE A SIGNIFICANT DISRUPTION OF OUR
FINANCIAL MANAGEMENT AND CONTROL SYSTEMS OR A LENGTHY INTERRUPTION IN OUR
MANUFACTURING OPERATIONS.
As with many other companies, the Year 2000 computer issue presents risks
for us. We use a significant number of computer software programs and operating
systems in our internal operations, including applications used in our
financial, product development, order management and manufacturing systems.
The inability of computer software programs to accurately recognize,
interpret and process date codes designating the year 2000 and beyond could
cause systems to yield inaccurate results or encounter operating problems
resulting in the interruption of the business operations which they control.
This could adversely affect our ability to process orders, forecast production
requirements or issue invoices. A significant failure of the computer integrated
manufacturing systems, which monitor and control factory equipment, would
disrupt manufacturing operations and cause a delay in completion and shipping of
products. Moreover, if our critical suppliers' or customers' systems or products
fail because of a Year 2000 malfunction, it could impact our operating results.
Finally, our own products could malfunction as a result of a failure in date
recognition, giving rise to the possibility of warranty claims and litigation.
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<PAGE> 15
Based on currently available information, our management does not believe
that the Year 2000 issues discussed above, related to internal systems or
products sold to customers, will have a material impact on our financial
condition or overall trends in results of operations. However, we are uncertain
to what extent we may be affected by such matters. A significant disruption of
our financial management and control systems or a lengthy interruption in our
manufacturing operations caused by a Year 2000 related issue could result in a
material adverse impact on our operating results and financial condition. In
addition, it is possible that a supplier's failure to ensure Year 2000
capability or our customer's concerns about Year 2000 readiness of our products
would have a material adverse effect on our results of operations.
THE NOTES ARE SUBORDINATED AND OUR ABILITY TO REPAY THE NOTES IS DEPENDENT IN
PART ON THE EARNINGS OF OUR SUBSIDIARIES.
The notes are unsecured and subordinated to our senior indebtedness.
Upon the occurrence of:
- bankruptcy,
- liquidation,
- reorganization, or
- acceleration of the notes
our assets will be available to pay the notes only after we have paid all of our
senior indebtedness. After we repay our senior indebtedness, we may not have
enough assets to repay the notes. The notes are effectively subordinated to the
liabilities, including trade payables, of our subsidiaries.
The notes are exclusively obligations of LSI Logic Corporation. A
substantial portion of our operations are conducted through our subsidiaries. As
a result, our cash flow and our ability to service our debt, including the
notes, is dependent upon the earnings of our subsidiaries. In addition, we are
dependent on the distribution of earnings, loans or other payments by our
subsidiaries to us.
Our subsidiaries are separate and distinct legal entities. Our subsidiaries
have no obligation to pay any amounts due on the notes. Our subsidiaries are not
required to provide us with funds for our payment obligations, whether by
dividends, distributions, loans or other payments. In addition, any payment of
dividends, distributions, loans or advances by our subsidiaries to us could be
subject to statutory or contractual restrictions. Payments to us by our
subsidiaries will also be contingent upon our subsidiaries' earnings and
business considerations.
Our right to receive any assets of any of our subsidiaries upon their
liquidation or reorganization, and therefore the right of the holders to
participate in those assets, will be effectively subordinated to the claims of
that subsidiary's creditors, including trade creditors. In addition, even if we
were a creditor to any of our subsidiaries, our rights as a creditor would be
subordinate to any security interest in the assets of our subsidiaries and any
indebtedness of our subsidiaries senior to that held by us.
Neither we nor our subsidiaries are prohibited or limited from incurring
additional debt under the indenture. As of March 31, 1999, we had approximately
$374 million of senior indebtedness. As of March 31, 1999, our subsidiaries had
approximately $215 million of indebtedness and other liabilities to which the
notes were effectively subordinated. This amount included trade and other
payables, but excluded:
- approximately $74.1 million of indebtedness guaranteed by LSI Logic
Corporation,
- intercompany liabilities, and
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<PAGE> 16
- liabilities not required to be on a balance sheet in accordance with
generally accepted accounting principles.
We and our subsidiaries will also incur other debt in the future. See
"Description of Notes -- Subordination of Notes."
WE MAY NOT BE ABLE TO REDEEM THE NOTES UPON A FUNDAMENTAL CHANGE.
If a fundamental change occurs, a holder may require us to redeem their
notes. If a fundamental change occurs, we may not have enough funds to pay the
redemption price for all tendered notes. In addition, our existing credit
facility prohibits redemptions of the notes. Our existing credit facility also
provides that both the triggering of redemption rights as a result of a
fundamental change and the occurrence of a change of control would be an event
of default under the credit facility. We may also enter into future debt
agreements that may contain similar provisions.
If a fundamental change occurs when we are prohibited from redeeming notes,
we could either:
- seek the consent of our lenders to redeem the notes, or
- refinance the debt containing this prohibition.
If we do not obtain a consent from our lenders or repay these borrowings,
we would be prohibited from redeeming the notes. If we failed to redeem notes,
it would be an event of default under the indenture. If we had an event of
default under the indenture, or the fundamental change resulted in an event of
default under our senior indebtedness, the indenture would restrict our ability
to pay the noteholders.
A "fundamental change" is limited to certain types of transactions. A
fundamental change may not include other events that might adversely affect our
financial condition. This provision may not protect you if we engage in a highly
leveraged transaction, reorganization or merger. See "Description of
Notes -- Redemption at Option of the Holder."
A PUBLIC MARKET MAY NOT DEVELOP FOR THE NOTES.
Prior to this offering, there has been no trading market for the notes.
Although the initial purchasers have advised us that they currently intend to
make a market in the notes, they are not obligated to make a market. Their
market making activity will also be subject to the limits imposed by the
securities laws. As a result, we cannot guarantee that there will be a market
for the notes. Even if a market does develop, we cannot guarantee that a market
will be maintained. If an active market for the notes does not develop, the
trading price of the notes could decrease.
OUR NOTES MAY NOT BE RATED OR MAY RECEIVE A LOWER RATING THAN ANTICIPATED.
We believe it is likely that one or more rating agencies may rate the
notes. If one or more rating agencies assign the notes a rating lower than
expected by investors, the market price of the notes and our common stock would
be materially adversely affected.
POSSIBLE VOLATILITY OF PRICE OF COMMON STOCK AND NOTES.
The market price of our common stock has been volatile in the past. The
market price of the notes and the common stock may be volatile in the future.
The trading price of the notes and the common stock may be significantly
affected by the following factors:
- The cyclical nature of both the semiconductor industry and the markets
addressed by our products;
- The availability and extent of utilization of manufacturing capacity;
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<PAGE> 17
- Erosion in the price of our products;
- The timing of new product introductions, the ability to develop and
implement new technologies and other competitive factors;
- Our announcement of new products or product enhancements or similar
announcements by our competitors; and
- General market conditions or market conditions specific to particular
industries.
In addition, the stock prices of many companies in the technology and
emerging growth sectors have fluctuated widely due to events unrelated to their
operating performance. These fluctuations may adversely affect the market price
of the notes and the common stock.
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<PAGE> 18
USE OF PROCEEDS
We will not receive any proceeds from the sale by any selling
securityholder of the notes or the underlying common stock.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods indicated is
as follows:
<TABLE>
<CAPTION>
FISCAL QUARTER
ENDED
FISCAL YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------- ---------------
1994 1995 1996 1997 1998 1998 1999
---- ----- ---- ----- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.......... 6.1x 11.8x 7.3x 10.8x -- 9.5 1.4x
</TABLE>
These computations include us and our consolidated subsidiaries. For these
ratios, "earnings" represents income before taxes plus fixed charges (excluding
capitalized interest net of amortization). "Fixed charges" consists of:
- interest on all indebtedness and amortization of debt issuance costs,
- capitalized interest, and
- an interest expense under operating leases deemed by us to be
representative of the interest factor.
In the fiscal year ended December 31, 1998, earnings were inadequate to
cover fixed charges by $133.8 million.
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DESCRIPTION OF NOTES
The notes are issued under an indenture dated as of March 15, 1999, between
us and State Street Bank and Trust Company of California, N.A., as trustee. The
following summary of certain provisions of the indenture is not complete. You
should look at the indenture and the form of note that has been filed as an
exhibit to this registration statement.
GENERAL
We issued $345,000,000 of notes in a private placement in March 1999. The
notes are unsecured and are subordinated to our senior indebtedness. The notes
were issued in denominations of $1,000 and multiples of $1,000. The notes mature
on March 15, 2004.
The interest rate on the notes is 4 1/4% per year. We will pay interest on
March 15 and September 15 of each year, beginning on September 15, 1999.
Interest is based on a 360-day year composed of twelve 30-day months. Interest
will be paid to record holders:
- on March 1 in the case of the March 15 interest payment date, and
- on September 1 in the case of the September 15 interest payment date,
subject to certain exceptions if notes are converted or redeemed prior to the
interest payment date.
Payments on the notes will be made at the office of the paying agent. The
paying agent office will initially be an office or agency of the trustee in the
Borough of Manhattan, the City of New York.
CONVERSION OF NOTES
You may convert your note, in whole or in part, into common stock at any
time prior to maturity. However, if we call a note for redemption, a holder may
convert a note only until the close of business on the business day prior to the
redemption date unless we fail to pay the redemption price. If you have
submitted your notes for redemption upon a fundamental change, you may convert
your note only if you withdraw your conversion election.
The initial conversion price is $31.353 per share of common stock, subject
to adjustment as described below. We will not issue fractional shares of common
stock upon conversion of notes. Instead, we will pay cash equal to the market
price of the common stock on the business day prior to the conversion date.
Except as described below, you will not receive any accrued interest or
dividends upon conversion. If you convert your notes during the period from the
record date to the next interest payment date, you will be required to pay us
the interest on conversion unless we have called the notes for redemption on a
redemption date during this time period.
We will adjust the conversion price if the following events occur:
(1) the issuance of common stock as a dividend or distribution on common
stock;
(2) the issuance of rights or warrants to purchase common stock to all
holders of common stock;
(3) certain subdivisions and combinations of common stock;
(4) distributions of capital stock, other than common stock, or debt
instruments or assets to all holders of common stock, including
securities but excluding the following:
- rights or warrants listed in (2) above;
- dividend or distributions listed in (1) above; and
- cash distributions listed in (5) below;
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(5) distributions of cash, excluding any quarterly cash dividends on the
common stock if the quarterly distribution does not exceed the greater
of:
- the cash dividend per share from the previous quarter not requiring an
adjustment under this provision; or
- 3.75% of the sale price of common stock during the ten trading days
prior to the dividend declaration date;
(6) payment on a tender offer or exchange offer by us or our subsidiary for
the common stock if the payment exceeds the current market price of the
common stock on the trading day next succeeding the last date for
tenders or exchanges; and
(7) payment on certain tender offers or exchange offers by a third party
if, as of the closing date of the offer, the board of directors does
not recommend rejection of the offer. We will make this adjustment only
if:
- the tender offer or exchange offer increases the share ownership of
the person making the offer to more than 25% of our common stock; and
- the cash and other consideration paid exceeds the current market price
of the common stock.
We will not make this adjustment if as of closing we will engage in a
merger, consolidation or sale of all or substantially all of our assets.
Under our preferred shares rights plan, upon conversion holders will
receive, in addition to the common stock, the rights described in the
preferred shares rights plan, subject to customary exceptions.
In the event of:
- any reclassification of our common stock; or
- a consolidation, merger or combination involving LSI Logic; or
- a sale or conveyance to another person of our property and assets as an
entirety or substantially as an entirety
in which common stock holders would be entitled to receive stock, other
securities or property or assets or cash with respect to their common stock, the
noteholders will generally be allowed to convert their notes into the same type
of consideration received by common stock holders immediately prior to one of
the types of events.
Holders may as a result of certain types of conversion price adjustments be
subject to U.S. income tax. See "Certain Federal Income Tax Considerations."
We may reduce the conversion price for a period of at least 20 days. If we
reduce the conversion price, we must give you at least 15 days' prior notice. We
may, at our option, also reduce the conversion price to reduce any income tax to
holders of common stock resulting from any dividend or distribution of stock.
See "Certain Federal Income Tax Considerations."
We will not make any adjustment in the conversion price unless the
adjustment would require a change of at least 1% in the conversion price. We
will carry forward any adjustments less than 1% of the conversion price.
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OPTIONAL REDEMPTION BY LSI LOGIC CORPORATION
No sinking fund exists for the notes. On or after March 20, 2002, we may
redeem the notes, in whole or in part, on at least 30 days' notice at the
following redemption prices:
- if redeemed from March 20, 2002 through March 14, 2003, at 101.70% of the
principal amount;
- if redeemed from March 15, 2003 through March 14, 2004, at 100.58% of the
principal amount.
Holders in each case will receive accrued interest to, but excluding, the
redemption date. If the redemption date is an interest payment date, then
interest shall be paid to the record holder.
If we redeem less than all of the notes, the trustee will select the notes
to be redeemed in multiples of $1,000:
- by lot,
- pro rata, or
- by another method the trustee considers fair and appropriate.
If a portion of your notes is selected for partial redemption and you
convert a portion of your notes, the converted portion shall be deemed to be the
portion selected for redemption.
We may not give notice of any redemption of notes if we have defaulted in
payment of interest on the notes and there is an event of default.
HOLDERS MAY REQUIRE US TO REDEEM THE NOTES IN THE EVENT OF A FUNDAMENTAL CHANGE
If a fundamental change occurs prior to March 15, 2004, you may require us
to redeem, in whole or in part, your notes 30 days after our notice of the
fundamental change. We will redeem the notes at 100% of the principal amount
plus accrued interest to, but excluding, the repurchase date. If the repurchase
date is an interest payment date, then interest shall be paid to the record
holder.
We will mail to all record holders a notice within 10 days after the
occurrence of a fundamental change. We will also deliver a notice to the
trustee. You must deliver to us, on or before the 30th day after the date of our
fundamental change notice, your redemption notice together with the notes duly
endorsed for transfer.
We will comply with any applicable provisions of Rule l3e-4 and any other
tender offer rules under the Exchange Act in the event of a fundamental change.
A "fundamental change" is any transaction or event in which substantially
all of our common stock is exchanged for, converted into, acquired for or
constitutes solely the right to receive consideration that is not substantially
all common stock listed, or that will be listed, on:
- a U.S. national securities exchange;
- approved for quotation on the Nasdaq National Market; or
- any similar U.S. system of automated dissemination of quotations of
securities prices.
SUBORDINATION OF NOTES
The notes are subordinated to the prior payment in full of all of our
senior indebtedness.
If we dissolve, wind up, liquidate or reorganize our business, we will
repay the senior indebtedness before we make any payments on the notes. If the
notes are accelerated because of an
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<PAGE> 22
event of default, we will first pay the holders of any senior indebtedness in
full before we can pay the noteholders. The indenture requires us to promptly
notify the holders of senior indebtedness if payment of the notes accelerates
because of an event of default.
We may not make any payment on the notes if there is:
- a default in the payment of senior indebtedness occurs,
- any other default of designated senior indebtedness that permits the
holders of designated senior indebtedness to accelerate its maturity and
the trustee receives a payment blockage notice, or
- any judicial proceeding shall be pending with respect to any payment
default or non-payment default.
We may resume payments on the notes:
- in case of a payment default, upon the date on which such default is
cured or waived or ceases to exist, and
- in the case of a non-payment default, the earlier of:
- the date on which the non-payment default is cured to waived or ceases
to exist, or
- 179 days after the date on which the payment blockage notice is
received.
No new period of payment blockage may be commenced unless 365 days have
passed since the initial effectiveness of the immediately prior payment blockage
notice. No non-payment default that existed on the date of delivery of any
payment blockage notice to the trustee shall be the basis for any later payment
blockage notice.
If the trustee or any holder of the notes receives any payment or
distribution, then he or she must hold the payment or distribution in trust for
the benefit of holders of senior indebtedness to pay all senior indebtedness.
In the event of our bankruptcy, dissolution or reorganization, holders of
senior indebtedness may receive more, ratably, and holders of the notes may
receive less, ratably, than our other creditors.
We will pay the trustee reasonable compensation and will indemnify the
trustee against certain losses, liabilities or expenses it may incur in
connection with its duties. The trustee's claims for such payments will
generally be senior to the claims of the holders of the notes.
EVENTS OF DEFAULT; NOTICE AND WAIVER
An event of default on the notes includes any of the following:
- default in payment of the principal or premium;
- default for 30 days in payment of interest;
- default for 60 days after notice in the observance or performance of any
other covenants in the indenture; or
- certain events involving bankruptcy, insolvency or reorganization of us
or any of our significant subsidiaries.
The trustee may withhold notice to the holders of the notes of any default,
except defaults in payment of principal, premium or interest on the notes.
However, the trustee must consider it to be in the interest of the holders of
the notes to withhold this notice.
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<PAGE> 23
If an event of default occurs and continues, the trustee or the holders of
at least 25% in principal amount of the notes may declare the principal,
premium, and accrued interest on the notes to be immediately due and payable. If
LSI Logic experiences bankruptcy or insolvency, the principal, premium and
accrued interest on the notes automatically become due and payable.
If we cure all defaults other than nonpayment defaults and meet certain
other conditions, the holders of a majority of the principal amount of the notes
may cancel any acceleration with respect to the notes and waive past defaults.
Payments of principal, premium, or interest on the notes that are not made
when due will accrue interest at the annual rate of 4 1/4% from the required
payment date.
The holders of a majority of the notes will have the right to direct the
time, method and place of any proceedings for any remedy available to the
trustee, subject to limitations specified in the indenture.
No holder of the notes may pursue any remedy under the indenture, except in
the case of a default in the payment of principal, premium or interest on the
notes, unless:
- the holder has given the trustee written notice of an event of default;
- the holders of at least 25% in principal amount of the notes make a
written request, and offer reasonable indemnity, to the trustee to pursue
the remedy;
- the trustee does not receive an inconsistent direction from the holders
of a majority in principal amount of the notes; and
- the trustee fails to comply with the request within 60 days after
receipt.
MODIFICATION OF THE INDENTURE
With the consent of the holders of a majority in principal amount of the
notes, we may modify the indenture or enter into any supplemental indenture that
shall:
- extend the fixed maturity of any note;
- reduce the rate or extend the time for payment of interest of any note;
- reduce the principal amount or premium of any note;
- reduce any amount payable upon redemption of any note;
- adversely change our obligation to redeem any note upon a fundamental
change;
- impair the right of a holder to institute suit for payment on the note;
- change the currency in which any note is payable;
- impair the right to convert the notes;
- adversely modify the subordination provisions of the indenture; or
- reduce the percentage of notes required for consent to any modification
of the indenture.
The indenture also permits certain types of modifications of its terms without
the consent of the holders of the notes.
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DEFINITIONS USED IN THE DESCRIPTION OF NOTES
"Senior indebtedness" means the principal, premium and interest on, rent
payable under, and any other amounts due on all of our current and future
indebtedness. However, senior indebtedness does not include:
- indebtedness evidenced by the notes,
- our indebtedness to any of our majority-owned subsidiaries if the
indebtedness is pledged by the subsidiary as security for any senior
indebtedness,
- our accounts payable to trade creditors, and
- any particular indebtedness in which the instrument evidencing the
indebtedness provides that the indebtedness shall not be senior in right
of payment to, or is subordinated to, the notes.
The indenture defines "indebtedness" as:
- all obligations of any person:
- for borrowed money,
- evidenced by a note, debenture, bond or written instrument,
- leases of the person required to be accounted for as capitalized lease
obligations on the balance sheet of the person and all obligations and
other liabilities under any lease or related document in connection with
the lease of real property that provides that the person is contractually
obligated to purchase or cause a third party to purchase the leased
property, or
- letters of credit, local guarantees or bankers' acceptances;
- all obligation of others of the type described in the above clause or
clauses below guaranteed in any manner by the person;
- all obligations secured by a lien affecting title or resulting in a lien
to which the property of such person is subject;
- all obligations of any person under interest rate and currency swap
agreements, cap, floor and collar agreements, spot and forward contracts
and similar agreements and arrangements; and
- all obligations, contingent or otherwise, of any person under any and all
deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any liability described above.
INFORMATION CONCERNING THE TRUSTEE
We have appointed State Street Bank and Trust Company of California, N.A.,
as trustee under the indenture, paying agent, conversion agent, note registrar
and custodian for the notes. The trustee or its affiliates may provide banking
and other services to us in the ordinary course of their business.
Boston EquiServe, LP, an affiliate of the trustee, is the transfer agent
for the common stock. BancBoston, N.A., an affiliate of the trustee, is a lender
under our existing credit facility. The indenture contains certain limitations
on the rights of the trustee, as long as it or any of its affiliates remains our
creditor, to obtain payment of claims in certain cases or to realize on certain
property received on any claim as security or otherwise. The trustee and its
affiliates will be permitted to engage in other transactions with us. However,
if the trustee or any affiliate continues to have any conflicting interest and a
default occurs with respect to the notes, the trustee must eliminate such
conflict or resign.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 450,000,000 shares of common
stock, par value $0.01 per share, and 2,000,000 shares of preferred stock, par
value $0.01 per share.
COMMON STOCK. As of June 2, 1999, there were 143,198,070 shares of common
stock outstanding held by approximately 3,246 holders of record. Each holder of
common stock is entitled to one vote per share on all matters to be voted upon
by the stockholders. Our certificate of incorporation provides that at all
elections of directors, each holder of stock shall be entitled to cumulative
voting. The holder may cast all of these votes for a single candidate or may
distribute them among the number of directors to be elected. Holders of common
stock are entitled to receive dividends declared by the board of directors, out
of funds legally available for the payment of dividends subject to preferences
that may be applicable to the holders of preferred stock. Upon liquidation,
dissolution or winding up of our business, the holders of common stock are
entitled to share equally in all assets available for distribution after payment
of liabilities, subject to prior distribution rights of preferred stock. The
holders of common stock have no preemptive or conversion rights or other
subscription rights. No redemption or sinking fund provisions apply to the
common stock.
All outstanding shares of common stock are fully paid and nonassessable.
PREFERRED STOCK. As of June 2, 1999, no shares of preferred stock were
issued and outstanding. The board of directors has the authority to issue the
preferred stock in one or more series and to fix the following rights,
preferences, privileges and restrictions of the preferred stock without further
vote or action by our stockholders:
- dividend rights and rates;
- terms of conversion, voting rights, terms of redemption, liquidation
preferences;
- the number of shares constituting any series or the designation of such
series.
Preferred stock could be issued quickly with terms calculated to delay or
prevent a change in control and may adversely affect the voting and other rights
of the holders of common stock. Except in accordance with the rights plan
described below, we have no present plans to issue any shares of preferred
stock.
PREFERRED SHARES RIGHTS PLAN. On November 16, 1988, our board of directors
authorized a dividend distribution of one share purchase right for each share of
common stock outstanding as of the close of business on December 15, 1988 and
each future share of common stock. The Amended and Restated Preferred Shares
Rights Agreement dated November 20, 1998 between us and BankBoston, N.A., as
rights agent, provides, among other things, that after a distribution date, each
right entitles the registered holder to purchase from us 1/1000 of a share of
our Series A participating preferred stock, $0.01 par value, initially at a
price of $100.00.
The rights will expire ten years after the date of issuance, or December
15, 2008, unless earlier redeemed, and will become exercisable and transferable
separately from the common stock following the tenth day after a person or group
- acquires beneficial ownership of 20% or more of our common stock; or
- announces a tender or exchange offer, the consummation of which would
result in ownership by a person or group of 30% or more of our common
stock; or
- a later date after the occurrence of an event described in clause (i) or
(ii) above as may be determined by a majority of directors not affiliated
with the acquiring group or person.
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If (a) an acquiror obtains 30% or more of our common stock, (b) an
acquiring entity combines with us in a transaction in which we are the surviving
company and our common stock remains outstanding and unchanged or (c) we effect
or permit certain "self-dealing" transactions with an owner of 20% or more of
our common stock or its affiliates or associates, then each right will entitle
the holder to purchase, at the then-current purchase price, a number of shares
of common stock having a then-current market value of twice the purchase price.
If (x) we merge into another entity, (y) an acquiring entity merges into us
and our common stock is changed into or exchanged for other securities or assets
or (z) we sell more than 50% of our assets or earning power, then each right
will entitle the holder to purchase, at the then-current purchase price, a
number of shares of common stock of the person engaging in the transaction
having a then-current market value of twice the purchase price.
We may redeem the rights at our option for $0.01 per right at any time on
or prior to the tenth day after public announcement that a person or group has
acquired beneficial ownership of 20% or more of our common stock or such later
date as may be determined by a majority of the directors not affiliated with the
acquiring group or person. The rights are also redeemable at our option
following the shares acquisition date if:
- such redemption is in connection with a consolidation or merger in which
we are not the surviving corporation;
- no acquiror has held more than 20% of our common stock for less than the
last three years; and
- the redemption is approved by a majority of the directors not affiliated
with the acquiring group or person.
Our right of redemption may be reinstated if the acquiring person or group
reduces its beneficial ownership to 10% or less of our common stock.
The Series A participating preferred purchasable upon exercise of the
rights will be nonredeemable and junior to any other series of our preferred
stock. Each share of Series A participating preferred will have a preferential
cumulative quarterly dividend in an amount equal to 1,000 times the dividend
declared on each share of common stock. In the event of liquidation, the holders
of Series A participating preferred will receive a preferred liquidation payment
equal to 1,000 times the aggregate amount to be distributed per share to the
holders of shares of common stock plus accrued dividends. Following payment of
the Series A liquidation preference, and after the holders of shares of common
stock shall have received an amount per share equal to the quotient obtained by
dividing the Series A liquidation preference by 1,000, the holders of Series A
participating preferred and holders of common stock will share ratably and
proportionately the remaining assets to be distributed in liquidation. Each
share of Series A participating preferred Stock will have 1,000 votes and will
vote together with the shares of common stock. In the event of any merger,
consolidation or other transaction in which shares of common stock are exchanged
for or changed into other securities, cash and/or other property, each share of
Series A participating preferred will be entitled to receive 1,000 times the
amount and type of consideration received per share of common stock.
Although the rights should not interfere with a business combination
approved by the board of directors in the manner set forth in the rights plan,
they may cause substantial dilution to a person or group that attempts to
acquire control without approval by the board.
DELAWARE GENERAL CORPORATION LAW SECTION 203
We are a Delaware corporation subject to Section 203 of the Delaware
General Corporation Law, an anti-takeover law. In general, Section 203 prohibits
a publicly held Delaware corporation
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from engaging in a "business combination" transaction with an "interested
stockholder" for a period of three years after the person became an interested
stockholder, unless the business combination or the transaction in which the
person became an interested stockholder is approved in the manner described
below.
The Section 203 restrictions do not apply if:
(1) the business combination or transaction is approved by our board of
directors before the date the interested stockholder obtained the
status;
(2) upon consummation of the transaction which resulted in the stockholder
obtaining the status, the stockholder owned at least 85% of the shares
of stock entitled to vote in the election of directors, the "voting
stock". The 85% calculation does not include those shares:
- owned by directors who are also officers of the target corporation;
and
- held by employee stock plans which do not permit employees to decide
confidentially whether to accept a tender or exchange offer; or
- on or after the date the interested stockholder obtained its status,
the business combination is approved by our board of directors and at
a stockholder meeting by the affirmative vote of at least 66 2/3% of
the outstanding voting stock which is not owned by the interested
stockholder.
Generally, a "business combination" includes a merger, asset sale, or other
transaction resulting in a financial benefit to the interested stockholder.
Generally, an "interested stockholder" is a person who, together with affiliates
and associates, owns, or within three years prior to the determination of
interested stockholder status, did own, 15% or more of a corporation's voting
stock. Section 203 may prohibit or delay mergers or other takeover or change in
control attempts with respect to LSI Logic Corporation. As a result, Section 203
may discourage attempts to acquire us even though such transaction may offer our
stockholders the opportunity to sell their stock at a price above the prevailing
market price.
CHARTER AND BYLAW PROVISIONS
Our charter and bylaws include provisions that may have the effect of
discouraging, delaying or preventing a change in control or an unsolicited
acquisition proposal that a stockholder might consider favorable, including a
proposal that might result in the payment of a premium over the market price for
the shares held by stockholders as follows:
- our charter provides for cumulative voting at all elections of directors;
- our board has the power to establish the rights, preferences and
privileges of authorized and unissued shares;
- our charter limits the liability of our directors, in their capacity as
directors but not in their capacity as officers, to LSI Logic Corporation
or its stockholders to the fullest extent permitted by Delaware law.
INDEMNIFICATION ARRANGEMENTS
Our bylaws provide that our directors, officers and agents shall be
indemnified against expenses, judgments, fines, settlements actually and
reasonably incurred in connection with any proceeding arising out of their
status. However, the director, officer or agent acted in good faith and in a
manner he or she reasonably believed to be in the best interests of LSI Logic
Corporation, and, with the respect to any criminal action or proceeding, had no
reasonable cause to believe such conduct was unlawful.
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CHANGE OF CONTROL AGREEMENTS
We have entered into certain severance agreements with each of our
executive officers providing for the acceleration of unvested options held by
such executive officers and the payment of certain lump sum amounts and benefits
upon an involuntary termination at any time within twelve (12) months after a
change of control.
A "change of control" is defined as
- the consummation of a merger or consolidation with any other corporation,
other than a merger or consolidation in which we are the surviving
entity;
- the approval by our stockholders of a plan of liquidation or an agreement
for the sale or disposition by us of all or substantially all of our
assets; and
- any person becoming the beneficial owner, as defined in Rule 13d-3 under
the Securities and Exchange Act of 1934, as amended, of 50% or more of
our total outstanding voting securities. Our successors shall be bound
under the change of control severance agreements. The change of control
severance agreements terminate on November 20, 2003. Although these
should not interfere with a business combination, they may cause a
substantial dilution to a person or group that attempts to acquire us
without approval of our board of directors.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is Boston EquiServe,
L.P.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
This section summarizes certain U.S. federal income tax considerations
relating to the purchase, ownership and disposition of the notes and of common
stock into which you may convert the notes. This is not a complete analysis of
all the potential tax consequences that you may need to consider before
investing. This summary is based on current laws, regulations, rulings and
decisions. All of these may change, possibly with retroactive effect. This
summary applies only to beneficial owners who hold notes and common stock as
"capital assets". This discussion does not address tax considerations applicable
to an investor's particular circumstances or to investors that may be subject to
special tax rules, such as banks, holders subject to the alternative minimum
tax, tax-exempt organizations, insurance companies, non-U.S. persons or entities
except to the extent specifically set forth below, dealers in securities or
currencies, persons that will hold notes as a position in a hedging transaction,
"straddle" or "conversion transaction" for tax purposes or persons deemed to
sell notes or common stock under the constructive sale provisions of the
Internal Revenue Code of 1986, as amended (the "Code"). This summary also does
not discuss the tax considerations applicable to subsequent purchasers of the
notes. We have not sought any ruling from the Internal Revenue Service (the
"IRS") or an opinion of counsel with respect to the statements made and the
conclusions reached in the following summary. We cannot guarantee that the IRS
will agree with these statements and conclusions. This summary does not consider
the effect of the federal estate or gift tax laws or the tax laws, except as set
forth below with respect to non-U.S. holders, of any applicable foreign, state,
local or other jurisdiction.
BEFORE YOU INVEST IN THESE SECURITIES, YOU SHOULD CONSULT YOUR OWN TAX
ADVISORS TO DETERMINE THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX
LAWS TO YOUR PARTICULAR SITUATION AND FOR INFORMATION ABOUT ANY TAX CONSEQUENCES
ARISING UNDER THE FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY
STATE, LOCAL, OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
U.S. HOLDERS
Taxation of Interest
You generally must include interest on the notes in your income as ordinary
income at the time you receive or accrue interest, depending on your method of
accounting for U.S. federal income tax purposes. Under Treasury Regulations, the
possibility of an additional payment under a note will not affect the amount of
interest income you recognize if the likelihood of the payment, as of the date
the notes are issued, is remote. We must pay liquidated damages to holders of
the notes in certain circumstances. In addition, a holder may require us to
redeem any of his notes in the event of a fundamental change. We believe that
the likelihood of a liquidated damages payment with respect to the notes is
remote. Therefore, we do not intend to treat the potential payment as part of
the yield to maturity of any note. Similarly, we intend to take the position
that a "fundamental change" is remote under the Treasury Regulations, and
likewise do not intend to treat the possibility of a "fundamental change" as
affecting the yield to maturity of any note. In the event either contingency
occurs, it would affect the amount and timing of the income that must be
recognized by a U.S. holder of notes. There can be no assurance that the IRS
will agree with such positions.
