<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 16, 2000
SOLECTRON CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
DELAWARE 1-11098 94-2447045
- -------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
777 GIBRALTAR DRIVE, MILPITAS, CALIFORNIA 95035
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 957-8500
- -------------------------------------------------------------------------------
NOT APPLICABLE
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE> 2
Item 5. Other Events.
On May 8, 2000, Solectron Corporation (the "Registrant") completed its
sale of $3,500,000,000 aggregate principal amount at maturity of Liquid Yield
Option(TM) Notes (Zero Coupon-Senior) due 2020 under an effective registration
statement filed with the Securities and Exchange Commission. This current report
on Form 8-K is being filed for the purpose of filing as exhibits certain
documents relating to such sale.
Item 7. Financial Statements and Exhibits.
(c)Exhibits in accordance with the provisions of Item 601 of Regulation
S-K
Exhibit No. Exhibit Description
----------- -------------------
1.1 Purchase Agreement dated May 2, 2000 between the
Registrant and Merrill Lynch, Pierce, Fenner &
Smith Incorporated.
4.1 Supplemental Indenture dated May 8, 2000 between
the Registrant and State Street Bank and Trust
Company of California, N.A., as Trustee.
8.1 Tax Opinion dated May 15, 2000
Solectron and the Solectron logo are registered trademarks of Solectron
Corporation. All other names are trademarks and/or registered trademarks of
their respective owners.
(TM) Trademark of Merrill Lynch & Co., Inc.
-2-
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 16, 2000 SOLECTRON CORPORATION
/s/ Susan S. Wang
----------------------------------------------
Susan S. Wang
Senior Vice President, Chief Financial Officer
and Secretary
(Principal Financial and Accounting Officer)
-3-
<PAGE> 4
EXHIBIT INDEX
Exhibit No. Exhibit Description
----------- -------------------
1.1 Purchase Agreement dated May 2, 2000 between the
Registrant and Merrill Lynch, Pierce, Fenner &
Smith Incorporated.
4.1 Supplemental Indenture dated May 8, 2000 between
the Registrant and State Street Bank and Trust
Company of California, N.A., as Trustee.
8.1 Tax Opinion dated May 15, 2000
<PAGE> 1
EXHIBIT 1.1
PURCHASE AGREEMENT
between
SOLECTRON CORPORATION
and
MERRILL LYNCH & CO.
May 2, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 1. Representations and Warranties....................................................3
(a) Representations and Warranties by the Company.....................................3
(1) Compliance with Registration Requirements....................................3
(2) Incorporated Documents.......................................................4
(3) Independent Accountants......................................................4
(4) Financial Statements.........................................................4
(5) No Material Adverse Change in Business.......................................4
(6) Good Standing of the Company.................................................4
(7) Good Standing of Subsidiaries................................................5
(8) Capitalization...............................................................5
(9) Authorization of this Underwriting Agreement.................................5
(10) Authorization of the Securities..............................................5
(11) Description of the Securities and the Indenture..............................6
(12) Authorization and Description of Common Stock................................6
(13) Authorization of the Indenture...............................................6
(14) Absence of Defaults and Conflicts............................................6
(15) Absence of Labor Dispute.....................................................7
(16) Absence of Proceedings.......................................................7
(17) Accuracy of Exhibits.........................................................7
(18) Absence of Further Requirements..............................................7
(19) Possession of Intellectual Property..........................................8
(20) Possession of Licenses and Permits...........................................8
(21) Title to Property............................................................8
(22) Investment Company Act.......................................................8
(23) Environmental Laws...........................................................9
(24) Florida Laws.................................................................9
(b) Officers' Certificates............................................................9
SECTION 2. Sale and Delivery to Underwriters; Closing........................................9
(a) Initial Securities................................................................9
(b) Option Securities.................................................................9
(c) Payment..........................................................................10
(d) Denominations; Registration......................................................10
SECTION 3. Covenants of the Company.........................................................10
(a) Compliance with Securities Regulations and Commission Requests...................10
(b) Filing of Amendments.............................................................11
(c) Delivery of Registration Statements..............................................11
(d) Delivery of Prospectuses.........................................................11
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
(e) Continued Compliance with Securities Laws........................................11
(f) Blue Sky Qualifications..........................................................12
(g) Earnings Statement...............................................................12
(h) Reservation of Securities........................................................12
(i) Use of Proceeds..................................................................12
(j) Restriction on Sale of Common Stock..............................................12
(k) Reporting Requirements...........................................................13
SECTION 4. Payment of Expenses..............................................................13
(a) Expenses.........................................................................13
(b) Termination of Agreement.........................................................13
SECTION 5. Conditions of Underwriter's Obligations..........................................14
(a) Effectiveness of Registration Statement..........................................14
(b) Opinion of Counsel for Company...................................................14
(c) Opinion of Counsel for Underwriters..............................................14
(d) Officers' Certificate............................................................14
(e) Accountant's Comfort Letter......................................................15
(f) Bring-down Comfort Letter........................................................15
(g) Ratings..........................................................................15
(h) Lock-up Agreements...............................................................15
(i) No Objection.....................................................................15
(j) Over-Allotment Option............................................................15
(k) Amendment of Agreements..........................................................16
(l) Listing Application..............................................................16
(m) Additional Documents.............................................................16
(n) Termination of Agreement.........................................................16
SECTION 6. Indemnification..................................................................17
(a) Indemnification of Underwriter...................................................17
(b) Indemnification of Company, Directors and Officers...............................18
(c) Actions against Parties; Notification............................................18
(d) Settlement without Consent if Failure to Reimburse...............................19
SECTION 7. Contribution.....................................................................19
SECTION 8. Representations, Warranties and Agreements to Survive Delivery...................20
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 9. Termination......................................................................20
(a) Termination of Agreement.........................................................20
(b) Liabilities......................................................................20
SECTION 10. Notices..........................................................................21
SECTION 11. Parties..........................................................................21
SECTION 12. Governing Law and Time...........................................................21
SECTION 13. Effect of Headings...............................................................21
</TABLE>
iii
<PAGE> 5
SOLECTRON CORPORATION
(a Delaware corporation)
$3,500,000,000
Liquid Yield Option (TM) Notes due 2020 (Zero Coupon - Senior)
PURCHASE AGREEMENT
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Solectron Corporation, a Delaware corporation (the "Company"), confirms
its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Underwriter"), with respect to the issue and sale by the
Company and the purchase by the Underwriter, of $3,500,000,000 aggregate
principal amount of the Company's Liquid Yield Option (TM) Notes due 2020 (Zero
Coupon - Senior) (the "LYONs"), and with respect to the grant by the Company to
the Underwriter of the option described in Section 2(b) hereof to purchase all
or any part of an additional $525,000,000 principal amount of LYONs to cover
over-allotments, if any. The aforesaid $3,500,000,000 principal amount of LYONs
(the "Initial Securities") to be purchased by the Underwriter and all or any
part of the $525,000,000 principal amount of LYONs subject to the option
described in Section 2(b) hereof (the "Option Securities") are hereinafter
called, collectively, the "Securities". The Securities are to be issued pursuant
to a senior indenture (the "Senior Indenture") between the Company and State
Street Bank and Trust Company of California, N.A., as trustee (the "Trustee"),
as to be supplemented by a supplemental indenture to be executed at the Closing
Time (as defined below) between the Company and the Trustee (the "Supplemental
Indenture", and the Senior Indenture, as supplemented by the Supplemental
Indenture, the "Indenture").
The Securities are convertible at any time on or prior to maturity,
unless previously redeemed or otherwise purchased, into shares of common stock,
par value $0.001 per share, of the Company (the "Common Stock") in accordance
with the terms of the Securities and the Indenture, at the initial conversion
rate of 12.3309 shares per LYON.
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as the Underwriter deems advisable after this
Agreement has been executed
<PAGE> 6
and delivered and the Indenture has been qualified under the Trust Indenture Act
of 1939, as amended (the "1939 Act").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-34494) and
pre-effective amendment no. 1 thereto, covering the registration of the
Securities under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus or prospectuses. Such registration
statement has been declared effective by the Commission and the Indenture is
duly qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). Promptly after execution and delivery of this Agreement, the Company will
either (i) prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under the
1933 Act (the "1933 Act Regulations") and/or paragraph (b) of Rule 424 ("Rule
424 (b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely
upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). The information included in such prospectus or in such Term Sheet, as
the case may be, that was omitted from such registration statement at the time
it became effective but that is deemed to be part of such registration statement
at the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriter for
use in connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus dated April 14, 2000 together with the Term Sheet and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or
2
<PAGE> 7
supplements to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by
reference in the Registration Statement, such preliminary Prospectus, as the
case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Underwriter, as of the date thereof, as of the
Closing Time and as of the Date of Delivery (as defined below) (in each case, a
"Representation Date"), as follows:
(1) Compliance with Registration Requirements.The Company meets the
requirements for use of Form S-3 under the 1933 Act. The Registration Statement
(including any Rule 462(b) Registration Statement) has become effective under
the 1933 Act and no stop order suspending the effectiveness of the Registration
Statement (or such Rule 462(b) Registration Statement) has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with. In addition, the Indenture has been duly qualified under the 1939
Act.
At the respective times the Registration Statement (including any
Rule 462(b) Registration Statement) and any post-effective amendments thereto
became effective and at each Representation Date, the Registration Statement
(including any Rule 462(b) Registration Statement) and any amendments thereto
complied and will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act Regulations")
and did not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading. At the date of the Prospectus, at the Closing
Time and at the Date of Delivery, neither the Prospectus nor any amendments and
supplements thereto included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. If the Company elects to rely upon Rule 434 of the 1933
Act Regulations, the Company will comply with the requirements of Rule 434.
Notwithstanding the foregoing, the representations and warranties in this
subsection shall not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by the Underwriter expressly for
use in the Registration Statement or the Prospectus.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus
and the Prospectus delivered to the Underwriter for use in connection with the
offering of the Securities will, at the time of such delivery, be identical to
any electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
3
<PAGE> 8
(2) Incorporated Documents The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the Prospectus,
at the time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the 1934 Act and
the rules and regulations of the Commission thereunder (the "1934 Act
Regulations") and, when read together with the other information in the
Prospectus, at the date of the Prospectus, at the Closing Time and at the Date
of Delivery did not and will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(3) Independent Accountants. The accountants who certified the
financial statements and any supporting schedules thereto included in the
Registration Statement and the Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(4) Financial Statements. The financial statements of the Company
included in the Registration Statement and the Prospectus, together with the
related schedules and notes, as well as those financial statements, schedules
and notes of any other entity included therein, present fairly the financial
position of the Company and its consolidated subsidiaries, or such other entity,
as the case may be, at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries, or such other entity, as the case may be, for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved except to the extent that the interim audited
financial statements are subject to normal year-end adjustments, lack of
footnotes and other presentation items. The supporting schedules, if any,
included in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. The selected
financial data and the summary financial information included in the Prospectus
present fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement and the Prospectus.
(5) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (a) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (b) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those arising
in the ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise and (c) except for
dividends on the Company's preferred stock that may be outstanding from time to
time, in amounts per share that are consistent with the applicable charter
document or supplement thereto, respectively, no dividend or distribution of any
kind has been declared, paid or made by the Company on any class of its capital
stock.
(6) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Delaware
4
<PAGE> 9
and has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to enter into and
perform its obligations under, or as contemplated under, this Agreement. The
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in good
standing would not result in a Material Adverse Effect.
(7) Good Standing of Subsidiaries. Each Subsidiary of the Company
has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify or be in good standing would not result in a Material Adverse Effect.
The Company does not have any "significant subsidiaries" (as such term is
defined in Rule 1-02 of Regulation S-X promulgated under the 1933 Act) other
than Solectron Texas, Inc., Solectron California Corporation and SMART Modular
Technologies, Inc. Except as otherwise stated in the Registration Statement and
the Prospectus, all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and is validly issued, fully paid and
non-assessable and is owned by the Company (except for directors qualifying
shares), directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. None of the
outstanding shares of capital stock of any subsidiary was issued in violation of
preemptive or other similar rights of any securityholder of such subsidiary.
(8) Capitalization. The authorized, issued and outstanding shares of
capital stock of the Company is as set forth in the column entitled "Actual"
under the "Capitalization" section of the Prospectus section (except for
subsequent issuances thereof pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the Prospectus
or pursuant to the exercise of convertible securities or options referred to in
the Prospectus). Such shares of capital stock have been duly authorized and
validly issued by the Company and are fully paid and non-assessable, and none of
such shares of capital stock was issued in violation of preemptive or other
similar rights of any securityholder of the Company.
(9) Authorization of this Underwriting Agreement This Agreement has
been duly authorized, executed and delivered by the Company.
(10) Authorization of the Securities. The Securities have been duly
authorized and, at the Closing Time, will have been duly executed by the Company
and, when authenticated, issued and delivered in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor as
provided in this Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement
5
<PAGE> 10
is considered in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture.
(11) Description of the Securities and the Indenture. The Securities
and the Indenture will conform in all material respects to the respective
statements relating thereto contained in the Prospectus and will be in
substantially the respective forms filed or incorporated by reference, as the
case may be, as exhibits to the Registration Statement.
(12) Authorization and Description of Common Stock. The Common Stock
conforms to all statements relating thereto contained or incorporated by
reference in the Prospectus and such description conforms to the rights set
forth in the instruments defining the same. Upon issuance and delivery of the
Securities in accordance with this Agreement and the Indenture, the Securities
will be convertible at the option of the holder thereof for shares of Common
Stock in accordance with the terms of the Securities and the Indenture; the
shares of Common Stock issuable upon conversion of the Securities have been duly
authorized and reserved for issuance upon such conversion by all necessary
corporate action and such shares, when issued upon such conversion, will be
validly issued and will be fully paid and non-assessable; no holder of such
shares will be subject to personal liability by reason of being such a holder;
and the issuance of such shares upon such conversion will not be subject to the
preemptive or other similar rights of any securityholder of the Company.