Sale, Exchange or Redemption of the Notes
Except as described below under "Conversion of the Notes", upon the sale,
exchange or redemption of a note, you generally will recognize capital gain or
loss equal to the difference between (i) the amount of cash proceeds and the
fair market value of any property you receive on the sale, exchange or
redemption, except any portion that is accrued interest income, which is taxable
as ordinary income, and (ii) your adjusted tax basis in the note. Your adjusted
tax basis generally will equal the cost of the note to you. This capital gain or
loss will be long-term if you have held the note
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for more than one year. Long-term capital gains recognized by certain
non-corporate U.S. holders, including individuals, will generally taxed at your
maximum rate of tax of 20%. The deductibility of capital losses is subject to
limitations.
Conversion of the Notes
You generally will not recognize any income, gain or loss upon conversion
of a note into common stock except to the extent the common stock is considered
attributable to accrued interest not previously included in income or with
respect to cash you receive instead of a fractional share of common stock. Your
tax basis in the common stock received on conversion of a note will be the same
as your adjusted tax basis in the note at the time of conversion, reduced by any
basis allocable to a fractional share interest for which you receive cash. Your
holding period for the common stock received on conversion will generally
include the holding period of the note converted. However, your tax basis in
shares of common stock considered attributable to accrued interest generally
will equal the amount of such accrued interest included in income. The holding
period for such shares shall begin on the date of conversion.
You should treat cash you receive instead of a fractional share of common
stock upon conversion as a payment in exchange for the fractional share of
common stock. This generally will result in capital gain or loss, measured by
the difference between the cash received for the fractional share and your
adjusted tax basis in the fractional share.
Dividends
Distributions made on the common stock after a conversion generally will be
included in your income as ordinary dividend income to the extent of our current
or accumulated earnings and profits. Distributions in excess of our current and
accumulated earnings and profits will be treated as a return of capital to the
extent of your basis in the common stock and thereafter as capital gain.
Constructive Dividends
The conversion price of our notes may change under certain circumstances.
In such a case, you may be treated as having received constructive
distributions. Adjustments to the conversion price made pursuant to a reasonable
adjustment formula which has the effect of preventing the dilution of the
interest of the holders of the debt instruments, however, will generally not
result in a constructive distribution of stock. Certain of the possible
adjustments provided in the notes will not qualify as being pursuant to a
reasonable adjustment formula. If such adjustments are made, you will be deemed
to have received constructive distributions taxable as dividends to the extent
of our current and accumulated earnings and profits even though you did not
receive any cash or property. In certain circumstances, the failure to provide
for such an adjustment may result in taxable dividend income to you.
Sale of Common Stock
On the sale or exchange of common stock, you generally will recognize
capital gain or loss equal to the difference between (i) the amount of cash and
the fair market value of any property received on the sale or exchange and (ii)
your adjusted tax basis in the common stock. This capital gain or loss will be
long-term if your holding period in common stock is more than one year.
Long-term capital gains for certain non-corporate taxpayers, including
individuals, are taxed at a maximum rate of 20%. A U.S. Holder's basis and
holding period in common stock received upon conversion of a note are determined
as discussed above under "Conversion of the Notes." The deductibility of capital
losses is subject to limitations.
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SPECIAL TAX RULES APPLICABLE TO NON-U.S. HOLDERS
In general, subject to the discussion below concerning backup withholding:
(a) Payments of principal or interest on the notes by us to a
beneficial owner of a note that is a non-U.S. holder will not be subject to
U.S. withholding tax, provided that, in the case of interest, (i) the
non-U.S. holder does not own, actually or constructively, 10% or more of
the total combined voting power of all classes of our stock entitled to
vote, within the meaning of Section 871(h)(3) of the Code, (ii) the
non-U.S. holder is not a "controlled foreign corporation" with respect to
which we are a "related person" within the meaning of the Code, (iii) the
non-U.S. holder is not a bank receiving interest described in Section
881(c)(3)(A) of the Code, and (iv) the certification requirements under
Section 871(h) or Section 881(c) of the Code and Treasury Regulations are
satisfied;
(b) A non-U.S. holder of a note or common stock will not be subject to
U.S. federal income tax on gains realized on the sale, exchange or other
disposition of any note or common stock unless (i) the non-U.S. holder is
an individual who is present in the U.S. for 183 days or more in the
taxable year of sale, exchange or other disposition, and certain conditions
are met, (ii) the gain is effectively connected with the conduct by the
non-U.S. holder of a trade or business in the U.S. and, if certain U.S.
income tax treaties apply, is attributable to a U.S. permanent
establishment maintained by the non-U.S. holder, (iii) the non-U.S. holder
is subject to Code provisions applicable to certain U.S. expatriates or,
(iv) in the case of common stock held by a person who holds more than 5% of
the stock, we are or have been, at any time within the shorter of the
five-year period preceding the sale or other disposition or the period the
non-U.S. holder held the common stock, a U.S. real property holding
corporation for U.S. federal income tax purposes. We do not believe that we
are currently a U.S. real property holding corporation or that we will
become one in the future;
(c) Interest on notes not excluded from U.S. withholding tax as
described in (a) above and dividends on common stock after conversion
generally will be a subject to U.S. withholding tax at a 30% rate, except
where an applicable tax treaty provides for the reduction or elimination of
the withholding tax.
To satisfy the certification requirements referred to in (a)(iv) above,
Sections 871(h) and 881(c) of the Code and currently effective Treasury
Regulations require that either (i) the beneficial owner of a note must certify,
under penalties of perjury, to us that the owner is a non-U.S. holder and must
provide the owner's name and address, and U.S. taxpayer identification number,
if any, or (ii) a securities clearing organization, bank or other financial
institution that holds customer securities in the ordinary course of its trade
or business and holds the note on behalf of the beneficial owner thereof must
certify, under penalties of perjury, to us that the certificate has been
received from the beneficial owner and must furnish the payor with a copy
thereof. This requirement will be fulfilled if the beneficial owner of a note
certifies on IRS Form W-8, under penalties of perjury, that it is a non-U.S.
holder and provides its name and address or any financial institution holding
the note on behalf of the beneficial owner files a statement with the
withholding agent to the effect that it has received a statement from the
beneficial owner and furnishes the withholding agent with a copy thereof.
Treasury Regulations effective for payments made after December 31, 2000,
will provide alternative methods for satisfying the certification requirements
described above and below, subject to certain grandfathering provisions. These
new regulations also require, in the case of notes held by a foreign
partnership, that (i) the certification be provided by the partners rather than
by the foreign partnership and (ii) the partnership provide certain information,
including a U.S. taxpayer identification number. A look-through rule will apply
in the case of tiered partnerships.
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Provided that the certification requirements discussed below are met, if a
non-U.S. holder of a note or common stock is engaged in a trade or business in
the U.S. and if interest on the note, dividends on the common stock, or gain
realized on the sale, exchange or other disposition of the note or common stock
is effectively connected with the conduct of the trade or business, the non-
U.S. holder, although exempt from U.S. withholding tax, will generally be
subject to U.S. federal income tax on the interest, dividends or gain on a net
income basis in the same manner as if it were a U.S. holder. Instead of the
certificate described above, the non-U.S. holder will be required, under
currently effective Treasury Regulations, to provide us with a properly executed
IRS Form 4224 in order to claim an exemption from withholding tax. In addition,
if the non-U.S. holder is a foreign corporation, it may be subject to a branch
profits tax equal to 30%, or a lower rate if provided by an applicable treaty,
of its effectively connected earnings and profits for the taxable year, subject
to certain adjustments.
U.S. Federal Estate Tax
A note held by an individual who at the time of death is not a citizen or
resident of the U.S. will not be subject to U.S. federal estate tax if the
individual did not actually or constructively own 10% or more of the total
combined voting power of all our classes of stock and, at the time of the
individual's death, payments with respect to the note would not have been
effectively connected with the conduct by the individual of a trade or business
in the U.S. common stock held by an individual who at the time of death is not a
citizen or resident of the U.S. will be included in the individual's estate for
U.S. federal estate tax purposes, unless an applicable estate tax treaty
otherwise applies.
Non-U.S. holders should consult with their tax advisors regarding U.S. and
foreign tax consequences with respect to the notes and common stock.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding of U.S. federal income tax at a rate of 31% may apply to
payments made in to a U.S. holder of a note or common stock if the payee is not
an "exempt recipient" and fails to provide certain identifying information in
the manner required. Generally, individuals are not exempt recipients, whereas
corporations and certain other entities are exempt recipients. Payments made in
respect of a note or common stock must be reported to the IRS, unless the U.S.
holder is an exempt recipient or otherwise establishes an exemption.
In the case of payments of interest on a note to a non-U.S. holder,
Treasury Regulations provide that backup withholding and information reporting
will not apply to payments with respect to which either requisite certification
has been received or an exemption has otherwise been established.
Dividends on the common stock paid to non-U.S. holders that are subject to
U.S. withholding tax, as described above, generally will be exempt from U.S.
backup withholding tax but will be subject to certain information reporting.
Payments of the proceeds of the sale of a note or common stock to or
through a foreign office of a broker that is a "controlled foreign corporation"
as defined in the Code, or a foreign person, 50% or more of whose gross income
from all sources for the three-year period ending with the close of its taxable
year preceding the payment was effectively connected with the conduct of a trade
or business within the U.S. are currently subject to certain information
reporting requirements. If the payee is an exempt recipient or the broker has
evidence in its records that the payee is a non-U.S. holder and no actual
knowledge that the evidence is false and certain other conditions are met, the
reporting requirements do not apply. Temporary Treasury Regulations indicate
that the payments are not currently subject to backup withholding. Under current
Treasury Regulations, payments of the proceeds of a sale of a note or common
stock to or through the U.S. office of a broker will be subject to information
reporting and backup withholding unless the payee certifies under penalties of
perjury
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as to his or her status as a non-U.S. holder and satisfies certain other
qualifications and provides his or her name and address or the payee otherwise
establishes an exemption.
You may credit any amounts withheld under the backup withholding rules
against your U.S. federal income tax, if the required information is furnished
to the IRS in a timely manner.
New regulations will generally be applicable to payments made after
December 31, 2000. In general, these new regulations attempt to unify current
certification procedures and forms and clarify reliance standards. Under these
new regulations, special rules apply which permit the shifting of primary
responsibility for withholding to certain financial intermediaries acting on
behalf of beneficial owners. You should consult with your tax advisor regarding
the application of the backup withholding rules to your particular situation,
the availability of an exemption, the procedure for obtaining an exemption and
the impact of these new regulations on payments made with respect to notes or
common stock after December 31, 2000.
THE PRECEDING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
IS FOR YOUR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY, YOU
SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE PARTICULAR U.S. FEDERAL, STATE,
AND LOCAL TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF THE NOTES AND
COMMON STOCK. TAX ADVISORS SHOULD ALSO BE CONSULTED AS TO THE U.S. ESTATE AND
GIFT TAX CONSEQUENCES AND THE FOREIGN TAX CONSEQUENCES OF PURCHASING, HOLDING
AND DISPOSING OF THE NOTES AND COMMON STOCK, AS WELL AS THE CONSEQUENCES OF ANY
PROPOSED CHANGE IN APPLICABLE LAWS.
SELLING SECURITYHOLDERS
We originally issued the notes in a private placement in March, 1999. The
notes were resold by the initial purchasers to qualified institutional buyers
under Rule 144A under the Securities Act and to a limited number of
institutional accredited investors as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act in transactions exempt from registration under the
Securities Act. Selling securityholders may offer and sell the notes and the
underlying common stock pursuant to this prospectus.
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The following table contains information as of June 2, 1999, with respect
to the selling securityholders and the principal amount of notes and the
underlying common stock beneficially owned by each selling security holders that
may be offered using this prospectus.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT AT
MATURITY OF NUMBER OF
NOTES SHARES OF
BENEFICIALLY PERCENTAGE OF COMMON STOCK PERCENTAGE OF
OWNED THAT NOTES THAT MAY BE COMMON STOCK
NAME MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
---- ------------ ------------- ------------ ----------------
<S> <C> <C> <C> <C>
AIG/National Union Fire
Insurance........................ $ 700,000 * 22,326 *
Aim High Yield Fund................ 3,165,000 * 100,947 *
Aim High Yield II Fund............. 35,000 * 1,116 *
Aloha Airlines Non-Pilots Pension
Trust............................ 120,000 * 3,827 *
Aloha Airlines Pilots Retirement
Trust............................ 70,000 * 2,232 *
Arkansas PERS...................... 1,375,000 * 43,855 *
Arkansas Teacher Ret............... 3,043,000 * 97,056 *
Arpeggio Fund, L.P................. 300,000 * 9,568 *
Associated Electric & Gas Insurance
Services Limited................. 750,000 * 23,921 *
BancBoston Robertson Stephens...... 5,000,000 1.4% 159,474 *
Bancroft Convertible Fund, Inc..... 250,000 * 7,973 *
Bankers Trust Trustee for Chrysler
Corp Emp #1 Pension Plan Dtd
4/1/89........................... 3,345,000 1.0% 106,688 *
Baptist Hlth So Florida............ 205,000 * 6,538 *
Bear, Stearns & Co................. 1,225,000 * 39,071 *
BNP Arbitrage SNC.................. 250,000 * 7,973 *
Bostik Inc......................... 75,000 * 2,392 *
Bosto+A53n Museum of Fine Arts..... 158,000 * 5,039 *
Boulder Capital Inc................ 7,650,000 2.2% 243,995 *
Boulder II Limited................. 1,700,000 * 54,221 *
BS Debt Income Fund -- Class A..... 10,000 * 318 *
BVI Social Security Board.......... 20,000 * 637 *
C&H Sugar Company.................. 170,000 * 5,422 *
Calamos Convertible Fund........... 600,000 * 19,136 *
Calamos Growth and Income Fund..... 200,000 * 6,378 *
Calamos Strategic Income Fund...... 30,000 * 956 *
Capital Market Transactions,
Inc.............................. 1,250,000 * 39,868 *
Champion International Corporation
Master Retirement Trust.......... 475,000 * 15,150 *
Chase Manhattan NA Trustee for IBM
Retirement Plan Dtd 12/18/45..... 5,045,000 1.5% 160,909 *
Christian Science Trustees for
Gifts and Endowments............. 550,000 * 17,542 *
Chrysler Corporation Master
Retirement Trust................. 2,730,000 * 87,073 *
City of Knoxville Pension System... 275,000 * 8,771 *
City University of New York........ 50,000 * 1,594 *
</TABLE>
33
<PAGE> 35
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT AT
MATURITY OF NUMBER OF
NOTES SHARES OF
BENEFICIALLY PERCENTAGE OF COMMON STOCK PERCENTAGE OF
OWNED THAT NOTES THAT MAY BE COMMON STOCK
NAME MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
---- ------------ ------------- ------------ ----------------
<S> <C> <C> <C> <C>
Conseco Direct Life................ 700,000 * 22,326 *
Convertible Fund................... 480,000 * 15,309 *
Cova Bond-Debenture Fund........... 500,000 * 15,947 *
David Lipscomb University General
Endowment........................ 135,000 * 4,305 *
Declaration of Trust for the
Defined Benefit Plans of ICI
American Holdings Inc. .......... 1,100,000 * 35,084 *
Declaration of Trust for the
Defined Benefit Plans of ZENECA
Holdings Inc. ................... 725,000 * 23,123 *
Delaware PERS...................... 1,200,000 * 38,273 *
Delaware State Employees'
Retirement Fund.................. 1,100,000 * 35,084 *
Delphi Foundation.................. 24,000 * 765 *
Delta Airlines Master Trust........ 1,000,000 * 31,894 *
Delta Air Lines Master Retirement
Trust............................ 1,105,000 * 35,243 *
Dorinco Reinsurance Company........ 300,000 * 9,568 *
The Dow Chemical Company Employees'
Retirement Plan.................. 920,000 * 29,343 *
Elf Aquitaine...................... 300,000 * 9,568 *
Ellsworth Convertible Growth and
Income Fund, Inc. ............... 250,000 * 7,973 *
Employee Benefit Convertible
Securities Fund.................. 200,000 * 6,378 *
Employers' Reinsurance
Corporation...................... 421,000 * 13,427 *
Engrs Joint Pension Fund........... 427,000 * 13,619 *
Equi-Select Total Return Equity.... 1,320,000 * 42,101 *
Equitable Life Assurance Separate
Account -- Balanced.............. 155,000 * 4,943 *
Equitable Life Assurance Separate
Account -- Convertibles.......... 2,735,000 * 87,232 *
Family Service Life Insurance
Co............................... 200,000 * 6,378 *
Federated Equity Income Fund,
Inc. ............................ 11,595,000 3.4% 369,821 *
Federated Insurance Series, on
behalf of its Federated Equity
Income Fund II................... 300,000 * 9,568 *
Fidelity Financial Trust: Fidelity
Convertible Securities Fund...... 9,500,000 2.8% 303,001 *
First Church of Christ,
Scientist -- Endowment........... 600,000 * 19,136 *
Franklin & Marshall College........ 260,000 * 8,292 *
The Frist Foundation............... 390,000 * 12,439 *
</TABLE>
34
<PAGE> 36
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT AT
MATURITY OF NUMBER OF
NOTES SHARES OF
BENEFICIALLY PERCENTAGE OF COMMON STOCK PERCENTAGE OF
OWNED THAT NOTES THAT MAY BE COMMON STOCK
NAME MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
---- ------------ ------------- ------------ ----------------
<S> <C> <C> <C> <C>
Fuji U.S. Income Open.............. 700,000 * 22,326 *
General Motors Employees Global
Group Pension Trust.............. 4,518,000 1.3% 144,101 *
General Motors Foundation.......... 162,000 * 5,166 *
General Motors Insurance
Corporation...................... 1,296,000 * 41,335 *
Genesee County Employees'
Retirement System................ 125,000 * 3,986 *
Grable Foundation.................. 70,000 * 2,232 *
Gryphon Domestic III, LLC.......... 1,300,000 * 41,463 *
Guardian Life Insurance Company of
America.......................... 4,600,000 1.3% 146,716 *
Guardian Pension Trust............. 200,000 * 6,378 *
Hawaiian Airlines Employees Pension
Plan -- IAM...................... 100,000 * 3,189 *
Hawaiian Airlines Pension Plan for
Salaried Employees............... 25,000 * 797 *
Hawaiian Airlines Pilots Retirement
Plan............................. 160,000 * 5,103 *
Highbridge Capital Corporation..... 4,000,000 1.2% 127,579 *
Hudson River Trust Balanced
Account.......................... 2,345,000 * 74,793 *
Hudson River Trust Growth &
Income........................... 4,285,000 1.2% 136,669 *
Hudson River Trust Growth
Investors........................ 1,960,000 * 62,513 *
ICI American Holdings Trust........ 525,000 * 16,744 *
Investcorp SAM Fund Limited........ 2,500,000 * 79,737 *
Island Holdings.................... 10,000 * 318 *
JMG Convertible Investments,
L.P.............................. 500,000 * 15,947 *
The J.W. McConnell Family
Foundation....................... 250,000 * 7,973 *
Kapiolani Medical Center........... 240,000 * 7,654 *
Kentfield Trading, Ltd............. 6,050,000 1.8% 192,963 *
Lipper Convertibles, L.P........... 17,450,000 5.1% 556,565 *
Lipper Convertibles Series II,
L.P. ............................ 5,750,000 1.7% 183,395 *
Lipper Offshore Convertibles,
L.P.............................. 8,750,000 2.5% 279,080 *
Lord Abbett Bond Debenture Fund.... 3,800,000 1.1% 121,200 *
Macomb County Employees' Retirement
System........................... 75,000 * 2,392 *
MainStay Convertible Fund.......... 2,000,000 * 63,789 *
MainStay VP Convertible Fund....... 1,000,000 * 31,894 *
Maryland State Retirement System... 1,000,000 * 31,894 *
McMahan Securities Company, L.P.... 150,000 * 4,784 *
Memphis Light, Gas & Water
Retirement Fund.................. 1,995,000 * 63,630 *
Merrill Lynch Convertible Fund,
Inc. ............................ 375,000 * 11,960 *
</TABLE>
35
<PAGE> 37
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT AT
MATURITY OF NUMBER OF
NOTES SHARES OF
BENEFICIALLY PERCENTAGE OF COMMON STOCK PERCENTAGE OF
OWNED THAT NOTES THAT MAY BE COMMON STOCK
NAME MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
---- ------------ ------------- ------------ ----------------
<S> <C> <C> <C> <C>
Merrill Lynch ECS Convertible
Securities Portfolio............. 125,000 * 3,986 *
Merrill Lynch Insurance Group...... 170,000 * 5,422 *
Merrill Lynch Pierce Fenner &
Smith, Inc....................... 197,000 * 6,283 *
MFS Series Trust -- MFS Convertible
Securities Fund.................. 8,000 * 255 *
MFS Series Trust V -- MFS Total
Return Fund...................... 2,250,000 * 71,763 *
Morgan Stanley Dean Witter......... 6,670,000 1.9% 212,738 *
Motion Picture Industry Health
Plan -- Active Member Fund....... 330,000 * 10,525 *
Motion Picture Industry Health
Plan -- Retiree Member Fund...... 165,000 * 5,262 *
Museum of Fine Arts, Boston........ 107,000 * 3,412 *
Nalco Chemical Company............. 265,000 * 8,452 *
National Bank of Canada............ 700,000 * 22,326 *
Nations Funds Capital Income
Fund............................. 3,000,000 * 95,684 *
Nationwide Family of Funds, on
behalf of its Nationwide Equity
Income Fund...................... 90,000 * 2,870 *
New Hampshire Retirement System.... 359,000 * 11,450 *
New Orleans Firefighters........... 100,000 * 3,189 *
New York Life Insurance & Annuity
Corporation...................... 1,100,000 * 35,084 *
New York Life Insurance Company.... 14,000,000 4.1% 446,528 *
New York Life Separate Account
#7............................... 1,500,000 * 47,842 *
Occidental Petroleum Inc........... 130,000 * 4,146 *
OCM Convertible Limited
Partnership...................... 30,000 * 956 *
OCM Convertible Limited
Partnership...................... 55,000 * 1,754 *
OCM Convertible Trust.............. 2,735,000 * 87,232 *
Ohio National Fund, Inc., on behalf
of its Ohio National Equity
Income Portfolio................. 15,000 * 478 *
Onex Industrial Partners Limited... 7,050,000 2.0% 224,858 *
Oxford, Lord Abbett & Co........... 1,500,000 * 47,842 *
Pacific Innovations Trust Capital
Income Fund...................... 200,000 * 6,378 *
Palladin Securities, LLC........... 600,000 * 19,136 *
Parker-Hannifan Corporation........ 59,000 * 1,881 *
Partner Reinsurance Company,
Ltd. ............................ 310,000 * 9,887 *
Penn Treaty Network America
Insurance Company................ 225,000 * 7,176 *
Pilgrim Convertible Fund........... 3,355,000 1.0% 107,007 *
</TABLE>
36
<PAGE> 38
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT AT
MATURITY OF NUMBER OF
NOTES SHARES OF
BENEFICIALLY PERCENTAGE OF COMMON STOCK PERCENTAGE OF
OWNED THAT NOTES THAT MAY BE COMMON STOCK
NAME MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
---- ------------ ------------- ------------ ----------------
<S> <C> <C> <C> <C>
PIMCO Convertible Bond Fund........ 200,000 * 6,378 *
Port Authority of Allegheny County
Retirement and Disability
Allowance Plan for the Employees
Represented by Local 85 of the
Amalgamated Transit Union........ 500,000 * 15,947 *
PRIM Board......................... 2,235,000 * 71,285 *
ProMutual.......................... 177,000 * 5,645 *
Public Employees' Retirement
Association of Colorado.......... 1,000,000 * 31,894 *
Putnam Balanced Retirement Fund.... 134,000 * 4,273 *
Putnam Convertible Income-Growth
Trust............................ 5,500,000 1.6% 175,421 *
Putnam Convertible Opportunities
and Income Trust................. 138,000 * 4,401 *
Quattro Offshore Fund Ltd. ........ 1,000,000 * 31,894 *
Queen's Health Plan................ 40,000 * 1,275 *
Raytheon Company Master Retirement
Trust............................ 1,380,000 * 44,014 *
Resnick Partners, LP............... 50,000 * 1,594 *
Rhapsody Fund, LP.................. 400,000 * 12,757 *
Rhone-Poulenc Rorer Pension Plan... 18,000 * 574 *
S D Cnty Convertible............... 3,127,000 * 99,735 *
Sage Capital....................... 3,550,000 1.0% 113,226 *
San Diego City Retirement.......... 1,198,000 * 38,210 *
Shell Pension Trust................ 100,000 * 3,189 *
Southern Farm Bureau Life Insurance
Company.......................... 290,000 * 9,249 *
Southern Farm Bureau Life
Insurance -- FRIC................ 575,000 * 18,339 *
SPT................................ 300,000 * 9,568 *
Starvest Combined Portfolio........ 1,025,000 * 32,692 *
Starvest Managed Portfolio......... 95,000 * 3,030 *
State Employees' Retirement Fund of
the State of Delaware............ 950,000 * 30,300 *
State of Connecticut Combined
Investment Funds................. 3,205,000 * 102,223 *
State of Oregon Equity............. 5,950,000 1.7% 189,774 *
State of Oregon/SAIF Corporation... 5,000,000 1.4% 159,474 *
State Street Bank Custodian for GE
Pension Trust.................... 1,765,000 * 56,294 *
Summer Hill Global Partners L.P.... 150,000 * 4,784 *
Sun America Total Return........... 400,000 * 12,757 *
The TCW Group, Inc................. 10,850,000 3.1% 346,059 *
</TABLE>
37
<PAGE> 39
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT AT
MATURITY OF NUMBER OF
NOTES SHARES OF
BENEFICIALLY PERCENTAGE OF COMMON STOCK PERCENTAGE OF
OWNED THAT NOTES THAT MAY BE COMMON STOCK
NAME MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
---- ------------ ------------- ------------ ----------------
<S> <C> <C> <C> <C>
Teachers Insurance and Annuity
Association of America........... 2,000,000 * 63,789 *
Triton Capital Investments, Ltd.... 500,000 * 15,947 *
United Food and Commercial Workers
Local 1262 and Employers Pension
Fund............................. 300,000 * 9,568 *
University of Rochester............ 45,000 * 1,435 *
Van Kampen Convertible Securities
Fund............................. 1,300,000 * 41,463 *
Vanguard Convertible Securities
Fund, Inc........................ 2,005,000 * 63,949 *
Van Kampen Harbor Fund............. 7,000,000 2.0% 223,264 *
Van Waters & Rogers, Inc.
Retirement Plan (f.k.a. Univar
Corporation)..................... 150,000 * 4,784 *
Wake Forest University............. 1,052,000 * 33,553 *
White River Securities LLC......... 1,225,000 * 39,071 *
Zeneca Holdings Trust.............. 525,000 * 16,744 *
Any other holder of Notes or future
transferee, pledgee, donee or
successor of any holder(3)(4).... 73,167,000 21.2% 2,333,652 *
</TABLE>
- -------------------------
* Less than 1%.
(1) Assumes conversion of all of the holder's notes at a conversion price of
$31.353 per share of common stock. However, this conversion price will be
subject to adjustment as described under "Description of Notes -- Right of
Conversion." As a result, the amount of common stock issuable upon
conversion of the notes may increase or decrease in the future.
(2) Calculated based on Rule 13d-3(d)(i) of the Exchange Act using 143,198,070
shares of common stock outstanding as of June 2, 1999. In calculating this
amount, we treated as outstanding the number of shares of common stock
issuable upon conversion of all of that particular holder's notes. However,
we did not assume the conversion of any other holder's notes.
(3) Information about other selling security holders will be set forth in
prospectus supplements, if required.
(4) Assumes that any other holders of notes, or any future transferees,
pledgees, donees or successors of or from any such other holders of notes,
do not beneficially own any common stock other than the common stock
issuable upon conversion of the notes at the initial conversion rate.
We prepared this table based on the information supplied to us by the
selling securityholders named in the table.
The selling securityholders listed in the above table may have sold or
transferred, in transactions exempt from the registration requirements of the
Securities Act, some or all of their notes since the
38
<PAGE> 40
date on which the information in the above table is presented. Information about
the selling securityholders may change from over time. Any changed information
will be set forth in prospectus supplements.
Because the selling securityholders may offer all or some of their notes or
the underlying common stock from time to time, we cannot estimate the amount of
the notes or underlying common stock that will be held by the selling
securityholders upon the termination of any particular offering. See "Plan of
Distribution."
PLAN OF DISTRIBUTION
We will not receive any of the proceeds of the sale of the notes and the
underlying common stock offered by this prospectus. The notes and the underlying
common stock may be sold from time to time to purchasers:
- directly by the selling securityholders;
- through underwriters, broker-dealers or agents who may receive
compensation in the form of discounts, concessions or commissions from
the selling securityholders or the purchasers of the notes and the
underlying common stock.
The selling securityholders and any such broker-dealers or agents who
participate in the distribution of the notes and the underlying common stock may
be deemed to be "underwriters." As a result, any profits on the sale of the
notes and underlying common stock by selling securityholders and any discounts,
commissions or concessions received by any such broker-dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities Act.
If the selling securityholders were to deemed underwriters, the selling
securityholders may be subject to certain statutory liabilities of, including,
but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act.
If the notes and underlying common stock are sold through underwriters or
broker-dealers, the selling securityholders will be responsible for underwriting
discounts or commissions or agent's commissions.
The notes and underlying common stock may be sold in one or more
transactions at:
- fixed prices;
- prevailing market prices at the time of sale;
- varying prices determined at the time of sale; or
- negotiated prices.
These sales may be effected in transactions:
- on any national securities exchange or quotation service on which the
notes and underlying common stock may be listed or quoted at the time of
the sale, including the New York Stock Exchange in the case of the common
stock;
- in the over-the-counter market;
- in transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
- through the writing of options.
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as an agent on both sides of the
trade.
In connection with sales of the notes and underlying common stock or
otherwise, the selling securityholders may enter into hedging transactions with
broker-dealers. These broker-dealers may in
39
<PAGE> 41
turn engage in short sales of the notes and underlying common stock in the
course of hedging their positions. The selling securityholders may also sell the
notes and underlying common stock short and deliver notes and underlying common
stock to close out short positions, or loan or pledge notes and underlying
common stock to broker-dealers that in turn may sell the notes and underlying
common stock.
To our knowledge, there are currently no plans, arrangement or
understandings between any selling securityholders and any underwriter,
broker-dealer or agent regarding the sale of the notes and the underlying common
stock by the selling securityholders. Selling securityholders may not sell any
or all of the notes and the underlying common stock offered by them pursuant to
this prospectus. In addition, we cannot assure you that any such selling
securityholder will not transfer, devise or gift the notes and the underlying
common stock by other means not described in this prospectus.
Our common stock trades on the New York Stock Exchange under the symbol
"LSI". We do not intend to apply for listing of the notes on any securities
exchange or for quotation through Nasdaq. Accordingly, no assurance can be given
as to the development of liquidity or any trading market for the notes. See
"Risk Factors -- A public market may not develop for the notes."
There can be no assurance that any selling securityholder will sell any or
all of the notes or underlying common stock pursuant to this prospectus. In
addition, any notes or underlying common stock covered by this prospectus that
qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be
sold under Rule 144 or Rule 144A rather than pursuant to this prospectus.
The selling securityholders and any other person participating in such
distribution will be subject to the Exchange Act. The Exchange Act rules
include, without limitation, Regulation M, which may limit the timing of
purchases and sales of any of the notes and the underlying common stock by the
selling securityholders and any other such person. In addition, Regulation M of
the Exchange Act may restrict the ability of any person engaged in the
distribution of the notes and the underlying common stock to engage in
market-making activities with respect to the particular notes and the underlying
common stock being distributed for a period of up to five business days prior to
the commencement of such distribution. This may affect the marketability of the
notes and the underlying common stock and the ability of any person or entity to
engage in market-making activities with respect to the notes and the underlying
common stock.
Pursuant to the registration rights agreement filed as an exhibit to this
registration statement, we and the selling securityholders will be indemnified
by the other against certain liabilities, including certain liabilities under
the Securities Act or will be entitled to contribution in connection with these
liabilities.
We have agreed to pay substantially all of the expenses incidental to the
registration, offering and sale of the notes and underlying common stock to the
public other than commissions, fees and discounts of underwriters, brokers,
dealers and agents.
LEGAL MATTERS
The validity of the issuance of LSI Logic Corporation's securities offered
by this prospectus will be passed upon for LSI Logic Corporation by Wilson
Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto, California.
EXPERTS
The consolidated financial statements and schedule incorporated in this
prospectus by reference to the Annual Report on Form 10-K/A filed on May 28,
1999 of LSI Logic Corporation for the year ended December 31, 1998 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent auditors, given on the authority of said firm as experts in auditing
and accounting.
40
<PAGE> 42
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The aggregate estimated (other than the registration fee) expenses to be
paid by the Registrant in connection with this offering are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 95,910
Trustee's fees and expenses................................. 4,100
Accounting fees and expenses................................ 42,000
Legal fees and expenses..................................... 20,000
Miscellaneous............................................... 76,000
---------
Total..................................................... $ 238,010
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS OF LSI
CERTIFICATE OF INCORPORATION
Article 10 of our Certificate of Incorporation provides that, to the
fullest extent permitted by Delaware law, as the same now exists or may
hereafter be amended, a director shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director. Delaware law provides that directors of a corporation will
not be personally liable for monetary damages for breach of their fiduciary
duties as directors, except for liability:
- for any breach of their duty of loyalty to the corporation or its
stockholders,
- for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law,
- for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General
Corporation Law, or
- for any transaction from which the director derived an improper personal
benefit.
BYLAWS
INDEMNIFICATION ARRANGEMENTS
Our bylaws provide that our directors, officers and agents shall be
indemnified against expenses including attorneys' fees, judgments, fines,
settlements actually and reasonably incurred in connection with any proceeding
arising out of their status as such, if such director, officer or agent acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of LSI Logic Corporation, and, with the respect to any
criminal action or proceeding, had no reasonable cause to believe such conduct
was unlawful.
We have entered into agreements to indemnify our directors and officers, in
addition to the indemnification provided for in our Certificate of Incorporation
and Bylaws. These agreements, among other things, indemnify our directors and
officers for certain expenses, including attorney's fees, judgments, fines and
settlement amounts incurred by any such person in any action or proceeding,
including any action by or in the right of LSI, arising out of such person's
services as a director or officer of LSI, any subsidiary of LSI or any other
company or enterprise to which the person provides services at the request of
LSI.
II-1
<PAGE> 43
ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated by reference
herein:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
3.1 Amended and Restated Certificate of Incorporation.(1)
3.2 Bylaws.(2)
4.1 Indenture.
4.2 Registration Rights Agreement.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.*
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of PricewaterhouseCoopers LLP, independent auditors.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).*
24.1 Power of Attorney of certain directors and officers of LSI
Logic Corporation (see page II-4 of this Form S-3).
25.1 Form T-1 Statement of Eligibility of Trustee for Indenture
under the Trust Indenture Act of 1939.
</TABLE>
- -------------------------
* To be filed by amendment.
(1) Incorporated by reference to exhibits filed with the Registrant's
Registration Statement on Form S-8 (No. 333-57563) filed June 24, 1998
(2) Incorporated by reference to exhibits filed with the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 26, 1998.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act,
(b) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement,
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that clauses (a) and (b) do not apply if the information
required to be included in a post-effective amendment by such clauses is
contained in periodic reports filed with or furnished to the Securities and
Exchange Commission by the Registrant pursuant to Section 13 or
II-2
<PAGE> 44
Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed 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.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
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 provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities, other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding, is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained
in a 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 this registration statement as of the time it was declared
effective.
(2) For the purpose 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.
II-3
<PAGE> 45
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
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 on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Milpitas, State of California, on June 14, 1999.
LSI LOGIC CORPORATION
By: /s/ WILFRED J. CORRIGAN
------------------------------------
Name: Wilfred J. Corrigan
Title: Chairman, Chief Executive
Officer
and Director
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints Wilfred J. Corrigan and R. Douglas Norby, and
each of them, as his true and lawful attorneys-in-fact and agent, each with the
power of substitution, for him in his name, place and stead, in any and all
capacities, to sign the Registration Statement filed herewith and any and all
amendments (including post-effective amendments) to this Registration Statement,
and to sign any registration statement for the same offering covered by this
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) promulgated under the Securities Act of 1933, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the foregoing, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ WILFRED J. CORRIGAN Chairman, Chief Executive June 14, 1999
- ----------------------------------------------------- Officer and Director
Wilfred J. Corrigan (Principal Executive Officer)
/s/ R. DOUGLAS NORBY Executive Vice President, June 14, 1999
- ----------------------------------------------------- Chief Financial Officer and
R. Douglas Norby Director (Principal Financial
Officer and Principal
Accounting Officer)
/s/ T.Z. CHU Director June 14, 1999
- -----------------------------------------------------
T.Z. Chu
/s/ MALCOLM R. CURRIE Director June 14, 1999
- -----------------------------------------------------
Malcolm R. Currie
</TABLE>
II-4
<PAGE> 46
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ JAMES H. KEYES Director June 14, 1999
- -----------------------------------------------------
James H. Keyes
/s/ MATTHEW J. O'ROURKE Director June 14, 1999
- -----------------------------------------------------
Matthew J. O'Rourke
</TABLE>
II-5
<PAGE> 47
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<C> <S>
3.1 Amended and Restated Certificate of Incorporation.(1)
3.2 Bylaws.(2)
4.1 Indenture.
4.2 Registration Rights Agreement.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.*
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of PricewaterhouseCoopers LLP, independent auditors.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).*
24.1 Power of Attorney of certain directors and officers of LSI
Logic Corporation (see page II-4 of this Form S-3).
25.1 Form T-1 Statement of Eligibility of Trustee for Indenture
under the Trust Indenture Act of 1939.
</TABLE>
- -------------------------
* To be filed by amendment.
(1) Incorporated by reference to exhibits filed with the Registrant's
Registration Statement on Form S-8 (No. 333-57563) filed June 24, 1998.
(2) Incorporated by reference to exhibits filed with the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 26, 1998.
<PAGE> 1
EXHIBIT 4.1
LSI LOGIC CORPORATION
TO
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.,
AS TRUSTEE
INDENTURE
DATED AS OF MARCH 15, 1999
4 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
<PAGE> 2
LSI LOGIC CORPORATION
Reconciliation and Tie Between the Trust Indenture Act of 1939 and
Indenture, dated as of March 15, 1999, between LSI Logic Corporation and State
Street Bank and Trust Company of California, N.A., as Trustee.
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION INDENTURE SECTION
<S> <C>
Section 310(a)(1) .................................................... 8.9
(a)(2) ............................................................... 8.9
(a)(3) ............................................................... Not Applicable
(a)(4) ............................................................... Not Applicable
(a)(5) ............................................................... 8.9
(b) .................................................................. 8.8; 8.9; 8.10; 8.11
Section 311(a) ....................................................... 8.13
(b) .................................................................. 8.13
(b)(2) ............................................................... 6.3(a)
Section 312(a) ....................................................... 6.1; 6.2(a)
(b) .................................................................. 6.2(b)
(c) .................................................................. 6.2(c)
Section 313(a) ....................................................... 6.3(a)
(b) .................................................................. 6.3(a)
(c) .................................................................. 6.3(a)
(d) .................................................................. 6.3(b)
Section 314(a) ....................................................... 6.14
(b) .................................................................. Not Applicable
(c)(1) ............................................................... 16.5
(c)(2) ............................................................... 16.5
(c)(3) ............................................................... Not Applicable
(d) .................................................................. Not Applicable
(e) .................................................................. 16.5
Section 315(a) ....................................................... 8.1
(b) .................................................................. 7.8
(c) .................................................................. 8.1
(d) .................................................................. 8.1
(d)(1) ............................................................... 8.1(a)
(d)(2) ............................................................... 8.1(b)
(d)(3) ............................................................... 8.1(c)
(e) .................................................................. 7.9
Section 316(a) ....................................................... 7.7
(a)(1)(A) ............................................................ 7.7
(a)(1)(B) ............................................................ 7.7
(a)(2) ............................................................... Not Applicable
(b) .................................................................. 7.4
Section 317(a)(1) .................................................... 7.5
(a)(2) ............................................................... 7.5
(b) .................................................................. 5.4
Section 318(a) ....................................................... 16.7
</TABLE>
- ---------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
-i-
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
DEFINITIONS ............................................................... 1
Section 1.1 Definitions ................................................... 1
Affiliate ............................................................ 2
Board of Directors ................................................... 2
Business Day ......................................................... 2
Closing Price ........................................................ 2
Commission ........................................................... 2
Common Stock ......................................................... 2
Company .............................................................. 2
Company Note ......................................................... 2
Conversion Price ..................................................... 3
Corporate Trust Office ............................................... 3
Custodian ............................................................ 3
Default .............................................................. 3
Depositary ........................................................... 3
Designated Senior Debt ............................................... 3
Event of Default ..................................................... 3
Exchange Act ......................................................... 3
Existing Credit Agreement ............................................ 3
Fundamental Change ................................................... 3
Indebtedness ......................................................... 4
Indenture ............................................................ 4
Initial Purchasers ................................................... 4
Institutional Accredited Investor .................................... 4
Liquidated Damages ................................................... 5
Note or Notes ........................................................ 5
Noteholder or holder ................................................. 5
Note register ........................................................ 5
Officers' Certificate ................................................ 5
Opinion of Counsel ................................................... 5
outstanding .......................................................... 5
Payment Blockage Notice .............................................. 5
person ............................................................... 5
Portal Market ........................................................ 6
Predecessor Note ..................................................... 6
QIB .................................................................. 6
Registration Rights Agreement ........................................ 6
Representative ....................................................... 6
Responsible Officer .................................................. 6
</TABLE>
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<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Restricted Securities ..................................................................... 6
Rule 144A ................................................................................. 6
Securities Act ............................................................................ 6
Senior Debt ............................................................................... 6
Significant Subsidiary .................................................................... 7
Subsidiary ................................................................................ 7
Trading Day ............................................................................... 7
Trigger Event ............................................................................. 7
Trust Indenture Act ....................................................................... 7
Trustee ................................................................................... 7
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES .............................. 8
Section 2.1 Designation Amount and Issue of Notes .............................................. 8
Section 2.2 Form of Notes ...................................................................... 8
Section 2.3 Date and Denomination of Notes; Payments of Interest ............................... 8
Section 2.4 Execution of Notes ................................................................. 10
Section 2.5 Exchange and Registration of Transfer of Notes: Restrictions on Transfer; Depositary
10
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes ......................................... 17
Section 2.7 Temporary Notes .................................................................... 18
Section 2.8 Cancellation of Notes Paid, Etc .................................................... 18
Section 2.9 CUSIP Numbers ...................................................................... 18
ARTICLE III
REDEMPTION OF NOTES ............................................................................ 19
Section 3.1 Redemption Prices .................................................................. 19
Section 3.2 Notice of Redemption; Selection of Notes ........................................... 19
Section 3.3 Payment of Notes Called for Redemption ............................................. 20
Section 3.4 Conversion Arrangement on Call for Redemption ...................................... 21
Section 3.5 Redemption at Option of Holders .................................................... 21
ARTICLE IV
SUBORDINATION OF NOTES ......................................................................... 23
Section 4.1 Notes Subordinated to Senior Debt .................................................. 23
Section 4.2 Subrogation ........................................................................ 25
Section 4.3 Obligation of Company Unconditional ................................................ 25
Section 4.4 Modification of Terms of Senior Debt ............................................... 26
Section 4.5 Payments on Notes Permitted ........................................................ 26
</TABLE>
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<PAGE> 5
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 4.6 Effectuation of Subordination by Trustee ................................ 26
Section 4.7 Knowledge of Trustee .................................................... 26
Section 4.8 Trustee's Relation to Senior Debt ....................................... 27
Section 4.9 Rights of Holders of Senior Debt Not Impaired ........................... 27
Section 4.10 Certain Conversions Not Deemed Payment .................................. 27
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY .................................................. 28
Section 5.1 Payment of Principal, Premium and Interest .............................. 28
Section 5.2 Maintenance of Office or Agency ......................................... 28
Section 5.3 Appointments to Fill Vacancies in Trustee's Office ...................... 29
Section 5.4 Provisions as to Paying Agent ........................................... 29
Section 5.5 Existence ............................................................... 30
Section 5.6 Maintenance of Properties ............................................... 30
Section 5.7 Payment of Taxes and Other Claims ....................................... 30
Section 5.8 Rule 144A Information Requirement ....................................... 30
Section 5.9 Stay, Extension and Usury Laws .......................................... 31
Section 5.10 Compliance Certificate .................................................. 31
ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE ........................ 31
Section 6.1 Noteholders' Lists ....................................................... 31
Section 6.2 Preservation and Disclosure of Lists ..................................... 32
Section 6.3 Reports by Trustee ....................................................... 32
Section 6.4 Reports by Company ....................................................... 32
ARTICLE VII
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS UPON AN EVENT OF DEFAULT ..................... 33
Section 7.1 Events of Default ........................................................ 33
Section 7.2 Payments of Notes on Default; Suit Therefor .............................. 34
Section 7.3 Application of Monies Collected by Trustee ............................... 36
Section 7.4 Proceedings by Noteholder ................................................ 37
Section 7.5 Proceedings by Trustee ................................................... 37
Section 7.6 Remedies Cumulative and Continuing ....................................... 37
Section 7.7 Direction of Proceedings and Waiver of Defaults by Majority of Noteholders 38
Section 7.8 Notice of Defaults ....................................................... 38
Section 7.9 Undertaking to Pay Costs ................................................. 38
</TABLE>
-iii-
<PAGE> 6
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE VIII
CONCERNING THE TRUSTEE .......................................................... 39
Section 8.1 Duties and Responsibilities of Trustee ............................. 39
Section 8.2 Reliance on Documents, Opinions, Etc ............................... 40
Section 8.3 No Responsibility for Recitals, Etc ................................ 41
Section 8.4 Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes 41
Section 8.5 Monies to Be Held in Trust ......................................... 41
Section 8.6 Compensation and Expenses of Trustee ............................... 41
Section 8.7 Officers' Certificate as Evidence .................................. 42
Section 8.8 Conflicting Interests of Trustee ................................... 42
Section 8.9 Eligibility of Trustee ............................................. 42
Section 8.10 Resignation or Removal of Trustee .................................. 42
Section 8.11 Acceptance by Successor Trustee .................................... 43
Section 8.12 Succession by Merger, Etc .......................................... 44
Section 8.13 Preferential Collection of Claims .................................. 44
Section 8.14 Trustee's Application for Instructions from the Company ............ 44
ARTICLE IX
CONCERNING THE NOTEHOLDERS ...................................................... 45
Section 9.1 Action by Noteholders .............................................. 45
Section 9.2 Proof of Execution by Noteholders .................................. 45
Section 9.3 Who Are Deemed Absolute Owners ..................................... 45
Section 9.4 Company-Owned Notes Disregarded .................................... 46
Section 9.5 Revocation of Consents; Future Holders Bound ....................... 46
ARTICLE X
NOTEHOLDERS' MEETINGS ........................................................... 46
Section 10.1 Purpose of Meetings ................................................ 46
Section 10.2 Call of Meetings by Trustee ........................................ 47
Section 10.3 Call of Meetings by Company or Noteholders ......................... 47
Section 10.4 Qualifications for Voting .......................................... 47
Section 10.5 Regulations ........................................................ 47
Section 10.6 Voting ............................................................. 48
Section 10.7 No Delay of Rights by Meeting ...................................... 48
</TABLE>
-iv-
<PAGE> 7
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
ARTICLE XI
<S> <C>
SUPPLEMENTAL INDENTURES ................................................................. 49
Section 11.1 Supplemental Indentures Without Consent of Noteholders ..................... 49
Section 11.2 Supplemental Indenture with Consent of Noteholders ......................... 50
Section 11.3 Effect of Supplemental Indenture ........................................... 51
Section 11.4 Notation on Notes .......................................................... 51
Section 11.5 Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee ... 51
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE ....................................... 51
Section 12.1 Company May Consolidate Etc. on Certain Terms .............................. 51
Section 12.2 Successor Corporation to Be Substituted .................................... 52
Section 12.3 Opinion of Counsel to Be Given Trustee ..................................... 52
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE ................................................. 52
Section 13.1 Discharge of Indenture ..................................................... 52
Section 13.2 Deposited Monies to Be Held in Trust by Trustee ............................ 53
Section 13.3 Paying Agent to Repay Monies Held .......................................... 53
Section 13.4 Return of Unclaimed Monies ................................................. 53
Section 13.5 Reinstatement .............................................................. 53
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS ......................... 54
Section 14.1 Indenture and Notes Solely Corporate Obligations ........................... 54
ARTICLE XV
CONVERSION OF NOTES ..................................................................... 54
Section 15.1 Right to Convert ........................................................... 54
Section 15.2 Exercise of Conversion Privilege; Issuance of Common Stock on Conversion; No
Adjustment for Interest or Dividends ....................................... 55
Section 15.3 Cash Payments in Lieu of Fractional Shares ................................. 56
Section 15.4 Conversion Price ........................................................... 56
Section 15.5 Adjustment of Conversion Price ............................................. 56
Section 15.6 Effect of Reclassification, Consolidation, Merger or Sale .................. 64
</TABLE>
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<PAGE> 8
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 15.7 Taxes on Shares Issued ..................................................... 65
Section 15.8 Reservation of Shares; Shares to Be Fully Paid; Compliance with Governmental
Requirements; Listing of Common Stock ...................................... 65
Section 15.9 Responsibility of Trustee .................................................. 65
Section 15.10 Notice to Holders Prior to Certain Actions ................................ 66
ARTICLE XVI
MISCELLANEOUS PROVISIONS ................................................................ 67
Section 16.1 Provisions Binding on Company's Successors ................................ 67
Section 16.2 Official Acts by Successor Corporation .................................... 67
Section 16.3 Addresses for Notices, Etc ................................................ 67
Section 16.4 Governing Law ............................................................. 68
Section 16.5 Evidence of Compliance with Conditions Precedent; Certificates to Trustee.. 68
Section 16.6 Legal Holidays ............................................................ 68
Section 16.7 Trust Indenture Act ....................................................... 68
Section 16.8 No Security Interest Created .............................................. 68
Section 16.9 Benefits of Indenture ..................................................... 69
Section 16.10 Table of Contents, Headings, Etc .......................................... 69
Section 16.11 Authenticating Agent ...................................................... 69
Section 16.12 Execution in Counterparts ................................................. 70
</TABLE>
-vi-
<PAGE> 9
INDENTURE
INDENTURE, dated as of March 15, 1999, between LSI Logic Corporation, a
Delaware corporation (hereinafter sometimes called the "Company", as more fully
set forth in Section 1.1), and State Street Bank and Trust Company of
California, N.A., a national banking association organized under the laws of the
United States of America, as trustee hereunder (hereinafter sometimes called the
"Trustee", as more fully set forth in Section 1.1).
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 4 1/4% Convertible Subordinated Notes due 2004
(hereinafter sometimes called the "Notes"), in an aggregate principal amount not
to exceed $300,000,000 (or $345,000,000 if the over-allotment option set forth
in Section 2 of the Placement Agreement dated March 15, 1999 between the Company
and the Initial Purchasers is exercised in full) and, to provide the terms and
conditions upon which the Notes are to be authenticated, issued and delivered,
the Company has duly authorized the execution and delivery of this Indenture;
and
WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes, a form of assignment, a form of option to elect repayment upon a
Fundamental Change, and a form of conversion notice to be borne by the Notes are
to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. The terms defined in this Section 1.1 (except
as herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture that are defined in the Trust Indenture Act or
which are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context
<PAGE> 10
otherwise requires) shall have the meanings assigned to such terms in said Trust
Indenture Act and in said Securities Act as in force at the date of the
execution of this Indenture. The words "herein," "hereof," "hereunder," and
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other Subdivision. The terms defined in this
Article include the plural as well as the singular.
AFFILIATE: The term "Affiliate" of any specified person shall
mean any other person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person. For the
purposes of this definition, "control," when used with respect to any specified
person means the power to direct or cause the direction of the management and
policies of such person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
BOARD OF DIRECTORS: The term "Board of Directors" shall mean the
Board of Directors of the Company or a committee of such Board duly authorized
to act for it hereunder.
BUSINESS DAY: The term "Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York or the city in which the Corporate Trust
Office is located are authorized or obligated by law or executive order to close
or be closed.
CLOSING PRICE: The term "Closing Price" shall have the meaning
specified in Section 15.5(h)(1).
COMMISSION: The term "Commission" shall mean the Securities and
Exchange Commission.
COMMON STOCK: The term "Common Stock" shall mean any stock of
any class of the Company which has no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not subject to redemption
by the Company. Subject to the provisions of Section 15.6, however, shares
issuable on conversion of Notes shall include only shares of the class
designated as common stock of the Company at the date of this Indenture or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
COMPANY: The term "Company" shall mean LSI Logic Corporation, a
Delaware corporation, having its principal office at 1551 McCarthy Boulevard,
Milpitas, California 95035 and subject to the provisions of Article XII, shall
include its successors and assigns.
COMPANY NOTE: The term "Company Note" shall have the meaning
specified in Section 3.5(b).
-2-
<PAGE> 11
CONVERSION PRICE: The term "Conversion Price" shall have the
meaning specified in Section 15.4.
CORPORATE TRUST OFFICE: The term "Corporate Trust Office" or
other similar term, shall mean the office of the Trustee at which at any
particular time the trust created by this Indenture shall be administered, which
office is, at the date as of which this Indenture is dated, located at 633 West
5th Street, 12th Floor, Los Angeles, CA 90071, Attention: Corporate Trust
Department (LSI Logic Corporation - 4 1/4% Convertible Subordinated Notes due
2004).
CUSTODIAN: The term "Custodian" shall mean State Street Bank and
Trust Company of California, N.A., as custodian with respect to the Notes in
global form, or any successor entity thereto.
DEFAULT: The term "default" shall mean any event that is, or
after notice or passage of time, or both, would be, an Event of Default.
DEFAULTED INTEREST: The term "Defaulted Interest" shall have the
meaning specified in Section 2.3.
DEPOSITARY: The term "Depositary" shall mean, with respect to
the Notes issuable or issued in whole or in part in global form, the person
specified in Section 2.5(d) as the Depositary with respect to such Notes, until
a successor shall have been appointed and become such pursuant to the applicable
provisions of this Indenture, and thereafter, "Depositary" shall mean or include
such successor.
DESIGNATED SENIOR DEBT: The term "Designated Senior Debt" shall
mean (i) Senior Debt under the Existing Credit Agreement, and (ii) any other
particular Senior Debt in which the instrument creating or evidencing the same
or the assumption or guarantee thereof (or related agreements or documents to
which the Company is a party) expressly provides that such Senior Debt shall be
"Designated Senior Debt" for purposes of this Indenture (provided that such
instrument, agreement or other document may place limitations and conditions on
the right of such Senior Debt to exercise the rights of Designated Senior Debt).
EVENT OF DEFAULT: The term "Event of Default" shall mean any
event specified in Section 7.1(a), (b), (c), (d) or (e).
EXCHANGE ACT: The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder, as in effect from time to time.
EXISTING CREDIT AGREEMENT: The term "Existing Credit Agreement"
shall mean that Amended and Restated Credit Agreement, dated as of September 22,
1998, among the Company, LSI Logic Japan Semiconductor, Inc., the lenders named
therein, ABN AMRO Bank N.V., as agent for the lenders, and The Industrial Bank
of Japan Limited, as Yen manager, as such agreement may be amended, amended and
restated, supplemented or otherwise modified from time to time.
FUNDAMENTAL CHANGE: The term "Fundamental Change" shall mean the
occurrence of any transaction or event in connection with which all or
substantially all the Common Stock shall be
-3-
<PAGE> 12
exchanged for, be converted into, acquired for, or constitute solely the right
to receive, consideration (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which is not all or substantially all common
stock listed (or, upon consummation of or immediately following such transaction
or event, which will be listed) on a United States national securities exchange
or approved for quotation on the Nasdaq National Market or any similar United
States system of automated dissemination of quotations of securities prices.
GLOBAL NOTE: The term "Global Note" shall have the meaning set
forth in Section 2.5(b).
INDEBTEDNESS: The term "Indebtedness" shall mean, with respect
to any person, (i) all obligations, contingent or otherwise, of such person (a)
for borrowed money (whether or not the recourse of the lender is to the whole of
the assets of such person or only to a portion thereof), (b) evidenced by a
note, debenture, bond or written instrument (including a purchase money
obligation), (c) in respect of leases of such person required, in conformity
with generally accepted accounting principles, to be accounted for as
capitalized lease obligations on the balance sheet of such person and all
obligations and other liabilities (contingent or otherwise) under any lease or
related document (including a purchase agreement) in connection with the lease
of real property which provides that such person is contractually obligated to
purchase or cause a third party to purchase the leased property and thereby
guarantee a minimum residual value of the leased property to the lessor and the
obligations of such person under such lease or related document to purchase or
to cause a third party to purchase such leased property; or (d) in respect of
letters of credit (including reimbursement obligations with respect thereto),
local guarantees or bankers' acceptances; (ii) all obligations of others of the
type described in clause (i) above or clause (iii), (iv) or (v) below assumed by
or guaranteed in any manner by such person or in effect guaranteed by such
person through an agreement to purchase, contingent or otherwise (and the
obligations of such person under any such assumptions, guarantees or other such
arrangements); (iii) all obligation secured by a mortgage, pledge, lien,
encumbrance, charge or adverse claim affecting title or resulting in an
encumbrance to which the property or assets of such person are subject, whether
or not the obligation secured thereby shall have been assumed by or shall
otherwise be such person's legal liability; (iv) to the extent not otherwise
included, all obligations of such person under interest rate and currency swap
agreements, cap, floor and collar agreements, spot and forward contracts and
similar agreements and arrangements; and (v) all obligations, contingent or
otherwise, of such person under or in respect of any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (i), (ii), (iii) or (iv).
INDENTURE: The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
INITIAL PURCHASERS: The term "Initial Purchasers" shall mean
Morgan Stanley & Co. Incorporated, BancBoston Robertson Stephens Inc. and J.P.
Morgan & Co., Inc.
INSTITUTIONAL ACCREDITED INVESTOR: The term "Institutional
Accredited Investor" shall mean an institutional "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
-4-
<PAGE> 13
LIQUIDATED DAMAGES: The term "Liquidated Damages" shall have the
meaning defined as "Liquidated Damages Amount" in Section 2(e) of the
Registration Rights Agreement.
NOTE OR NOTES: The terms "Note" or "Notes" shall mean any Note or Notes,
as the case may be, authenticated and delivered under this Indenture, including
the Global Note.
NOTEHOLDER OR HOLDER: The terms "Noteholder" or "holder" as
applied to any Note, or other similar terms (but excluding the term "beneficial
holder"), shall mean any person in whose name at the time a particular Note is
registered on the Note registrar's books.
NOTE REGISTER: The term "Note register" shall have the meaning
specified in Section 2.5.
OFFICERS' CERTIFICATE: The term "Officers' Certificate," when
used with respect to the Company, shall mean a certificate signed by both (a)
the President, the Chief Executive Officer, Executive or Senior Vice President
or any Vice President (whether or not designated by a number or numbers or word
or words added before or after the title "Vice President") and (b) by the
Treasurer or any Assistant Treasurer or Secretary or any Assistant Secretary of
the Company.
OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean an
opinion in writing signed by legal counsel, who may be an employee of or counsel
to the Company, or other counsel acceptable to the Trustee.
OUTSTANDING: The term "outstanding," when used with reference to
Notes, shall, subject to the provisions of Section 9.4, mean, as of any
particular time, all Notes authenticated and delivered by the Trustee under this
Indenture, except
(a) Notes theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Notes, or portions thereof, (i) for the redemption
of which monies in the necessary amount shall have been deposited in trust with
the Trustee or with any paying agent (other than the Company) or (ii) which
shall have been otherwise defeased in accordance with Article XIII;
(c) Notes in lieu of which, or in substitution for
which, other Notes shall have been authenticated and delivered pursuant to the
terms of Section 2.6; and
(d) Notes converted into Common Stock pursuant to
Article XV and Notes deemed not outstanding pursuant to Article III.
PAYMENT BLOCKAGE NOTICE: The term "Payment Blockage Notice"
shall have the meaning specified in Section 4.2.
PERSON: The term "person" shall mean a corporation, an
association, a partnership, a limited liability corporation, an individual, a
joint venture, a joint stock company, a trust, an unincorporated organization or
a government or an agency or a political subdivision thereof.
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PORTAL MARKET: The term "The Portal Market" shall mean The
Portal Market operated by the National Association of Securities Dealers, Inc.
or any successor thereto.
PREDECESSOR NOTE: The term "Predecessor Note" of any particular
Note shall mean every previous Note evidencing all or a portion of the same debt
as that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 2.6 in lieu of a
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
lost, destroyed or stolen Note that it replaces.
QIB: The term "QIB" shall mean a "qualified institutional buyer"
as defined in Rule 144A.
REGISTRATION RIGHTS AGREEMENT: The term "Registration Rights
Agreement" shall mean that certain Registration Rights Agreement, dated as of
March 15, 1999, between the Company and the Initial Purchasers, as amended from
time to time in accordance with its terms.
REPRESENTATIVE: The term "Representative" shall mean (a) the
indenture trustee or other trustee, agent or representative for any Senior
Indebtedness or (b) with respect to any Senior Indebtedness that does not have
any such trustee, agent or other representative, (i) in the case of such Senior
Indebtedness issued pursuant to an agreement providing for voting arrangements
as among the holders or owners of such Senior Indebtedness, any holder or owner
of such Senior Indebtedness acting with the consent of the required persons
necessary to bind such holders or owners of such Senior Indebtedness and (ii) in
the case of all other such Senior Indebtedness, the holder or owner of such
Senior Indebtedness.
REPURCHASE DATE: The term "Repurchase Date" shall have the
meaning specified in Section 3.5.
RESPONSIBLE OFFICER: The term "Responsible Officer," when used
with respect to the Trustee, shall mean an officer of the Trustee in the
Corporate Trust Office assigned and duly authorized by the Trustee to administer
its corporate trust matters.
RESTRICTED SECURITIES: The term "Restricted Securities" shall
have the meaning specified in Section 2.5.
RULE 144A: The term "Rule 144A" shall mean Rule 144A as
promulgated under the Securities Act.
SECURITIES ACT: The term "Securities Act" shall mean the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
SENIOR DEBT: The term "Senior Debt" means the principal of,
premium, if any, and interest on, rent payable under, and any other amounts due
on or in connection with any and all Indebtedness of the Company (including,
without limitation, fees, costs, expenses and any interest accruing after the
filing of a petition initiating any proceeding pursuant to any bankruptcy law,
but only to the extent allowed or permitted to the holder of such Indebtedness
against the bankruptcy or other insolvency estate of the Company in such
proceeding), whether outstanding on the date of the Indenture
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or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by
the Company (including all deferrals, renewals, extensions or refundings of, or
amendments, modifications or supplements to the foregoing); provided, however,
that Senior Debt does not include (w) Indebtedness evidenced by the Notes, (x)
Indebtedness of the Company to any subsidiary of the Company, a majority of the
voting stock of which is owned by the Company, except to the extent such
Indebtedness is pledged by such subsidiary as security for any Senior Debt, (y)
accounts payable of the Company to trade creditors arising in the ordinary
course of business, and (z) any particular Indebtedness in which the instrument
creating or evidencing the same or the assumption or guarantee thereof expressly
provides that such Indebtedness shall not be senior in right of payment to, or
is pari passu with, or is subordinated or junior to, the Notes.
SIGNIFICANT SUBSIDIARY: The term "Significant Subsidiary" shall
mean, as of any date of determination, a Subsidiary of the Company, if as of
such date of determination either (a) the assets of such subsidiary equal 10% or
more of the Company's total consolidated assets or (b) the total revenue of
which represented 10% or more of the Company's consolidated total revenue for
the most recently completed fiscal year.