(13) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and duly qualified under the 1939 Act and, when duly
executed and delivered by the Company and the Trustee, will constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(14) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them may
be bound, or to which any of the assets, properties or operations of the Company
or any of its subsidiaries is subject (collectively, "Agreements and
Instruments"), except for such defaults that would not result in a Material
Adverse Effect. The execution, delivery and performance of this Agreement, and
the Indenture and any other agreement or instrument entered into or issued or to
be entered into or issued by the Company in connection with the transactions
contemplated hereby or thereby or in the Registration Statement and the
Prospectus and the consummation of the transactions contemplated herein and in
the Registration Statement and the Prospectus (including the issuance and sale
of the Securities and the use of the proceeds from the sale of the Securities as
described under the caption "Use of Proceeds" as well as the issuance of the
shares of Common Stock issuable upon conversion of the Securities) and
compliance by the Company with its obligations hereunder and thereunder have
been duly authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice
6
<PAGE> 11
or passage of time or both, conflict with or constitute a breach of, or default
or Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any assets, properties or
operations of the Company or any of its subsidiaries pursuant to, any Agreements
and Instruments except for such conflicts, defaults or breaches that would not
result in a Material Adverse Effect, or violate any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets, properties or
operations except where such violation would not result in a Material Adverse
Effect, nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries. As used herein, a
"Repayment Event" means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its subsidiaries.
(15) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(16) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or to the knowledge of the Company
threatened, against or affecting the Company or any of its subsidiaries which is
required to be disclosed in the Registration Statement and the Prospectus, or
which might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect the
assets, properties or operations thereof or the consummation of the transactions
contemplated under the Prospectus, this Agreement or the Indenture, or the
performance by the Company of its obligations hereunder and thereunder. The
aggregate of all pending legal or governmental proceedings to which the Company
or any of its subsidiaries is a party or of which any of their respective
assets, properties or operations is the subject which are not described in the
Registration Statement and the Prospectus, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result in a
Material Adverse Effect.
(17) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus or
the documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
(18) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or foreign,
is necessary or required for the due authorization, execution and delivery by
the Company of this Agreement or for the performance by the Company of the
transactions contemplated under the Prospectus, this Agreement, or the
Indenture, except such as have been already made, obtained or rendered, as
applicable.
7
<PAGE> 12
(19) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them, and, other
than as described in the Prospectus, neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly
or in the aggregate, would result in a Material Adverse Effect.
(20) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them. The Company and its subsidiaries are
in compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, singly or in the aggregate,
result in a Material Adverse Effect. All of the Governmental Licenses are valid
and in full force and effect, except where the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force and
effect would not result in a Material Adverse Effect. Neither the Company nor
any of its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
(21) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each case,
free and clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind, except (a) as otherwise stated in the
Registration Statement and the Prospectus or (b) for any of the foregoing,
which, either singly or in the aggregate, would not result in a Material Adverse
Effect. All of the leases and subleases material to the business of the Company
and its subsidiaries considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties described in the Prospectus, are in
full force and effect, and neither the Company nor any of its subsidiaries has
received any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any of its subsidiaries under any
of the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such subsidiary of the continued possession of the
leased or subleased premises under any such lease or sublease, except for any
such claim, which, either singly or in the aggregate, would not result in a
Material Adverse Effect.
(22) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus will not be, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended (the "1940 Act").
8
<PAGE> 13
(23) Environmental Laws. Except as otherwise stated in the
Registration Statement and the Prospectus and except as would not, singly or in
the aggregate, result in a Material Adverse Effect, (a) neither the Company nor
any of its subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (b) the Company and
its subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (c) there are no pending or threatened administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (d) there
are no events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(24) Florida Laws. The Company has complied with, and is and will be
in compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida statutes, and the rules and regulations thereunder or is exempt
therefrom.
(b) Officers' Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries and delivered the Underwriter or to counsel
for the Underwriter in connection with the offering of the Securities shall be
deemed a representation and warranty by the Company to the Underwriter as to the
matters covered thereby on the date of such certificate and, unless subsequently
amended or supplemented, at each Representation Date subsequent thereto.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriter, and the Underwriter agrees
to purchase from the Company, at the price set forth in Schedule A,
$3,500,000,000 in the aggregate principal amount of Initial Securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriter to purchase up
to an additional $525,000,000 principal amount of Securities at the same price
per share set forth in Schedule A for the Initial Securities, plus accreted
interest, if any, from the Closing Date to the date of Delivery (as defined
below). The option hereby granted will expire thirty (30) days after the date
hereof and may be exercised
9
<PAGE> 14
in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Underwriter to the
Company setting forth the number of Option Securities as to which the
Underwriter is then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Underwriter, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, unless otherwise agreed upon by the Underwriter
and the Company. If the option is exercised as to all or any portion of the
Option Securities, the Underwriter will purchase that number of Option
Securities.
(c) Payment. Payment of the purchase price for, and delivery of, the
Initial Securities shall be made at the offices of Wilson Sonsini Goodrich &
Rosati, 650 Page Mill Road, Palo Alto, California 94304, or at such other place
as shall be agreed upon by Merrill Lynch and the Company, at 10:00 a.m.
(California time) on the third (fourth, if the pricing occurs after 4:30 p.m.
(Eastern time) on any given day) business day after the date hereof or such
other time not later than ten business days after such date as shall be agreed
upon by Merrill Lynch and the Company (such time and date of payment and
delivery being herein called "Closing Time"). In addition, in the event that the
Underwriter has exercised its option to purchase any or all of the Option
Securities, payment of the purchase price for, and delivery of such Option
Securities, shall be made at the above-mentioned offices of Wilson Sonsini
Goodrich & Rosati, or at such other place as shall be agreed upon by Merrill
Lynch and the Company, on the relevant Date of Delivery as specified in the
notice from Merrill Lynch to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
Merrill Lynch for the account of the Underwriter of the Securities to be
purchased by it.
(d) Denominations; Registration. The certificates for the Securities,
shall be in such denominations and registered in such names as Merrill Lynch may
request in writing at least one full business day prior to the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the
Underwritten Securities will be made available for examination and packaging by
Merrill Lynch in the City of New York not later than 10:00 a.m. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. COVENANTS OF THE COMPANY
The Company covenants with the Underwriter, as follows:
(a) Compliance with Securities Regulations and Commission Request. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
of the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations, as
applicable, and will notify the Underwriter immediately, and confirm the notice
in writing, of (i) the effectiveness of any post-effective amendment to the
Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii) any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
10
<PAGE> 15
or suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424 and will
take such steps as it deems necessary to ascertain promptly whether the
Prospectus transmitted for filing under Rule 424 was received for filing by the
Commission and, in the event that it was not, it will promptly file the
Prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriter notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b) of the 1933 Act Regulations), any Term
Sheet or any amendment, supplement or revision to either the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act effect or relating to
the Securities, will furnish the Underwriter with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the Underwriter or
counsel for the Underwriter shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriter and counsel for the Underwriter, without charge,
one signed copy of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts. The Registration Statement and each amendment thereto furnished to the
Underwriter will be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company will deliver to the
Underwriter, without charge, as many copies of each preliminary prospectus as
the Underwriter may reasonably request, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to the Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus as the Underwriter may reasonably request.
The Prospectus and any amendments or supplements thereto furnished to the
Underwriter will be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Registration Statement and the
Prospectus. If at any time when the Prospectus is required by the 1933 Act or
the 1934 Act to be delivered in connection with sales of the Securities, any
event shall occur or condition shall exist as a result of which it is necessary,
in the opinion of counsel for the Underwriter or for the Company, to amend the
Registration Statement in order that the Registration Statement will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
11
<PAGE> 16
misleading or to amend or supplement the Prospectus in order that the Prospectus
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriter, without charge, such number of copies of such amendment or
supplement as the Underwriter may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriter, to qualify the Securities and the shares of
Common Stock issuable upon conversion of Securities for offering and sale under
the applicable securities laws of such states and other jurisdictions (domestic
or foreign) as the Underwriter may designate and to maintain such qualifications
in effect for a period of not less than one year from the date hereof; provided,
however, that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the Securities or the
shares of Common Stock issuable upon conversion of Securities have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the date hereof.
(g) Earnings Statement. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) Reservation of Securities. The Company will reserve and keep
available at all times, free of preemptive or other similar rights, a sufficient
number of shares of Common Stock for the purpose of enabling the Company to
satisfy any obligations to issue the shares of Common Stock issuable upon
conversion of Securities.
(i) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(j) Restriction on Sale of Common Stock During a period of 90 days from
the Closing Time, the Company will not, without the prior written consent of the
Underwriter, (i) directly or indirectly, offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic
12
<PAGE> 17
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder and the
Company's LYONs due 2019, (B) any shares of Common Stock issued by the Company
upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof and referred to in the Prospectus, (C) any shares
of Common Stock issued or options to purchase Common Stock granted pursuant to
existing employee benefit plans of the Company referred to in the Prospectus,
(D) any shares of Common Stock issued pursuant to any non-employee director
stock plan or dividend reinvestment plan and (E) any shares of Common Stock
issued pursuant to any acquisition consummated pursuant to an agreement executed
by the Company prior to the Closing Time.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. PAYMENT OF EXPENSES
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriter of this
Agreement, the Agreement among Underwriters, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities or the issuance or delivery of the Common
Stock issuable upon conversion thereof, (iii) the preparation, issuance and
delivery of the Securities and the issuance or delivery of the Common Stock
issuable upon conversion thereof, any certificates for the Securities or such
Common Stock issuable upon conversion thereof, including any transfer taxes and
any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors or agents (including transfer agents and
registrars), as well as the fees and disbursements of the Trustee and its
counsel, (v) the qualification of the Securities and Common Stock issuable upon
conversion thereof under state securities laws in accordance with the provisions
of Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriter in connection therewith and in
connection with the preparation, printing and delivery of the Blue Sky Survey,
and any amendment thereto, (vi) the printing and delivery to the Underwriter of
copies of each preliminary prospectus, any Term Sheet, and the Prospectus and
any amendments or supplements thereto, (vii) the fees charged by nationally
recognized statistical rating organizations for the rating of the Securities,
(viii) the fees and expenses incurred with respect to the listing of the Common
Stock issuable upon conversion of the Securities, and (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review, if any, by the National Association
of Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5 or Section 9(b)(i)
hereof, the Company shall
13
<PAGE> 18
reimburse the Underwriter for all of its accountable out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriter.
SECTION 5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS
The obligations of the Underwriter to purchase and pay for the
Securities pursuant to this Agreement are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any of its subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective under the
1933 Act and no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or be pending or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriter. A prospectus containing information relating to the
description of the Securities and the Common Stock, the specific method of
distribution and similar matters shall have been filed with the Commission in
accordance with Rule 424(b)(1), (b)(2), (b)(3), (b)(4) or (b)(5), as applicable
(or any required post-effective amendment providing such information shall have
been filed and declared effective in accordance with the requirements of Rule
430A), or, if the Company has elected to rely upon Rule 434 of the 1933 Act
Regulations, a Term Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b)(7).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriter
shall have received the favorable opinion, dated as of Closing Time, of Wilson
Sonsini Goodrich & Rosati, Professional Corporation, counsel for the Company, in
form and substance reasonably satisfactory to counsel for the Underwriter, to
the effect set forth in Exhibit B hereto and to such further effect as counsel
to the Underwriter shall reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing Time,
of Latham & Watkins, counsel for the Underwriter. In giving such opinion, such
counsel may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York, the federal law of the United States and
the General Corporation Law of the State of Delaware, upon the opinions of
counsel satisfactory to the Underwriter. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any Material Adverse Effect, and the Underwriter shall
have received a certificate of the President or a Vice President of the Company
and of the chief financial officer or chief accounting officer of the Company,
dated as of Closing Time, to the effect that (i) there has been no such Material
Adverse Effect, (ii) the representations and warranties in Section 1(a) are true
and correct with
14
<PAGE> 19
the same force and effect as though expressly made at and as of the Closing
Time, (iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted, are pending or, to the best of such officer's knowledge, are
threatened by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Underwriter shall have received from KPMG LLP a letter dated such
date, in form and substance satisfactory to the Underwriter, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Underwriter shall
have received from KPMG LLP a letter, dated as of Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
Section 5(e), except that the specified date referred to shall be a date not
more than three business days prior to the Closing Time.
(g) Ratings. At Closing Time, the Securities shall be rated at least
Baa3 by Moody's Investor's Service Inc. and BBB by Standard & Poor's and the
Company shall have delivered to the Underwriter a letter dated the Closing Time,
from each such rating agency, or other evidence satisfactory to the Underwriter,
confirming that the Securities have such ratings; and since the date of this
Agreement, there shall not have occurred a downgrading in the rating assigned to
the Securities or any of the Company's other debt securities by any "nationally
recognized statistical rating agency", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the 1933 Act, and no such organization
shall have publicly announced that it has under surveillance or review its
rating of the Securities or any of the Company's other debt securities.
(h) Lock-up Agreements. On the date hereof, the Underwriter shall have
received a lock-up agreement substantially in the form attached hereto as
Exhibit A signed by the persons listed on Schedule B hereto.
(i) No Objection. If the Registration Statement or an offering of the
Securities is required to be filed with the NASD for review, the NASD shall not
have raised any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(j) Over-Allotment Option. In the event that the Underwriter exercises
its option to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company or any of its
subsidiaries hereunder shall be true and correct as of the Date of Delivery,
and, at the relevant Date of Delivery, the Underwriter shall have received:
(1) A certificate, dated such Date of Delivery, of the President or
a Vice President of the Company and the chief financial officer or chief
accounting officer of the Company, confirming that the certificate delivered at
the Closing Time pursuant to Section 5(d) hereof remains true and correct as of
such Date of Delivery.
15
<PAGE> 20
(2) The favorable opinion of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Underwriter, dated such Date of
Delivery, relating to the Option Securities and otherwise to the same effect as
the opinion required by Section 5(b) hereof.
(3) The favorable opinion of Latham & Watkins, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by Section 5(c) hereof.
(4) A letter from KPMG LLP, in form and substance satisfactory to
the Underwriter and dated such Date of Delivery, substantially in the same form
and substance as the letter furnished to the Underwriter pursuant to Section
5(f) hereof, except that the "specified date" on the letter furnished pursuant
to this paragraph shall be a date not more than three business days prior to
such Date of Delivery.