SUBSIDIARY: The term "Subsidiary" shall mean, with respect to
any person, (i) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of capital stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such person or one or more of the other subsidiaries
of that person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such person or a
subsidiary of such person or (b) the only general partners of which are such
person or of one or more subsidiaries of such person (or any combination
thereof).
TRADING DAY: The term "Trading Day" shall have the meaning
specified in Section 15.5(h)(5).
TRIGGER EVENT: The term "Trigger Event" shall have the meaning
specified in Section 15.5(d).
TRUST INDENTURE ACT: The term "Trust Indenture Act" shall mean
the Trust Indenture Act of 1939, as amended, as it was in force at the date of
execution of this Indenture, except as provided in Sections 11.3 and 15.6;
provided, however, that in the event the Trust Indenture Act of 1939 is amended
after the date hereof, the term "Trust Indenture Act" shall mean, to the extent
required by such amendment, the Trust Indenture Act of 1939 as so amended.
TRUSTEE: The term "Trustee" shall mean State Street Bank and
Trust Company of California, N.A. and its successors and any corporation
resulting from or surviving any consolidation or merger to which it or its
successors may be a party and any successor trustee at the time serving as
successor trustee hereunder.
The definitions of certain other terms are as specified in
Sections 2.5 and 3.5 and Article XV.
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ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
SECTION 2.1 DESIGNATION AMOUNT AND ISSUE OF NOTES. The Notes shall be
designated as "4 1/4% Convertible Subordinated Notes due 2004." Notes not to
exceed the aggregate principal amount of $300,000,000 (or $345,000,000 if the
over-allotment option set forth in Section 2 of the Placement Agreement dated
March 15, 1999 (as amended from time to time by the parties thereto) by and
between the Company and the Initial Purchasers is exercised in full) (except
pursuant to Sections 2.5, 2.6, 3.3, 3.5 and 15.2 hereof) upon the execution of
this Indenture, or from time to time thereafter, may be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order of the Company,
signed by its (a) Chief Executive Officer, President, Executive or Senior Vice
President or any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "Vice President") and
(b) Treasurer or Assistant Treasurer or its Secretary or any Assistant
Secretary, without any further action by the Company hereunder.
SECTION 2.2 FORM OF NOTES. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage.
Any Note in global form shall represent such of the outstanding Notes as
shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be increased or reduced to reflect transfers or exchanges permitted
hereby. Any endorsement of a Note in global form to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in such manner and upon instructions given by the holder of such Notes in
accordance with this Indenture. Payment of principal of and interest and
premium, if any, on any Note in global form shall be made to the holder of such
Note.
The terms and provisions contained in the form of Note attached as
Exhibit A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
SECTION 2.3 DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST. The
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and integral multiples thereof. Every Note shall be
dated the date of its authentication and shall bear interest from the
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applicable date in each case as specified on the face of the form of Note
attached as Exhibit A hereto. Interest on the Notes shall be computed on the
basis of a 360-day year comprised of twelve (12) 30-day months.
The person in whose name any Note (or its Predecessor Note) is
registered on the Note register at the close of business on any record date with
respect to any interest payment date shall be entitled to receive the interest
payable on such interest payment date, except (i) that the interest payable upon
redemption (unless the date of redemption is an interest payment date) will be
payable only to the person to whom principal is payable pursuant to such
redemption and (ii) as set forth in the next succeeding sentence. In the case of
any Note (or portion thereof) which is converted into Common Stock of the
Company during the period from (but excluding) a record date to (but excluding)
the next succeeding interest payment date either (i) if such Note (or portion
thereof) has been called for redemption on a redemption date which occurs during
such period, or is to be redeemed in connection with a Fundamental Change on a
Repurchase Date (as defined in Section 3.5) which occurs during such period, the
Company shall not be required to pay interest on such interest payment date in
respect of any such Note (or portion thereof) except to the extent required to
be paid upon redemption of such Note or portion thereof pursuant to Section 3.3
or 3.5 hereof or (ii) if otherwise, any Note (or portion thereof) submitted for
conversion during such period shall be accompanied by funds equal to the
interest payable on such succeeding interest payment date on the principal
amount so converted. Interest shall be payable at the office of the Company
maintained by the Company for such purposes in the Borough of Manhattan, The
City of New York, which shall initially be an office or agency of the Trustee
and may, as the Company shall specify to the paying agent in writing by each
record date, be paid either (i) by check mailed to the address of the person
entitled thereto as it appears in the Note register (provided that the holder of
Notes with an aggregate principal amount in excess of $10,000,000 shall, at the
written election of such holder, be paid by wire transfer in immediately
available funds) or (ii) by transfer to an account maintained by such person
located in the United States; provided, however, that payments to the Depositary
will be made by wire transfer of immediately available funds to the account of
the Depositary or its nominee. The term "record date" with respect to any
interest payment date shall mean the March 1 or September 1 immediately
preceding said March 15 or September 15, respectively.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any said March 15 or September 15 (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Noteholder on
the relevant record date by virtue of his having been such Noteholder; and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below;
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on a special record
date for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest to be paid on each Note and the date of the payment (which
shall be not less than twenty-five (25) days after the receipt by the Trustee of
such notice, unless the Trustee shall consent to an earlier date), and at the
same time the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the
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Trustee shall fix a special record date for the payment of such Defaulted
Interest which shall be not more than fifteen (15) days and not less than ten
(10) days prior to the date of the proposed payment, and not less than ten (10)
days after the receipt by the Trustee of the notice of the proposed payment, the
Trustee shall promptly notify the Company of such special record date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date therefor to be
mailed, first-class postage prepaid, to each Noteholder at his address as it
appears in the Note register, not less than ten (10) days prior to such special
record date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest
shall be paid to the persons in whose names the Notes (or their respective
Predecessor Notes) were registered at the close of business on such special
record date and shall no longer be payable pursuant to the following clause (2)
of this Section 2.3.
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Notes may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
SECTION 2.4 EXECUTION OF NOTES. The Notes shall be signed in the name
and on behalf of the Company by the manual or facsimile signature of its Chief
Executive Officer, President, any Executive or Senior Vice President or any Vice
President (whether or not designated by a number or numbers or word or words
added before or after the title "Vice President") or Treasurer and attested by
the manual or facsimile signature of its Secretary or any of its Assistant
Secretaries or Treasurer or any of its Assistant Treasurers (which may be
printed, engraved or otherwise reproduced thereon, by facsimile or otherwise).
Only such Notes as shall bear thereon a certificate of authentication
substantially in the form set forth on the form of Note attached as Exhibit A
hereto, manually executed by the Trustee (or an authenticating agent appointed
by the Trustee as provided by Section 16.11), shall be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. Such certificate by
the Trustee (or such an authenticating agent) upon any Note executed by the
Company shall be conclusive evidence that the Note so authenticated has been
duly authenticated and delivered hereunder and that the holder is entitled to
the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
SECTION 2.5 EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES: RESTRICTIONS
ON TRANSFER; DEPOSITARY.
(a) The Company shall cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any other
office or agency of the Company
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designated pursuant to Section 5.2 being herein sometimes collectively referred
to as the "Note register") in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration of Notes and of
transfers of Notes. The Note register shall be in written form or in any form
capable of being converted into written form within a reasonably prompt period
of time. The Trustee is hereby appointed "Note registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. The Company may
appoint one or more co-registrars in accordance with Section 5.2.
Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.
Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 5.2. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
All Notes presented or surrendered for registration of transfer or for
exchange, redemption or conversion shall (if so required by the Company or the
Note registrar) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, and the Notes shall
be duly executed by the Noteholder thereof or his attorney duly authorized in
writing.
No service charge shall be made to the Noteholders for any registration
of transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax, assessment or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes.
Neither the Company nor the Trustee nor any Note registrar shall be
required to exchange or register a transfer of (a) any Notes for a period of
fifteen (15) days next preceding any selection of Notes to be redeemed or (b)
any Notes or portions thereof called for redemption pursuant to Section 3.2 or
(c) any Notes or portion thereof surrendered for conversion pursuant to Article
XV or (d) any Notes or portions thereof tendered for redemption (and not
withdrawn) pursuant to Section 3.5.
(b) So long as the Notes are eligible for book-entry settlement
with the Depositary, or unless otherwise required by law, all Notes that upon
initial issuance are beneficially owned by QIBs or as a result of a sale or
transfer after initial issuance are beneficially owned by QIBs will be
represented by one or more Notes in global form registered in the name of the
Depositary or the nominee of the Depositary (each, a "Global Note"), except as
otherwise specified below. The transfer and exchange of beneficial interests in
any Global Note shall be effected through the Depositary in accordance with this
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Indenture and the procedures of the Depositary therefor. The Trustee shall make
appropriate endorsements to reflect increases or decreases in the principal
amounts of any such Global Note as set forth on the face of the Note ("Principal
Amount") to reflect any such transfers. Except as provided below, beneficial
owners of a Global Note shall not be entitled to have certificates registered in
their names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered holders of such
Global Note.
(c) So long as the Notes are eligible for book-entry settlement,
or unless otherwise required by law, upon any transfer of a definitive Note to a
QIB in accordance with Rule 144A, and upon receipt of the definitive Note or
Notes being so transferred, together with a certification, substantially in the
form on the reverse of the Note, from the transferor that the transfer is being
made in compliance with Rule 144A (or other evidence satisfactory to the
Trustee), the Trustee shall make an endorsement on the Global Note to reflect an
increase in the aggregate Principal Amount of the Notes represented by such
Global Note, the Trustee shall cancel such definitive Note or Notes in
accordance with the standing instructions and procedures of the Depositary, the
aggregate Principal Amount of Notes represented by such Global Note to be
increased accordingly; provided that no definitive Note, or portion thereof, in
respect of which the Company or an Affiliate of the Company held any beneficial
interest shall be included in such Global Note until such definitive Note is
freely tradable in accordance with Rule 144(k); provided further that the
Trustee shall issue Notes in definitive form upon any transfer of a beneficial
interest in the Global Note to the Company or any Affiliate of the Company.
Upon any sale or transfer of a Note to an Institutional Accredited
Investor (other than pursuant to a registration statement that has been declared
effective under the Securities Act), such Institutional Accredited Investor
shall, prior to such sale or transfer, furnish to the Company and/or the Trustee
a signed letter containing representations and agreements relating to
restrictions on transfer substantially in the form set forth in Exhibit B to
this Indenture. Upon any transfer of a beneficial interest in the Global Note to
an Institutional Accredited Investor, the Trustee shall make an endorsement on
the Global Note to reflect a decrease in the aggregate Principal Amount of the
Notes represented by such Note in global form, and the Company shall executed a
definitive Note or Notes in exchange therefore, and the Trustee, upon receipt of
such definitive Note or Notes and the written order of the Company, shall
authenticate and deliver such, definitive Note or Notes.
Any Global Note may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the provisions
of this Indenture as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be
tradeable on The Portal Market or as may be required for the Notes to be
tradeable on any other market developed for trading of securities pursuant to
Rule 144A or required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange or
automated quotation system upon which the Notes may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Notes are subject.
(d) Every Note that bears or is required under this Section
2.5(d) to bear the legend set forth in this Section 2.5(d) (together with any
Common Stock issued upon conversion of the Notes and required to bear the legend
set forth in Section 2.5(e), collectively, the "Restricted Securities") shall be
subject to the restrictions on transfer set forth in this Section 2.5(d)
(including those set forth in the legend
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set forth below) unless such restrictions on transfer shall be waived by written
consent of the Company, and the holder of each such Restricted Security, by such
holder's acceptance thereof, agrees to be bound by all such restrictions on
transfer. As used in Sections 2.5(d) and 2.5(e), the term "transfer" encompasses
any sale, pledge, transfer or other disposition whatsoever of any Restricted
Security.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (and all securities issued in exchange therefor
or substitution thereof, other than Common Stock, if any, issued upon conversion
thereof, which shall bear the legend set forth in Section 2.5(e), if applicable)
shall bear a legend in substantially the following form, unless such Note has
been sold pursuant to a registration statement that has been declared effective
under the Securities Act (and which continues to be effective at the time of
such transfer), or unless otherwise agreed by the Company in writing, with
written notice thereof to the Trustee:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR"); (2) AGREES THAT IT WILL NOT,
PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT
(A) TO LSI LOGIC CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR
TO SUCH TRANSFER, FURNISHES TO STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING
TO THE RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE), IT WILL FURNISH TO STATE STREET
BANK AND TRUST COMPANY
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OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IS A
PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS SUCH TRUSTEE
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE NOTE EVIDENCED HEREBY
PURSUANT TO CLAUSE 2(E) ABOVE OR UPON ANY TRANSFER OF THE NOTE EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
Any Note (or security issued in exchange or substitution therefor) as to
which such restrictions on transfer shall have expired in accordance with their
terms or as to the conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Note for exchange to the
Note registrar in accordance with the provisions of this Section 2.5, be
exchanged for a new Note or Notes, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.5(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the second paragraph of Section 2.5(b) and in this
Section 2.5(d)), a Global Note may not be transferred as a whole or in part
except by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
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The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Global Notes. Initially, the Global Note shall be
issued to the Depositary, registered in the name of Cede & Co., as the nominee
of the Depositary, and deposited with the Custodian for Cede & Co.
If at any time the Depositary for a Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for such Note, the
Company may appoint a successor Depositary with respect to such Note. If a
successor Depositary is not appointed by the Company within ninety (90) days
after the Company receives such notice, the Company will execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Notes, will authenticate and deliver, Notes in certificated form, in
aggregate principal amount equal to the principal amount of such Global Note, in
exchange for such Global Note.
If a Note in certificated form is issued in exchange for any portion of
a Global Note after the close of business at the office or agency where such
exchange occurs on any record date and before the opening of business at such
office or agency on the next succeeding interest payment date, interest will not
be payable on such interest payment date in respect of such Note, but will be
payable on such interest payment date, subject to the provisions of Section 2.3,
only to the person to whom interest in respect of such portion of such Global
Note is payable in accordance with the provisions of this Indenture.
Notes in certificated form issued in exchange for all or a part of a
Global Note pursuant to this Section 2.5 shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. Upon execution and authentication, the Trustee shall deliver such Notes
in certificated form to the persons in whose names such Notes in certificated
form are so registered.
At such time as all interests in a Global Note have been redeemed,
converted, canceled, exchanged for Notes in certificated form, or transferred to
a transferee who receives Notes in certificated form thereof, such Global Note
shall, upon receipt thereof, be canceled by the Trustee in accordance with
standing procedures and instructions existing between the Depositary and the
Custodian. At any time prior to such cancellation, if any interest in a Global
Note is exchanged for Notes in certificated form, redeemed, converted,
repurchased or canceled, exchanged for Notes in certificated form or transferred
to a transferee who receives Notes in certificated form therefor or any Note in
certificated form is exchanged or transferred for part of a Global Note, the
principal amount of such Global Note shall, in accordance with the standing
procedures and instructions existing between the Depositary and the Custodian,
be appropriately reduced or increased, as the case may be, and an endorsement
shall be made on such Global Note, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction or increase.
(E) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of any
Note shall bear a legend in substantially the following form, unless such Common
Stock has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or such Common Stock has been issued upon conversion of
Notes that have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, or unless otherwise agreed by
the Company in writing with written notice thereof to the transfer agent:
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<PAGE> 24
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES
THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE
TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO LSI LOGIC
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE
WITH RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
THAT PRIOR TO SUCH TRANSFER FURNISHES TO BOSTON EQUISERVE L.P., AS
TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRANSFER AGENT OR A SUCCESSOR
TRANSFER AGENT, AS APPLICABLE), (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(E) ABOVE), IT WILL FURNISH
TO BOSTON EQUISERVE L.P., AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER
AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (3)
IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY
IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(E) ABOVE) A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED
HEREBY PURSUANT TO CLAUSE 1(E) ABOVE OR UPON ANY TRANSFER OF THE COMMON
STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN,
THE TERMS "UNITED STATES" AND "UNITED STATES PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
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<PAGE> 25
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.5(e).
(f) Any Note or Common Stock issued upon the conversion or
exchange of a Note that, prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), is purchased or owned by the Company or any Affiliate
thereof may not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Notes or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144).
SECTION 2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. In case any Note
shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its written request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Note, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Note, or in lieu of
and in substitution for the Note so destroyed, lost or stolen. In every case the
applicant for a substituted Note shall furnish to the Company, to the Trustee
and, if applicable, to such authenticating agent such security or indemnity as
may be required by them to save each of them harmless for any loss, liability,
cost or expense caused by or connected with such substitution, and, in every
case of destruction, loss or theft, the applicant shall also furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent
evidence to their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof.
Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Note and make available for delivery such
Note. Upon the issuance of any substituted Note, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses connected therewith.
In case any Note which has matured or is about to mature or has been called for
redemption or has been tendered for redemption (and not withdrawn) or is about
to be converted into Common Stock shall become mutilated or be destroyed, lost
or stolen, the Company may, instead of issuing a substitute Note, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Note), as the case
may be, if the applicant for such payment or conversion shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in case of destruction, loss or theft, evidence satisfactory
to the Company, the Trustee and, if applicable, any paying agent or conversion
agent of the destruction, loss or theft of such Note and of the ownership
thereof.
Every substitute Note issued pursuant to the provisions of this Section
2.6 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the
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<PAGE> 26
Company, whether or not the destroyed, lost or stolen Note shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Notes duly issued hereunder. To the extent permitted by law,
all Notes shall be held and owned upon the express condition that the foregoing
provisions are exclusive with respect to the replacement or payment or
conversion of mutilated, destroyed, lost or stolen Notes and shall preclude any
and all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment or
conversion of negotiable instruments or other securities without their
surrender.
SECTION 2.7 TEMPORARY NOTES. Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in the
form of the Notes in certificated form, but with such omissions, insertions and
variations as may be appropriate for temporary Notes, all as may be determined
by the Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Notes in certificated form. Without unreasonable delay the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form (other than in the case of Notes in global form) and thereupon
any or all temporary Notes (other than any such Note in global form) may be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 5.2 and the Trustee or such authenticating agent
shall authenticate and make available for delivery in exchange for such
temporary Notes an equal aggregate principal amount of Notes in certificated
form. Such exchange shall be made by the Company at its own expense and without
any charge therefor. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits and subject to the same limitations
under this Indenture as Notes in certificated form authenticated and delivered
hereunder.
SECTION 2.8 CANCELLATION OF NOTES PAID, ETC. All Notes surrendered for
the purpose of payment, redemption, conversion, exchange or registration of
transfer, shall, if surrendered to the Company or any paying agent or any Note
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by
it, and no Notes shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall return such
canceled Notes to the Company. If the Company shall acquire any of the Notes,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Notes unless and until the same are delivered
to the Trustee for cancellation.
SECTION 2.9 CUSIP NUMBERS. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Noteholders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE III
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REDEMPTION OF NOTES
SECTION 3.1 REDEMPTION PRICES. The Company may not redeem the Notes
prior to March 20, 2002. At any time on or after March 20, 2002, the Company
may, at its option, redeem all or from time to time any part of the Notes on any
date prior to maturity, upon notice as set forth in Section 3.2, and at the
optional redemption prices set forth in the form of Note attached as Exhibit A
hereto, together with accrued but unpaid interest to, but excluding, the date
fixed for redemption.
SECTION 3.2 NOTICE OF REDEMPTION; SELECTION OF NOTES. In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Notes pursuant to Section 3.1, it shall fix a date for
redemption and it or, at its written request received by the Trustee not fewer
than forty-five (45) days prior (or such shorter period of time as may be
acceptable to the Trustee) to the date fixed for redemption, the Trustee in the
name of and at the expense of the Company, shall mail or cause to be mailed a
notice of such redemption at least thirty (30) days prior to the date fixed for
redemption to the holders of Notes so to be redeemed as a whole or in part at
their last addresses as the same appear on the Note register; provided that if
the Company shall give such notice, it shall also give written notice, and
written notice of the Notes to be redeemed, to the Trustee. Such mailing shall
be by first class mail. The notice if mailed in the manner herein provided shall
be conclusively presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Note designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of any other Note.
Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the CUSIP numbers, the date fixed for redemption
(which shall be a Business Day), the redemption price at which Notes are to be
redeemed, the place or places of payment, that payment will be made upon
presentation and surrender of such Notes, that unpaid interest accrued to the
date fixed for redemption will be paid as specified in said notice, and that on
and after said date interest thereon or on the portion thereof to be redeemed
will cease to accrue. Such notice shall also state the current Conversion Price
and the date on which the right to convert such Notes or portions thereof into
Common Stock will expire. If fewer than all the Notes are to be redeemed, the
notice of redemption shall identify the Notes to be redeemed (including CUSIP
numbers, if any). In case any Note is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion thereof will be issued.
On or prior to the redemption date specified in the notice of redemption
given as provided in this Section 3.2, the Company will deposit with the Trustee
or with one or more paying agents (or, if the Company is acting as its own
paying agent, set aside, segregate and hold in trust as provided in Section 5.4)
an amount of money sufficient to redeem on the redemption date all the Notes (or
portions thereof) so called for redemption (other than those theretofore
surrendered for conversion into Common Stock) at the appropriate redemption
price, together with accrued but unpaid interest to, but excluding, the date
fixed for redemption; provided that if such payment is made on the redemption
date it must be received by the Trustee or paying agent, as the case may be, by
10:00 a.m. New York City time, on such date. If any Note called for redemption
is converted pursuant hereto, any money deposited with the Trustee or any paying
agent or so segregated and held in trust for the redemption of such Note shall
be paid to the Company upon its written request, or, if then held by the Company
shall be discharged from
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such trust. Whenever any Notes are to be redeemed, the Company will give the
Trustee written notice in the form of an Officers' Certificate not fewer than
thirty (30) days (or such shorter period of time as may be acceptable to the
Trustee) prior to the redemption date as to the aggregate principal amount of
Notes to be redeemed.
If fewer than all the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof of the Global Note or the Notes in certificated
form to be redeemed (in principal amounts of $1,000 or integral multiples
thereof), by lot or by another method the Trustee deems fair and appropriate. If
any Note selected for partial redemption is converted in part after such
selection, the converted portion of such Note shall be deemed (so far as may be)
to be the portion to be selected for redemption. The Notes (or portions thereof)
so selected shall be deemed duly selected for redemption for all purposes
hereof, notwithstanding that any such Note is converted as a whole or in part
before the mailing of the notice of redemption.
Upon any redemption of less than all Notes, the Company and the Trustee
may (but need not) treat as outstanding any Notes surrendered for conversion
during the period of fifteen (15) days next preceding the mailing of a notice of
redemption and may (but need not) treat as outstanding any Note authenticated
and delivered during such period in exchange for the unconverted portion of any
Note converted in part during such period.
SECTION 3.3 PAYMENT OF NOTES CALLED FOR REDEMPTION. If notice of
redemption has been given as above provided, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date fixed for
redemption and at the place or places stated in such notice at the applicable
redemption price, together with unpaid interest accrued to (but excluding) the
date fixed for redemption, and on and after said date (unless the Company shall
default in the payment of such Notes at the redemption price, together with
unpaid interest accrued to said date), interest on the Notes or portion of Notes
so called for redemption shall cease to accrue and such Notes shall cease after
the close of business on the Business Day next preceding the date fixed for
redemption to be convertible into Common Stock and, except as provided in
Sections 8.5 and 13.4, to be entitled to any benefit or security under this
Indenture, and the holders thereof shall have no right in respect of such Notes
except the right to receive the redemption price thereof and unpaid interest
accrued to (but excluding) the date fixed for redemption. On presentation and
surrender of such Notes at a place of payment in said notice specified, the said
Notes or the specified portions thereof shall be paid and redeemed by the
Company at the applicable redemption price, together with unpaid interest
accrued thereon to (but excluding) the date fixed for redemption; provided that,
if the applicable redemption date is an interest payment date, the semi-annual
payment of interest becoming due on such date shall be payable to the holders of
such Notes registered as such on the relevant record date instead of the holders
surrendering such Notes for redemption on such date.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes or
mail any notice of optional redemption during the continuance of a default in
payment of interest on the Notes. If any Note
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called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and premium, if any, shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate borne
by the Note and such Note shall remain convertible into Common Stock until the
principal and premium, if any, and interest shall have been paid or duly
provided for.
SECTION 3.4 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In connection
with any redemption of Notes, the Company may arrange for the purchase and
conversion of any Notes by an agreement with one or more investment bankers or
other purchasers to purchase such Notes by paying to the Trustee in trust for
the Noteholders, on or before the date fixed for redemption, an amount not less
than the applicable redemption price, together with unpaid interest accrued to
(but excluding) the date fixed for redemption, of such Notes. Notwithstanding
anything to the contrary contained in this Article III, the obligation of the
Company to pay the redemption price of such Notes, together with unpaid interest
accrued to (but excluding) the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, a copy of which will be filed
with the Trustee prior to the date fixed for redemption, any Notes not duly
surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary
contained in Article XV) surrendered by such purchasers for conversion, all as
of immediately prior to the close of business on the business day immediately
preceding the date fixed for redemption (and the right to convert any such Notes
shall be extended through such time), subject to payment of the above amount as
aforesaid. At the direction of the Company, the Trustee shall hold and dispose
of any such amount paid to it in the same manner as it would monies deposited
with it by the Company for the redemption of Notes. Without the Trustee's prior
written consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Notes shall increase or otherwise affect any of
the powers, duties, responsibilities or obligations of the Trustee as set forth
in this Indenture.
SECTION 3.5 REDEMPTION AT OPTION OF HOLDERS.
(a) If there shall occur a Fundamental Change, then each
Noteholder shall have the right, at such holder's option, to require the Company
to redeem all of such holder's Notes, or any portion thereof that is an integral
multiple of $1,000 principal amount, on the date (the "Repurchase Date") that is
thirty (30) days after the date of the Company Notice (as defined in Section
3.5(b) below) of such Fundamental Change (or, if such 30th day is not a Business
Day, the next succeeding Business Day). Such repayment shall be made at a price
equal to 100% of the principal amount to be redeemed. The Company shall also pay
to such holders accrued but unpaid interest on the redeemed Notes to, but
excluding, the Repurchase Date; provided that, if such Repurchase Date is March
15 or September 15, then the interest payable on such date shall be paid to the
holders of record of the Notes on the next preceding March 1 or September 1,
respectively.
Upon presentation of any Note redeemed in part only, the Company shall
execute and, upon the Company's written direction to the Trustee, the Trustee
shall authenticate and deliver to the holder thereof, at the expense of the
Company, a new Note or Notes, of authorized denominations, in principal amount
equal to the unredeemed portion of the Notes so presented.
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(b) On or before the tenth day after the occurrence of a
Fundamental Change, the Company, or, at its written request (which must be
received by the Trustee at least five (5) Business Days prior to the date the
Trustee is requested to give notice as described below), the Trustee in the name
of and at the expense of the Company, shall mail or cause to be mailed to all
holders of record on the date of the Fundamental Change a notice (the "Company
Notice") of the occurrence of such Fundamental Change and of the redemption
right at the option of the holders arising as a result thereof. Such notice
shall be mailed in the manner and with the effect set forth in the first
paragraph of Section 3.2. The Company shall also deliver a copy of the Company
Notice to the Trustee at such time as it is mailed to Noteholders.
Each Company Notice shall specify the circumstances constituting the
Fundamental Change, the Repurchase Date, the latest time (not less than thirty
(30) days after the date of the Company's notice of a Fundamental Change) on the
Repurchase Date by which the holder must exercise the redemption right (the
"Fundamental Change Expiration Time"), that the holder shall have the right to
withdraw any Notes surrendered prior to the Fundamental Change Expiration Time,
a description of the procedure which a Noteholder must follow to exercise such
redemption right and to withdraw any surrendered Notes, the place or places
where the holder is to surrender such holder's Notes, and the amount of unpaid
interest accrued on each Note to the Repurchase Date.
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders' redemption rights or affect the validity of
the proceedings for the repurchase of the Notes pursuant to this Section 3.5.
(c) For a Note to be so repaid at the option of the holder, the
Company must receive at the office or agency of the Company maintained for that
purpose or, at the option of such holder, the Corporate Trust Office, such Note
with the form entitled "Option to Elect Repayment Upon A Fundamental Change" on
the reverse thereof duly completed, together with such Notes duly endorsed for
transfer, on or before the Fundamental Change Expiration Time. All questions as
to the validity, eligibility (including time of receipt) and acceptance of any
Note for repayment shall be determined by the Company, whose determination shall
be final and binding absent manifest error.
(d) On or prior to the Repurchase Date, the Company will deposit
with the Trustee or with one or more paying agents (or, if the Company is acting
as its own paying agent, set aside, segregate and hold in trust as provided in
Section 5.4) an amount of money sufficient to repay on the Repurchase Date all
the Notes to be repaid on such date at the appropriate redemption price,
together with accrued but unpaid interest to (but excluding) the Repurchase
Date; provided that if such payment is made on the Repurchase Date it must be
received by the Trustee or paying agent, as the case may be, by 10:00 a.m. New
York City time, on such date. Payment for Notes surrendered for redemption (and
not withdrawn) prior to the Fundamental Change Expiration Time will be made
promptly (but in no event more than five (5) Business Days) following the
Repurchase Date by mailing checks for the amount payable to the holders of such
Notes entitled thereto as they shall appear on the registry books of the
Company.
(e) In the case of a reclassification, change, consolidation,
merger, combination, sale or conveyance to which Section 15.6 applies, in which
the Common Stock of the Company is changed or exchanged as a result into the
right to receive stock, securities or other property or assets (including cash),
which includes shares of Common Stock of the Company or another person that are,
or upon issuance will be, traded on a United States national securities exchange
or approved for trading on an established
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automated over-the-counter trading market in the United States and such shares
constitute at the time such change or exchange becomes effective in excess of
50% of the aggregate fair market value of such stock, securities or other
property or assets (including cash) into which the Common Stock of the Company
is or is to be changed or exchanged or (as determined by the Company, which
determination shall be conclusive and binding), then the person formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture (accompanied by an Opinion of Counsel that such supplemental indenture
complies with the Trust Indenture Act as in force at the date of execution of
such supplemental indenture) modifying the provisions of this Indenture relating
to the right of holders of the Notes to cause the Company to repurchase the
Notes following a Fundamental Change, including without limitation the
applicable provisions of this Section 3.5 and the definitions of Common Stock
and Fundamental Change, as appropriate, as determined in good faith by the
Company (which determination shall be conclusive and binding), to make such
provisions apply to such other person if different from the Company and the
common stock issued thereby (in lieu of the Company and the Common Stock of the
Company).
(f) The Company will comply with the provisions of Rule 13e-4
and any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the redemption rights of the holders of Notes in
the event of a Fundamental Change.
ARTICLE IV
SUBORDINATION OF NOTES
SECTION 4.1 NOTES SUBORDINATED TO SENIOR DEBT. The Company covenants and
agrees, and each Holder of Notes, by his acceptance thereof, likewise covenants
and agrees, that the indebtedness represented by the Notes and the payment of
the principal of (and premium, if any) and interest on each and all of the Notes
is hereby expressly subordinate and junior, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment in full of all
Senior Debt.
(a) In the event of any distribution of assets of the Company
upon any dissolution, winding up, liquidation or reorganization of the Company,
whether in bankruptcy, insolvency, reorganization or receivership proceedings or
upon an assignment for the benefit of creditors or any other marshaling of the
assets and liabilities of the Company or otherwise, then the holders of all
Senior Debt shall first be entitled to receive payment of the full amount due
thereon in cash or other consideration satisfactory to the holders of Senior
Debt in respect of principal (and premium, if any) and interest, or provision
shall be made for such amount in money or money's worth, before the Holders of
any of the Notes are entitled to receive any payment or distribution of any
character, whether in cash, securities or other property, on account of the
principal of (or premium, if any) or interest on the indebtedness evidenced by
the Notes.
For purposes of this Article IV, the words, "cash, securities or other
property" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article IV with respect
to the Notes to the
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payment of all Senior Debt which may at the time be outstanding; provided that
(i) the Senior Debt is assumed by the new corporation, if any, resulting from
any reorganization or readjustment, and (ii) the rights of the holders of Senior
Debt (other than leases which are not assumed by the Company or the new
corporation, as the case may be) are not, without the consent of such holders,
altered by such reorganization or readjustment. The consolidation of the Company
with, or the merger of the Company into, another person or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another person upon the
terms and conditions provided for in Article XII shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 4.1(a) if such other person shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
XII.