(5) Since the time of execution of this Agreement, there shall not
have occurred a downgrading in, or withdrawal of, the rating assigned to the
Securities or any of the Company's other securities by any such rating
organization, and no such rating organization shall have publicly announced that
it has under surveillance or review its rating of the Securities or any of the
Company's other securities.
(k) Amendment of Agreements. Prior to Closing Time, each of the
agreements listed on Schedule C shall have been amended to permit the offering
of the Securities without resulting in a default thereunder and at Closing Time
shall be in form and substance satisfactory to the Underwriter and counsel for
the Underwriter.
(l) Listing Application. Prior to Closing Time, the Company shall have
filed an application with the New York Stock Exchange to list the Securities
thereon.
(m) Additional Documents. At Closing Time and at the Date of Delivery,
counsel for the Underwriter shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Underwriter and counsel for the Underwriter.
(n) Termination of Agreement. If any condition specified in this Section
5 shall not have been fulfilled when and as required to be fulfilled, this
Agreement (or, with respect to the Underwriter's exercise of any over-allotment
option for the purchase of Option Securities on a Date of Delivery after the
Closing Time, the obligations of the Underwriter to purchase the Option
Securities on such Date of Delivery) may be terminated by the Underwriter by
notice to the Company at any time at or prior to the Closing Time (or such Date
of Delivery, as applicable), and such termination shall be without liability of
any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
16
<PAGE> 21
SECTION 6. INDEMNIFICATION
(a) Indemnification of Underwriter. The Company agrees to indemnify and
hold harmless the Underwriter and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(3) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Underwriter), reasonably
incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above; provided, however, that
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by the Underwriter expressly
for use in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information deemed to be a part thereof,
if applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto).
The foregoing indemnity with respect to any untrue statement contained
in or omission from a preliminary prospectus shall not inure to the benefit of
the Underwriter (or any person controlling the Underwriter) from whom the person
asserting any such loss, liability, claim, damage or expense purchased any of
the Securities which are the subject thereof, if the Company shall sustain the
burden of proving that such person was not sent or given a copy of the
Prospectus at or prior to the written confirmation of the sale of such
Securities to such person and the untrue statement contained in or omission from
such preliminary prospectus was corrected in the Prospectus.
17
<PAGE> 22
(b) Indemnification of Company, Directors and Officers. The Underwriter
agrees to indemnify and hold harmless the Company, its directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Underwriter, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than forty-five (45) days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least thirty (30) days prior to such
settlement being
18
<PAGE> 23
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. CONTRIBUTION
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and the
Underwriter, on the other hand, from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) 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 Company, on the one hand, and the Underwriter, on the other hand, in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriter, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of such
Securities (before deducting expenses) received by the Company and the total
underwriting discount received by the Underwriter, in each case as set forth on
the cover of the Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet bear to the aggregate initial public offering price of such
Securities as set forth on such cover.
The relative fault of the Company, on the one hand, and the Underwriter,
on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Underwriter shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of
19
<PAGE> 24
any damages which the Underwriter has otherwise been required to pay by reason
of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of and payment for the Securities.
SECTION 9. TERMINATION
(a) Termination of Agreement. The Underwriter may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
or any relevant Date of Delivery, if (i) there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the Prospectus, any Material Adverse Effect, or (ii)
there has occurred any material adverse change in the financial markets in the
United States, or any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Underwriter, impracticable to market the Securities or to enforce contracts for
the sale of the Securities, or (iii) trading in any securities of the Company
has been suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the New York Stock Exchange or the American
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by either of said exchanges or by such
system or by order of the Commission, the NASD or any other governmental
authority, or (iv) a banking moratorium has been declared by either Federal or
New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section 9, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
20
<PAGE> 25
SECTION 10. NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriter shall be directed to
Merrill Lynch at 10900 Wilshire Boulevard, Suite 900, Los Angeles, California
90024, Attn: Harold McMahon; and notices to the Company shall be directed to it
at 777 Gibraltar Drive, Milpitas, California 95035, Attn: Susan Wang, Senior
Vice President and Chief Financial Officer.
SECTION 11. PARTIES
This Agreement shall inure to the benefit of and be binding upon the
Company and Underwriter and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriter and the Company and
their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and their respective successors, and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from the Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 12. GOVERNING LAW AND TIME
THIS UNDERWRITING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH
HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 13. EFFECT OF HEADINGS
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
[Signature Page Follows]
21
<PAGE> 26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this Agreement, along with all counterparts, will become a binding agreement
between the Underwriter and the Company in accordance with its terms and as of
the date first set forth above.
Very truly yours,
SOLECTRON CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
CONFIRMED AND ACCEPTED,
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By:_____________________________________
Name:___________________________________
Title:__________________________________
S-1
<PAGE> 27
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by Solectron Corporation
Dear Sirs:
The undersigned, a stockholder and an officer of Solectron Corporation,
a Delaware corporation (the "Company"), understands that Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") proposes to
enter into a Purchase Agreement (the "Purchase Agreement") with the Company
providing for the public offering of $3,500,000,000 aggregate principal amount
of the Company's Liquid Yield Option (TM) Notes due 2020 (Zero Coupon - Senior)
(the "Securities"). In recognition of the benefit that such an offering will
confer upon the undersigned as a stockholder and an officer of the Company, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned agrees with Merrill Lynch that, during
a period of 45 days from the date of the Purchase Agreement, the undersigned
will not, without the prior written consent of Merrill Lynch directly or
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or transfer any shares
of the Company's Common Stock, par value $0.001 per share (the "Common Stock"),
or any securities convertible into or exchangeable or exercisable for Common
Stock, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of 1933
as amended, with respect to any of the foregoing or (ii) enter into any swap or
any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of Common Stock or
any securities convertible into or exchangeable for Common Stock, whether any
such swap or transaction is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
Very truly yours,
Signature:___________________________________
Print Name:__________________________________
A-1
<PAGE> 28
EXHIBIT B
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under, or as
contemplated by, the Purchase Agreement.
(iii) The Company is in good standing as a foreign corporation duly
qualified to transact business in California and Georgia.
(iv) The Company has the authorized capitalization as set forth in the
Prospectus under the caption "Capitalization."
(v) Each of Solectron Texas, Inc., Solectron California Corporation and
SMART Modular Technologies, Inc. ("U.S. Significant Subsidiaries") is duly
incorporated and is an existing corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and is in good standing as a foreign corporation duly qualified to
transact business in each jurisdiction in which such qualification is required,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect. All of the issued and outstanding capital
stock of each U.S. Significant Subsidiary has been duly authorized and is
validly issued, fully paid and non-assessable and, to our knowledge, is owned by
the Company, directly or through subsidiaries, free of any adverse claim. None
of the outstanding shares of capital stock of any U.S. Significant Subsidiary
was issued in violation of any statutory preemptive or similar rights of any
security holder of such U.S. Significant Subsidiary under such corporation's
charter, by-law or any Reviewed Agreement.
(vi) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(vii) The documents incorporated by reference in the Prospectus (other
than the financial statements and supporting schedules and other financial
information derived from accounting records, included therein or omitted
therefrom, as to which we need express no opinion), when they were filed with
the Commission complied as to form in all material respects with the
requirements of the 1934 Act and the rules and regulations of Commission
thereunder.
(viii) To our knowledge, except as disclosed in the Prospectus, there is
not pending or threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any of
B-1
<PAGE> 29
its subsidiaries is a party, or to which the assets, properties or operations of
the Company or any subsidiary is subject, before or brought by any court or
governmental agency or body which such counsel believes will have a Material
Adverse Effect or materially or adversely affect the Company's ability to
consummate transactions contemplated by the Purchase Agreement or the
performance by the Company of its obligations thereunder.
(ix) The information in the Prospectus under the captions "Description
of LYONS", "Description of Capital Stock" and in the Registration Statement
under Item 15, insofar as it purports to summarize the documents or laws
referred to therein, fairly summarize in all material respects the matter
referred to therein.
(x) We confirm our opinion as set forth in the fifth full paragraph
under the caption "Federal Income Tax Considerations" in the Prospectus. The
information in the Prospectus under the caption "Federal Income Tax
Considerations," while not purporting to discuss all tax matters relating to the
Securities, based upon the Securities being treated as indebtedness, sets forth
the material federal income tax consequences of the Securities, subject to the
qualifications set forth therein.
(xi) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any U.S. federal or California,
or under the General Corporation Law of Delaware, Delaware court or governmental
authority or agency is necessary or required by the Company in connection with
the due authorization, execution or delivery by the Company of the Purchase
Agreement or the Indenture or for the performance by the Company of the
transactions contemplated under the Prospectus or the Indenture, other than
under the 1933 Act and the 1939 Act, which has already been made, obtained or
rendered, as applicable, and other than as may be required under state or
non-U.S. securities laws as to which no opinion need be rendered.
(xii) The Registration Statement (including any Rule 462(b) Registration
Statement) has been declared effective under the 1933 Act. The required filings
of the Prospectus pursuant to Rule 424(b) have been made in the manner and
within the time periods required by Rule 424(b). To our knowledge, no stop order
suspending the effectiveness of the Registration Statement (or such Rule 462(b)
Registration Statement) has been issued under the 1933 Act and no proceedings
for that purpose have been instituted or are pending or threatened by the
Commission.
(xiii) The Registration Statement (including any Rule 462(b)
Registration Statement) and the Prospectus, excluding the documents incorporated
by reference therein, and each amendment or supplement to the Registration
Statement and Prospectus, excluding the documents incorporated by reference
therein, as of their respective effective or issue dates (other than the
financial statements and supporting schedules and other financial information
derived from accounting records, included therein or omitted therefrom, and the
Trustee's Statement of Eligibility on Form T-1, as to which we need express no
opinion) complied as to form in all
B-2
<PAGE> 30
material respects with the requirements of the 1933 Act and the rules and
regulations of the Commission thereunder.
(xiv) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(xv) To our knowledge, the execution, delivery and performance by the
Company of its obligations under the Purchase Agreement, the Indenture and the
Securities and the consummation by the Company of the transactions contemplated
by the Purchase Agreement (including the issuance of the shares of Common Stock
issuable upon conversion of the Securities) do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in Section
1(a)(xiv) of the Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to any Reviewed Agreement (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
have a Material Adverse Effect), nor will such action result in any violation of
the provisions of the charter or by-laws of the Company, or any applicable U.S.
federal or California law, statute, rule, regulation, judgment, order, writ or
decree, known to us, of any U.S. federal or California government, government
instrumentality or court having jurisdiction over the Company or any of their
respective properties, assets or operations. For purposes of this opinion,
"Reviewed Agreements" are agreements that would be required to be filed as an
exhibit to the Company's Annual Report on Form 10-K if such Annual Report was
being filed for the first time as of the date of such counsel's opinion, as
certified by the Company.
(xvi) Each of the Senior Indenture and the Supplemental Indenture
(collectively, the "Indenture") has been duly authorized, executed and delivered
by the Company and, assuming the due authorization, execution and delivery
thereof by the Trustee, constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.
(xvii) The Securities are in the form contemplated by the Indenture,
have been duly authorized by the Company and, assuming that the Securities have
been duly authenticated by the Trustee in the manner described in its
certificate delivered to you today (which fact such counsel need not determine
by an inspection of the Securities), the Securities have been duly executed,
issued and delivered by the Company and constitute valid and binding obligations
of the Company, enforceable against the Company in accordance with their terms,
and will be entitled to benefits of the Indenture.
(xviii)The shares of Common Stock issuable upon conversion of the
Securities have been duly authorized and reserved for issuance upon such
conversion by all necessary corporate action; such shares, when issued upon such
conversion, will be validly issued and will be fully paid and non-assessable,
and no holder of such Common Stock is or will be subject to personal liability
solely by reason of being such a holder.
B-3
<PAGE> 31
(xix) The issuance of the shares of Common Stock upon conversion of the
Securities is not subject to any statutory preemptive or other similar rights of
any security holder of the Company under the Company's charter, by-laws or any
Reviewed Agreement.
(xx) The Senior Indenture has been duly qualified under the 1939 Act.
(xxi) The form of certificate to be used to evidence the Common Stock
issuable upon conversion of the Securities complies in all material respects
with all applicable statutory requirements, with any applicable requirements of
the charter and by-laws of the Company and the requirements of the New York
Stock Exchange.
(xxii) To our knowledge, there are no contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments required to be filed or
incorporated by reference as exhibits to the Registration Statement other than
those filed or incorporated by reference as exhibits thereto, and the
descriptions thereof or references thereto are correct in all material respects.
Such counsel shall also have furnished to you a written statement
(included in such written opinion or in a separate letter) to the effect that,
although such counsel has not verified, and is not passing upon and does not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior to the
Closing Time, except as set forth in paragraphs (ix) and (x) above, such counsel
has acted as counsel to the Company in connection with the preparation of the
Registration Statement and Prospectus and any such further amendments or
supplements and such counsel has reviewed and discussed the contents of the
Registration Statement and the Prospectus and any such further amendments and
supplements with representatives of the Company, its auditors, you and your
counsel, and on the basis of the information that such counsel gained in the
course of this review and discussion, but without independent check or
verification, no facts have come to such counsel's attention that caused it to
believe (i) that, as of its effective date, the Registration Statement or any
further amendment thereto made by the Company prior to such Closing Time
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that, as of its date or such Closing Time, the Prospectus or
any further amendment or supplement thereto made by the Company prior to such
Closing Time contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (ii) that any
amendment to the Registration Statement was required to be filed. Such counsel
need not express any opinion to make any statement as to the financial
statements and related schedules or other financial data derived from accounting
records included in or omitted from the Registration Statement or the Prospectus
or any amendment or supplement thereto or with respect to the Statement of
Eligibility and Qualification of the Trustee under the 1939 Act filed as an
exhibit to the Registration Statement.
B-4
<PAGE> 32
Such counsel's opinions with respect to any documents being valid,
binding or enforceable according to its terms may be qualified as to:
(i) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium or other similar
laws relating to or affecting the rights and remedies of
creditors generally;
(ii) rights to indemnification and contribution which may be limited
by applicable law or equitable principles; and
(iii) general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair
dealing, and the possible unavailability of specific performance
or injunctive relief, and limitations or rights of acceleration,
regardless of whether such validity and binding effect are
considered in a proceeding in equity or at law.