(b) In the event of any default in payment of the principal of
or premium, if any, or interest on, rent under, or any other payment obligation
under any Senior Debt (a "Payment Default") beyond any applicable grace period
with respect thereto, then, unless and until all such payments due in respect of
such Senior Debt have been paid in full in cash or other consideration
satisfactory to holders of Senior Debt or such default shall have been cured or
waived or shall have ceased to exist, no payment shall be made by the Company
with respect to the principal of, premium, if any, or interest on the Notes or
to acquire any of the Notes (including any repurchase pursuant to the repurchase
right of a Holder upon a Fundamental Change).
(c) In the event (i) any event of default, other than a payment
default, with respect to any Designated Senior Debt shall have occurred and be
continuing permitting the holders of such Designated Senior Debt (or a trustee
or other representative on behalf of the holders thereof) to declare such
Designated Senior Debt due and payable prior to the date on which it would
otherwise have become due and payable, upon written notice thereof to the
Company and the Trustee by any holders of such Designated Senior Debt (or a
trustee or other representative on behalf of the holders thereof) (the "Default
Notice"), unless and until such event of default shall have been cured or waived
or shall have ceased to exist and such acceleration shall have been rescinded or
annulled, or (ii) any judicial proceeding shall be pending with respect to any
such default in payment or event of default, then no payment shall be made by
the Company, directly or indirectly, with respect to principal of, premium, if
any, or interest on the Notes (including any repurchase pursuant to the exercise
of the repurchase right of a Holder upon a Fundamental Change) provided,
however, that clause (i) of this paragraph shall not prevent the making of any
such payment by the Company with respect to the Notes for more than 179 days
after a Default Notice shall have been received by the Trustee unless the
Designated Senior Debt in respect of which such event of default exists has been
declared due and payable in its entirety in which case no such payment may be
made until such acceleration has been rescinded or annulled or such Designated
Senior Debt has been paid in full. Notwithstanding the foregoing, no event of
default which existed or was continuing on the date of any Default Notice shall
be made the basis for the giving of a second Default Notice; provided, further,
however, that no subsequent Default Notice shall be effective for purposes of
this Section 4.1(c) unless and until at least 365 days shall have elapsed since
the initial effectiveness of the immediately prior Default Notice.
(d) If the maturity of the Notes is accelerated, no payment may
be made on the Notes until all amounts due or to become due on Senior Debt has
been paid in full in cash or other consideration satisfactory to holders of
Senior Debt or until such acceleration has been cured or waived.
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(e) In the event that, notwithstanding the foregoing
provisions of Sections 4.1(a), (b), (c) and (d), any payment on account of
principal of or interest on the Notes shall be made by or on behalf of the
Company and received by the Trustee, by any Holder or by any Paying Agent (or,
if the Company is acting as its own Paying Agent, money for any such payment
shall be segregated and held in trust), at a time when such payment is not
permitted by any of such provisions, then, unless and until all Senior Debt (or
Designated Senior Debt, in the case of Section 4.1(c)) is paid in full in cash
or other consideration satisfactory to the holders thereof, or such payment is
otherwise permitted to be made by the provisions of each of Sections 4.1(a),
4.1(b), 4.1(c) and 4.1(d) (subject, in each case, to the provisions of Section
4.7), such payment on account of principal of or interest on the Notes shall be
held in trust for the benefit of, and shall be immediately paid over to, the
holders of Senior Debt (or Designated Senior Debt, in the case of Section
4.1(c)) or their representative or representatives or the trustee or trustees
under any indenture under which any instruments evidencing any of the Senior
Debt (or Designated Senior Debt, in the case of Section 4.1(c)) may have been
issued, as their interests may appear.
Regardless of anything to the contrary herein, nothing shall prevent (a)
any payment by the Company or the Trustee to Holders of amounts in connection
with a redemption of Notes if (i) notice of such redemption has been given
pursuant to Section 3.2 prior to the receipt by the Trustee of written notice as
aforesaid, and (ii) such notice of redemption is given not earlier than 75 days
before the Redemption Date, or (b) any payment by the Trustee to the Holders of
amounts deposited with it pursuant to Sections 4.1 and 4.2.
SECTION 4.2 SUBROGATION. Subject to the payment in full of all Senior
Debt to which the indebtedness evidenced by the Notes is in the circumstances
subordinated as provided in Section 4.1, the Holders of the Notes (together with
the holders of any other indebtedness of the Company which is subordinate in
right of payment to the payment in full of all Senior Debt, which is not
subordinate in right of payment to the Notes and which by its terms grants such
right of subrogation to the holders thereof) shall be subrogated to the rights
of the holders of such Senior Debt to receive payments or distributions of cash,
property or securities of the Company applicable to such Senior Debt until all
amounts owing on the Notes shall be paid in full, and, as between the Company,
its creditors other than holders of such Senior Debt, and the Holders of the
Notes, no such payment or distribution made to the holders of Senior Debt by
virtue of this Article which otherwise would have been made to the Holders of
the Notes shall be deemed to be a payment by the Company on account of such
Senior Debt, it being understood that the provisions of this Article are and are
intended solely for the purpose of defining the relative rights of the Holders
of the Notes, on the one hand, and the holders of Senior Debt, on the other
hand.
SECTION 4.3 OBLIGATION OF COMPANY UNCONDITIONAL. Nothing contained in
this Article or elsewhere in this Indenture or in the Notes is intended to or
shall impair, as between the Company, its creditors other than the holders of
Senior Debt, and the Holders of the Notes, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Notes the principal
of (and premium, if any) and interest on the Notes as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Notes and creditors of
the Company other than the holders of Senior Debt, nor shall anything herein or
therein prevent the Trustee or the Holder of any Note from exercising all
remedies otherwise permitted
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by applicable law upon default under this Indenture, subject to the rights, if
any, under this Article of the holders of Senior Debt in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
SECTION 4.4 MODIFICATION OF TERMS OF SENIOR DEBT. Any renewal or
extension of the time of payment of any Senior Debt or the exercise by the
holders of Senior Debt of any of their rights under any instrument creating or
evidencing Senior Debt, including without limitation the waiver of default
thereunder, may be made or done all without notice to or assent from the Holders
of the Notes or the Trustee.
No compromise, alteration, amendment, modification, extension, renewal
or other change of, or waiver, consent or other action in respect of, any
liability or obligation under or in respect of, or of any of the terms,
covenants or conditions of any indenture or other instrument under which any
Senior Debt is outstanding or of such Senior Debt, whether or not such release
is in accordance with the provisions of any applicable document, shall in any
way alter or affect any of the provisions of this Article or of the Notes
relating to the subordination thereof
SECTION 4.5 PAYMENTS ON NOTES PERMITTED. Nothing contained in this
Article or elsewhere in this Indenture, or in any of the Notes, shall affect the
obligation of the Company to make, or prevent the Company from making, payments
of the principal of, or premium, if any, or interest on the Notes in accordance
with the provisions hereof and thereof, or shall prevent the Trustee or any
Paying Agent from applying any moneys deposited with it hereunder to the payment
of the principal of, or premium, if any, or interest on the Notes, in each case
except as otherwise provided in this Article.
SECTION 4.6 EFFECTUATION OF SUBORDINATION BY TRUSTEE. Each Holder of
Notes, by his acceptance thereof, authorizes and directs the Trustee in his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee and the Holders of the Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
any such dissolution, winding up, liquidation or reorganization proceeding
affecting the affairs of the Company is pending or upon a certificate of the
trustee in bankruptcy, receiver, assignee for the benefit of creditors,
liquidating trustee or agent or other Person making any payment or distribution,
delivered to the Trustee or to the Holders of the Notes, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, and as to other facts pertinent to the right of such Persons under
this Article, and if such evidence is not furnished, the Trustee may defer any
payment to such Persons pending judicial determination as to the right of such
Persons to receive such payment.
SECTION 4.7 KNOWLEDGE OF TRUSTEE. Notwithstanding the provisions of this
Article or any other provisions of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any Senior Debt, of any default in
payment of principal, premium (if any) or interest on any Senior Debt, or of any
facts which would prohibit the making of any payment of moneys to or by the
Trustee, or the taking of any other action by the Trustee, unless and until a
Responsible Officer of the Trustee having
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responsibility for the administration of the trust established by this Indenture
shall have received written notice thereof from the Company, any Holder of
Notes, any Paying or Conversion Agent of the Company or the holder or
representative of any class of Senior Debt, and, prior to the receipt of any
such written notice, the Trustee shall be entitled in all respects to assume
that no such default or facts exist; provided, however, that unless on the third
Business Day prior to the date upon which by the terms hereof any such moneys
may become payable for any purpose (other than a payment under Article III) the
Trustee shall have received the notice provided for in this Section 4.7, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such moneys and apply the same to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it on or after such date.
SECTION 4.8 TRUSTEE'S RELATION TO SENIOR DEBT. The Trustee shall be
entitled to all the rights set forth in this Article with respect to any Senior
Debt at the time held by it, to the same extent as any other holder of Senior
Debt and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder.
Nothing in this Article shall apply to claims of or payments to the
Trustee under or pursuant to Section 8.6.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Debt shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Debt and the Trustee shall not be liable to any holder
of Senior Debt if it shall pay over or deliver to Holders, the Company or any
other Person moneys or assets to which any holder of Senior Debt shall be
entitled by virtue of this Article or otherwise.
SECTION 4.9 RIGHTS OF HOLDERS OF SENIOR DEBT NOT IMPAIRED. No right of
any present or future holder of any Senior Debt to enforce the subordination
herein shall at any time or in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
SECTION 4.10 CERTAIN CONVERSIONS NOT DEEMED PAYMENT. For the purposes of
this Article IV only, (1) the issuance and delivery of junior securities upon
conversion of Notes in accordance with Article XV shall not be deemed to
constitute a payment or distribution on account of the principal of, premium, if
any, or interest (including Liquidated Damages, if any) on Notes or on account
of the purchase or other acquisition of Notes, and (2) the payment, issuance or
delivery of cash (except in satisfaction of fractional shares pursuant to
Section 15.2), property or securities (other than junior securities) upon
conversion of a Note shall be deemed to constitute payment on account of the
principal of, premium, if any, or interest (including Liquidated Damages, if
any) on such Note. For the purposes of this Section 4.10, the term "junior
securities" means (a) shares of any stock of any class of the Company or (b)
securities of the Company that are subordinated in right of payment to all
Senior Debt to substantially the same extent as, or to a greater extent than,
the Notes are so subordinated as provided in this Article. Nothing contained in
this Article IV or elsewhere in this Indenture or in the Notes is
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intended to or shall impair, as among the Company, its creditors (other than
holders of Senior Debt) and the Holders, the right, which is absolute and
unconditional, of the holder of any Note to convert such note in accordance with
Article XV.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any (including upon redemption pursuant to
Article III), and interest (including Liquidated Damages, if any) on each of the
Notes at the places, at the respective times and in the manner provided herein
and in the Notes. Each installment of interest on the Notes due on any
semi-annual interest payment date may be paid either (i) by check mailed to the
address of the person entitled thereto as it appears in the Note register;
provided that the holder of Notes with an aggregate principal amount in excess
of $10,000,000 shall, at the written election of such holder, be paid by wire
transfer in immediately available funds; or (ii) by transfer to an account
maintained by such person located in the United States; provided, however, that
payments to the Depositary will be made by wire transfer of immediately
available funds to the account of the Depositary or its nominee.
SECTION 5.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
an office or agency in The Borough of Manhattan, The City of New York, where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office or the office or agency of
the Trustee in The Borough of Manhattan, The City of New York (which shall
initially be located at State Street Bank and Trust Company, N.A., 61 Broadway,
New York, NY 10006, Attention: Corporate Trust (LSI Logic Corporation 4 1/4%
Convertible Subordinated Notes due 2004).
The Company may also from time to time designate co-registrars and one
or more other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice to any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby initially designates the Trustee as paying agent,
Note registrar, Custodian and conversion agent and each of the Corporate Trust
Office of the Trustee and the office or agency of the Trustee in The Borough of
Manhattan, The City of New York (which shall initially be located at State
Street Bank and Trust Company, N.A., 61 Broadway, New York, NY 10006, Attention:
Corporate Trust (LSI Logic Corporation 4 1/4% Convertible Subordinated Notes due
2004)), shall be considered as one such office or agency of the Company for each
of the aforesaid purposes.
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So long as the Trustee is the Note registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the
third paragraph of Section 8.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Notes it can identify from its records.
SECTION 5.3 APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 5.4 PROVISIONS AS TO PAYING AGENT.
(a) If the Company shall appoint a paying agent other than the
Trustee, or if the Trustee shall appoint such a paying agent, it will cause such
paying agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section
5.4:
(1) that it will hold all sums held by it as such agent
for the payment of the principal of and premium, if any, or interest on the
Notes (whether such sums have been paid to it by the Company or by any other
obligor on the Notes) in trust for the benefit of the holders of the Notes;
(2) that it will give the Trustee notice of any failure
by the Company (or by any other obligor on the Notes) to make any payment of the
principal of and premium, if any, or interest on the Notes when the same shall
be due and payable; and
(3) that at any time during the continuance of an Event
of Default, upon request of the Trustee, it will forthwith pay to the Trustee
all sums so held in trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Notes, deposit with the paying agent a sum
in good funds sufficient to pay such principal, premium, if any, or interest,
and (unless such paying agent is the Trustee) the Company will promptly notify
the Trustee of any failure to take such action; provided that if such deposit is
made on the due date, such deposit shall be received by the paying agent by
10:00 a.m. New York City time, on such date.
(b) If the Company shall act as its own paying agent, it will,
on or before each due date of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Notes, set aside, segregate and
hold in trust for the benefit of the holders of the Notes a sum sufficient to
pay such principal, premium, if any, or interest (including Liquidated Damages,
if any) so becoming due and promptly will notify the Trustee of any failure to
take such action and of any failure by the Company (or any other obligor under
the Notes) to make any payment of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Notes when the same shall become
due and payable.
(c) Anything in this Section 5.4 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by the Company or any
paying agent hereunder as required by this Section 5.4, such sums to be held by
the Trustee upon the trusts herein
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contained and upon such payment by the Company or any paying agent to the
Trustee, the Company or such paying agent shall be released from all further
liability with respect to such sums.
(d) Anything in this Section 5.4 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
5.4 is subject to Sections 13.3 and 13.4.
The Trustee shall not be responsible for the actions of any
other paying agents (including the Company if acting as its own paying agent)
and shall have no control of any funds held by such other paying agents.
SECTION 5.5 EXISTENCE. Subject to Article XII, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided, however, that
the Company shall not be required to preserve any such right if the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the holders.
SECTION 5.6 MAINTENANCE OF PROPERTIES. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any subsidiary and
not disadvantageous in any material respect to the holders.
SECTION 5.7 PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all stamps and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with
the issuance, transfer, exchange or conversion of any Notes or with respect to
this Indenture; provided, however, that, in the case of clauses (i) and (ii),
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do so
will not, in the aggregate, have a material adverse impact on the Company, or
(B) if the amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 5.8 RULE 144A INFORMATION REQUIREMENT. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Notes or any Common Stock issued upon conversion thereof
which continue to be Restricted Securities in connection with any sale thereof
and any prospective purchaser of Notes or such Common Stock from
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such holder or beneficial holder, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any holder or beneficial
holder of the Notes or such Common Stock and it will take such further action as
any holder or beneficial holder of such Notes or such Common Stock may
reasonably request, all to the extent required from time to time to enable such
holder or beneficial holder to sell its Notes or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time. Upon the
request of any holder or any beneficial holder of the Notes or such Common
Stock, the Company will deliver to such holder a written statement as to whether
it has complied with such requirements.
SECTION 5.9 STAY, EXTENSION AND USURY LAWS. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest (including Liquidated Damages, if any) on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture, and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.10 COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
the signer may have knowledge.
The Company will deliver to the Trustee, forthwith upon becoming aware
of any default in the performance or observance of any covenant, agreement or
condition contained in this Indenture, or any Event of Default, an Officers'
Certificate specifying with particularity such default or Event of Default and
further stating what action the Company has taken, is taking or proposes to take
with respect thereto.
Any notice required to be given under this Section 5.10 shall be
delivered to the Trustee at its Corporate Trust Office.
ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 6.1 NOTEHOLDERS' LISTS. The Company covenants and agrees that it
will furnish or cause to be furnished to the Trustee, semiannually, not more
than fifteen (15) days after each March 1 and September 1 in each year beginning
with September 1, 1999, and at such other times as the Trustee may
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request in writing, within thirty (30) days after receipt by the Company of any
such request (or such lesser time as the Trustee may reasonably request in order
to enable it to timely provide any notice to be provided by it hereunder), a
list in such form as the Trustee may reasonably require of the names and
addresses of the holders of Notes as of a date not more than fifteen (15) days
(or such other date as the Trustee may reasonably request in order to so provide
any such notices) prior to the time such information is furnished, except that
no such list need be furnished by the Company to the Trustee so long as the
Trustee is acting as the sole Note registrar.
SECTION 6.2 PRESERVATION AND DISCLOSURE OF LISTS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Notes contained in the most recent list furnished to it as provided
in Section 6.1 or maintained by the Trustee in its capacity as Note registrar or
co-registrar in respect of the Notes, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 6.1 upon receipt of a new list so
furnished.
(b) The rights of Noteholders to communicate with other holders
of Notes with respect to their rights under this Indenture or under the Notes,
and the corresponding rights and duties of the Trustee, shall be as provided by
the Trust Indenture Act.
(c) Every Noteholder, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Notes made
pursuant to the Trust Indenture Act.
SECTION 6.3 REPORTS BY TRUSTEE.
(a) Within sixty (60) days after May 15 of each year commencing
with the year 1999, the Trustee shall transmit to holders of Notes such reports
dated as of May 15 of the year in which such reports are made concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of such report shall, at the time of such
transmission to holders of Notes, be filed by the Trustee with each stock
exchange and automated quotation system upon which the Notes are listed and with
the Company. The Company will notify the Trustee in writing within a reasonable
time when the Notes are listed on any stock exchange or automated quotation
system or delisted therefrom.
SECTION 6.4 REPORTS BY COMPANY. The Company shall file with the Trustee
(and the Commission if at any time after the Indenture becomes qualified under
the Trust Indenture Act), and transmit to holders of Notes, such information,
documents and other reports and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act, whether or not the Notes are governed by such Act;
provided that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be
filed with the Trustee within fifteen (15) days after the same is so required to
be filed with the Commission. Delivery of such reports, information and
documents to the Trustee is for
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informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE VII
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS UPON AN EVENT OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of any installment of interest
(including Liquidated Damages, if any) upon any of the Notes as and when the
same shall become due and payable, and continuance of such default for a period
of thirty (30) days, whether or not such payment is permitted under Article IV
hereof; or
(b) default in the payment of the principal of or premium, if
any, on any of the Notes as and when the same shall become due and payable
either at maturity or in connection with any redemption pursuant to Article III,
by acceleration or otherwise, whether or not such payment is permitted under
Article IV hereof; or
(c) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the Company in
the Notes or in this Indenture (other than a covenant or agreement a default in
whose performance or whose breach is elsewhere in this Section 7.1 specifically
dealt with) continued for a period of sixty (60) days after the date on which
written notice of such failure, requiring the Company to remedy the same, shall
have been given to the Company by the Trustee, or to the Company and a
Responsible Officer of the Trustee by the holders of at least twenty-five
percent (25%) in aggregate principal amount of the Notes at the time outstanding
determined in accordance with Section 9.4; or
(d) the Company or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or any Significant Subsidiary or its or such
Significant Subsidiary's debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
Significant Subsidiary or any substantial part of the property of the Company or
any Significant Subsidiary, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it or any Significant Subsidiary, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; or
(e) an involuntary case or other proceeding shall be commenced
against the Company or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or any
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Significant Subsidiary or its or such Significant Subsidiary's debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any Significant Subsidiary or any substantial part of
the property of the Company or any Significant Subsidiary, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a period of
ninety (90) consecutive days; then, and in each and every such case (other than
an Event of Default specified in Section 7.1 (d) or (e) with respect to the
Company), unless the principal of all of the Notes shall have already become due
and payable, either the Trustee or the holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Notes then outstanding
hereunder determined in accordance with Section 9.4, by notice in writing to the
Company (and to the Trustee if given by Noteholders), may declare the principal
of and premium, if any, on all the Notes and the unpaid interest accrued thereon
(including Liquidated Damages, if any) to be due and payable immediately, and
upon any such declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Notes contained to the contrary
notwithstanding. If an Event of Default specified in Section 7.1(d) or (e) with
respect to the Company occurs, the principal of all the Notes and the unpaid
interest accrued thereon shall (including Liquidated Damages, if any) be
immediately and automatically due and payable without necessity of further
action. This provision, however, is subject to the conditions that if, at any
time after the principal of the Notes shall have been so declared due and
payable, and before any judgment or decree for the payment of the monies due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon (including Liquidated Damages, if any) all Notes
and the principal of and premium, if any, on any and all Notes which shall have
become due otherwise than by acceleration (with interest on overdue installments
of interest (including Liquidated Damages, if any) (to the extent that payment
of such interest is enforceable under applicable law) and on such principal and
premium, if any, at the rate borne by the Notes, to the date of such payment or
deposit) and amounts due to the Trustee pursuant to Section 8.6, and if any and
all defaults under this Indenture, other than the nonpayment of principal of and
premium, if any, and accrued but unpaid interest on (including Liquidated
Damages, if any) Notes which shall have become due by acceleration, shall have
been cured or waived pursuant to Section 7.7 -- then and in every such case the
holders of a majority in aggregate principal amount of the Notes then
outstanding, by written notice to the Company and to the Trustee, may waive all
defaults or Events of Default and rescind and annul such declaration and its
consequences; but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or Event of Default, or shall impair any
right consequent thereon. The Company shall notify a Responsible Officer of the
Trustee in writing, promptly upon becoming aware thereof, of any Event of
Default.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been taken.
SECTION 7.2 PAYMENTS OF NOTES ON DEFAULT; SUIT THEREFOR. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon (including Liquidated Damages, if any) any of the
Notes as and when the same shall become due and payable, and such default
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shall have continued for a period of thirty (30) days, or (b) in case default
shall be made in the payment of the principal of or premium, if any, on any of
the Notes as and when the same shall have become due and payable, whether at
maturity of the Notes or in connection with any redemption, by or under this
Indenture declaration or otherwise -- then, upon demand of the Trustee, the
Company will pay to the Trustee, for the benefit of the holders of the Notes,
the whole amount that then shall have become due and payable on all such Notes
for principal and premium, if any, or interest (including Liquidated Damages, if
any), as the case may be, with interest upon the overdue principal and premium,
if any, and (to the extent that payment of such interest is enforceable under
applicable law) upon the overdue installments of interest (including Liquidated
Damages, if any) at the rate borne by the Notes; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee, its agents,
attorneys and counsel, and other amounts due the Trustee under Section 8.6.
Until such demand by the Trustee, the Company may pay the principal of and
premium, if any, and interest on (including Liquidated Damages, if any) the
Notes to the registered holders, whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In the case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest (including Liquidated Damages, if any) owing and unpaid in
respect of the Notes, and, in case of any judicial proceedings, to file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and of the Noteholders allowed in
such judicial proceedings relative to the Company or any other obligor on the
Notes, its or their creditors, or its or their property, and to collect and
receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of any amounts due the Trustee
under Section 8.6; and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby authorized
by each of the Noteholders to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly to
the Noteholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees
incurred by it up to the date of such distribution. To the extent that such
payment of reasonable compensation, expenses, advances and disbursements out of
the estate in any such proceedings shall be denied for any reason, payment of
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the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, monies, securities and other property which the
holders of the Notes may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.
SECTION 7.3 APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to this Article VII shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 8.6;
SECOND: Subject to the provisions of Article IV, in case the
principal of the outstanding Notes shall not have become due and be
unpaid, to the payment of accrued but unpaid interest on (including
Liquidated Damages, if any) the Notes in default in the order of the
maturity of the installments of such interest, with interest (to the
extent that such interest has been collected by the Trustee) upon the
overdue installments of interest (including Liquidated Damages, if any)
at the rate borne by the Notes, such payments to be made ratably to the
persons entitled thereto;
THIRD: Subject to the provisions of Article IV, in case the
principal of the outstanding Notes shall have become due, by declaration
or otherwise, and be unpaid to the payment of the whole amount then
owing and unpaid upon the Notes for principal and premium, if any, and
accrued but unpaid interest (including Liquidated Damages, if any), with
interest on the overdue principal and premium, if any, and (to the
extent that such interest has been collected by the Trustee) upon
overdue installments of interest (including Liquidated Damages, if any)
at the rate borne by the Notes; and in case such monies shall be
insufficient to pay in full the whole amounts so due and unpaid upon the
Notes, then to the payment of such principal and premium, if any, and
interest (including Liquidated Damages, if any) without preference or
priority of principal and premium, if any, over interest (including
Liquidated Damages, if any), or of interest (including Liquidated
Damages, if any) over principal and premium, if any, or of any
installment of interest over any other installment of interest, or of
any Note over any other Note, ratably to the aggregate of such principal
and premium, if any, and accrued and unpaid interest; and
FOURTH: Subject to the provisions of Article IV, to the payment
of the remainder, if any, to the Company or any other person lawfully
entitled thereto.
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SECTION 7.4 PROCEEDINGS BY NOTEHOLDER. No holder of any Note shall have
any right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than twenty-five percent (25%)
in aggregate principal amount of the Notes then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for sixty (60)
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 7.7; it being understood and intended, and being
expressly covenanted by the taker and holder of every Note with every other
taker and holder and the Trustee, that no one or more holders of Notes shall
have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Notes, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Notes (except as otherwise provided herein).
For the protection and enforcement of this Section 7.4, each and every
Noteholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any (including upon redemption pursuant to Article
III), and accrued interest on (including Liquidated Damages, if any) such Note,
on or after the respective due dates expressed in such Note or in the event of
redemption, or to institute suit for the enforcement of any such payment on or
after such respective dates against the Company shall not be impaired or
affected without the consent of such holder.
Anything in this Indenture or the Notes to the contrary notwithstanding,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in its own behalf and for its own benefit, may enforce, and
may institute and maintain any proceeding suitable to enforce, its rights of
conversion as provided herein.
SECTION 7.5 PROCEEDINGS BY TRUSTEE. In case of an Event of Default the
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
SECTION 7.6 REMEDIES CUMULATIVE AND CONTINUING. Except as provided in
Section 2.6, all powers and remedies given by this Article VII to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies available
to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to
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enforce the performance or observance of the covenants and agreements contained
in this Indenture, and no delay or omission of the Trustee or of any holder of
any of the Notes to exercise any right or power accruing upon any default or
Event of Default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such default or any
acquiescence therein; and, subject to the provisions of Section 7.4, every power
and remedy given by this Article VII or by law to the Trustee or to the
Noteholders may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Noteholders.
SECTION 7.7 DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY
OF NOTEHOLDERS. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 9.4 shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided, however, that (a) such direction shall
not be in conflict with any rule of law or with this Indenture, (b) the Trustee
may take any other action which is not inconsistent with such direction and (c)
the Trustee may decline to take any action that would benefit some Noteholder to
the detriment of other Noteholders. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.4 may on behalf of the holders of all of the Notes waive any past
default or Event of Default hereunder and its consequences except (i) a default
in the payment of interest or premium, if any, on, or the principal of, the
Notes, (ii) a failure by the Company on request to convert any Notes into Common
Stock, (iii) a default in the payment of redemption price pursuant to Article
III or (iv) a default in respect of a covenant or provisions hereof which under
Article XI cannot be modified or amended without the consent of the holders of
all Notes then outstanding or affected thereby. Upon any such waiver, the
Company, the Trustee and the holders of the Notes shall be restored to their
former positions and rights hereunder; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Whenever any default or Event of Default hereunder shall have been
waived as permitted by this Section 7.7, said default or Event of Default shall
for all purposes of the Notes and this Indenture be deemed to have been cured
and to be not continuing; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 7.8 NOTICE OF DEFAULTS. The Trustee shall, within ninety (90)
days after a Responsible Officer of the Trustee has knowledge of the occurrence
of a default, mail to all Noteholders, as the names and addresses of such
holders appear upon the Note register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; and provided that, except in the case of default in
the payment of the principal of, or premium, if any, or interest (including
Liquidated Damages, if any) on any of the Notes, the Trustee shall be protected
in withholding such notice if and so long as a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Noteholders.
SECTION 7.9 UNDERTAKING TO PAY COSTS. All parties to this Indenture
agree, and each holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the
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merits and good faith of the claims or defenses made by such party litigant;
provided that the provisions of this Section 7.9 (to the extent permitted by
law) shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Noteholder, or group of Noteholders, holding in the aggregate
more than ten percent in principal amount of the Notes at the time outstanding
determined in accordance with Section 9.4, or to any suit instituted by any
Noteholder for the enforcement of the payment of the principal of or premium, if
any, or interest on any Note on or after the due date expressed in such Note or
to any suit for the enforcement of the right to convert any Note in accordance
with the provisions of Article XV.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1 DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior
to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and the Trust
Indenture Act, and the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture and the
Trust Indenture Act against the Trustee; and
(2) in the absence of bad faith and willful misconduct
on the part of the Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the Trustee, unless
the Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the written
direction of the holders of not less than a majority
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in principal amount of the Notes at the time outstanding determined as provided
in Section 9.4 relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture;
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of any payment
(as to the correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any paying agent or
any records maintained by any co-registrar with respect to the Notes; and
(f) if any party fails to deliver a notice relating to an event
the fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
SECTION 8.2 RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise
provided in Section 8.1:
(a) the Trustee may rely and shall be protected in acting upon
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon or other paper or
document believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically prescribed);
and any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
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consent, order, bond, debenture or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney; and
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed by it with due care
hereunder.
SECTION 8.3 NO RESPONSIBILITY FOR RECITALS, ETC. The recitals contained
herein and in the Notes (except in the Trustee's certificate of authentication)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
SECTION 8.4 TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY
OWN NOTES. The Trustee, any paying agent, any conversion agent or Note
registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.
SECTION 8.5 MONIES TO BE HELD IN TRUST. Subject to the provisions of
Section 13.4 and Section 4.2, all monies received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as may be agreed from time to time in writing by the Company and the
Trustee.
SECTION 8.6 COMPENSATION AND EXPENSES OF TRUSTEE. The Company covenants
and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by it hereunder
in any capacity (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) as mutually agreed to in
writing between the Company and the Trustee, and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee (or any officer,
director or employee of the Trustee) in any capacity under this Indenture and
its agents and any authenticating agent for, and to hold them harmless against,
any loss, liability or expense incurred without negligence, willful misconduct,
recklessness, or bad faith on the part of the Trustee or such officers,
directors, employees and agent or authenticating agent, as the case may be, and
arising out of or in connection with the acceptance or administration of this
trust or in any other capacity hereunder, including the costs and expenses of
defending themselves against any claim of liability in the premises. The
obligations of the Company under this Section 8.6 to compensate or indemnify the
Trustee and to pay or reimburse the Trustee for
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expenses, disbursements and advances shall be secured by a lien prior to that of
the Notes upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular Notes.
The obligation of the Company under this Section shall survive the satisfaction
and discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
7.1(d) or (e) with respect to the Company occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.
SECTION 8.7 OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise
provided in Section 8.1, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence, willful misconduct, recklessness,
or bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee.
SECTION 8.8 CONFLICTING INTERESTS OF TRUSTEE. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
SECTION 8.9 ELIGIBILITY OF TRUSTEE. There shall at all times be a
Trustee hereunder which shall be a person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 8.10 RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign by giving written notice
of such resignation to the Company and to the holders of Notes. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment sixty (60) days after the
mailing of such notice of resignation to the Noteholders, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Noteholder who has been a bona fide holder of a Note
or Notes for at least six (6) months may, subject to the provisions of Section
7.9, on behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.
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(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with Section 8.8
after written request therefor by the Company or by any Noteholder who has been
a bona fide holder of a Note or Notes for at least six (6) months; or
(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.9 and shall fail to resign after written
request therefor by the Company or by any such Noteholder; or
(3) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.9, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee; provided that
if no successor trustee shall have been appointed and have accepted appointment
sixty (60) days after either the Company or the Noteholders has removed the
Trustee, the Trustee so removed may petition any court of competent jurisdiction
for an appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of
the Notes at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten (10) days after notice to the Company of such
nomination the Company objects thereto, in which case the Trustee so removed or
any Noteholder, or if such Trustee so removed or any Noteholder fails to act,
the Company, upon the terms and conditions and otherwise as in Section 8.10(a)
provided, may petition any court of competent jurisdiction for an appointment of
a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of
a successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.