Moreover, such counsel need express no opinion as to the validity, binding
effect or enforceability of any provisions of the Indenture purporting to impose
penalties or any increase in interest rate to the extent they constitute a
penalty or are otherwise contrary to public policy.
In rendering such opinion, such counsel may rely as to matters of fact
on documents, certificates, corporate records, opinions and instruments as such
counsel has deemed necessary or appropriate for purposes of this opinion. In
addition, such counsel may state their opinion is limited to matters governed by
the laws of the State of California, the General Corporation Law of the State of
Delaware and the Federal law of the United States, and, as to the valid and
binding nature of the Indenture and the Securities and the enforceability
thereof as set forth in paragraphs (xvi) and (xvii), the laws of the State of
New York.
With respect to matters other than the laws of the State of California,
the General Corporation Law of the State of Delaware and the Federal law of the
U.S., and, as set forth in the preceding paragraph, the laws of the State of New
York, such counsel may omit such opinions, provided that such opinions are
provided by other counsel reasonably acceptable to the Underwriter.
B-5
<PAGE> 33
SCHEDULE A
PURCHASE PRICE
$2,026,920,000.00
<PAGE> 34
SCHEDULE B
PARTIES TO LOCK-UP AGREEMENT
David Kynaston
Ko Nishimura
Daniel Perez
Ajay Shah
Ken Tsai
Susan Wang
Walter Wilson
Saeed Zohouri
<PAGE> 35
SCHEDULE C
AGREEMENTS TO BE AMENDED
1. Credit Agreement, dated as of April 30, 1997, among the Company and the banks
party thereto, as amended.
2. Amended and Restated Lease Agreement, dated as of July 1, 1998, among the
Company, Solectron Washington, Inc. and BNP Leasing Corporation ("BNP") and
Amended and Restated Guaranty, dated as of July 1, 1998, by the Company in favor
of BNP, in each case as amended.
3. Lease Agreement, dated as of October 20, 1998, among the Company, Solectron
Georgia Corporation and BNP, as amended.
4. Participation Agreement, dated as of June 4, 1999, among the Company,
Solectron South Carolina Corporation, Solectron California Corporation, SMART
Modular Technologies, Inc., First Security Bank, National Association, as
trustee, the lenders party thereto from time to time, and First Security Bank,
National Association, as agent for such lenders, and certain agreements among
such parties related thereto, in each case as amended.
5. Amended and Restated Lease Agreement, dated as of July 16, 1998, between BNP
and Force Computers, Inc. and Amended and Restated Guaranty, dated as of July
16, 1998, by the Company in favor of BNP, in each case as amended.
6. Lease Agreement, dated as of September 6, 1994, between BP and the Company,
as amended.
<PAGE> 1
EXHIBIT 4.1
SOLECTRON CORPORATION
Liquid Yield Option(TM) Notes due 2020
(Zero Coupon-Senior)
--------------------------------------
Supplemental Indenture
Dated as of May 8, 2000
Supplementing that certain
Indenture
Dated as of May 8, 2000
--------------------------------------
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.,
TRUSTEE
-----------------------------------------------
(TM)Trademark of Merrill Lynch & Co., Inc.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE ONE ISSUANCE OF LYONS..................................................................... 3
Section 101..................................Issuance of LYONs; Principal Amount; Maturity 3
Section 102...................No Interest on the LYONs; Accrual of Original Issue Discount 4
ARTICLE TWO CERTAIN DEFINITIONS................................................................... 4
Section 201............................................................Certain Definitions 4
Section 202..............................................................Other Definitions 6
ARTICLE THREE CERTAIN COVENANTS................................................................... 7
Section 301.......................................................Registration and Listing 7
ARTICLE FOUR ..................................................................................... 7
Section 401............................................................Right of Redemption 7
Section 402..................................Conversion Arrangement on Call for Redemption 8
ARTICLE FIVE ..................................................................................... 9
Section 501...........................................................Conversion Privilege 9
Section 502...........................................................Conversion Procedure 10
Section 503.........................................Adjustment for Change in Capital Stock 12
Section 504....................................................Adjustment for Rights Issue 12
Section 505.............................................Adjustment for Other Distributions 14
Section 506................................................When Adjustment May Be Deferred 16
Section 507....................................................When No Adjustment Required 16
Section 508...........................................................Notice of Adjustment 16
Section 509.............................................................Voluntary Increase 17
Section 5010..............................Reorganization of Company; Special Distributions 17
Section 5011......................................................Simultaneous Adjustments 18
Section 5012........................................................Successive Adjustments 18
Section 5013...............Rights Issued in Respect of Common Stock Issued Upon Conversion 18
ARTICLE SIX ...................................................................................... 18
Section 601......................................Purchase of LYONs at Option of the Holder 19
Section 602...............Purchase of LYONs at Option of the Holder upon Change in Control 25
</TABLE>
-i-
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 603.................Effect of Purchase Notice or Change in Control Purchase Notice 27
Section 604..................Deposit of Purchase Price or Change in Control Purchase Price 29
Section 605........................................................LYONs Purchased in Part 29
Section 606.................Covenant to Comply with Securities Laws Upon Purchase of LYONs 29
Section 607.......................................................Repayment to the Company 29
ARTICLE SEVEN .................................................................................... 30
Section 701...................Optional Conversion to Semiannual Coupon LYON Upon Tax Event 30
Section 702.................................Payment of Interest; Interest Rights Preserved 30
ARTICLE EIGHT .................................................................................... 31
Section 801..............................................................Events of Default 32
Section 802......................................................Acceleration of the LYONs 33
ARTICLE NINE ..................................................................................... 33
Section 901....................................................Consent of Holders Required 33
Section 902.........................................Applicability of Defeasance Provisions 34
Section 903...........................................Restrictive Covenants Not Applicable 34
Section 904.......................................Reference to and Effect on the Indenture 34
Section 905....................................................Waiver of Certain Covenants 34
Section 906.........................Supplemental Indenture May be Executed In Counterparts 35
Section 907.............................................................Effect of Headings 35
</TABLE>
-ii-
<PAGE> 4
This Supplemental Indenture, dated as of May 8, 2000 (the "Supplemental
Indenture"), between Solectron Corporation, a corporation duly organized and
existing under the laws of the State of Delaware (the "Company"), and State
Street Bank and Trust Company of California, N.A., a national banking
association organized and existing under the laws of the United States of
America, as Trustee (the "Trustee"), supplementing that certain Indenture, dated
as of May 8, 2000, between the Company and the Trustee (the "Indenture").
RECITALS
A. The Company has duly authorized the execution and delivery of the
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes, or other evidences of indebtedness to be issued in one or
more series as provided for in the Indenture.
B. The Indenture provides that the Securities of each series shall be in
substantially the form set forth in the Indenture, or in such other form as may
be established by or pursuant to a Board Resolution or in one or more
supplemental indentures thereto, in each case with such appropriate insertions,
omissions, substitutions, and other variations as are required or permitted by
the Indenture, and may have such letters, numbers, or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined to be required by the officers executing
such securities, as evidenced by their execution thereof.
C. The Company and the Trustee have agreed that the Company shall issue
and deliver, and the Trustee shall authenticate, Securities denominated "Liquid
Yield Option(TM) Notes due 2020 (Zero Coupon-Senior)" (the "LYONs") pursuant to
the terms of this Supplemental Indenture and substantially in the form set forth
in Exhibit A below, in each case with such appropriate insertions, omissions,
substitutions, and other variations as are required or permitted by the
Indenture and this Supplemental Indenture, and with such letters, numbers, or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of such Securities.
ARTICLE ONE
ISSUANCE OF LYONS
Section 101. ISSUANCE OF LYONS; PRINCIPAL AMOUNT; MATURITY.
(a) On May 8, 2000, the Company shall issue and deliver to the Trustee,
and the Trustee shall authenticate, LYONs substantially in the form set forth in
Exhibit A below, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by the Indenture
and this Supplemental Indenture, and with such letters, numbers, or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any LYONs exchange or as may,
3
<PAGE> 5
consistently herewith, be determined by the officers executing such LYONs, as
evidenced by their execution of such LYONs.
(b) The LYONs shall be issued in the aggregate Principal Amount at
Maturity of $3,500,000,000 (or $4,025,000,000 if the over-allotment option set
forth in Section 2(b) of the Underwriting Agreement dated May 2, 2000 (as
amended from time to time by the parties thereto) by and between the Company and
Merrill Lynch & Co. Inc. is exercised in full) and shall mature on May 8, 2020.
The LYONs shall be issued only in denominations of $1,000 Principal Amount at
Maturity and any integral multiple thereof.
Section 102. NO INTEREST ON THE LYONS; ACCRUAL OF ORIGINAL ISSUE DISCOUNT.
(a) The LYONs shall not bear interest except as specified in paragraphs 1
or 10 of the LYONs. Original Issue Discount (the difference between the Issue
Price and the Principal Amount at Maturity of the LYONs), in the period during
which a LYON remains outstanding, shall accrue at 2-3/4% per annum, on a
semiannual bond equivalent basis using a 360-day year composed of twelve 30-day
months, from the Issue Date of this LYON.
(b) The Company shall promptly make all payments in respect of the LYONs
on the dates and in the manner provided in the LYONs or pursuant to this
Indenture and Supplemental Indenture. Principal Amount at Maturity, Restated
Principal Amount, Issue Price Plus accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price and interest, if any,
shall be considered paid on the applicable date due if on such date (or in the
case of a Purchase Price or Change in Control Purchase Price, on the Business
Day following the applicable Purchase Date or Change in Control Purchase Date,
as the case may be) the Trustee or the Paying Agent holds, in accordance with
this Indenture and Supplemental Indenture, money or securities, if permitted
hereunder, sufficient to pay all such amounts then due.
(c) The Company shall, to the extent permitted by law, pay interest on
overdue amounts at the rate per annum set forth in paragraph 1 of the LYONs,
compounded semiannually, which interest shall accrue from the date such overdue
amount was originally due to the date payment of such amount, including interest
thereon, has been made or duly provided for. All such interest shall be payable
on demand. The accrual for such interest on overdue amounts shall be in lieu of,
and not in addition to, the continued accrual of Original Issue Discount.
ARTICLE TWO
CERTAIN DEFINITIONS
Section 201. CERTAIN DEFINITIONS
The terms defined in this Section 201 (except as herein otherwise expressly
provided or unless the context of this Supplemental Indenture otherwise
requires) for all purposes of this Supplemental Indenture and of any indenture
supplemental hereto have the respective meanings specified in this Section 201.
All other terms used in this Supplemental Indenture that are
-4-
<PAGE> 6
defined in the Indenture or the Trust Indenture Act, either directly or by
reference therein (except as herein otherwise expressly provided or unless the
context of this Supplemental Indenture otherwise requires), have the respective
meanings assigned to such terms in the Indenture or the Trust Indenture Act, as
the case may be, as in force at the date of this Supplemental Indenture as
originally executed.
"Capital Stock" for any corporation means any and all shares, interest,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation.
"Conversion Agent" means State Street Bank and Trust Company of California,
N.A., or any successor entity thereto.
"Debt" means with respect to the Company at any date, without duplication,
obligations (other than nonrecourse obligations) for borrowed money or evidenced
by bonds, debentures, notes or similar instruments.
"Issue Date" of any LYON means the date on which the LYON was originally
issued or deemed issued as set forth on the face of the LYON.
"Issue Price" of any LYON means, in connection with the original issuance
of such LYON, the initial issue price at which the LYON is sold as set forth on
the face of the LYON.
"Original Issue Discount" of any LYON means the difference between the
Issue Price and the Principal Amount at Maturity of the LYON as set forth on the
face of the LYON.
"Principal Amount at Maturity" of a LYON means the Principal Amount at
Maturity as set forth on the face of the LYON.
"Redemption Date" or "redemption date" shall mean the date specified for
redemption of the LYONs in accordance with the terms of the LYONs and this
Indenture.
"Redemption Price" or "redemption price" shall have the meaning set forth
in paragraph 5 of the LYONs.
"SEC" means the Securities and Exchange Commission.
"Special Record Date" means for the payment of any Defaulted Interest, the
date fixed by the Trustee pursuant to Section 702(b).
"Stated Maturity", when used with respect to any LYON, means the date
specified in such LYON as the fixed date on which an amount equal to the
Principal Amount at Maturity of such LYON is due and payable.
-5-
<PAGE> 7
"Supplemental Indenture" means this Supplemental Indenture, as amended or
supplemented from time to time in accordance with the terms hereof, including
the provisions of the Trust Indenture Act that are deemed to be part hereof,
supplementing that certain Indenture, dated as of May 8, 2000 between the
Company and the Trustee.
"Tax Event" means that the Company shall have received an opinion from
independent tax counsel experienced in such matters to the effect that, on or
after May 8, 2000, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein or (b) any amendment to, or change in, an interpretation or application
of such laws or regulations by any legislative body, court, governmental agency
or regulatory authority, in each case which amendment or change is enacted,
promulgated, issued or announced or which interpretation is issued or announced
or which action is taken, on or after May 8, 2000, there is more than an
insubstantial risk that interest (including Original Issue Discount) payable on
the LYONs either (i) would not be deductible on a current accrual basis or (ii)
would not be deductible under any other method, in either case in whole or in
part, by the Company (by reason of deferral, disallowance, or otherwise) for
United States Federal income tax purposes.
"Trading Day" means a day during which trading in securities generally
occurs on the New York Stock Exchange or, if the Common Stock is not listed on
the New York Stock Exchange, on the principal other national or regional
securities exchange on which the Common Stock is then listed or, if the Common
Stock is not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock is then traded.
Section 202. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Defined in
Term Section
---- -----------
<S> <C>
"Associate"..................................................... 602(a)
"Average Quoted Price".......................................... 501
"Bankruptcy Law"................................................ 801
"beneficial owner".............................................. 602(a)
"cash".......................................................... 601(b)
"Change in Control"............................................. 602(a)
"Change in Control Purchase Date"............................... 602(a)
"Change in Control Purchase Notice"............................. 602(c)
"Change in Control Purchase Price".............................. 602(a)
"Company Notice"................................................ 601(e)
"Company Notice Date"........................................... 601(c)
"Conversion Date"............................................... 502
"Conversion Rate"............................................... 501
"Custodian"..................................................... 801
"Defaulted Interest"............................................ 702(b)
</TABLE>
-6-
<PAGE> 8
<TABLE>
<S> <C>
"Ex-Dividend Time".............................................. 501
"Extraordinary Cash Dividend"................................... 505
"Interest Payment Date"......................................... 701
"Legal Holiday"................................................. 502
"Market Price".................................................. 601(d)
"Option Exercise Date".......................................... 701
"Purchase Date"................................................. 601(a)
"Purchase Notice"............................................... 601(a)(1)
"Purchase Price"................................................ 601(a)
"Quoted Price".................................................. 501
"Regular Record Date"........................................... 701
"Restated Principal Amount"..................................... 701
"Rights"........................................................ 513
"Rights Agreement".............................................. 513
"Sale Price".................................................... 601(d)
"Tax Event Date"................................................ 701
"Time of Determination"......................................... 501
</TABLE>
ARTICLE THREE
CERTAIN COVENANTS
The following covenant shall be applicable to the Company for so long as
any of the LYONs are outstanding. Nothing in this paragraph will, however,
affect the Company's obligations under any provision of the Indenture or, except
for Article Three hereof, this Supplemental Indenture.
Section 301. REGISTRATION AND LISTING.
The Company (i) will effect all registrations with, and obtain all
approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act, the Exchange
Act and state securities and Blue Sky laws) before the shares of Common Stock
issuable upon conversion of LYONs may be lawfully issued and delivered, and
thereafter publicly traded, and qualified or listed as contemplated by clause
(ii); and (ii) will list the shares of Common Stock required to be issued and
delivered upon conversion of the LYONs prior to such issuance or delivery on The
Nasdaq National Market or such other exchange or automated quotation as the
Common Stock is then listed at such date of conversion.
ARTICLE FOUR
REDEMPTION OF LYONS
Section 401. RIGHT OF REDEMPTION.
-7-
<PAGE> 9
The LYONs will not be subject to redemption prior to May 8, 2003 and will
be redeemable on and after such date at the option of the Company, in whole or
in part, upon not less than 15 nor more than 60 days' notice to the Holders.
The table below shows redemption prices of a LYON on May 8, 2003, at each
May 8 thereafter prior to maturity and at maturity on May 8, 2020. These prices
reflect the accrued Original Issue Discount calculated to each such date. The
redemption price of a LYON redeemed between such dates would include an
additional amount reflecting the additional Original Issue Discount accrued
since the next preceding date in the table.
<TABLE>
<CAPTION>
(2)
Accrued (3)
(1) Original Redemption
LYON Issue Discount Price
Issue Price at 2 3/4% (1)+(2)
----------- -------------- -----------
Redemption Date
---------------
<S> <C> <C> <C>
May 8, 2003...................................... $ 579.12 $ 49.45 $ 628.57
May 8, 2004...................................... 579.12 66.85 645.97
May 8, 2005...................................... 579.12 84.74 663.86
May 8, 2006...................................... 579.12 103.12 682.24
May 8, 2007...................................... 579.12 122.01 701.13
May 8, 2008...................................... 579.12 141.43 720.55
May 8, 2009...................................... 579.12 161.38 740.50
May 8, 2010...................................... 579.12 181.88 761.00
May 8, 2011...................................... 579.12 202.95 782.07
May 8, 2012...................................... 579.12 224.60 803.72
May 8, 2013...................................... 579.12 246.86 825.98
May 8, 2014...................................... 579.12 269.73 848.85
May 8, 2015...................................... 579.12 293.23 872.35
May 8, 2016...................................... 579.12 317.39 896.51
May 8, 2017...................................... 579.12 342.21 921.33
May 8, 2018...................................... 579.12 367.72 946.84
May 8, 2019...................................... 579.12 393.94 973.06
At Stated Maturity............................... $ 579.12 $ 420.88 $ 1,000.00
</TABLE>
If converted to semiannual coupon LYONs following the occurrence of a Tax
Event, the LYONs will be redeemable at the restated principal amount plus
accrued and unpaid interest from the date of the conversion through the
redemption date. However, in no event may the LYONs be redeemed prior to May 8,
2003.
Section 402. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of LYONs, the Company may arrange for the
purchase and conversion of any LYONs called for redemption by an agreement with
one or more investment bankers or other purchasers to purchase such LYONs by
paying to the Trustee in trust for the Holders, on or before the close of
business on the Redemption Date, an amount that,
-8-
<PAGE> 10
together with any amounts deposited with the Trustee by the Company for the
redemption of such LYONs, is not less than the Redemption Price, of such LYONs.
Notwithstanding anything to the contrary contained in this Article Three, the
obligation of the Company to pay the Redemption Price of such LYONs, 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, any LYONs 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 11 of the Indenture) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the
Redemption Date, subject to payment of the above amount as aforesaid. The
Trustee shall hold and pay to the Holders whose LYONs are selected for
redemption any such amount paid to it for purchase and conversion in the same
manner as it would moneys deposited with it by the Company for the redemption of
LYONs. Without the Trustee's prior written consent, no arrangement between the
Company and such purchasers for the purchase and conversion of any LYONs shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any LYONs between the Company and such
purchasers, including the costs and expenses incurred by the Trustee in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE FIVE
CONVERSION OF LYONS
Section 501. CONVERSION PRIVILEGE.
A Holder of a LYON may convert such LYON into Common Stock at any time
during the period stated in paragraph 8 of the LYONs. The number of shares of
Common Stock issuable upon conversion of a LYON per $1,000 of Principal Amount
at Maturity thereof (the "Conversion Rate") shall be that set forth in paragraph
8 in the LYONs, subject to adjustment as herein set forth.
A Holder may convert a portion of the Principal Amount at Maturity of a
LYON if the portion is $1,000 or an integral multiple of $1,000. Provisions of
this Supplemental Indenture that apply to conversion of all of a LYON also apply
to conversion of a portion of a LYON.
"Quoted Price" means, for any given day, the last reported per share sale
price (or, if no sale price is reported, the average of the bid and ask prices
or, if more than one in either case, the average of the average bid and average
ask prices) on such day of the Common Stock on the New York Stock Exchange
Composite Tape or, in the event shares of Common Stock are not listed on the New
York Stock Exchange, in the composite transactions for such other national or
regional securities exchange upon which the Common Stock is listed, or, if the
shares of Common Stock are not listed on a national or regional securities
exchange, as quoted on the
-9-
<PAGE> 11
National Association of Securities Dealers Automated Quotation System or by the
National Quotation Bureau Incorporated. In the absence of such quotations, the
Company shall be entitled to determine the Quoted Price on the basis of such
quotations as it considers appropriate.
"Average Quoted Price" means the average of the Quoted Prices of the Common
Stock for the shorter of
(i) 30 consecutive Trading Days ending on the last full Trading Day
prior to the Time of Determination with respect to the rights, warrants or
options or distribution in respect of which the Average Quoted Price is being
calculated, or
(ii) the period (x) commencing on the date next succeeding the first
public announcement of (a) the issuance of rights, warrants or options or (b)
the distribution, in each case, in respect of which the Average Quoted Price is
being calculated and (y) proceeding through the last full Trading Day prior to
the Time of Determination with respect to the rights, warrants or options or
distribution in respect of which the Average Quoted Price is being calculated
(excluding days within such period, if any, which are not Trading Days), or
(iii) the period, if any, (x) commencing on the date next succeeding
the Ex-Dividend Time with respect to the next preceding (a) issuance of rights,
warrants or options or (b) distribution, in each case, for which an adjustment
is required by the provisions of Section 503(4), 504 or 505 and (y) proceeding
through the last full Trading Day prior to the Time of Determination with
respect to the rights, warrants or options or distribution in respect of which
the Average Quoted Price is being calculated (excluding days within such period,
if any, which are not Trading Days).
In the event that the Ex-Dividend Time (or in the case of a subdivision,
combination or reclassification, the effective date with respect thereto) with
respect to a dividend, subdivision, combination or reclassification to which
Section 503(1), (2), (3) or (5) applies occurs during the period applicable for
calculating "Average Quoted Price" pursuant to the definition in the preceding
sentence, "Average Quoted Price" shall be calculated for such period in a manner
determined by the Board of Directors to reflect the impact of such dividend,
subdivision, combination or reclassification on the Quoted Price of the Common
Stock during such period.
"Time of Determination" means the time and date of the earlier of (i) the
determination of stockholders entitled to receive rights, warrants or options or
a distribution, in each case, to which Section 504 or 505 applies and (ii) the
time ("Ex-Dividend Time") immediately prior to the commencement of "ex-dividend"
trading for such rights, warrants or options or distribution on the New York
Stock Exchange or such other national or regional exchange or market on which
the Common Stock is then listed or quoted.
Section 502. CONVERSION PROCEDURE.
To convert a LYON a Holder must satisfy the requirements in paragraph 8 of
the LYONs. The date on which the Holder satisfies all those requirements is the
conversion date (the "Conversion Date"). As soon as practicable after the
Conversion Date, the Company shall
-10-
<PAGE> 12
deliver to the Holder, through the Conversion Agent, a certificate for the
number of full shares of Common Stock issuable upon the conversion and cash in
lieu of any fractional share determined pursuant to Section 14.3 of the
Indenture. The Company shall determine such full number of shares and the
amounts of the required cash with respect to any fractional share, and shall set
forth such information in a certificate delivered to the Conversion Agent. The
Person in whose name the certificate is registered shall be treated as a
stockholder of record on and after the Conversion Date; provided, however, that
no surrender of a LYON on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the Person or Persons entitled
to receive the shares of Common Stock upon such conversion as the record holder
or holders of such shares of Common Stock on such date, but such surrender shall
be effective to constitute the Person or Persons entitled to receive such shares
of Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; such conversion shall be at the Conversion Rate in effect on the date
that such LYON shall have been surrendered for conversion, as if the stock
transfer books of the Company had not been closed. Upon conversion of a LYON,
such Person shall no longer be a Holder of such LYON.
No payment or adjustment will be made for dividends on, or other
distributions with respect to, any Common Stock except as provided in this
Article Five. On conversion of a LYON, that portion of accrued Original Issue
Discount (or interest, if the Company has exercised its option provided for in
Section 701) attributable to the period from the Issue Date (or, if the Company
has exercised the option provided for in Section 701, the later of (x) the date
of such exercise and (y) the date on which interest was last paid) of the LYON
through the Conversion Date with respect to the converted LYON shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through delivery of the Common Stock (together with
the cash payment, if any, in lieu of fractional shares) in exchange for the LYON
being converted pursuant to the provisions hereof; and the fair market value of
such shares of Common Stock (together with any such cash payment in lieu of
fractional shares) shall be treated as issued, to the extent thereof, first in
exchange for Original Issue Discount (or interest, if the Company has exercised
its option provided for in Section 701) accrued through the Conversion Date, and
the balance, if any, of such fair market value of such Common Stock (and any
such cash payment) shall be treated as issued in exchange for the Issue Price of
the LYON being converted pursuant to the provisions hereof.
If the Holder converts more than one LYON at the same time, the number of
shares of Common Stock issuable upon the conversion shall be based on the total
Principal Amount at Maturity of the LYONs converted.
If the last day on which a LYON may be converted is a day other than a
Business Day (a "Legal Holiday"), the LYON may be surrendered on the next
succeeding day that is not a Legal Holiday.
Upon surrender of a LYON that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder, a new
LYON in an authorized denomination equal in Principal Amount at Maturity to the
unconverted portion of the LYON surrendered.
-11-
<PAGE> 13
All shares of Common Stock delivered upon conversion of the LYONs shall be
newly issued shares or treasury shares, shall be duly and validly issued and
fully paid and nonassessable and shall be free from preemptive rights and free
of any lien or adverse claim.
Section 503. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.
If, after the Issue Date of the LYONs, the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
(4) pays a dividend or makes a distribution on its Common Stock in
shares of its Capital Stock (other than Common Stock or rights, warrants or
options for its Capital Stock); or
(5) issues by reclassification of its Common Stock any shares of its
Capital Stock (other than rights, warrants or options for its Capital Stock),
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a LYON thereafter
converted may receive the number of shares of Capital Stock of the Company which
such Holder would have owned immediately following such action if such Holder
had converted the LYON immediately prior to such action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a LYON upon conversion of such LYON may
receive shares of two or more classes of Capital Stock of the Company, the
Conversion Rate shall thereafter be subject to adjustment upon the occurrence of
an action taken with respect to any such class of Capital Stock as is
contemplated by this Article Five with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article Five.
Section 504. ADJUSTMENT FOR RIGHTS ISSUE.
If after the Issue Date of the LYONs, the Company distributes any rights,
warrants or options to all holders of its Common Stock entitling them, for a
period expiring within 60 days after the record date for such distribution, to
purchase shares of Common Stock at a price per share less than the Quoted Price
as of the Time of Determination, the Conversion Rate shall be adjusted in
accordance with the formula:
-12-
<PAGE> 14
R' = R x (O + N)
---------------
(O + (N x P)/M)
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
O = the number of shares of Common Stock outstanding on the record
date for the distribution to which this Section 504 is being
applied.
N = the number of additional shares of Common Stock offered pursuant
to the distribution.
P = the offering price per share of the additional shares.
M = the Average Quoted Price, minus, in the case of (i) a
distribution to which Section 503(4) applies or (ii) a
distribution to which Section 505 applies, for which, in each
case, (x) the record date shall occur on or before the record
date for the distribution to which this Section 504 applies and
(y) the Ex-Dividend Time shall occur on or after the date of the
Time of Determination for the distribution to which this Section
504 applies, the fair market value (on the record date for the
distribution to which this Section 504 applies) of the
(1) Capital Stock of the Company distributed in respect of
each share of Common Stock in such Section 503(4)
distribution and
(2) assets of the Company or debt securities or any
rights, warrants or options to purchase securities of the
Company distributed in respect of each share of Common
Stock in such Section 505 distribution.