SECTION 8.11 ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the provisions of Section
8.6, execute and deliver an instrument
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transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act. Upon request of any such successor trustee, the Company shall
execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor trustee all such rights and powers. Any
trustee ceasing to act shall, nevertheless, retain a lien upon all property and
funds held or collected by such trustee as such, except for funds held in trust
for the benefit of holders of particular Notes, to secure any amounts then due
it pursuant to the provisions of Section 8.6.
No successor trustee shall accept appointment as provided in this
Section 8.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note register. If the Company fails to mail such notice within ten
(10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
SECTION 8.12 SUCCESSION BY MERGER, ETC. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee such
corporation shall be qualified under the provisions of Section 8.8 and eligible
under the provisions of Section 8.9.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or any authenticating agent appointed by such successor
trustee may authenticate such Notes in the name of the successor trustee; and in
all such cases such certificates shall have the full force that is provided in
the Notes or in this Indenture; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or authenticate Notes
in the name of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
SECTION 8.13 PREFERENTIAL COLLECTION OF CLAIMS. If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the
Notes), the Trustee shall be subject to the provisions of the Trust Indenture
Act regarding the collection of the claims against the Company (or any such
other obligor).
SECTION 8.14 TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY.
Any application by the Trustee for written instructions from the Company (other
than with regard to any action proposed to be taken or omitted to be taken by
the Trustee that affects the rights of the holders of the Notes or holders
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of Senior Indebtedness under this Indenture, including, without limitation,
under Article IV hereof) may, at the option of the Trustee, set forth in writing
any action proposed to be taken or omitted by the Trustee under this Indenture
and the date on and/or after which such action shall be taken or such omission
shall be effective. The Trustee shall not be liable for any action taken by, or
omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than three (3) Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such action
(or the effective date in the case of an omission), the Trustee shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
ARTICLE IX
CONCERNING THE NOTEHOLDERS
SECTION 9.1 ACTION BY NOTEHOLDERS. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article X, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.
SECTION 9.2 PROOF OF EXECUTION BY NOTEHOLDERS. Subject to the provisions
of Sections 8.1, 8.2 and 10.5, proof of the execution of any instrument by a
Noteholder or its agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. The holding of Notes shall
be proved by the registry of such Notes or by a certificate of the Note
registrar.
The record of any Noteholders' meeting shall be proved in the manner
provided in Section 10.6.
SECTION 9.3 WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the Trustee,
any paying agent, any conversion agent and any Note registrar may deem the
person in whose name such Note shall be registered upon the Note register to be,
and may treat it as, the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of, premium, if any, and interest on such Note, for conversion of such Note and
for all other purposes; and neither the Company nor the Trustee nor any paying
agent nor any conversion agent nor any Note registrar shall be affected by any
notice to the contrary. All such payments so made to any holder for the time
being, or upon his order,
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shall be valid, and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for monies payable upon any such Note.
SECTION 9.4 COMPANY-OWNED NOTES DISREGARDED. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes which
are owned by the Company or any other obligor on the Notes or any Affiliate of
the Company or of any other obligor on the Notes shall be disregarded and deemed
not to be outstanding for the purpose of any such determination; provided that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, consent, waiver or other action only Notes which
a Responsible Officer knows are so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section 9.4 if the pledgee shall establish to the satisfaction
of the Trustee the pledgee's right to vote such Notes and that the pledgee is
not the Company, any other obligor on the Notes or any Affiliate of the Company
or of any such other obligor. In the case of a dispute as to such right, any
decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Notes, if any, known by the Company to be owned or held by or for the
account of any of the above described persons; and, subject to Section 8.1, the
Trustee shall be entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Notes not
listed therein are outstanding for the purpose of any such determination.
SECTION 9.5 REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 9.2, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.
ARTICLE X
NOTEHOLDERS' MEETINGS
SECTION 10.1 PURPOSE OF MEETINGS. A meeting of Noteholders may be called
at any time and from time to time pursuant to the provisions of this Article X
for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to
give any directions to the Trustee permitted under this Indenture, or to consent
to the waiving of any default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by Noteholders
pursuant to any of the provisions of Article VII;
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(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article VIII;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2; or
(4) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount of the Notes
under any other provision of this Indenture or under applicable law.
SECTION 10.2 CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place as the Trustee shall determine. Notice of
every meeting of the Noteholders, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting and
the establishment of any record date pursuant to Section 9.1, shall be mailed to
holders of Notes at their addresses as they shall appear on the Note register.
Such notice shall also be mailed to the Company. Such notices shall be mailed
not less than twenty (20) nor more than ninety (90) days prior to the date fixed
for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders
of all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
SECTION 10.3 CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS. In case at any
time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent (10%) in aggregate principal amount of the Notes
then outstanding, shall have requested the Trustee to call a meeting of
Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within twenty (20) days after receipt of such request,
then the Company or such Noteholders may determine the time and the place for
such meeting and may call such meeting to take any action authorized in Section
10.1, by mailing notice thereof as provided in Section 10.2.
SECTION 10.4 QUALIFICATIONS FOR VOTING. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting, or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes, on the record
date pertaining to such meeting. The only persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the persons entitled
to vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.
SECTION 10.5 REGULATIONS. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
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The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.
Subject to the provisions of Section 9.4, at any meeting each Noteholder
or proxyholder shall be entitled to one vote for each $1,000 principal amount of
Notes held or represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Note challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The chairman of
the meeting shall have no right to vote other than by virtue of Notes held by
him or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Noteholders. Any meeting of Noteholders duly called
pursuant to the provisions of Section 10.2 or 10.3 may be adjourned from time to
time by the holders of a majority of the aggregate principal amount of Notes
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
SECTION 10.6 VOTING. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the outstanding principal amount of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 10.2 or Section 10.3. The record shall show the principal
amount of the Notes voting in favor of or against any resolution. The record
shall be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 10.7 NO DELAY OF RIGHTS BY MEETING. Nothing in this Article X
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any right
or rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.
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ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 11.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS. The
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of
the holders of Notes pursuant to the requirements of Section 15.6 and the
redemption obligations of the Company pursuant to the requirements of Section
3.5(e);
(b) subject to Article IV, to convey, transfer, assign, mortgage
or pledge to the Trustee as security for the Notes, any property or assets;
(c) to evidence the succession of another person to the Company,
or successive successions, and the assumption by the successor person of the
covenants, agreements and obligations of the Company pursuant to Article XII;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the Trustee
shall consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to provide
for exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture that shall not materially adversely
affect the interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualifications of
this Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted.
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Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.2.
Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.
SECTION 11.2 SUPPLEMENTAL INDENTURE WITH CONSENT OF NOTEHOLDERS. With
the consent (evidenced as provided in Article IX) of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Notes; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
thereof, or impair the right of any Noteholder to institute suit for the payment
thereof, or make the principal thereof or interest or premium, if any, thereon
payable in any coin or currency other than that provided in the Notes, or modify
the provisions of this Indenture with respect to the subordination of the Notes
in a manner materially adverse to the Noteholders, or change the obligation of
the Company to redeem any Note upon the happening of a Fundamental Change in a
manner adverse to the holder of Notes, or impair the right to convert the Notes
into Common Stock subject to the terms set forth herein, including Section 15.6,
in each case, without the consent of the holder of each Note so affected, or
(ii) reduce the aforesaid percentage of Notes, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of all Notes then outstanding.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
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SECTION 11.3 EFFECT OF SUPPLEMENTAL INDENTURE. Any supplemental
indenture executed pursuant to the provisions of this Article XI shall comply
with the Trust Indenture Act, as then in effect; provided that this Section 11.3
shall not require such supplemental indenture or the Trustee to be qualified
under the Trust Indenture Act prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act, nor shall it constitute any admission
or acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article XI, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 11.4 NOTATION ON NOTES. Notes authenticated and delivered after
the execution of any supplemental indenture pursuant to the provisions of this
Article XI may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any modification of this Indenture contained in
any such supplemental indenture may, at the Company's expense, be prepared and
executed by the Company, authenticated by the Trustee (or an authenticating
agent duly appointed by the Trustee pursuant to Section 16.11) and delivered in
exchange for the Notes then outstanding, upon surrender of such Notes then
outstanding.
SECTION 11.5 EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TRUSTEE. Prior to entering into any supplemental indenture, the
Trustee may request an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article XI.
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.1 COMPANY MAY CONSOLIDATE ETC. ON CERTAIN TERMS. Subject to
the provisions of Section 12.2, nothing contained in this Indenture or in any of
the Notes shall prevent any consolidation or merger of the Company with or into
any other person or persons (whether or not affiliated with the Company), or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance or
lease (or successive sales, conveyances or leases) of all or substantially all
of the property of the Company, to any other person (whether or not affiliated
with the Company), authorized to acquire and operate the same and that shall be
organized under the laws of the United States of America, any state thereof or
the District of Columbia; provided that upon any such consolidation, merger,
sale, conveyance or lease, the due and punctual payment of the principal of and
premium, if any, and interest (including Liquidated Damages, if any) on all of
the Notes, according to their tenor, and the due and punctual performance and
observance of all of the covenants and
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conditions of this Indenture to be performed by the Company, shall be expressly
assumed, by supplemental indenture satisfactory in form to the Trustee, executed
and delivered to the Trustee by the person (if other than the Company) formed by
such consolidation, or into which the Company shall have been merged, or by the
person that shall have acquired or leased such property, and such supplemental
indenture shall provide for the applicable conversion rights set forth in
Section 15.6.
SECTION 12.2 SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Notes and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor person shall succeed to
and be substituted for the Company, with the same effect as if it had been named
herein as the party of the first part. Such successor person thereupon may cause
to be signed, and may issue either in its own name or in the name of LSI Logic
Corporation any or all of the Notes issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee; and, upon the
order of such successor person instead of the Company and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver, or cause to be authenticated and
delivered, any Notes which previously shall have been signed and delivered by
the officers of the Company to the Trustee for authentication, and any Notes
which such successor person thereafter shall cause to be signed and delivered to
the Trustee for that purpose. All the Notes so issued shall in all respects have
the same legal rank and benefit under this Indenture as the Notes theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Notes had been issued at the date of the execution hereof. In the event
of any such consolidation, merger, sale, conveyance or lease, the person named
as the "Company" in the first paragraph of this Indenture or any successor which
shall thereafter have become such in the manner prescribed in this Article XII
may be dissolved, wound up and liquidated at any time thereafter and such person
shall be released from its liabilities as obligor and maker of the Notes and
from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate.
SECTION 12.3 OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.1 DISCHARGE OF INDENTURE. When (a) the Company shall deliver
to the Trustee for cancellation all Notes theretofore authenticated (other than
any Notes which have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within
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one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee, in trust, funds sufficient to pay at
maturity or upon redemption of all of the Notes (other than any Notes which
shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
not theretofore canceled or delivered to the Trustee for cancellation, including
principal and premium, if any, and interest due or to become due to such date of
maturity or redemption date, as the case may be, accompanied by a verification
report, as to the sufficiency of the deposited amount, from an independent
certified accountant or other financial professional satisfactory to the
Trustee, and if the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to (i) remaining rights of registration of transfer,
substitution and exchange and conversion of Notes, (ii) rights hereunder of
Noteholders to receive payments of principal of and premium, if any, and
interest on, the Notes and the other rights, duties and obligations of
Noteholders, as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights, obligations and immunities of
the Trustee hereunder), and the Trustee, on written demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel as required by
Section 16.5 and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture; the
Company, however, hereby agreeing to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Notes.
SECTION 13.2 DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. Subject to
Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1,
provided such deposit was not in violation of Article IV, shall be held in trust
for the sole benefit of the Noteholders and not to be subject to the
subordination provisions of Article IV, and such monies shall be applied by the
Trustee to the payment, either directly or through any paying agent (including
the Company if acting as its own paying agent), to the holders of the particular
Notes for the payment or redemption of which such monies have been deposited
with the Trustee, of all sums due and to become due thereon for principal and
interest and premium, if any.
SECTION 13.3 PAYING AGENT TO REPAY MONIES HELD. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon written request of the Company, be
repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
SECTION 13.4 RETURN OF UNCLAIMED MONIES. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Notes shall thereafter look
only to the Company for any payment which such holder may be entitled to collect
unless an applicable abandoned property law designates another person.
SECTION 13.5 REINSTATEMENT. If the Trustee or the paying agent is unable
to apply any money in accordance with Section 13.2 by reason of any order or
judgment of any court or governmental
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authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 13.1 until such
time as the Trustee or the paying agent is permitted to apply all such money in
accordance with Section 13.2; provided, however, that if the Company makes any
payment of interest on or principal of any Note following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the holders of
such Notes to receive such payment from the money held by the Trustee or paying
agent.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.1 INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal of or premium, if any, or interest on
any Note, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, or director or subsidiary,
as such, past, present or future, of the Company or of any successor person,
either directly or through the Company or any successor person, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes.
ARTICLE XV
CONVERSION OF NOTES
SECTION 15.1 RIGHT TO CONVERT. Subject to and upon compliance with the
provisions of this Indenture, including without limitation Article IV, the
holder of any Note shall have the right, at its option, at any time after
original issuance thereof through the close of business on the final maturity
date of the Notes (except that, with respect to any Note or portion of a Note
which shall be called for redemption, such right shall terminate, except as
provided in Section 15.2 or Section 3.4, at the close of business on the
Business Day next preceding the date fixed for redemption of such Note or
portion of a Note unless the Company shall default in payment due upon
redemption thereof) to convert the principal amount of any such Note, or any
portion of such principal amount which is $1,000 or an integral multiple
thereof, into that number of fully paid and non-assessable shares of Common
Stock (as such shares shall then be constituted) obtained by dividing the
principal amount of the Note or portion thereof surrendered for conversion by
the Conversion Price in effect at such time, by surrender of the Note so to be
converted in whole or in part in the manner provided, together with any required
funds, in Section 15.2. A Note in respect of which a holder is exercising its
option to require redemption upon a Fundamental Change pursuant to Section 3.5
may be converted only if such holder withdraws its election to exercise in
accordance with Section 3.5. A holder of Notes is not entitled to any rights of
a holder of Common Stock until such holder has converted his Notes to Common
Stock, and only to the extent such Notes are deemed to have been converted to
Common Stock under this Article XV.
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SECTION 15.2 EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK
ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to exercise the
conversion privilege with respect to any Note in certificated form, the holder
of any such Note to be converted in whole or in part shall surrender such Note,
duly endorsed, at an office or agency maintained by the Company pursuant to
Section 5.2, accompanied by the funds, if any, required by the penultimate
paragraph of this Section 15.2, and shall give written notice of conversion in
the form provided on the Notes (or such other notice which is acceptable to the
Company) to the office or agency that the holder elects to convert such Note or
the portion thereof specified in said notice. Such notice shall also state the
name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued, and shall be accompanied by transfer taxes, if
required pursuant to Section 15.7. Each such Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same
name as the registration of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any
interest in a Note in global form, the holder must complete the appropriate
instruction form for conversion pursuant to the Depository's book-entry
conversion program, deliver by book-entry delivery an interest in such Note in
global form, furnish appropriate endorsements and transfer documents if required
by the Company or the Trustee or conversion agent, and pay the funds, if any,
required by this Section 15.2 and any transfer taxes if required pursuant to
Section 15.7.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such holder at the office or agency maintained by the Company for such purpose
pursuant to Section 5.2, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Note or portion
thereof in accordance with the provisions of this Article and a check or cash in
respect of any fractional interest in respect of a share of Common Stock arising
upon such conversion, as provided in Section 15.3. In case any Note of a
denomination greater than $1,000 shall be surrendered for partial conversion,
and subject to Section 2.3, the Company shall execute and the Trustee shall
authenticate and deliver to the holder of the Note so surrendered, without
charge to him, a new Note or Notes in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the date on which the requirements set forth above
in this Section 15.2 have been satisfied as to such Note (or portion thereof),
and the person in whose name any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.
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Any Note or portion thereof surrendered for conversion during the period
from the close of business on the record date for any interest payment date to
the close of business on the Business Day next preceding the following interest
payment date shall (unless such Note or portion thereof being converted shall
have been called for redemption) be accompanied by payment, in New York Clearing
House funds or other funds acceptable to the Company, of an amount equal to the
accrued but unpaid interest otherwise payable on such interest payment date on
the principal amount being converted. Except as provided above in this Section
15.2, no payment or other adjustment shall be made for unpaid interest accrued
on any Note converted or for unpaid dividends on any shares issued upon the
conversion of such Note as provided in this Article.
Upon the conversion of an interest in a Note in global form, the Trustee
(or other conversion agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other conversion agent appointed by the Company),
shall make a notation on such Note in global form as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in
writing of any conversions of Notes effected through any conversion agent other
than the Trustee.
SECTION 15.3 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Notes. If more than one Note shall be surrendered for
conversion at one time by the same holder, the number of full shares which shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of stock would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment and payment therefor in cash at the current market price thereof to
the holder of Notes. The current market price of a share of Common Stock shall
be the Closing Price on the last Business Day immediately preceding the day on
which the Notes (or specified portions thereof) are deemed to have been
converted.
SECTION 15.4 CONVERSION PRICE. The conversion price shall be as
specified in the form of Note (herein called the "Conversion Price") attached as
Exhibit A hereto, subject to adjustment as provided in this Article XV.
SECTION 15.5 ADJUSTMENT OF CONVERSION PRICE. The Conversion Price shall
be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
next following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 15.5(a) is declared but not so paid or made,
the Conversion Price shall again be
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adjusted to the Conversion Price that would then be in effect if such dividend
or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined below) on the date fixed for determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date fixed
for determination of stockholders entitled to receive such rights or warrants by
a fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for determination of
stockholders entitled to receive such rights and warrants plus the number of
shares which the aggregate offering price of the total number of shares so
offered would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Common Stock outstanding on the
date fixed for determination of stockholders entitled to receive such rights and
warrants plus the total number of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall be successively made whenever
any such rights and warrants are issued, and shall become effective immediately
after the opening of business on the day next following the date fixed for
determination of stockholders entitled to receive such rights or warrants. To
the extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants, the value of
such consideration, if other than cash, to be determined by the Board of
Directors (whose determination shall be conclusive and described in a resolution
of the Board of Directors).
(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day next following the day upon
which such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day next following the day upon which such
combination becomes effective shall be proportionately increased, such reduction
or increase, as the case may be, to become effective immediately after the
opening of business on the day next following the day upon which such
subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company (other than any dividends or distributions to which Section
15.5(a) applies) or evidences of its indebtedness or assets (including
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securities, but excluding any rights or warrants referred to in Section 15.5(b),
and excluding any dividend or distribution (x) paid exclusively in cash or (y)
referred to in Section 15.5(a) (any of the foregoing hereinafter in this Section
15.5(d) called the "Securities")), then, in each such case (unless the Company
elects to reserve such Securities for distribution to the Noteholders upon the
conversion of the Notes so that any such holder converting Notes will receive
upon such conversion, in addition to the shares of Common Stock to which such
holder is entitled, the amount and kind of such Securities which such holder
would have received if such holder had converted its Notes into Common Stock
immediately prior to the Record Date (as defined in Section 15.5(h) for such
distribution of the Securities)), the Conversion Price shall be reduced so that
the same shall be equal to the price determined by multiplying the Conversion
Price in effect on the Record Date with respect to such distribution by a
fraction of which the numerator shall be the Current Market Price per share of
the Common Stock on such Record Date less the fair market value (as determined
by the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board if Directors) on such Record Date of the
portion of the Securities so distributed applicable to one share of Common Stock
and the denominator shall be the Current Market Price per share of the Common
Stock on such Record Date, such reduction to become effective immediately prior
to the opening of business on the day next following such Record Date; provided,
however, that in the event the then fair market value (as so determined) of the
portion of the Securities so distributed applicable to one share of Common Stock
is equal to or greater than the Current Market Price per share of the Common
Stock on such Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Noteholder shall have the right to receive
upon conversion the amount of Securities such holder would have received had
such holder converted each Note on such Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 15.5(d) by reference to the actual or when issued trading market for any
securities, it must in doing so consider the prices in such market over the same
period used in computing the Current Market Price of the Common Stock.
Under the provisions of the Company's Preferred Shares Rights Plan (the
"Rights Plan"), upon conversion of the Notes into Common Stock, to the extent
that the Rights Plan is still in effect upon such conversion, the holders of
Notes will receive, in addition to the Common Stock, the rights described
therein (whether or not the rights have separated from the Common Stock at the
time of conversion), subject to the limitations set forth in the Rights Plan.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.5 (and no adjustment to the Conversion Price under
this Section 15.5 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 15.5(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such
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event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 15.5 was made, (1) in the case of any such
rights or warrants which shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Price shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants which shall have expired or been terminated without exercise by any
holders thereof, the Conversion Price shall be readjusted as if such rights and
warrants had not been issued.
For purposes of this Section 15.5(d) and Sections 15.5(a) and (b), any
dividend or distribution to which this Section 15.5(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants to
purchase shares of Common Stock (and any Conversion Price reduction required by
this Section 15.5(d) with respect to such dividend or distribution shall then be
made) immediately followed by (2) a dividend or distribution of such shares of
Common Stock or such rights or warrants (and any further Conversion Price
reduction required by Sections 15.5(a) and (b) with respect to such dividend or
distribution shall then be made), except (A) the Record Date of such dividend or
distribution shall be substituted as "the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution" and "the
date fixed for such determination" within the meaning of Sections 15.5(a) and
(b) and (B) any shares of Common Stock included in such dividend or distribution
shall not be deemed "outstanding at the close of business on the date fixed for
such determination" within the meaning of Section 15.5(a).
(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (x) any quarterly
cash dividend on the Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any fiscal quarter does not exceed the greater of (A)
the amount per share of Common Stock of the next preceding quarterly cash
dividend on the Common Stock to the extent that such preceding quarterly
dividend did not require any adjustment of the Conversion Price pursuant to this
Section 15.5(e) (as adjusted to reflect subdivisions or combinations of the
Common Stock), and (B) 3.75% of the arithmetic average of the Closing Price
(determined as set forth in Section 15.5(h)) during the ten Trading Days (as
defined in Section 15.5(h)) immediately prior to the date of declaration of such
dividend, and (y) any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary), then, in such case, the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the Record Date for such
dividend or distribution, as the case may be, by a fraction the numerator of
which shall be the Current Market Price of the Common Stock on such Record Date
less the amount of cash so distributed (and not excluded as provided above)
applicable to one share of Common Stock and the denominator shall be such
Current Market Price of the Common Stock, such reduction to be effective
immediately
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prior to the opening of business on the day next following such Record Date;
provided, however, that in the event the portion of the cash so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price of the Common Stock on such Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Noteholder shall have
the right to receive upon conversion the amount of cash such holder would have
received had such holder converted each Note on such Record Date. In the event
that such dividend or distribution is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in effect
if such dividend or distribution had not been declared. If any adjustment is
required to be made as set forth in this Section 15.5(e) as a result of a
distribution that is a quarterly dividend, such adjustment shall be based upon
the amount by which such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded pursuant hereto. If an adjustment is required
to be made as set forth in this Section 15.5(e) above as a result of a
distribution that is not a quarterly dividend, such adjustment shall be based
upon the full amount of the distribution.
(f) In case a tender or exchange offer made by the Company or
any Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors)
that as of the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended) exceeds
the Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) at the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day next following
the Expiration Time. In the event that the Company is obligated to purchase
shares pursuant to any such tender or exchange offer, but the Company is
permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such tender or exchange
offer had not been made.
(g) In case of a tender or exchange offer made by a person
other than the Company or any Subsidiary for an amount which increases the
offeror's ownership of Common Stock to more than twenty-five percent (25%) of
the Common Stock outstanding and shall involve the payment by such person of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive,
and described in a resolution of the Board of Directors) at the last time (the
"Offer Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as it shall have been amended) that exceeds the
Current Market Price of
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the Common Stock on the Trading Day next succeeding the Offer Expiration Time,
and in which, as of the Offer Expiration Time the Board of Directors is not
recommending rejection of the offer, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the Offer Expiration Time by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the Offer Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the Offer Expiration Time and the denominator shall be the sum
of (x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares validly
tendered or exchanged and not withdrawn as of the Offer Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
"Accepted Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Accepted Purchased Shares) on the Offer
Expiration Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Offer Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day next following
the Offer Expiration Time. In the event that such person is obligated to
purchase shares pursuant to any such tender or exchange offer, but such person
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Price shall again be adjusted
to be the Conversion Price which would then be in effect if such tender or
exchange offer had not been made. Notwithstanding the foregoing, the adjustment
described in this Section 15.5(g) shall not be made if, as of the Offer
Expiration Time, the offering documents with respect to such offer disclose a
plan or intention to cause the Company to engage in any transaction described in
Article XII.
(h) For purposes of this Section 15.5, the following terms shall
have the meaning indicated:
(1) "Closing Price" with respect to any securities on any
day shall mean the closing sale price regular way on such day or, in case no
such sale takes place on such day, the average of the reported closing bid and
asked prices, regular way, in each case as quoted on the Nasdaq National Market,
or, if such security is not listed or admitted to trading on the Nasdaq National
Market, on the principal national security exchange or quotation system on which
such security is quoted or listed or admitted to trading, or, if not quoted or
listed or admitted to trading on any national securities exchange or quotation
system, the average of the closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similar generally accepted reporting
service, or if not so available, in such manner as furnished by any New York
Stock Exchange member firm selected from time to time by the Board of Directors
for that purpose, or a price determined in good faith by the Board of Directors
or, to the extent permitted by applicable law, a duly authorized committee
thereof, whose determination shall be conclusive.
(2) "Current Market Price" shall mean the average of the
daily Closing Prices per share of Common Stock for the ten consecutive Trading
Days immediately prior to the date in question; provided, however, that (1) if
the "ex" date (as hereinafter defined) for any event (other than the issuance or
distribution or Fundamental Change requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 15.5(a), (b), (c), (d),
(e), (f) or (g) occurs during such ten consecutive Trading Days, the Closing
Price for each Trading Day prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the same fraction by which the
Conversion
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Price is so required to be adjusted as a result of such other event, (2) if the
"ex" date for any event (other than the issuance, distribution or Fundamental
Change requiring such computation) that requires an adjustment to the Conversion
Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs on or
after the "ex" date for the issuance or distribution requiring such computation
and prior to the day in question, the Closing Price for each Trading Day on and
after the "ex" date for such other event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by which the Conversion Price is
so required to be adjusted as a result of such other event, and (3) if the "ex"
date for the issuance, distribution or Fundamental Change requiring such
computation is prior to the day in question, after taking into account any
adjustment required pursuant to clause (1) or (2) of this proviso, the Closing
Price for each Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market value (as determined
by the Board of Directors or, to the extent permitted by applicable law, a duly
authorized committee thereof in a manner consistent with any determination of
such value for purposes of Section 15.5(d), (f) or (g), whose determination
shall be conclusive and described in a resolution of the Board of Directors or
such duly authorized committee thereof, as the case may be) of the evidences of
indebtedness, shares of capital stock or assets being distributed applicable to
one share of Common Stock as of the close of business on the day before such
"ex" date. For purposes of any computation under Section 15.5(f) or (g), the
Current Market Price of the Common Stock on any date shall be deemed to be the
average of the daily Closing Prices per share of Common Stock for such day and
the next two succeeding Trading Days; provided, however, that if the "ex" date
for any event (other than the tender or exchange offer requiring such
computation) that requires an adjustment to the Conversion Price pursuant to
Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs on or after the
Expiration Time or Offer Expiration Time, as the case may be, for the tender or
exchange offer requiring such computation and prior to the day in question, the
Closing Price for each Trading Day on and after the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the reciprocal of
the fraction by which the Conversion Price is so required to be adjusted as a
result of such other event. For purposes of this paragraph, the term "ex" date,
(1) when used with respect to any issuance or distribution, means the first date
on which the Common Stock trades regular way on the relevant exchange or in the
relevant market from which the Closing Price was obtained without the right to
receive such issuance or distribution, (2) when used with respect to any
subdivision or combination of shares of Common Stock, means the first date on
which the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes effective, and
(3) when used with respect to any tender or exchange offer means the first date
on which the Common Stock trades regular way on such exchange or in such market
after the Offer Expiration Time of such offer.
(3) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length transaction.
(4) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other property, the date
fixed for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable
security is listed or admitted for trading on the New York Stock Exchange or
another national security exchange, a day on
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which the New York Stock Exchange or another national security exchange is open
for business or (y) if the applicable security is quoted on the Nasdaq National
Market, a day on which trades may be made on thereon or (z) if the applicable
security is not so listed, admitted for trading or quoted, any day other than a
Saturday or Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
(i) The Company may make such reductions in the Conversion Price,
in addition to those required by Sections 15.5 (a), (b), (c), (d), (e), (f) or
(g) as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to holders of record of the Notes a
notice of the reduction at least fifteen (15) days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
(j) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least one
percent (1%) in such price; provided, however, that any adjustments which by
reason of this Section 15.5(j) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article XV shall be made by the Company and shall be made to the
nearest cent or to the nearest one-hundredth (1/100) of a share, as the case may
be. No adjustment need be made for rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest. To the extent the Notes
become convertible into cash, assets, property or securities (other than capital
stock of the Company), no adjustment need be made thereafter as to the cash,
assets, property or such securities. Interest will not accrue on the cash.
(k) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the Conversion Price
to the holder of each Note at his last address appearing on the Note register
provided for in Section 2.5 of this Indenture, within twenty (20) days after
execution thereof. Failure to deliver such notice shall not affect the legality
or validity of any such adjustment.
(l) In any case in which this Section 15.5 provides that an
adjustment shall become effective immediately after a record date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
holder of any Note converted after such record date and before the occurrence of
such event the additional shares of Common Stock issuable upon such conversion
by reason of the
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adjustment required by such event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (ii) paying to such
holder any amount in cash in lieu of any fraction pursuant to Section 15.3.
(m) For purposes of this Section 15.5, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
SECTION 15.6 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any of the following events occur, namely (i) any reclassification or change
of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.5(c) applies), (ii) any consolidation, merger or
combination of the Company with another person as a result of which holders of
Common Stock shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock, or
(iii) any sale or conveyance of all or substantially all of the properties and
assets of the Company to any other person as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then the
Company or the successor or purchasing person, as the case may be, shall execute
with the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture) providing that such Note shall be convertible into the kind and
amount of shares of stock and other securities or property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Notes (assuming, for such purposes, a
sufficient number of authorized shares of Common Stock available to convert all
such Notes) immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance assuming such holder of Common Stock did
not exercise his rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance (provided that,
if the kind or amount of securities, cash or other property receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
is not the same for each share of Common Stock in respect of which such rights
of election shall not have been exercised ("nonelecting share")), then for the
purposes of this Section 15.6 the kind and amount of securities, cash or other
property receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance for each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares. Such supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note register provided for in Section 2.5 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
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If this Section 15.6 applies to any event or occurrence, Section 15.5
shall not apply.
SECTION 15.7 TAXES ON SHARES ISSUED. The issue of stock certificates on
conversions of Notes shall be made without charge to the converting Noteholder
for any tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of stock in any name other than that of the holder of
any Note converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the person or persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 15.8 RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE
WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK. The Company shall
provide, free from preemptive rights, out of its authorized but unissued shares
or shares held in treasury, sufficient shares of Common Stock to provide for the
conversion of the Notes from time to time as such Notes are presented for
conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and non-assessable
by the Company and free from all taxes, liens and charges with respect to the
issue thereof.
The Company covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Notes hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
The Company further covenants that if at any time the Common Stock shall
be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Notes;
provided, however, that if rules of such exchange or automated quotation system
permit the Company to defer the listing of such Common Stock until the first
conversion of the Notes into Common Stock in accordance with the provisions of
this Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Notes in accordance with the requirements of such exchange or
automated quotation system at such time.