The Board of Directors shall determine fair market values for the
purposes of this Section 504.
The adjustment shall become effective immediately after the record date for
the determination of shareholders entitled to receive the rights, warrants or
options to which this Section 504 applies. If all of the shares of Common Stock
subject to such rights, warrants or options have not been issued when such
rights, warrants or options expire, then the Conversion Rate shall promptly be
readjusted to the Conversion Rate which would then be in effect had the
adjustment upon the issuance of such rights, warrants or options been made on
the basis of the actual number of shares of Common Stock issued upon the
exercise of such rights, warrants or options.
-13-
<PAGE> 15
No adjustment shall be made under this Section 504 if the application of
the formula stated above in this Section 504 would result in a value of R' that
is equal to or less than the value of R.
Section 505. ADJUSTMENT FOR OTHER DISTRIBUTIONS.
If, after the Issue Date of the LYONs, the Company distributes to all
holders of its Common Stock any of its assets, or debt securities or any rights,
warrants or options to purchase securities of the Company (including securities
or cash, but excluding (x) distributions of Capital Stock referred to in Section
503 and distributions of rights, warrants or options referred to in Section 504
and (y) cash dividends or other cash distributions that are paid out of
consolidated current net earnings or earnings retained in the business as shown
on the books of the Company unless such cash dividends or other cash
distributions are Extraordinary Cash Dividends) the Conversion Rate shall be
adjusted, subject to the provisions of the last paragraph of this Section 505,
in accordance with the formula:
R' = R x M
-------
M - F
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Quoted Price, minus, in the case of a distribution to
which Section 503(4) applies, for which (i) the record date shall
occur on or before the record
date for the distribution to which this Section 505 applies and
(ii) the Ex-Dividend Time shall occur on or after the date of the
Time of Determination for the distribution to which this Section
505 applies, the fair market value (on the record date for the
distribution to which this Section 505 applies) of any Capital
Stock of the Company distributed in respect of each share of
Common Stock in such Section 503(4) distribution.
F = the fair market value (on the record date for the distribution to
which this Section 505 applies) of the assets, securities,
rights, warrants or options to be distributed in respect of each
share of Common Stock in the distribution to which this Section
505 is being applied (including, in the case of cash dividends or
other cash distributions giving rise to an adjustment, all such
cash distributed concurrently).
The Board of Directors shall determine fair market values for the
purposes of this Section 505.
-14-
<PAGE> 16
The adjustment shall become effective immediately after the record date for
the determination of shareholders entitled to receive the distribution to which
this Section 505 applies.
For purposes of this Section 505, the term "Extraordinary Cash Dividend"
shall mean any cash dividend with respect to the Common Stock the amount of
which, together with the aggregate amount of cash dividends on the Common Stock
to be aggregated with such cash dividend in accordance with the provisions of
this paragraph, equals or exceeds the threshold percentages set forth in item
(i) or (ii) below:
(i) If, upon the date prior to the Ex-Dividend Time with respect to a cash
dividend on the Common Stock, the aggregate amount of such cash dividend
together with the amounts of all cash dividends on the Common Stock with
Ex-Dividend Times occurring in the 85 consecutive day period ending on the date
prior to the Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied equals or exceeds on a per share basis 12.5% of the
average of the Quoted Prices during the period beginning on the date after the
first such Ex-Dividend Time in such period and ending on the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this provision is
being applied (except that if no other cash dividend has had an Ex-Dividend Time
occurring in such period, the period for calculating the average of the Quoted
Prices shall be the period commencing 85 days prior to the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this provision is
being applied), such cash dividend together with each other cash dividend with
an Ex-Dividend Time occurring in such 85 day period shall be deemed to be an
Extraordinary Cash Dividend and for purposes of applying the formula set forth
above in this Section 505, the value of "F" shall be equal to (w) the aggregate
amount of such cash dividend together with the amounts of the other cash
dividends with Ex-Dividend Times occurring in such period minus (x) the
aggregate amount of such other cash dividends with Ex-Dividend Times occurring
in such period for which a prior adjustment in the Conversion Rate was
previously made under this Section 505.
(ii) If, upon the date prior to the Ex-Dividend Time with respect to a
cash dividend on the Common Stock, the aggregate amount of such cash dividend
together with the amounts of all cash dividends on the Common Stock with
Ex-Dividend Times occurring in the 365 consecutive day period ending on the date
prior to the Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied equals or exceeds on a per share basis 25% of the
average of the Quoted Prices during the period beginning on the date after the
first such Ex-Dividend Time in such period and ending on the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this provision is
being applied (except that if no other cash dividend has had an Ex-Dividend Time
occurring in such period, the period for calculating the average of the Quoted
Prices shall be the period commencing 365 days prior to the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this provision is
being applied), such cash dividend together with each other cash dividend with
an Ex-Dividend Time occurring in such 365 day period shall be deemed to be an
Extraordinary Cash Dividend and for purposes of applying the formula set forth
above in this Section 505, the value of "F" shall be equal to (y) the aggregate
amount of such cash dividend together with the amounts of the other cash
dividends with Ex-Dividend Times occurring in such period minus (z) the
aggregate
-15-
<PAGE> 17
amount of such other cash dividends with Ex-Dividend Times occurring in such
period for which a prior adjustment in the Conversion Rate was previously made
under this Section 505.
In making the determinations required by items (i) and (ii) above, the
amount of cash dividends paid on a per share basis and the average of the Quoted
Prices, in each case during the period specified in item (i) or (ii) above, as
applicable, shall be appropriately adjusted to reflect the occurrence during
such period of any event described in Section 503.
In the event that, with respect to any distribution to which this Section
505 would otherwise apply, the difference "M-F" as defined in the above formula
is less than $1.00 or "F" is equal to or greater than "M", then the adjustment
provided by this Section 505 shall not be made and in lieu thereof the
provisions of Section 5010 shall apply to such distribution.
Section 506. WHEN ADJUSTMENT MAY BE DEFERRED.
No adjustment in the Conversion Rate need be made unless the adjustment
would require an increase or decrease of at least 1% in the Conversion Rate. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment.
All calculations under this Article Five shall be made to the nearest cent
or to the nearest 1/1,000th of a share, as the case may be.
Section 507. WHEN NO ADJUSTMENT REQUIRED.
No adjustment need be made for a transaction referred to in Section 503,
504, 505 or 5011 if Holders are to participate in the transaction on a basis and
with notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock participate in
the transaction. Such participation by Holders may include participation upon
conversion provided that an adjustment shall be made at such time as the Holders
are no longer entitled to participate.
No adjustment need be made for rights to purchase Common Stock pursuant to
a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par value of
the Common Stock.
To the extent the LYONs become convertible pursuant to this Article Five
into cash, no adjustment need be made thereafter as to the cash. Interest will
not accrue on the cash.
Section 508. NOTICE OF ADJUSTMENT.
Whenever the Conversion Rate is adjusted, the Company shall promptly mail
to Holders a notice of the adjustment. The Company shall file with the Trustee
and the Conversion Agent such notice and a certificate from the Company's
independent public accountants briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be
-16-
<PAGE> 18
conclusive evidence that the adjustment is correct. Neither the Trustee nor any
Conversion Agent shall be under any duty or responsibility with respect to any
such certificate except to exhibit the same to any Holder desiring inspection
thereof. Unless and until the Trustee shall receive such notice and certificate
with respect to an adjustment of the Conversion Rate or a notice of a voluntary
increase pursuant to Section 509, the Trustee may assume without inquiry that
the Conversion Rate has not been adjusted.
Section 509. VOLUNTARY INCREASE.
The Company from time to time may increase the Conversion Rate by any
amount for any period of time. Whenever the Conversion Rate is increased, the
Company shall mail to Holders and file with the Trustee and the Conversion Agent
a notice of the increase. The Company shall mail the notice at least 15 days
before the date the increased Conversion Rate takes effect. The notice shall
state the increased Conversion Rate and the period it will be in effect.
A voluntary increase of the Conversion Rate does not change or adjust the
Conversion Rate otherwise in effect for purposes of Section 503, 504 or 505.
Section 5010. REORGANIZATION OF COMPANY; SPECIAL DISTRIBUTIONS.
The provisions of Section 14.9 of the Indenture shall not be applicable to
the LYONs.
If the Company is a party to a transaction subject to Article 8 of the
Indenture (other than a sale of all or substantially all of the assets of the
Company in a transaction in which the holders of Common Stock immediately prior
to such transaction do not receive securities, cash or other assets of the
Company or any other Person) or a merger or binding share exchange which
reclassifies or changes its outstanding Common Stock, the Person obligated to
deliver securities, cash or other assets upon conversion of the LYONs shall
enter into a supplemental indenture. If the issuer of securities deliverable
upon conversion of LYONs is an Affiliate of the successor Company, that issuer
shall join in the supplemental indenture.
The supplemental indenture shall provide that the Holder of a LYON may
convert it into the kind and amount of securities, cash or other assets which
such Holder would have received immediately after the consolidation, merger,
binding share exchange or transfer if such Holder had converted the LYON
immediately before the effective date of the transaction, assuming (to the
extent applicable) that such Holder (i) was not a constituent Person or an
Affiliate of a constituent Person to such transaction; (ii) made no election
with respect thereto; and (iii) was treated alike with the plurality of
non-electing Holders. The supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practical to the adjustments
provided for in this Article Five. The successor Company shall mail to Holders a
notice briefly describing the supplemental indenture.
If this Section applies, neither Section 503 nor 504 applies.
-17-
<PAGE> 19
If the Company makes a distribution to all holders of its Common Stock of
any of its assets, or debt securities or any rights, warrants or options to
purchase securities of the Company that, but for the provisions of the last
paragraph of Section 505, would otherwise result in an adjustment in the
Conversion Rate pursuant to the provisions of Section 505, then, from and after
the record date for determining the holders of Common Stock entitled to receive
the distribution, a Holder of a LYON that converts such LYON in accordance with
the provisions of this Indenture shall upon such conversion be entitled to
receive, in addition to the shares of Common Stock into which the LYON is
convertible, the kind and amount of securities, cash or other assets comprising
the distribution that such Holder would have received if such Holder had
converted the LYON immediately prior to the record date for determining the
holders of Common Stock entitled to receive the distribution.
Section 5011. SIMULTANEOUS ADJUSTMENTS.
In the event that this Article Five requires adjustments to the Conversion
Rate under more than one of Sections 503(4), 504 or 505, and the record dates
for the distributions giving rise to such adjustments shall occur on the same
date, then such adjustments shall be made by applying, first, the provisions of
Section 503, second, the provisions of Section 505 and, third, the provisions of
Section 504.
Section 5012. SUCCESSIVE ADJUSTMENTS.
After an adjustment to the Conversion Rate under this Article Five, any
subsequent event requiring an adjustment under this Article Five shall cause an
adjustment to the Conversion Rate as so adjusted.
Section 5013. RIGHTS ISSUED IN RESPECT OF COMMON STOCK ISSUED UPON CONVERSION.
Each share of Common Stock issued upon conversion of LYONs pursuant to this
Article Five shall be entitled to receive the appropriate number of common stock
or preferred stock purchase rights, as the case may be (the "Rights"), if any,
and the certificates representing the Common Stock issued upon such conversion
shall bear such legends, if any, in each case as may be provided by the terms of
any shareholder rights agreement adopted by the Company, as the same may be
amended from time to time (in each case, a "Rights Agreement"). Provided that
such Rights Agreement requires that each share of Common Stock issued upon
conversion of LYONs at any time prior to the distribution of separate
certificates representing the Rights be entitled to receive such Rights, then,
notwithstanding anything else to the contrary in this Article Five, there shall
not be any adjustment to the conversion privilege or Conversion Rate as a result
of the issuance of Rights, the distribution of separate certificates
representing the Rights, the exercise or redemption of such Rights in accordance
with any such Rights Agreement, or the termination or invalidation of such
Rights.
ARTICLE SIX
PURCHASE OF LYONS AT OPTION OF HOLDER
Section 601. PURCHASE OF LYONS AT OPTION OF THE HOLDER.
-18-
<PAGE> 20
(a) General. LYONs shall be purchased by the Company pursuant to paragraph
6 of the LYONs as of May 8, 2003 and May 8, 2010 (each, a "Purchase Date"), at
the purchase price specified therein (each, a "Purchase Price"), at the option
of the Holder thereof, upon:
(1) delivery to the Paying Agent, by the Holder of a written notice
of purchase (a "Purchase Notice") at any time from the opening of business on
the date that is 20 Business Days prior to a Purchase Date until the close of
business on such Purchase Date stating:
(A) the certificate number of the LYON which the Holder will
deliver to be purchased,
(B) the portion of the Principal Amount at Maturity of the LYON
which the Holder will deliver to be purchased, which portion must be $1,000 or
an integral multiple thereof,
(C) that such LYON shall be purchased as of the Purchase Date
pursuant to the terms and conditions specified in paragraph 6 of the LYONs and
in this Supplemental Indenture, and
(D) in the event the Company elects, pursuant to Section 601(b),
to pay the Purchase Price to be paid as of such Purchase Date, in whole or in
part, in shares of Common Stock but such portion of the Purchase Price shall
ultimately be payable to such Holder entirely in cash because any of the
conditions to payment of the Purchase Price in Common Stock is not satisfied
prior to the close of business on such Purchase Date, as set forth in Section
601(d), whether such Holder elects (i) to withdraw such Purchase Notice as to
some or all of the LYONs to which such Purchase Notice relates (stating the
Principal Amount at Maturity and certificate numbers of the LYONs as to which
such withdrawal shall relate), or (ii) to receive cash in respect of the entire
Purchase Price for all LYONs (or portions thereof) to which such Purchase Notice
relates; and
(2) delivery of such LYON to the Paying Agent prior to, on or after
the Purchase Date (together with all necessary endorsements) at the offices of
the Paying Agent, such delivery being a condition to receipt by the Holder of
the Purchase Price therefor; provided, however, that such Purchase Price shall
be so paid pursuant to this Section 601 only if the LYON so delivered to the
Paying Agent shall conform in all respects to the description thereof in the
related Purchase Notice.
If a Holder, in such Holder's Purchase Notice and in any written notice of
withdrawal delivered by such Holder pursuant to the terms of Section 603, fails
to indicate such Holder's choice with respect to the election set forth in
clause (D) of Section 601(a)(1), such Holder shall be deemed to have elected to
receive cash in respect of the Purchase Price for all LYONs subject to such
Purchase Notice in the circumstances set forth in such clause (D).
-19-
<PAGE> 21
The Company shall purchase from the Holder thereof, pursuant to this
Section 601, a portion of a LYON if the Principal Amount at Maturity of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Supplemental Indenture that apply to the purchase of all of a LYON also apply to
the purchase of such portion of such LYON.
Any purchase by the Company contemplated pursuant to the provisions of this
Section 601 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Purchase Date and the
time of delivery of the LYON.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Purchase Notice contemplated by this Section 601(a) shall
have the right to withdraw such Purchase Notice at any time prior to the close
of business on the Purchase Date by delivery of a written notice of withdrawal
to the Paying Agent in accordance with Section 603.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.
(b) Company's Right to Elect Manner of Payment of Purchase Price. The
LYONs to be purchased pursuant to Section 601(a) may be paid for, at the
election of the Company, in U.S. legal tender ("cash") or Common Stock, or in
any combination of cash and Common Stock, subject to the conditions set forth in
Sections 601(c) and (d). The Company shall designate, in the Company Notice
delivered pursuant to Section 601(e), whether the Company will purchase the
LYONs for cash or Common Stock, or, if a combination thereof, the percentages of
the Purchase Price of LYONs in respect of which it will pay in cash or Common
Stock; provided that the Company will pay cash for fractional interests in
Common Stock. For purposes of determining the existence of potential fractional
interests, all LYONs subject to purchase by the Company held by a Holder shall
be considered together (no matter how many separate certificates are to be
presented). Each Holder whose LYONs are purchased pursuant to this Section 601
shall receive the same percentage of cash or Common Stock in payment of the
Purchase Price for such LYONs, except (i) as provided in Section 601(d) with
regard to the payment of cash in lieu of fractional shares of Common Stock and
(ii) in the event that the Company is unable to purchase the LYONs of a Holder
or Holders for Common Stock because any necessary qualifications or
registrations of the Common Stock under applicable state securities laws cannot
be obtained, the Company may purchase the LYONs of such Holder or Holders for
cash. The Company may not change its election with respect to the consideration
(or components or percentages of components thereof) to be paid once the Company
has given its Company Notice to Holders except pursuant to this Section 601(b)
or pursuant to Section 601(d) in the event of a failure to satisfy, prior to the
close of business on the Purchase Date, any condition to the payment of the
Purchase Price, in whole or in part, in Common Stock.
At least three Business Days before the Company Notice Date, the Company
shall deliver an Officers' Certificate to the Trustee specifying:
(i) the manner of payment selected by the Company,
-20-
<PAGE> 22
(ii) the information required by Section 601(e),
(iii) if the Company elects to pay the Purchase Price, or a specified
percentage thereof, in Common Stock, that the conditions to such manner of
payment set forth in Section 601(d) have been or will be complied with, and
(iv) whether the Company desires the Trustee to give the Company
Notice required by Section 601(e).
(c) Purchase with Cash. On each Purchase Date, at the option of the
Company, the Purchase Price of LYONs in respect of which a Purchase Notice
pursuant to Section 601(a) has been given, or a specified percentage thereof,
may be paid by the Company with cash equal to the aggregate Purchase Price of
such LYONs. If the Company elects to purchase LYONs with cash, the Company
Notice, as provided in Section 601(e), shall be sent to Holders (and to
beneficial owners as required by applicable law) not less than 20 Business Days
prior to such Purchase Date (the "Company Notice Date").
(d) Payment by Issuance of Common Stock. On each Purchase Date, at the
option of the Company, the Purchase Price of LYONs in respect of which a
Purchase Notice pursuant to Section 601(a) has been given, or a specified
percentage thereof, may be paid by the Company by the issuance of a number of
shares of Common Stock equal to the quotient obtained by dividing (i) the amount
of cash to which the Holders would have been entitled had the Company elected to
pay all or such specified percentage, as the case may be, of the Purchase Price
of such LYONs in cash by (ii) the Market Price of a share of Common Stock,
subject to the next succeeding paragraph.
The Company will not issue a fractional share of Common Stock in payment of
the Purchase Price. Instead the Company will pay cash for the current market
value of the fractional share. The current market value of a fraction of a share
shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent. It is understood that if a
Holder elects to have more than one LYON purchased, the number of shares of
Common Stock shall be based on the aggregate amount of LYONs to be purchased.
If the Company elects to purchase the LYONs by the issuance of shares of
Common Stock, the Company Notice, as provided in Section 601(e), shall be sent
to the Holders (and to beneficial owners as required by applicable law) not
later than the Company Notice Date.
The Company's right to exercise its election to purchase the LYONs pursuant
to Section 601 through the issuance of shares of Common Stock shall be
conditioned upon:
(i) the Company's not having given its Company Notice of an election
to pay entirely in cash and its giving of timely Company Notice of election to
purchase all or a specified percentage of the LYONs with Common Stock as
provided herein;
-21-
<PAGE> 23
(ii) the registration of the shares of Common Stock to be issued in
respect of the payment of the Purchase Price under the Securities Act or the
Exchange Act, in each case, if required;
(iii) any necessary qualification or registration under applicable
state securities laws or the availability of an exemption from such
qualification and registration; and
(iv) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the Common
Stock are in conformity with this Supplemental Indenture and (B) the shares of
Common Stock to be issued by the Company in payment of the Purchase Price in
respect of LYONs have been duly authorized and, when issued and delivered
pursuant to the terms of this Supplemental Indenture in payment of the Purchase
Price in respect of the LYONs, will be validly issued, fully paid and
non-assessable and, to the best of such counsel's knowledge, free from
preemptive rights, and, in the case of such Officer's Certificate, stating that
conditions (i), (ii) and (iii) above and the condition set forth in the second
succeeding sentence have been satisfied and, in the case of such Opinion of
Counsel, stating that conditions (ii) and (iii) above has been satisfied.
Such Officers' Certificate shall also set forth the number of shares of
Common Stock to be issued for each $1,000 Principal Amount at Maturity of LYONs
and the Sale Price of a share of Common Stock on each Trading Day during the
period commencing on the first Trading Day of the period during which the Market
Price is calculated and ending on the applicable Purchase Date. The Company may
pay the Purchase Price (or any portion thereof) in Common Stock only if the
information necessary to calculate the Market Price is published in a daily
newspaper of national circulation. If the foregoing conditions are not satisfied
with respect to a Holder or Holders prior to the close of business on the
Purchase Date and the Company has elected to purchase the LYONs pursuant to this
Section 601 through the issuance of shares of Common Stock, the Company shall
pay the entire Purchase Price of the LYONs of such Holder or Holders in cash.
The "Market Price" means the average of the Sale Prices of the Common Stock
for the five Trading Day period ending on (if the third Business Day prior to
the applicable Purchase Date is a Trading Day, or if not, then on the last
Trading Day prior to) the third Business Day prior to the applicable Purchase
Date, appropriately adjusted to take into account the occurrence, during the
period commencing on the first of such Trading Days during such five Trading Day
period and ending on such Purchase Date, of any event described in Section 503,
504 or 505; subject, however, to the conditions set forth in Sections 506 and
507.
The "Sale Price" of the Common Stock on any date means the closing per
share sale price (or, if no closing sale price is reported, the average of the
bid and ask prices or, if more than one in either case, the average of the
average bid and average ask prices) on such date as reported in the composite
transactions for the principal United States securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United States
national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System.
-22-
<PAGE> 24
(e) Notice of Election. The Company's notice of election to purchase with
cash or Common Stock or any combination thereof shall be sent to the Holders
(and to beneficial owners as required by applicable law) in the manner provided
in Sections 1.5 and 1.6 of the Indenture at the time specified in Section 601(c)
or (d), as applicable (the "Company Notice"). Such Company Notice shall state
the manner of payment elected and shall contain the following information:
In the event the Company has elected to pay the Purchase Price (or a
specified percentage thereof) with Common Stock, the Company Notice shall:
(1) state that each Holder will receive Common Stock with a Market
Price determined as of a specified date prior to the Purchase Date equal to such
specified percentage of the Purchase Price of the LYONs held by such Holder
(except any cash amount to be paid in lieu of fractional shares);
(2) set forth the method of calculating the Market Price of the
Common Stock; and
(3) state that because the Market Price of Common Stock will be
determined prior to the Purchase Date, Holders will bear the market risk with
respect to the value of the Common Stock to be received from the date such
Market Price is determined to the Purchase Date.
In any case, each Company Notice shall include a form of Purchase Notice to
be completed by a Holder and shall state:
(i) the Purchase Price and the Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion
Agent;
(iii) that LYONs as to which a Purchase Notice has been given may be
converted pursuant to Article Five hereof only if the applicable Purchase Notice
has been withdrawn in accordance with the terms of this Indenture;
(iv) that LYONs must be surrendered to the Paying Agent to collect
payment;
(v) that the Purchase Price for any security as to which a Purchase
Notice has been given and not withdrawn will be paid promptly following the
later of the Purchase Date and the time of surrender of such LYON as described
in (iv);
(vi) the procedures the Holder must follow to exercise rights under
Section 601 and a brief description of those rights;
(vii) briefly, the conversion rights of the LYONs;
-23-
<PAGE> 25
(viii) the procedures for withdrawing a Purchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms of
Section 601(a)(1)(D) or Section 603); and
(ix) the CUSIP number or numbers of the LYONs being purchased.
At the Company's request, the Trustee shall give such Company Notice in the
Company's name and at the Company's expense; provided, however, that, in all
cases, the text of such Company Notice shall be prepared by the Company.
Upon determination of the actual number of shares of Common Stock to be
issued for each $1,000 Principal Amount at Maturity of LYONs, the Company will
publish such determination on the Company's Web site on the World Wide Web.
(f) Covenants of the Company. All shares of Common Stock delivered upon
purchase of the LYONs shall be newly issued shares or treasury shares, shall be
duly authorized, validly issued, fully paid and nonassessable and shall be free
from preemptive rights and free of any lien or adverse claim.
The Company shall use its best efforts to list or cause to have quoted any
shares of Common Stock to be issued to purchase LYONs on each national
securities exchange or over-the-counter or other domestic market on which the
Common Stock is then listed or quoted.
(g) Procedure upon Purchase. The Company shall deposit cash (in respect of
a cash purchase under Section 601(c) or for fractional interests, as applicable)
or shares of Common Stock, or a combination thereof, as applicable, at the time
and in the manner Section 604 sufficient to pay the aggregate Purchase Price of
all LYONs to be purchased pursuant to this Section 601. As soon as practicable
after the Purchase Date, the Company shall deliver to each Holder entitled to
receive Common Stock through the Paying Agent, a certificate for the number of
full shares of Common Stock issuable in payment of the Purchase Price and cash
in lieu of any fractional interests. The Person in whose name the certificate
for Common Stock is registered shall be treated as a holder of record of shares
of Common Stock on the Business Day following the Purchase Date. Subject to
Section 601(d), no payment or adjustment will be made for dividends on the
Common Stock the record date for which occurred on or prior to the Purchase
Date.
(h) Taxes. If a Holder of a LYON is paid in Common Stock, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on such
issue of shares of Common Stock. However, the Holder shall pay any such tax
which is due because the Holder requests the shares of Common Stock to be issued
in a name other than the Holder's name. The Paying Agent may refuse to deliver
the certificates representing the Common Stock being issued in a name other than
the Holder's name until the Paying Agent receives a sum sufficient to pay any
tax which will be due because the shares of Common Stock are to be issued in a
name other than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.
-24-
<PAGE> 26
Section 602. PURCHASE OF LYONS AT OPTION OF THE HOLDER UPON CHANGE IN CONTROL.
(1) If on or prior to May 8, 2003 there shall have occurred a Change in
Control, LYONs shall be purchased by the Company, at the option of the Holder
thereof, at the purchase price specified in paragraph 6 of the LYONs (the
"Change in Control Purchase Price"), as of the date that is 35 Business Days
after the occurrence of the Change in Control (the "Change in Control Purchase
Date"), subject to satisfaction by or on behalf of the Holder of the
requirements set forth in Section 602(c).
A "Change in Control" shall be deemed to have occurred at such time as
either of the following events shall occur:
(i) There shall be consummated any consolidation or merger of the
Company pursuant to which the Common Stock would be converted into cash,
securities or other property, in each case other than a consolidation or merger
of the Company in which the holders of the Common Stock immediately prior to the
consolidation or merger have, directly or indirectly, at least a majority of the
total voting power in the aggregate of all classes of capital stock of the
continuing or surviving corporation immediately after such consolidation or
merger; or
(ii) There is a report filed on Schedule 13D or 14D-1 (or any
successor schedule, form or report) pursuant to the Exchange Act, disclosing
that any person (for the purposes of this Section 602 only, as the term "person"
is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become
the beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3
or any successor rule or regulation promulgated under the Exchange Act) of 50%
or more of the voting power of the Common Stock then outstanding; provided,
however, that a person shall not be deemed beneficial owner of, or to own
beneficially, (A) any securities tendered pursuant to a tender or exchange offer
made by or on behalf of such person or any of such person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange
thereunder, or (B) any securities if such beneficial ownership (1) arises solely
as a result of a revocable proxy delivered in response to a proxy or consent
solicitation made pursuant to the applicable rules and regulations under the
Exchange Act, and (2) is not also then reportable on Schedule 13D (or any
successor schedule) under the Exchange Act.
Notwithstanding the foregoing provisions of this Section 602, a Change in
Control shall not be deemed to have occurred by virtue of the Company, any
Subsidiary, any employee stock ownership plan or any other employee benefit plan
of the Company or any Subsidiary, or any person holding Common Stock for or
pursuant to the terms of any such employee benefit plan, filing or becoming
obligated to file a report under or in response to Schedule 13D or Schedule
14D-1 (or any successor schedule, form or report) under the Exchange Act
disclosing beneficial ownership by it of shares of Common Stock, whether in
excess of 50% or otherwise.