SECTION 15.9 RESPONSIBILITY OF TRUSTEE. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine the Conversion Price or whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method
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employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Note; and the Trustee and any
other conversion agent make no representations with respect thereto. Neither the
Trustee nor any conversion agent shall be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock or stock
certificates or other securities or property or cash upon the surrender of any
Note for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article. Without
limiting the generality of the foregoing, neither the Trustee nor any conversion
agent shall be under any responsibility to determine the correctness of any
provisions contained in any supplemental indenture entered into pursuant to
Section 15.6 relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Noteholders upon the
conversion of their Notes after any event referred to in such Section 15.6 or to
any adjustment to be made with respect thereto, but, subject to the provisions
of Section 8.1, may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, the Officers' Certificate
(which the Company shall be obligated to file with the Trustee prior to the
execution of any such supplemental indenture) with respect thereto.
SECTION 15.10 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in the
Conversion Price pursuant to Section 15.5; or
(b) the Company shall authorize the granting to the holders of
all or substantially all of its Common Stock of rights or warrants to subscribe
for or purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock
of the Company (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company or any Significant Subsidiary; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company or any Significant Subsidiary; the Company shall cause
to be filed with the Trustee and to be mailed to each holder of Notes at his
address appearing on the Note register provided for in Section 2.5 of this
Indenture, as promptly as possible but in any event at least fifteen (15) days
prior to the applicable date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution or rights or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined, or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective or occur, and the date
as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
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deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. Unless and until a Responsible Offer of
the Trustee has received such notice, the Trustee shall not be deemed to have
knowledge of the facts and statements made therein.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
SECTION 16.1 PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
SECTION 16.2 OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any person that shall at the time be the lawful sole successor of the
Company.
SECTION 16.3 ADDRESSES FOR NOTICES, ETC. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to LSI Logic Corporation, 1551 McCarthy Boulevard, Milpitas, California
95035, Attention: General Counsel. Any notice, direction, request or demand
hereunder to or upon the Trustee shall be deemed to have been sufficiently given
or made, for all purposes, if given or served by being deposited postage prepaid
by registered or certified mail in a post office letter box addressed to the
Corporate Trust Office, which office is, at the date as of which this Indenture
is dated, located at 633 West 5th Street, 12th Floor, Los Angeles, CA 90071,
Attention: Corporate Trust Department (LSI Logic Corporation 4 1/4% Convertible
Subordinated Notes due 2004).
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note register and shall be sufficiently given to him if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect
in it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
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SECTION 16.4 GOVERNING LAW. This Indenture and each Note shall be deemed
to be a contract made under the laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of the State of New
York, without regard to principles of conflicts of laws.
SECTION 16.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 16.6 LEGAL HOLIDAYS. In any case where the date of maturity of
interest on or principal of the Notes or the date fixed for redemption of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period from and after such date.
SECTION 16.7 TRUST INDENTURE ACT. This Indenture is hereby made subject
to, and shall be governed by, the provisions of the Trust Indenture Act required
to be part of and to govern indentures qualified under the Trust Indenture Act;
provided, however, that, unless otherwise required by law, notwithstanding the
foregoing, this Indenture and the Notes issued hereunder shall not be subject to
the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the
Trust Indenture Act as now in effect or as hereafter amended or modified;
provided, further, that this Section 16.7 shall not require this Indenture or
the Trustee to be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party to the
Indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in an indenture qualified under the
Trust Indenture Act, such required provision shall control.
SECTION 16.8 NO SECURITY INTEREST CREATED. Nothing in this Indenture or
in the Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction where property of the
Company or its subsidiaries is located.
-68-
<PAGE> 77
SECTION 16.9 BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any person, other than the parties
hereto, any paying agent, any authenticating agent, any Note registrar and their
successors hereunder, the holders of Notes and the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 16.10 TABLE OF CONTENTS, HEADINGS, ETC. The table of contents
and the titles and headings of the articles and sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 16.11 AUTHENTICATING AGENT. The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.5, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a person
eligible to serve as trustee hereunder pursuant to Section 8.9.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 16.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section, the Trustee
shall either promptly appoint a successor authenticating agent or itself assume
the duties and obligations of the former authenticating agent under this
Indenture, and upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note register.
The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the Trustee shall be entitled to be reimbursed by the
Company for such pre-approved payments, subject to Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 16.11
shall be applicable to any authenticating agent.
-69-
<PAGE> 78
SECTION 16.12 EXECUTION IN COUNTERPARTS. This Indenture may be executed
in any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
State Street Bank and Trust Company of California, N.A., hereby accepts
the trusts in this Indenture declared and provided, upon the terms and
conditions hereinabove set forth.
-70-
<PAGE> 79
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.
LSI LOGIC CORPORATION
By: /s/ R. DOUGLAS NORBY
-------------------------------
Name: R. Douglas Norby
Title: Executive Vice President, Chief
Financial Officer and Director
STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A.
as Trustee
By: /s/ JONI D'AMICO
-------------------------------
Name: Joni D'Amico
Title: Vice President
-71-
<PAGE> 80
EXHIBIT A
[For Global Note only:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITORY," WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. (OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR"); (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO LSI LOGIC CORPORATION OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN
A TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE), IT WILL FURNISH TO STATE STREET BANK
AND TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A
<PAGE> 81
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT;
AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO STATE
STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR IS A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS SUCH TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER
OF THE TRANSFER OF THE NOTE EVIDENCED HEREBY PURSUANT TO CLAUSE 2(D) OR 2(E)
ABOVE OR UPON ANY TRANSFER OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS
"UNITED STATES" AND "UNITED STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
-2-
<PAGE> 82
LSI LOGIC CORPORATION
4 1/4% CONVERTIBLE SUBORDINATED NOTE DUE 2004
No:____ CUSIP:______
LSI LOGIC CORPORATION, a corporation duly organized and validly existing
under the laws of the State of Delaware (herein called the "Company"), which
term includes any successor corporation under the Indenture referred to on the
reverse hereof, for value received hereby promises to pay to
____________________________ or registered assigns, the principal sum of
__________________ ($____________) on March 15, 2004, at the office or agency of
the Company maintained for that purpose in accordance with the terms of the
Indenture, or, at the option of the holder of this Note, at the Corporate Trust
Office, in such coin or currency of the United States of America as at the time
of payment shall be legal tender for the payment of public and private debts,
and to pay interest, semi-annually on March 15 and September 15, of each year,
commencing September 15, 1999, on said principal sum at said office or agency,
in like coin or currency, at the rate per annum of 4 1/4% from March 19, 1999
and thereafter to maturity from the March 15 or September 15, as the case may
be, next preceding the date of this Note to which interest has been paid or duly
provided for, unless the date hereof is a date to which interest has been paid
or duly provided for, in which case from the date of this Note, or unless no
interest has been paid or duly provided for on the Notes, in which case from
March 19, 1999, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after any
March 1 or September 1, as the case may be, and before the next following March
15 or September 15, this Note shall bear interest from such March 15 or
September 15; provided, however, that if the Company shall default in the
payment of interest due on such March 15 or September 15, then this Note shall
bear interest from the next preceding March 15 or September 15, to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for on such Note, from March 19, 1999. The interest payable on the
Note pursuant to the Indenture on any March 15 or September 15 will be paid to
the person entitled thereto as it appears in the Note register at the close of
business on the record date, which shall be the March 1 or September 1 (whether
or not a Business Day) next preceding such March 15 or September 15, as provided
in the Indenture; provided that any such interest not punctually paid or duly
provided for shall be payable as provided in the Indenture. Interest may, at the
option of the Company, be paid either (i) by check mailed to the registered
address of such person (provided that the holder of Notes with an aggregate
principal amount in excess of $10,000,000 shall, at the written election of such
holder, be paid by wire transfer in immediately available funds) or (ii) by
transfer to an account maintained by such person located in the United States.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on the Notes to the
prior payment in full of all Senior Indebtedness, as defined in the Indenture,
and provisions giving the holder of this Note the right to convert this Note
into Common Stock of the Company on the terms and subject to the limitations
referred to on the reverse hereof and as more fully specified in the Indenture.
Such further provisions shall for all purposes have the same effect as though
fully set forth at this place.
<PAGE> 83
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal to be affixed or imported hereon.
LSI LOGIC CORPORATION
By:
-------------------------------
Name:
Title:
Attest:
---------------------------
Name:
Title:
Dated:
-------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-named Indenture.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.
as Trustee
By:
-------------------------------
Authorized Signatory
By:
-------------------------------
As Authenticating Agent
(if different from Trustee)
-2-
<PAGE> 84
[FORM OF REVERSE OF NOTE]
LSI LOGIC CORPORATION
4 1/4% CONVERTIBLE SUBORDINATED NOTE DUE 2004
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 4 1/4% Convertible Subordinated Notes due 2004 (herein called
the "Notes"), limited to the aggregate principal amount of $345,000,000 all
issued or to be issued under and pursuant to an indenture dated as of March 15,
1999 (herein called the "Indenture"), between the Company and State Street Bank
and Trust Company of California, N.A., as trustee (herein called the "Trustee"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the holders of the
Notes.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest (including Liquidated Damages, if any) on all Notes may be declared,
and upon said declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the holders of the Notes; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
thereof, or impair the right of any Noteholder to institute suit for the payment
thereof, or make the principal thereof or interest or premium, if any, thereon
payable in any coin or currency other than that provided in the Note, or modify
the provisions of the Indenture with respect to the subordination of the Notes
in a manner adverse to the Noteholders in any material respect, or change the
obligation of the Company to make redemption of any Note upon the happening of a
Fundamental Change in a manner adverse to the holder of the Notes, or impair the
right to convert the Notes into Common Stock subject to the terms set forth in
the Indenture, including Section 15.6 thereof, without the consent of the holder
of each Note so affected or (ii) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Notes then outstanding. It is also
provided in the Indenture that, prior to any declaration accelerating the
maturity of the Notes, the holders of a majority in aggregate principal amount
of the Notes at the time outstanding may on behalf of the holders of all of the
Notes waive any past default or Event of Default under the Indenture and its
consequences except a default in the payment of interest (including Liquidated
Damages, if any) or any premium on or the principal of any of the Notes, a
default in the payment of redemption price pursuant to Article III or a failure
by the Company to convert any Notes into Common Stock of the Company. Any such
consent or waiver by the holder of this Note (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all future
holders and owners of this Note and any Notes which may be issued in
<PAGE> 85
exchange or substitute hereof, irrespective of whether or not any notation
thereof is made upon this Note or such other Notes.
The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
as defined in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this Note, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium, if any, and
interest (including Liquidated Damages, if any) on this Note at the place, at
the respective times, at the rate and in the coin or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
The Notes are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000. At the office or
agency of the Company referred to on the face hereof, and in the manner and
subject to the limitations provided in the Indenture, without payment of any
service charge but with payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration or
exchange of Notes, Notes may be exchanged for a like aggregate principal amount
of Notes of other authorized denominations.
The Notes will not be redeemable at the option of the Company prior to
March 20, 2002. At any time on or after March 20, 2002, and prior to maturity,
the Notes may be redeemed at the option of the Company as a whole, or from time
to time in part, upon mailing a notice of such redemption not less than 30 days
before the date fixed for redemption to the holders of Notes at their last
registered addresses, all as provided in the Indenture, at the following
optional redemption prices (expressed as percentages of the principal amount),
together in each case with accrued but unpaid interest (including Liquidated
Damages, if any) to, but excluding, the date fixed for redemption:
If redeemed during the period beginning March 20, 2002 and ending on
March 14, 2003, at a redemption price of 101.70%, 100.85% if redeemed during the
12-month period beginning March 15, 2003, and 100% at March 15, 2004; provided
that if the date fixed for redemption is on March 15 or September 15, then the
interest payable on such date shall be paid to the holder of record on the next
preceding March 1 or September 1, respectively.
The Notes are not subject to redemption through the operation of any
sinking fund.
If a Fundamental Change (as defined in the Indenture) occurs at any time
prior to the final maturity date of the Notes, the Notes will be redeemable on
the 30th day after notice thereof at the option of the holder. Such repayment
shall be made at a price equal to 100% of the principal amount to be redeemed.
The Company shall also pay accrued but unpaid interest, if any (including
Liquidated
-4-
<PAGE> 86
Damages, if any) on such Notes to, but excluding, the Repurchase Date; provided
that if such Repurchase Date is March 15 or September 15, then the interest
payable on such date shall be paid to the holder of record of the Note on the
next preceding March 1 or September 1. The Company shall mail to all holders of
record of the Notes a notice of the occurrence of a Fundamental Change and of
the redemption right arising as a result thereof on or before the 10th day after
the occurrence of such Fundamental Change. For a Note to be so repaid at the
option of the holder, the Company must receive at the office or agency of the
Company maintained for that purpose in accordance with the terms of the
Indenture, such Note with the form entitled "Option to Elect Repayment Upon a
Fundamental Change" on the reverse thereof duly completed, together with such
Notes duly endorsed for transfer, on or before the 30th day after the date of
such notice (or if such 30th day is not a Business Day, the immediately
preceding Business Day).
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after the date of original issuance hereof
through the close of business on the final maturity date of this Note, or, as to
all or any portion hereof called for redemption, prior to the close of business
on the Business Day immediately preceding the date fixed for redemption (unless
the Company shall default in payment due upon redemption thereof), to convert
the principal hereof or any portion of such principal which is $1,000 or an
integral multiple thereof into that number of shares of the Company's Common
Stock, as said shares shall be constituted at the date of conversion, obtained
by dividing the principal amount of this Note or portion thereof to be converted
by the Conversion Price of $31.353 or such Conversion Price as adjusted from
time to time as provided in the Indenture, upon surrender of this Note, together
with a conversion notice as provided in the Indenture, to the Company at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, or at the option of such holder, the Corporate Trust
Office, and, unless the shares issuable on conversion are to be issued in the
same name as this Note, duly endorsed by, or accompanied by instruments of
transfer in form satisfactory to the Company duly executed by, the holder or by
his duly authorized attorney. No adjustment in respect of interest or dividends
will be made upon any conversion; provided, however, that if this Note shall be
surrendered for conversion during the period from the close of business on any
record date for the payment of interest to the close of business on the Business
Day next preceding the interest payment date, this Note (unless it or the
portion being converted shall have been called for redemption) must be
accompanied by an amount, in New York Clearing House funds or other funds
acceptable to the Company, equal to the interest payable on such interest
payment date on the principal amount being converted. No fractional shares will
be issued upon any conversion, but an adjustment in cash will be made, as
provided in the Indenture, in respect of any fraction of a share which would
otherwise be issuable upon the surrender of any Note or Notes for conversion.
Any Notes called for redemption, unless surrendered for conversion on or
before the close of business on the business day preceding the date fixed for
redemption, may be deemed to be purchased from the holder of such Notes at an
amount equal to the applicable redemption price, together with accrued but
unpaid interest (including Liquidated Damages, if any) to (but excluding) the
date fixed for redemption, by one or more investment bankers or other purchasers
who may agree with the Company to purchase such Notes from the holders thereof
and convert them into Common Stock of the Company and to make payment for such
Notes as aforesaid to the Trustee in trust for such holders.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, or at the option of the holder of this Note, at the
Corporate Trust Office, a new Note or Notes of authorized denominations
-5-
<PAGE> 87
for an equal aggregate principal amount will be issued to the transferee in
exchange thereof; subject to the limitations provided in the Indenture, without
charge except for any tax or other governmental charge imposed in connection
therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar), for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor any other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.
No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof; and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, employee, agent, officer or
director or subsidiary, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or any
successor corporation, whether by virtue of any constitution, statute or rule of
law or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Note shall be deemed to be a contract made under the laws of New
York, and for all purposes shall be construed in accordance with the laws of New
York, without regard to principles of conflicts of laws.
Terms used in this Note and defined in the Indenture are used herein as
therein defined.
-6-
<PAGE> 88
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -- Custodian
----- -----
TEN ENT - as tenant by the entireties (Cust)
JT TEN - as joint tenants with right (Minor)
of survivorship and not as under Uniform Gifts to Minors Act
tenants in common
-------------------------------
(State)
Additional abbreviations may also be used
though not in the above list.
<PAGE> 89
CONVERSION NOTICE
To: LSI Logic Corporation
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion hereof (which is
$1,000 or an integral multiple thereof) below designated, into shares of Common
Stock of LSI Logic Corporation in accordance with the terms of the Indenture
referred to in this Note, and directs that the shares issuable and deliverable
upon such conversion, together with any check in payment for fractional shares
and any Notes representing any unconverted principal amount hereof, be issued
and delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Note not converted are to be
issued in the name of a person other than the undersigned, the undersigned will
check the appropriate box below and pay all transfer taxes payable with respect
thereto. Any amount required to be paid to the undersigned on account of
interest accompanies this Note.
Dated:
----------------
-----------------------------------------------
-----------------------------------------------
Signature(s)
Signature(s) must be guaranteed by a commercial
bank or trust company or a member firm of a
major stock exchange if shares of Common Stock
are to be issued, or Notes to be delivered,
other than to and in the name of the registered
holder.
-----------------------------------------------
Signature Guarantee
<PAGE> 90
Fill in for registration of shares of Common Stock if to be issued, and Notes if
to be delivered, other than to and in the name of the registered holder:
- -------------------------------
(Name)
- -------------------------------
(Street Address)
- -------------------------------
(City, State and Zip Code)
Please print name and address
Principal amount to be converted
(if less than all): $
----------
Social Security or Other Taxpayer
Identification Number
----------
-2-
<PAGE> 91
OPTION TO ELECT REDEMPTION
UPON A FUNDAMENTAL CHANGE
TO: LSI LOGIC CORPORATION
The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from LSI Logic Corporation (the "Company") as
to the occurrence of a Fundamental Change with respect to the Company and
requests and instructs the Company to repay the entire principal amount of this
Note, or the portion thereof (which is $1,000 or an integral multiple thereof)
below designated, in accordance with the terms of the Indenture referred to in
this Note at the price of 100% of such entire principal amount or portion
thereof, together with accrued but unpaid interest to, but excluding, such date,
to the registered holder hereof.
Dated:
--------------
Signature(s)
NOTICE: The above signatures of the holder(s)
hereof must correspond with the name as written
upon the face of the Note in every particular
without alteration or enlargement or any change
whatever.
Principal amount to be redeemed (if less than
all):
$
----------
-----------------------------------------------
Social Security or Other Taxpayer Identification
Number
<PAGE> 92
ASSIGNMENT
For value received ______________________________ hereby sell(s),
assign(s) and transfer(s) unto ______________________________ (Please insert
social security or other Taxpayer Identification Number of assignee) the within
Note, and hereby irrevocably constitutes and appoints _________________________
attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.
In connection with any transfer of the Note within the period prior to
the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision) (other than any
transfer pursuant to a registration statement that has been declared effective
under the Securities Act), the undersigned confirms that such Note is being
transferred:
[ ] To LSI Logic Corporation or a subsidiary thereof, or
[ ] Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
[ ] To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended;
[ ] Pursuant to and in compliance with Rule 144 under the Securities
Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate").
[ ] The transferee is an Affiliate of the Company.
Dated:
------------- -----------------------------------------------
-----------------------------------------------
Signature(s)
Signature(s) must be guaranteed by a commercial
bank or trust company or a member firm of a
major stock
<PAGE> 93
exchange if shares of Common Stock are to be
issued, or Notes to be delivered, other than to
or in the name of the registered holder.
-----------------------------------------------
Signature Guarantee
NOTICE: The signature on the conversion notice, the option to elect repayment
upon a Fundamental Change or the assignment must correspond with the name as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatever.
<PAGE> 94
EXHIBIT B
LSI Logic Corporation
1551 McCarthy Boulevard
Milpitas, California 95035
State Street Bank and Trust Company
of California, N.A.
633 West 5th Street
12th Floor
Los Angeles, CA 90071
Attn: Corporate Trust Department
Ladies/Gentlemen:
We are delivering this letter in connection with an offering by LSI
Logic Corporation of 4 1/4% Convertible Subordinated Notes due 2004 (the
"Notes), which are convertible into shares of Common Stock, $.01 par value (the
"Common Stock"), all as described in the Offering Memorandum (the "Offering
Memorandum") relating to the offering.
We hereby confirm that:
1. we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933, as
amended (the "Securities Act"), or an entity in which all of the
equity owners are accredited investors within the meaning of
Rule 501(a)(1), (2) or (3) under the Securities Act (an
"Institutional Accredited Investor");
2. (A) any purchase of Notes by us will be for our own account or
for the account of one or more other Institutional Accredited
Investors or as fiduciary for the account of one or more trusts,
each of which is an "accredited investor" within the meaning of
Rule 501(a)(7) under the Securities Act and for each of which we
exercise sole investment discretion or (B) we are a "bank,"
within the meaning of Section 3(a)(2) of the Securities Act, or
a "savings and loan association" or other institution described
in Section 3(a)(5)(A) of the Securities Act that is acquiring
Notes as fiduciary for the account of one or more institutions
for which we exercise sole investment discretion;
3. in the event that we purchase any Notes, we will acquire Notes
having a minimum principal amount of not less than $200,000 for
our own account or for any separate account for which we are
acting;
<PAGE> 95
4. we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks
of purchasing Notes;
5. we are not acquiring Notes with a view to distribution thereof
or with any present intention of offering or selling Notes or
the Common Stock issuable upon conversion thereof, except as
permitted below; provided that the disposition of our property
and property of any accounts for which we are acting as
fiduciary shall remain at all times within our control; and
6. we have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such
questions of representatives of the Company and receive answers
thereto, as we deem necessary in connection with our decision to
purchase Notes.
We understand that the Notes are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Notes and the Common Stock issuable upon conversion
thereof have not been registered under the Securities Act, and we agree, on our
own behalf and on behalf of each account for which we acquire any Notes, that if
in the future we decide to resell or otherwise transfer such Notes or the Common
Stock issuable upon conversion thereof, such Notes or Common Stock may be resold
or otherwise transferred only (i) to the Company or any subsidiary thereof, (ii)
to a person who is a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in a transaction meeting the requirements of Rule
144A, (iii) to an Institutional Accredited Investor that, prior to such
transfer, furnishes to the Trustee for the Notes (or in the case of Common
Stock, the transfer agent therefor) a signed letter containing certain
representations and agreements relating to the restrictions on transfer of such
securities (the form of which letter can be obtained from the Trustee or
transfer agent, as the case may be), (iv) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if applicable), or
(v) pursuant to a registration statement which has been declared effective under
the Securities Act (and which continues to be effective at the time of such
transfer), and in each case, in accordance with any applicable securities laws
of any State of the United States or any other applicable jurisdiction and in
accordance with the legends set forth on the Notes or the Common Stock issuable
upon conversion thereof. We further agree to provide any person purchasing any
of the Notes or the Common Stock issuable upon conversion thereof (other than
pursuant to clause (v) above) from us a notice advising such purchaser that
resales of such securities are restricted as stated herein. We understand that
the Trustee or transfer agent for the Notes and the Common Stock will not be
required to accept for registration of transfer any Notes or Common Stock issued
upon conversion of the Notes except upon presentation of evidence satisfactory
to the Company that the foregoing restrictions on transfer have been complied
with. We further understand that certificates representing any Notes (or any
Note in global form) and any Common Stock issued upon
<PAGE> 96
conversion of the Notes (other than pursuant to clause (v) above) will bear a
legend reflecting the substance of this paragraph.
We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK
------------------------------------------
(Name of Purchaser)
By:
----------------------------------------
Name:
---------------------------------------
Title:
-------------------------------------
Address:
-----------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
<PAGE> 1
Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
LSI LOGIC CORPORATION
AS ISSUER,
AND
MORGAN STANLEY & CO. INCORPORATED,
BANCBOSTON ROBERTSON STEPHENS INC.
AND
J.P. MORGAN & CO., INC.
AS INITIAL PURCHASERS
DATED MARCH 19, 1999
<PAGE> 2
THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of March
19, 1999 by and among LSI Logic Corporation, a Delaware corporation (the
"Company"), and Morgan Stanley & Co. Incorporated, BancBoston Robertson Stephens
Inc. and J.P. Morgan & Co., Inc. pursuant to the Placement Agreement, dated
March 15, 1999 (the "Placement Agreement"), among the Company and the Initial
Purchasers. In order to induce the Initial Purchasers to enter into the
Placement Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution of this Agreement is a condition to
the closing under the Placement Agreement.
The Company agrees with the Initial Purchasers, (i) for their benefit as
Initial Purchasers and (ii) for the benefit of the beneficial owners (including
the Initial Purchasers) from time to time of the Notes (as defined herein) and
the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Notes (each of the foregoing a
"Holder" and together the "Holders"), as follows:
SECTION 1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Placement Agreement. As
used in this Agreement, the following terms shall have the following meanings:
Affiliate: With respect to any specified person, an "affiliate," as
defined in Rule 144, of such person.
Amendment Effectiveness Deadline Date: See Section 2(d) hereof.
Applicable Conversion Price: The Applicable Conversion Price as of any
date of determination means the Conversion Price in effect as of such date of
determination or, if no Notes are then outstanding, the Conversion Price that
would be in effect were Notes then outstanding.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
Common Stock: The shares of common stock, par value $0.01 per share, of
the Company and any other shares of common stock as may constitute "Common
Stock" for purposes of the Indenture, including the Underlying Common Stock.
Conversion Price: Conversion Price shall have the meaning assigned such
term in the Indenture.
Damages Accrual Period: See Section 2(e) hereof.
2
<PAGE> 3
Damages Payment Date: Each interest payment date under the Indenture in
the case of Notes, and each March 15 and September 15 in the case of the
Underlying Common Stock.
Deferral Notice: See Section 3(i) hereof.
Deferral Period: See Section 3(i) hereof.
Effectiveness Deadline Date: See Section 2(a) hereof.
Effectiveness Period: The period of two years from the later of (a) the
Issue Date (b) the last date of original issuance of the Notes, or such shorter
period ending on the date that all Registrable Securities have ceased to be
Registrable Securities.
Event: See Section 2(e) hereof.
Event Date: See Section 2(e) hereof.
Event Termination Date: See Section 2(e) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Filing Deadline Date: See Section 2(a) hereof.
Holder: See the second paragraph of this Agreement.
Indenture: The Indenture, dated as of the date hereof, between the
Company and State Street Bank and Trust Company of California, N.A., as trustee,
pursuant to which the Notes are being issued.
Initial Purchasers: Morgan Stanley & Co. Incorporated, BancBoston
Robertson Stephens Inc. and J.P. Morgan & Co., Inc.
Initial Shelf Registration Statement: See Section 2(a) hereof.
Issue Date: March 19, 1999.
Liquidated Damages Amount: See Section 2(e) hereof.
Losses: See Section 6 hereof.
Material Event: See Section 3(i) hereof.
3
<PAGE> 4
Notes: The 4 1/4% Convertible Subordinated Notes due 2004 of the Company
to be purchased pursuant to the Placement Agreement.
Notice and Questionnaire: A written notice delivered to the Company
containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex B to the Offering
Memorandum of the Company issued March 15, 1999 relating to the Notes.
Notice Holder: On any date, any Holder that has delivered a Notice and
Questionnaire to the Company on or prior to such date.
Placement Agreement. See the preamble hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.
Record Holder: (i) With respect to any Damages Payment Date relating to
any Notes as to which any such Liquidated Damages Amount has accrued, the holder
of record of such Note on the record date with respect to the interest payment
date under the Indenture on which such Damages Payment Date shall occur and (ii)
with respect to any Damages Payment Date relating to the Underlying Common Stock
as to which any such Liquidated Damages Amount has accrued, the registered
holder of such Underlying Common Stock fifteen (15) days prior to such Damages
Payment Date.
Registrable Securities: The Notes until such Notes have been converted
or exchanged into the Underlying Common Stock and, at all times subsequent to
any such conversion or exchange the Underlying Securities and any securities
into or for which such Underlying Common Stock have been converted or exchanged,
and any security issued with respect thereto upon any stock dividend, split or
similar event until, in the case of any such security, (A) the earliest of (i)
its effective registration under the Securities Act and resale in accordance
with the Registration Statement covering it, (ii) expiration of the holding
period that would be applicable thereto under Rule 144(k) were it not held by an
Affiliate of the Company or (iii) its sale to the public pursuant to Rule 144,
and (B) as a result of the event or circumstance described in any of the
foregoing clauses (i) through (iii), the legends with respect to transfer
restrictions required under the Indenture are removed or removable in accordance
with the terms of the Indenture or such legends, as the case may be.
Registration Expenses: See Section 5 hereof.
4
<PAGE> 5
Registration Statement: Any registration statement of the Company that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.
Restricted Securities: As this term is defined in Rule 144.
Rule 144: Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
Shelf Registration Statement: See Section 2(a) hereof.
Subsequent Shelf Registration Statement: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: Street Bank and Trust Company of California, N.A. (or any
successor entity), the Trustee under the Indenture.
Underlying Common Stock: The Common Stock into which the Notes are
convertible or issued upon any such conversion.
SECTION 2. Shelf Registration. (a) The Company shall prepare and file or
cause to be prepared and filed with the SEC, as soon as practicable but in any
event by the date (the "Filing Deadline Date") ninety (90) days after the Issue
Date, a Registration Statement for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 of the Securities Act (a "Shelf
Registration Statement") registering the resale from time to time by Holders
thereof of all of the Registrable Securities (the "Initial Shelf Registration
Statement"). The Initial Shelf Registration Statement shall be on Form S-3 or
another appropriate form permitting registration of such Registrable Securities
for resale by such Holders in accordance with the methods of distribution
elected by the Holders and set forth in the Initial Shelf Registration
Statement. The Company shall use its reasonable efforts to cause the Initial
Shelf Registration Statement to be declared effective under the Securities Act
as promptly as is practicable but in any event by the date (the "Effectiveness
Deadline Date") that is one hundred eighty (180) days after the Issue Date, and
to
5
<PAGE> 6
keep the Initial Shelf Registration Statement (or any Subsequent Shelf
Registration Statement) continuously effective under the Securities Act until
the expiration of the Effectiveness Period. At the time the Initial Shelf
Registration Statement is declared effective, each Holder that became a Notice
Holder on or prior to the date ten (10) Business Days prior to such time of
effectiveness shall be named as a selling securityholder in the Initial Shelf
Registration Statement and the related Prospectus in such a manner as to permit
such Holder to deliver such Prospectus to purchasers of Registrable Securities
in accordance with applicable law. None of the Company's security holders (other
than the Holders of Registrable Securities) shall have the right to include any
of the Company's securities in the Shelf Registration Statement.
(b) If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use its
reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within thirty (30) days of such
cessation of effectiveness amend the Shelf Registration Statement in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a "Subsequent Shelf Registration Statement"). If a
Subsequent Shelf Registration Statement is filed, the Company shall use
reasonable efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is practicable after such filing and to keep
such Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.
(c) The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the Securities Act or as reasonably requested by the Initial
Purchasers or by the Trustee on behalf of the registered Holders or by any
Managing Underwriter in the event of an Underwritten Offering.
(d) Each Holder of Registrable Securities agrees that if such Holder
wishes to sell Registrable Securities pursuant to a Shelf Registration Statement
and related Prospectus, it will do so only in accordance with this Section 2(d)
and Section 3(i). Each Holder of Registrable Securities wishing to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus agrees to deliver a Notice and Questionnaire to the Company at least
three (3) Business Days prior to any intended distribution of Registrable
Securities under the Shelf Registration Statement. From and after the date the
Initial Shelf Registration Statement is declared effective, the Company shall,
as promptly as practicable after the date a Notice and Questionnaire is
delivered, and in any event upon the later of (x) five (5) Business Days after
such date or (y) five (5) Business Days after the expiration of any Deferral
Period in effect when the Notice and Questionnaire is delivered or put into
effect within five (5) Business Days of such delivery date, (i) if required by
applicable law, file with the SEC a post-effective amendment to
6
<PAGE> 7
the Shelf Registration Statement or prepare and, if required by applicable law,
file a supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that the Holder delivering such Notice and Questionnaire is named as a
selling securityholder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Registrable Securities in accordance with applicable law
and, if the Company shall file a post-effective amendment to the Shelf
Registration Statement, use reasonable efforts to cause such post-effective
amendment to be declared effective under the Securities Act as promptly as is
practicable, but in any event by the date (the "Amendment Effectiveness Deadline
Date") that is forty-five (45) days after the date such post-effective amendment
is required by this clause to be filed; (ii) provide such Holder copies of any
documents filed pursuant to Section 2(d)(i); and (iii) notify such Holder as
promptly as practicable after the effectiveness under the Securities Act of any
post-effective amendment filed pursuant to Section 2(d)(i); provided, that if
such Notice and Questionnaire is delivered during a Deferral Period, the Company
shall so inform, the Holder delivering such Notice and Questionnaire and shall
take the actions set forth in clauses (i), (ii) and (iii) above upon expiration
of the Deferral Period in accordance with Section 3(i). Notwithstanding anything
contained herein to the contrary, (i) the Company shall be under no obligation
to name any Holder that is not a Notice Holder as a selling securityholder in
any Registration Statement or related Prospectus and (ii) the Amendment Deadline
Effective Date shall be extended by up to ten (10) Business Days from the
expiration of a Deferral Period (and the Company shall incur no obligation to
pay Liquidated Damages during such extension) if such Deferral Period shall be
in effect on the Amendment Deadline Effective Date.
(e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if (i) the Initial Shelf Registration Statement
has not been filed on or prior to the Filing Deadline Date, (ii) the Initial
Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date, (iii) the Company
has failed to perform its obligations set forth in Section 2(d) within the time
period required therein, (iv) the aggregate duration of Deferral Periods in any
period exceeds the number of days permitted in respect of such period pursuant
to Section 3(i) hereof or (v) the number of Deferral Periods in any period
exceeds the number permitted in respect of such period pursuant to Section 3(i)
hereof (each of the events of a type described in any of the foregoing clauses
(i) through (v) are individually referred to herein as an "Event," and the
Filing Deadline Date in the case of clause (i), the Effectiveness Deadline Date
in the case of clause (ii), the date by which the Company is required to perform
its obligations set forth in Section 2(d) in the case of clause (iii) (including
the filing of any post-effective amendment prior to the Amendment Effectiveness
Deadline Date), the date on which the aggregate duration of Deferral Periods in
any period exceeds the number of days permitted by Section 3(i) hereof in the
case of clause (iv), and the date of the commencement of a Deferral Period that
causes the limit on the number of Deferral Periods in any period under Section
3(i) hereof to be exceeded in the case of clause (v), being referred to herein
as an "Event Date"). Events shall be deemed to continue until the "Event
Termination Date," which shall be the following dates with respect to the
respective types of Events: the date
7
<PAGE> 8
the Initial Shelf Registration Statement is filed in the case of an Event of the
type described in clause (i), the date the Initial Shelf Registration Statement
is declared effective under the Securities Act in the case of an Event of the
type described in clause (ii), the date the Company performs its obligations set
forth in Section 2(d) in the case of an Event of the type described in clause
(iii) (including, without limitation, the date the relevant post-effective
amendment to the Shelf Registration Statement is declared effective under the
Securities Act), termination of the Deferral Period that caused the limit on the
aggregate duration of Deferral Periods in a period set forth in Section 3(i) to
be exceeded in the case of the commencement of an Event of the type described in
clause (iv), and termination of the Deferral Period the commencement of which
caused the number of Deferral Periods in a period permitted by Section 3(i) to
be exceeded in the case of an Event of the type described in clause (v).
Accordingly, commencing on (and including) any Event Date and ending on
(but excluding) the next date on which there are no Events that have occurred
and are continuing (a "Damages Accrual Period"), the Company agrees to pay, as
liquidated damages and not as a penalty, an amount (the "Liquidated Damages
Amount"), payable on the Damages Payment Dates to Record Holders of Notes that
are Registrable Securities and of shares of Underlying Common Stock issued upon
conversion of Notes that are Registrable Securities, as the case may be,
accruing, for each portion of such Damages Accrual Period beginning on and
including a Damages Payment Date (or, in respect of the first time that the
Liquidated Damages Amount is to be paid to Holders on a Damages Payment Date as
a result of the occurrence of any particular Event, from the Event Date) and
ending on but excluding the first to occur of (A) the date of the end of the
Damages Accrual Period or (B) the next Damages Payment Date, at a rate per annum
equal to one-half of one percent (0.5 %) of the aggregate principal amount of
such Notes and the Applicable Conversion Price of such shares of Underlying
Common Stock, as the case may be, in each case determined as of the Business Day
immediately preceding the next Damages Payment Date; provided, that in the case
of a Damages Accrual Period that is in effect solely as a result of an Event of
the type described in clause (iii) of the immediately preceding paragraph, such
Liquidated Damages Amount shall be paid only to the Holders that have delivered
Notice and Questionnaires that caused the Company to incur the obligations set
forth in Section 2(d) the non-performance of which is the basis of such Event,
provided further, that any Liquidated Damages Amount accrued with respect to any
Note or portion thereof called for redemption on a redemption date or converted
into Underlying Common Stock on a conversion date prior to the Damages Payment
Date, shall, in any such event, be paid instead to the Holder who submitted such
Note or portion thereof for redemption or conversion on the applicable
redemption date or conversion date, as the case may be, on such date (or
promptly following the conversion date, in the case of conversion).
Notwithstanding the foregoing, no Liquidated Damages Amounts shall accrue as to
any Registrable Security from and after the earlier of (x) the date such
security is no longer a Registrable Security and (y) expiration of the
Effectiveness Period. The rate of accrual of the Liquidated Damages Amount with
respect to any period shall not exceed the rate provided for in this paragraph
notwithstanding the occurrence of multiple concurrent Events. Following the cure
of all Events requiring the payment by the Company of Liquidated Damages Amounts
to the Holders of Registrable Securities pursuant to this Section, the accrual
of Liquidated Damages
8
<PAGE> 9
Amounts will cease (without in any way limiting the effect of any subsequent
Event requiring the payment of Liquidated Damages Amount by the Company).
The Trustee shall be entitled, on behalf of Holders of Notes or
Underlying Common Stock, to seek any available remedy for the enforcement of
this Agreement, including for the payment of any Liquidated Damages Amount.
Notwithstanding the foregoing, the parties agree that the sole damages payable
for a violation of the terms of this Agreement with respect to which liquidated
damages are expressly provided shall be such liquidated damages. Nothing shall
preclude a Notice Holder or Holder of Registrable Securities from pursuing or
obtaining specific performance or other equitable relief with respect to this
Agreement.
All of the Company's obligations set forth in this Section 2(e) that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).
The parties hereto agree that the liquidated damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.
SECTION 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, the Company shall:
(a) Before filing any Registration Statement or Prospectus or any
amendments or supplements thereto with the SEC, furnish to counsel to the
Initial Purchasers copies of all such documents proposed to be filed and use
reasonable efforts to reflect in each such document when so filed with the SEC
such comments as counsel to the Initial Purchasers reasonably shall propose
within five (5) Business Days of the delivery of such copies to the Initial
Purchasers.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable period
specified in Section 2(a); cause the related Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) under the Securities Act;
and use its reasonable best efforts to comply with the provisions of the
Securities Act applicable to it with respect to the disposition of all
securities covered by such Registration Statement during the Effectiveness
Period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement as so amended or such
Prospectus as so supplemented.
9
<PAGE> 10
(c) As promptly as practicable give notice to counsel to the Notice
Holders and the Initial Purchasers (i) when any Prospectus, Prospectus
supplement, Registration Statement or post-effective amendment to a Registration
Statement has been filed with the SEC and, with respect to a Registration
Statement or any post-effective amendment, when the same has been declared
effective, (ii) of any request, following the effectiveness of the Initial Shelf
Registration Statement under the Securities Act, by the SEC or any other federal
or state governmental authority for amendments or supplements to any
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of any Registration
Statement or the initiation or threatening of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) of the occurrence of (but
not the nature of or details concerning) a Material Event and (vi) of the
determination by the Company that a post-effective amendment to a Registration
Statement will be filed with the SEC, which notice may, at the discretion of the
Company (or as required pursuant to Section 3 (i)), state that it constitutes a
Deferral Notice, in which event the provisions of Section 3(i) shall apply.
(d) Use reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale, in either case at the earliest possible moment.
(e) If reasonably requested by the Initial Purchasers or any Notice
Holder, as promptly as practicable incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchasers or such Notice Holder shall, on the basis of a written
opinion of nationally-recognized counsel experienced in such matters, determine
to be required to be included therein by applicable law and make any required
filings of such Prospectus supplement or such post-effective amendment.
(f) As promptly as practicable furnish to each Notice Holder and the
Initial Purchasers, without charge, at least one (1) conformed copy of the
Registration Statement and any amendment thereto, including financial statements
but excluding schedules, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits (unless requested in writing to the
Company by such Notice Holder or the Initial Purchasers, as the case may be).
(g) During the Effectiveness Period, deliver to each Notice Holder in
connection with any sale of Registrable Securities pursuant to a Registration
Statement, without charge, as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities (including each preliminary prospectus)
and any amendment or supplement thereto as such Notice Holder may reasonably
request; and the Company hereby consents (except during such periods that a
Deferral Notice is outstanding and has not been revoked) to the use of such
Prospectus or each
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amendment or supplement thereto by each Notice Holder in connection with any
offering and sale of the Registrable Securities covered by such Prospectus or
any amendment or supplement thereto in the manner set forth therein.
(h) Prior to any public offering of the Registrable Securities pursuant
to the Shelf Registration Statement, register or qualify or cooperate with the
Notice Holders in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Notice Holder reasonably requests
in writing (which request may be included in the Notice and Questionnaire);
prior to any public offering of the Registrable Securities pursuant to the Shelf
Registration Statement, keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period in connection
with such Notice Holder's offer and sale of Registrable Securities pursuant to
such registration or qualification (or exemption therefrom) and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of such Registrable Securities in the manner set forth in the
relevant Registration Statement and the related Prospectus; provided, that the
Company will not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Agreement or (ii) take any action that would
subject it to general service of process in suits or to taxation in any such
jurisdiction where it is not then so subject.
(i) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any fact (a "Material Event") as a result of which any Registration Statement
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the occurrence or existence
of any pending corporate development that, in the reasonable discretion of the
Company, makes it appropriate to suspend the availability of the Shelf
Registration Statement and the related Prospectus, (i) in the case of clause (B)
above, subject to the next sentence, as promptly as practicable prepare and
file, if necessary pursuant to applicable law, a post-effective amendment to
such Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
that would be incorporated by reference into such Registration Statement and
Prospectus so that such Registration Statement does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
such Prospectus does not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective
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<PAGE> 12
amendment to a Registration Statement, subject to the next sentence, use its
reasonable efforts to cause it to be declared effective as promptly as is
practicable, and (ii) give notice to the Notice Holders that the availability of
the Shelf Registration Statement is suspended (a "Deferral Notice") and, upon
receipt of any Deferral Notice, each Notice Holder agrees not to sell any
Registrable Securities pursuant to the Registration Statement until such Notice
Holder's receipt of copies of the supplemented or amended Prospectus provided
for in clause (i) above, or until it is advised in writing by the Company that
the Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus. The Company will use all reasonable efforts to ensure that
the use of the Prospectus may be resumed (x) in the case of clause (A) above, as
promptly as is practicable, (y) in the case of clause (B) above, as soon as, in
the sole judgment of the Company, public disclosure of such Material Event would
not be prejudicial to or contrary to the interests of the Company or, if
necessary to avoid unreasonable burden or expense, as soon as practicable
thereafter and (z) in the case of clause (C) above, as soon as, in the
discretion of the Company, such suspension is no longer appropriate. The Company
shall be entitled to exercise its right under this Section 3(i) to suspend the
availability of the Shelf Registration Statement or any Prospectus, without
incurring or accruing any obligation to pay liquidated damages pursuant to
Section 2(e), no more than one (1) time in any three month period or four (4)
times in any twelve month period, and any such period during which the
availability of the Registration Statement and any Prospectus is suspended (the
"Deferral Period") shall, without incurring any obligation to pay liquidated
damages pursuant to Section 2(e), not exceed 30 days; provided, that in the case
of a Material Event relating to an acquisition or a probable acquisition or
financing, recapitalization, business combination or other similar transaction,
the Company may, without incurring any obligation to pay liquidated damages
pursuant to Section 2(e), deliver to Notice Holders a second notice to the
effect set forth above, which shall have the effect of extending the Deferral
Period by up to an additional 30 days, or such shorter period of time as is
specified in such second notice, provided, that the aggregate duration of any
Deferral Periods shall not, without incurring any obligation to pay liquidated
damages pursuant to Section 2(e), exceed 60 days in any three month period or 90
days in any twelve (12) month period.
(j) If requested in writing in connection with a disposition of
Registrable Securities pursuant to a Registration Statement, make reasonably
available for inspection during normal business hours by a representative for
the Notice Holders of such Registrable Securities and any broker-dealers,
attorneys and accountants retained by such Notice Holders, all relevant
financial and other records, pertinent corporate documents and properties of the
Company and its subsidiaries, and cause the appropriate officers, directors and
employees of the Company and its subsidiaries to make reasonably available for
inspection during normal business hours all relevant information reasonably
requested by such representative for the Notice Holders or any such
broker-dealers, attorneys or accountants in connection with such disposition, in
each case as is customary for similar "due diligence" examinations; provided,
however, that such persons shall first agree in writing with the Company that
any information that is reasonably and in good faith designated by the Company
in writing as confidential at the time of delivery of such information shall be
kept confidential by such persons and shall be used solely for the purposes
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<PAGE> 13
of exercising rights under this Agreement, unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to federal securities laws in connection with the filing of any Registration
Statement or the use of any Prospectus referred to in this Agreement), (iii)
such information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by any such person or (iv) such
information becomes available to any such person from a source other than the
Company and such source is not bound by a confidentiality agreement, and
provided further, that the foregoing inspection and information gathering shall,
to the greatest extent possible, be coordinated on behalf of all the Notice
Holders and the other parties entitled thereto by the counsel referred to in
Section 5.
(k) Use all reasonable efforts to comply with all applicable rules and
regulations of the SEC and make generally available to its securityholders
earning statements (which need not be audited) satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end of any
3-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year) commencing on the first day of the first fiscal quarter of the
Company commencing after the effective date of a Registration Statement, which
statements shall cover said periods.
(l) Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold or to be sold pursuant to a Registration Statement, which certificates
shall not bear any restrictive legends, and cause such Registrable Securities to
be in such denominations as are permitted by the Indenture and registered in
such names as such Notice Holder may request in writing at least two (2)
Business Days prior to any sale of such Registrable Securities.
(m) Provide a CUSIP number for all Registrable Securities covered by
each Registration Statement not later than the effective date of such
Registration Statement and provide the Trustee and the transfer agent for the
Common Stock with printed certificates for the Registrable Securities that are
in a form eligible for deposit with The Depository Trust Company.
(n) Provide such information as is required for any filings required to
be made with the National Association of Securities Dealers, Inc.
(o) Upon (i) the filing of the Initial Registration Statement and (ii)
the effectiveness of the Initial Registration Statement, announce the same, in
each case by release to Reuters Economic Services and Bloomberg Business News.
SECTION 4. Holder's Obligations. Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder of Registrable Securities shall be
entitled to sell any of such Registrable Securities pursuant to a Registration
Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a Notice and Questionnaire
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<PAGE> 14
as required pursuant to Section 2(d) hereof (including the information required
to be included in such Notice and Questionnaire) and the information set forth
in the next sentence. Each Notice Holder agrees promptly to furnish to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Notice Holder not
misleading and any other information regarding such Notice Holder and the
distribution of such Registrable Securities as the Company may from time to time
reasonably request. Any sale of any Registrable Securities by any Holder shall
constitute a representation and warranty by such Holder that the information
relating to such Holder and its plan of distribution is as set forth in the
Prospectus delivered by such Holder in connection with such disposition, that
such Prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to or provided by such Holder or its plan
of distribution and that such Prospectus does not as of the time of such sale
omit to state any material fact relating to or provided by such Holder or its
plan of distribution necessary to make the statements in such Prospectus, in the
light of the circumstances under which they were made, not misleading.
SECTION 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any of the
Registration Statements are declared effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the counsel specified
in the next sentence in connection with Blue Sky qualifications of the
Registrable Securities under the laws of such jurisdictions as the Notice
Holders of a majority of the Registrable Securities being sold pursuant to a
Registration Statement may designate), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
in a form eligible for deposit with The Depository Trust Company), (iii)
duplication expenses relating to copies of any Registration Statement or
Prospectus delivered to any Holders hereunder, (iv) fees and disbursements of
counsel for the Company in connection with the Shelf Registration Statement, (v)
reasonable fees and disbursements of the Trustee and its counsel and of the
registrar and transfer agent for the Common Stock and (vi) Securities Act
liability insurance obtained by the Company in its sole discretion. In addition,
the Company shall bear or reimburse the Notice Holders for the reasonable fees
and disbursements of one firm of legal counsel for the Holders, which shall
initially be Shearman & Sterling, but which may, with the written consent of the
Initial Purchasers (which shall not be unreasonably withheld), be another
nationally recognized law firm experienced in securities law matters designated
by the Company. In addition, the Company shall pay the internal expenses of the
Company (including, without limitation, all salaries and expenses of officers
and employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange on which similar securities of
the Company are then listed and the fees and expenses of any person, including
special experts, retained by the Company.
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Notwithstanding the provisions of this Section 5, each seller of Registrable
Securities shall pay selling expenses and all registration expenses to the
extent required by applicable law.
SECTION 6. Indemnification.
(a) Indemnification by the Company. The Company shall indemnify and hold
harmless each Notice Holder and each person, if any, who controls any Notice
Holder (within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act) from and against any losses, liabilities, claims,
damages and expenses (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) (collectively, "Losses"), arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, provided,
however, that the Company shall not be liable in any such case to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement contained in or omission or alleged omission from any
of such documents in reliance upon and conformity with any of the information
relating to the Holders furnished to the Company in writing by a Holder
expressly for use therein; provided further, that the indemnification contained
in this paragraph shall not inure to the benefit of any Holder of Registrable
Securities (or to the benefit of any person controlling such Holder) on account
of any such Losses arising out of or based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any preliminary
prospectus provided in each case the Company has performed its obligations under
Section 3(a) hereof if either (A) (i) such Holder failed to send or deliver a
copy of the Prospectus with or prior to the delivery of written confirmation of
the sale by such Holder to the person asserting the claim from which such Losses
arise and (ii) the Prospectus would have corrected such untrue statement or
alleged untrue statement or such omission or alleged omission, or (B) (x) such
untrue statement or alleged untrue statement, omission or alleged omission is
corrected in an amendment or supplement to the Prospectus and (y) having
previously been furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended or supplemented, with or prior to the
delivery of written confirmation of the sale of a Registrable Security to the
person asserting the claim from which such Losses arise.
(b) Indemnification by Holders of Registrable Securities. Each Holder
agrees severally and not jointly to indemnify and hold harmless the Company and
its respective directors and officers, and each person, if any, who controls the
Company (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) or any other Holder, from and against all Losses
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement or Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or based upon any omission or alleged omission to state therein a material
fact required to be stated
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<PAGE> 16
therein or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with information furnished to the Company by such Holder expressly
for use in such Registration Statement or Prospectus or amendment or supplement
thereto. In no event shall the liability of any selling Holder of Registrable
Securities hereunder be greater in amount than the dollar amount of the proceeds
received by such Holder upon the sale of the Registrable Securities pursuant to
the Registration Statement giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the reasonable fees and disbursements
of such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all indemnified parties, and that all such fees and expenses shall be reimbursed
as they are incurred. Such separate firm shall be designated in writing by, in
the case of parties indemnified pursuant to Section 6(a), the Holders of a
majority (with Holders of Notes deemed to be the Holders, for purposes of
determining such majority, of the number of shares of Underlying Common Stock
into which such Notes are or would be convertible or exchangeable as of the date
on which such designation is made) of the Registrable Securities covered by the
Registration Statement held by Holders that are indemnified parties pursuant to
Section 6(a) and, in the case of parties indemnified pursuant to Section 6(b),
the Company. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel and the indemnified party would be entitled thereto pursuant to the
second and third sentences of this paragraph, the indemnifying party agrees that
it shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by
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<PAGE> 17
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) Contribution. To the extent that the indemnification provided for in
this Section 6 is unavailable to an indemnified party under Section 6(a) or 6(b)
hereof in respect of any Losses or is insufficient to hold such indemnified
party harmless, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the initial placement pursuant to the Placement Agreement (before
deducting expenses) of the Registrable Securities to which such Losses relate.
Benefits received by any Holder shall be deemed to be equal to the value of
receiving Registrable Securities that are registered under the Securities Act.
The relative fault of the Holders on the one hand and the Company on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Holders
or by the Company, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Holders' respective obligations to contribute pursuant to this paragraph are
several in proportion to the respective number of Registrable Securities they
have sold pursuant to a Registration Statement, and not joint.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method or allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 6(d), an
indemnifying party that is a selling Holder of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such indemnifying party and
distributed to the public were offered to the public exceeds the amount of any
damages that such indemnifying party has otherwise
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<PAGE> 18
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The indemnity, contribution and expense reimbursement obligations of
the parties hereunder shall be in addition to any liability any indemnified
party may otherwise have hereunder, under the Placement Agreement or otherwise.
(f) The indemnity and contribution provisions contained in this Section
6 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any person controlling any Holder, or the Company, or the
Company's officers or directors or any person controlling the Company and (iii)
the sale of any Registrable Securities by any Holder.
SECTION 7. Information Requirements. (a) The Company covenants that, if
at any time before the end of the Effectiveness Period the Company is not
subject to the reporting requirements of the Exchange Act, it will cooperate
with any Holder of Registrable Securities and take such further reasonable
action as any Holder of Registrable Securities may reasonably request in writing
(including, without limitation, making such reasonable representations as any
such Holder may reasonably request), all to the extent required from time to
time to enable such Holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 and Rule 144A under the Securities Act and customarily taken in
connection with sales pursuant to such exemptions. Upon the written request of
any Holder of Registrable Securities, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing requirements,
unless such a statement has been included in the Company's most recent report
filed pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding
the foregoing, nothing in this Section 7 shall be deemed to require the Company
to register any of its securities (other than the Common Stock) under any
section of the Exchange Act.
SECTION 8. Miscellaneous.
(a) No Conflicting Agreements. The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement, enter
into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders of Registrable Securities in this Agreement. The
Company represents and warrants that the rights granted to the Holders of
Registrable Securities hereunder do not in any way conflict with the rights
granted to the holders of the Company's securities under any other agreements.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has
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<PAGE> 19
obtained the written consent of Holders of a majority of the then outstanding
Underlying Common Stock constituting Registrable Securities (with Holders of
Notes deemed to be the Holders, for purposes of this Section, of the number of
outstanding shares of Underlying Common Stock into which such Notes are or would
be convertible or exchangeable as of the date on which such consent is
requested). Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders of Registrable Securities may be given by
Holders of at least a majority of the Registrable Securities being sold by such
Holders pursuant to such Registration Statement; provided, that the provisions
of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding sentence. Each
Holder of Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 8(b), whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:
(w) if to a Holder of Registrable Securities, at the most
current address given by such Holder to the Company in a
Notice and Questionnaire or any amendment thereto;
(x) if to the Company, to:
LSI Logic Corporation
1551 McCarthy Boulevard
Milpitas, California 95035
Attention: General Counsel
Telecopy No.: (408) 433-6896
and
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Larry Sonsini
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<PAGE> 20
John Fore
Telecopy No.: (650) 493-6811
(y) if to the Initial Purchasers, to:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York
Attention: Equity Capital Markets
Telecopy No.: (212) 761-0356
and
Shearman & Sterling
1550 El Camino Real
Menlo Park, CA 94025
Attention: William H. Hinman, Esq.
Telecopy No. (650) 330-2299
or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.
(d) Approval of Holders. Whenever the consent or approval of Holders of
a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchasers
or subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be such affiliates solely by reason of their holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
(e) Successors and Assigns. Any person who purchases any Registrable
Securities from the Initial Purchasers shall be deemed, for purposes of this
Agreement, to be an assignee of the Initial Purchasers. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
20
<PAGE> 21
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
(i) Severability. If any term provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, and the parties hereto shall use their best efforts to find
and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction, it
being intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.
(j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities. Except as
provided in the Placement Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
undertakings among the parties with respect to such registration rights. No
party hereto shall have any rights, duties or obligations other than those
specifically set forth in this Agreement. In no event will such methods of
distribution take the form of an underwritten offering of the Registrable
Securities without the prior agreement of the Company.
(k) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.
21
<PAGE> 22
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
LSI LOGIC CORPORATION
By /s/ BRYON LOOK
-------------------------------
Name: Bryon Look
Title: Vice President
Confirmed and accepted as of the date first above written:
MORGAN STANLEY & CO. INCORPORATED
BANCBOSTON ROBERTSON STEPHENS INC.
J.P. MORGAN & CO., INC.
By: Morgan Stanley & Co. Incorporated
By /s/ BILL SALISBURY
-------------------------------
Name: Bill Salisbury
Title:
<PAGE> 1
REGISTRATION UNDER THE SECURITIES ACT OF 1933
RATIO OF EARNINGS TO FIXED CHARGES
EXHIBIT 12.1
LSI LOGIC CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Amounts in millions of dollars)
<TABLE>
<CAPTION>
Quarter Ended
Fiscal Year Ended December 31, March 31,
------------------------------------------------------------ ------------------
1994 1995 1996 1997 1998 1998 1999
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Pre-tax income (loss)
from continuing operations
before adjustment for
minority interests in
consolidated subsidiaries
or income or loss from
equity investees $156.2 $334.9 $205.1 $224.2 $(123.6) $ 40.7 $ 6.5
Add: Amortization of
capitalized interest 2.0 2.0 1.0 2.0 1.4 0.3 0.7
Less: Interest capitalized -- -- (2.0) (5.0) (11.5) (1.0) --
------ ------ ------ ------ ------ ------ ------
Subtotal $158.2 $336.9 $204.1 $221.2 $(133.7) $ 40.0 $ 7.2
====== ====== ====== ====== ====== ====== ======
Fixed charges:
Interest expensed and
capitalized and
amortization of debt
discount and premium
on all indebtedness $ 19.4 $ 16.5 $ 16.5 $ 7.5 $ 20.7 $ 1.0 $ 10.5
Rental 11.7 14.7 16.0 15.0 14.8 3.7 6.0
------ ------ ------ ------ ------ ------ ------
Total fixed charges $ 31.1 $ 31.2 $ 32.5 $ 22.5 $ 35.5 $ 4.7 $ 16.5
====== ====== ====== ====== ====== ====== ======
Pre-tax income (loss) from
continuing operations
before adjustment for
minority interests in
consolidated subsidiaries
or income or loss from
equity investees plus
fixed charges and
amortization of capitalized
interest, less interest
capitalized $189.3 $368.1 $236.6 $243.7 $(98.2) $ 44.7 $ 23.7
Ratio of earnings to ------ ------ ------ ------ ------ ------ ------
fixed charges 6.1 11.8 7.3 10.8 -- 9.5 1.4
====== ====== ====== ====== ====== ====== ======
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 22, 1999, which appears on
page 58 of LSI Logic Corporation's Annual Report on Form 10-K and 10-K/A for the
year ended December 31, 1998 and the related financial statement schedules
therein, filed with the Securities and Exchange Commission. We also consent to
the reference to us under the heading "Expert" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
San Jose, California
June 14, 1999
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
---------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2)
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
United States 06-1143380
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
</TABLE>
633 West 5th Street, 12th Floor, Los Angeles, California 90071
(Address of principal executive offices) (Zip Code)
Lynda A. Vogel, Senior Vice President and Managing Director
633 West 5th Street, 12th Floor, Los Angeles, California 90071
(213) 362-7399
(Name, address and telephone number of agent for service)
LSI LOGIC CORPORATION
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
Delaware 94-2712976
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
1511 Mc Carthy Boulevard, Milpitas, California 95035
(Address of principal executive offices) (Zip Code)
4 1/4% Convertible Subordinated Notes due 2004
(TYPE OF SECURITIES)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO WHICH
IT IS SUBJECT.
Comptroller of the Currency, Western District Office, 50 Fremont
Street, Suite 3900, San Francisco, California, 94105-2292
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Trustee
is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent, State
Street Bank and Trust Company.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN EFFECT.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as Exhibits
with corresponding exhibit numbers to the Form T-1of Western Digital
Corporation, filed pursuant to Section 305(b)(2) of the Act, on May 12,
1998 (Registration No. 333-52463), and are incorporated herein by
reference.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A Certificate of Corporate Existence (with fiduciary powers) from the
Comptroller of the Currency, Administrator of National Banks is on file
with the Securities and Exchange Commission as Exhibits with corresponding
exhibit numbers to the Form T-1 of Western Digital Corporation, filed
pursuant to Section 305(b)(2) of the Act, on May 12, 1998 (Registration No.
333-52463), and are incorporated herein by reference.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST
POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS SPECIFIED
IN PARAGRAPH (1) OR (2), ABOVE.
Authorization of the Trustee to exercise fiduciary powers (included in
Exhibits 1 and 2; no separate instrument).
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is on file
with the Securities and Exchange Commission as Exhibits with corresponding
exhibit numbers to the Form T-1 of Western Digital Corporation, filed
pursuant to Section 305(b)(2) of the Act, on May 12, 1998 (Registration No.
333-52463), and are incorporated herein by reference.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS IN
DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(B) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act is
annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING
AUTHORITY.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority is annexed hereto as Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company of California,
National Association, organized and existing under the laws of the United States
of America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Los
Angeles, and State of California, on the 1st day of June, 1999 .
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, NATIONAL ASSOCIATION
By: /s/ Joni D'Amico
--------------------------------
NAME: JONI D'AMICO
TITLE: VICE PRESIDENT
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended, in connection with the proposed issuance by LSI Logic
Corporation of its 4 1/4% Convertible Subordinated Notes due 2004, we hereby
consent that reports of examination by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, NATIONAL ASSOCIATION
By: /s/ Joni D'Amico
--------------------------------
NAME: JONI D'AMICO
TITLE: VICE PRESIDENT
DATED: JUNE 1, 1999
3
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition and Income for A Bank With Domestic Offices
Only and Total Assets of Less Than $100 Million of State Street Bank and Trust
Company of California, a national banking association duly organized and
existing under and by virtue of the laws of the United States of America, at the
close of business March 31, 1999, published in accordance with a call made by
the Federal Deposit Insurance Corporation pursuant to the required law: 12
U.S.C. Section 324 (State member banks); 12 U.S.C. Section 1817 (State nonmember
banks); and 12 U.S.C. Section 161 (National banks).
<TABLE>
<CAPTION>
Thousands
of Dollars
------------------
<S> <C> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin............. 6,881
Interest-bearing balances...................................... 0
Securities.......................................................... 38
Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and its
Edge subsidiary................................................ 0
Loans and lease financing receivables:
Loans and leases, net of unearned income................... 0
Allowance for loan and lease losses........................ 0
Allocated transfer risk reserve............................ 0
Loans and leases, net of unearned income and allowances........ 0
Assets held in trading accounts..................................... 0
Premises and fixed assets........................................... 41
Other real estate owned............................................. 0
Investments in unconsolidated subsidiaries.......................... 0
Customers' liability to this bank on acceptances outstanding........ 0
Intangible assets................................................... 0
Other Assets........................................................ 718
--------
Total assets........................................................ 7,678
========
LIABILITIES
Deposits:
In domestic offices............................................ 0
Noninterest-bearing................................... 0
Interest-bearing...................................... 0
In foreign offices and Edge subsidiary......................... 0
Noninterest-bearing................................... 0
Interest-bearing...................................... 0
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge subsidiary................................................ 0
Demand notes issued to the U.S. Treasury and Trading Liabilities.... 0
Other borrowed money................................................ 0
Subordinated notes and debentures................................... 0
Bank's liability on acceptances executed and outstanding............ 0
Other liabilities................................................... 3,370
Total liabilities................................................... 3,370
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus....................... 0
Common stock........................................................ 500
Surplus............................................................. 750
Undivided profits and capital reserves/Net unrealized holding
gains (losses)................................................... 3,058
Cumulative foreign currency translation adjustments................. 0
Total equity capital................................................ 4,308
--------
Total liabilities and equity capital................................ 7,678
========
</TABLE>
4
<PAGE> 6
I, Kevin R. Wallace, Vice President and Comptroller of the above named bank do
hereby declare that this Report of Condition and Income for this report date
have been prepared in conformance with the instructions issued by the
appropriate Federal regulatory authority and is true to the best of my knowledge
and belief.
Kevin R. Wallace
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
Lynda A. Vogel
James A. Quale
Stephen Rivero