"Associate" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.
-25-
<PAGE> 27
(b) Within 15 Business Days after the occurrence of a Change in Control,
the Company shall mail a written notice of Change in Control by first-class mail
to the Trustee and to each Holder (and to beneficial owners as required by
applicable law). The notice shall include a form of Change in Control Purchase
Notice to be completed by the Holder and shall state:
(1) briefly, the events causing a Change in Control and the date of
such Change in Control;
(2) the date by which the Change in Control Purchase Notice pursuant
to this Section 602 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) the name and address of the Paying Agent and the Conversion
Agent;
(6) the Conversion Rate and any adjustments thereto;
(7) that LYONs as to which a Change in Control Purchase Notice has
been given may be converted pursuant to Article Five hereof only if the Change
in Control Purchase Notice has been withdrawn in accordance with the terms of
this Indenture;
(8) that LYONs must be surrendered to the Paying Agent to collect
payment;
(9) that the Change in Control Purchase Price for any LYON as to
which a Change in Control Purchase Notice has been duly given and not withdrawn
will be paid promptly following the later of the Change in Control Purchase Date
and the time of surrender of such LYON as described in (8);
(10) briefly, the procedures the Holder must follow to exercise rights
under this Section 602;
(11) briefly, the conversion rights of the LYONs;
(12) the procedures for withdrawing a Change in Control Purchase
Notice; and
(13) the CUSIP number or numbers of the LYONs being purchased.
(c) A Holder may exercise its rights specified in Section 602(a) upon
delivery of a written notice of purchase (a "Change in Control Purchase Notice")
to the Paying Agent at any time prior to the close of business on the Change in
Control Purchase Date, stating:
-26-
<PAGE> 28
(1) the certificate number of the LYON which the Holder will deliver
to be purchased;
(2) the portion of the Principal Amount at Maturity of the LYON which
the Holder will deliver to be purchased, which portion must be $1,000 or an
integral multiple thereof; and
(3) that such LYON shall be purchased pursuant to the terms and
conditions specified in paragraph 6 of the LYONs.
The delivery of such LYON to the Paying Agent prior to, on or after the
Change in Control Purchase Date (together with all necessary endorsements) at
the offices of the Paying Agent shall be a condition to the receipt by the
Holder of the Change in Control Purchase Price therefor; provided, however, that
such Change in Control Purchase Price shall be so paid pursuant to this Section
602 only if the LYON so delivered to the Paying Agent shall conform in all
respects to the description thereof set forth in the related Change in Control
Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 602, a portion of a LYON if the Principal Amount at Maturity of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Supplemental Indenture that apply to the purchase of all of a LYON also apply to
the purchase of such portion of such LYON.
Any purchase by the Company contemplated pursuant to the provisions of this
Section 602 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Change in Control
Purchase Date and the time of delivery of the LYON to the Paying Agent in
accordance with this Section 602.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 602(c) shall have the right to withdraw such Change in Control Purchase
Notice at any time prior to the close of business on the Change in Control
Purchase Date by delivery of a written notice of withdrawal to the Paying Agent
in accordance with Section 603.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Change in Control Purchase Notice or written withdrawal thereof.
Section 603. EFFECT OF PURCHASE NOTICE OR CHANGE IN CONTROL PURCHASE NOTICE.
Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 601(a) or Section 602(c), as
applicable, the Holder of the LYON in respect of which such Purchase Notice or
Change in Control Purchase Notice, as the case may be, was given shall (unless
such Purchase Notice or Change in Control Purchase Notice is withdrawn as
specified in the following two paragraphs) thereafter be entitled to receive
solely the Purchase Price or Change in Control Purchase Price, as the case may
be, with respect to such LYON. Such Purchase Price or Change in Control Purchase
Price shall be paid to such Holder, subject to receipts of funds and/or
securities by the Paying Agent, promptly following the later of
-27-
<PAGE> 29
(x) the Purchase Date or the Change in Control Purchase Date, as the case may
be, with respect to such LYON (provided the conditions in Section 601(a) or
Section 602(c), as applicable, have been satisfied) and (y) the time of delivery
of such LYON to the Paying Agent by the Holder thereof in the manner required by
Section 601(a) or Section 602(c), as applicable. LYONs in respect of which a
Purchase Notice or Change in Control Purchase Notice, as the case may be, has
been given by the Holder thereof may not be converted pursuant to Article Five
hereof on or after the date of the delivery of such Purchase Notice or Change in
Control Purchase Notice, as the case may be, unless such Purchase Notice or
Change in Control Purchase Notice, as the case may be, has first been validly
withdrawn as specified in the following two paragraphs.
A Purchase Notice or Change in Control Purchase Notice, as the case may be,
may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent in accordance with the Purchase Notice or Change in
Control Purchase Notice, as the case may be, at any time prior to the close of
business on the Purchase Date or the Change in Control Purchase Date, as the
case may be, specifying:
(1) the certificate number of the LYON in respect of which such
notice of withdrawal is being submitted,
(2) the Principal Amount at Maturity of the LYON with respect to
which such notice of withdrawal is being submitted, and
(3) the Principal Amount at Maturity, if any, of such LYON which
remains subject to the original Purchase Notice or Change in
Control Purchase Notice, as the case may be, and which has been
or will be delivered for purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the form set
forth in the preceding paragraph or may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of Section
601(a)(1)(D) or (ii) a conditional withdrawal containing the information set
forth in Section 601(a)(1)(D) and the preceding paragraph and contained in a
written notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.
There shall be no purchase of any LYONs pursuant to Section 601 (other than
through the issuance of Common Stock in payment of the Purchase Price, including
cash in lieu of fractional shares) or 602 if there has occurred (prior to, on or
after, as the case may be, the giving, by the Holders of such LYONs, of the
required Purchase Notice or Change in Control Purchase Notice, as the case may
be) and is continuing an Event of Default (other than a default in the payment
of the Purchase Price or Change in Control Purchase Price, as the case may be,
with respect to such LYONs). The Paying Agent will promptly return to the
respective Holders thereof any LYONs (x) with respect to which a Purchase Notice
or Change in Control Purchase Notice, as the case may be, has been withdrawn in
compliance with this Supplemental Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, with
-28-
<PAGE> 30
respect to such LYONs) in which case, upon such return, the Purchase Notice or
Change in Control Purchase Notice with respect thereto shall be deemed to have
been withdrawn.
Section 604. DEPOSIT OF PURCHASE PRICE OR CHANGE IN CONTROL PURCHASE PRICE.
Prior to Noon (local time in The City of New York) on the Business Day
following the Purchase Date or the Change in Control Purchase, as the case may
be, the Company shall deposit with the Trustee or with the Paying Agent (or, if
the Company or a Subsidiary or an Affiliate of either of them is acting as the
Paying Agent, shall segregate and hold in trust an amount of money (in
immediately available funds if deposited on such Business Day) or Common Stock,
if permitted hereunder, sufficient to pay the aggregate Purchase Price or Change
in Control Purchase Price, as the case may be, of all the LYONs or portions
thereof which are to be purchased as of the Purchase Date or Change in Control
Purchase Date, as the case may be.
Section 605. LYONS PURCHASED IN PART.
Any LYON which is to be purchased only in part shall be surrendered at the
office of the Paying Agent (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing) and the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such LYON, without
service charge, a new LYON or LYONs, of any authorized denomination as requested
by such Holder in aggregate Principal Amount at Maturity equal to, and in
exchange for, the portion of the Principal Amount at Maturity of the LYON so
surrendered which is not purchased.
Section 606. COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE OF LYONS.
In connection with any offer to purchase or purchase of LYONs under Section
601 or 602 hereof (provided that such offer or purchase constitutes an "issuer
tender offer" for purposes of Rule 13e-4 (which term, as used herein, includes
any successor provision thereto) under the Exchange Act at the time of such
offer or purchase), the Company shall (i) comply with Rule 13e-4 and Rule 14e-1
under the Exchange Act, (ii) file the related Schedule TO (or any successor
schedule, form or report) under the Exchange Act, and (iii) otherwise comply
with all Federal and state securities laws so as to permit the rights and
obligations under Sections 601 and 602 to be exercised in the time and in the
manner specified in Sections 601 and 602.
Section 607. REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall return to the Company any cash or
shares of Common Stock that remain as provided in the Indenture, together with
interest or dividends, if any, thereon, held by them for the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be;
provided, however, that to the extent that the aggregate amount of cash or
shares of Common Stock deposited by the Company pursuant to Section 604 exceeds
the aggregate Purchase Price or Change in Control Purchase Price, as the case
may be, of LYONs or portions thereof which the Company is obligated to purchase
as of the Purchase Date or Change in Control Purchase Date, as the case may be,
then promptly after the Business Day following
-29-
<PAGE> 31
the Purchase Date or Change in Control Purchase Date, as the case may be, the
Trustee shall return any such excess to the Company together with interest or
dividends, if any, thereon.
ARTICLE SEVEN
SPECIAL TAX EVENT CONVERSION
Section 701. OPTIONAL CONVERSION TO SEMIANNUAL COUPON LYON UPON TAX EVENT.
From and after (i) the date (the "Tax Event Date") of the occurrence of a
Tax Event and (ii) the date the Company exercises such option, whichever is
later (the "Option Exercise Date"), at the option of the Company, interest in
lieu of future Original Issue Discount shall accrue at the rate of 2 3/4% per
annum on a restated principal amount per $1,000 original Principal Amount at
Maturity (the "Restated Principal Amount") equal to the Issue Price plus
Original Issue Discount accrued through the Option Exercise Date and shall be
payable semiannually on May 8 and November 8 of each year (each an "Interest
Payment Date") to holders of record at the close of business on April 23 or
October 24 (each a "Regular Record Date") immediately preceding such Interest
Payment Date. Interest will be computed on the basis of a 360-day year comprised
of twelve 30-day months and will accrue from the most recent date on which
interest has been paid or, if no interest has been paid, from the Option
Exercise Date. Within 15 days of the occurrence of a Tax Event, the Company
shall mail a written notice of such Tax Event by first-class mail to the Trustee
and within 15 days of its exercise of such option the Company shall mail a
written notice of the Option Exercise Date by first-class mail to the Trustee
and Holders of the LYONs. From and after the Option Exercise Date, (i) the
Company shall be obligated to pay at Stated Maturity, in lieu of the Principal
Amount at Maturity of a LYON, the Restated Principal Amount thereof and (ii)
"Issue Price and accrued Original Issue Discount," "Issue Price plus Original
Issue Discount" or similar words, as used herein, shall mean Restated Principal
Amount plus accrued and unpaid interest with respect to any LYON. LYONs
authenticated and delivered after the Option Exercise Date may, and shall if
required by the Trustee, bear a notation in a form approved by the Trustee as to
the conversion of the LYONs to semiannual coupon notes.
Section 702. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
(a) Interest on any LYON that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that LYON is registered at the close of business on the Regular Record Date
for such interest at the office or agency of the Company maintained for such
purpose. Each installment of interest on any LYON shall be paid in same-day
funds by transfer to an account maintained by the payee located inside the
United States. In the case of a permanent Global LYON, interest payable on any
Interest Payment Date will be paid to the Depositary, with respect to that
portion of such permanent Global LYON held for its account by Cede & Co. for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent Global LYON to the accounts of the beneficial owners
thereof.
(b) Except as otherwise specified with respect to the LYONs, any interest
on any LYON that is payable, but is not punctually paid or duly provided for,
within 30
-30-
<PAGE> 32
days following on any Interest Payment Date (herein called "Defaulted Interest",
which term shall include any accrued and unpaid interest that has accrued on
such defaulted amount in accordance with paragraph 1 of the LYONs), shall
forthwith cease to be payable to the registered Holder thereof on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, as 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 LYONs 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 proposed to be paid on
each LYON and the date of the proposed payment (which shall not be less than 20
days after such notice is received by the Trustee), and at the same time the
Company shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or 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 Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 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 Holder of LYONs at his address as
it appears on the list of Holders maintained pursuant to Section 3.5 of the
Indenture not less than 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 mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the LYONs are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the following
clause (2).
(2) The Company may make payment of any Defaulted Interest on
the LYONs in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such LYONs may be listed, and upon such notice
as may be required by such exchange, 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.
Subject to the foregoing provisions of this Section and Section 3.5 of the
Indenture, each LYON delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other LYON shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other LYON.
ARTICLE EIGHT
EVENTS OF DEFAULT
-31-
<PAGE> 33
Section 801. EVENTS OF DEFAULT.
The following will be Events of Default under the Supplemental Indenture:
(a) after exercise of its option pursuant to Section 701 of this
Supplemental Indenture following a Tax Event, the Company defaults in the
payment of interest upon any LYON when such interest becomes due and payable,
and such default continues for a period of 30 days;
(b) the Company defaults in the payment of the Principal Amount at
Maturity (or, if the LYONs have been converted to semiannual coupon notes
following a Tax Event pursuant to Article Seven, the Restated Principal Amount),
Issue Price plus accrued Original Issue Discount, Redemption Price, Purchase
Price or Change in Control Purchase Price on any LYON when the same becomes due
and payable at its Stated Maturity, upon redemption, upon declaration, when due
for purchase by the Company or otherwise;
(c) the Company fails to comply with any of its agreements in the LYONs or
this Indenture or Supplemental Indenture (other than those referred to in
clauses (a) and (b) above) and such failure continues for 60 days after receipt
by the Company of a Notice of Default;
(d) (1) failure of the Company to make any payment by the end of any
applicable grace period after maturity of Debt in an amount in excess of
$100,000,000 and continuance of such failure, or (2) the acceleration of Debt in
an amount in excess of $100,000,000 because of a default with respect to such
Debt without such Debt having been discharges or such acceleration having been
cured, waived, rescinded or annulled, in the case of (1) or (2) above, for a
period of 30 days after receipt by the Company of a Notice of Default; provided,
however, that if any such failure or acceleration referred to in (1) or (2)
above shall cease or be cured, waived, rescinded or annulled, then the Event of
Default by reason thereof shall be deemed not to have occurred; or
(e) the Company pursuant to or under or within the meaning of any
Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief against it in an
involuntary case or proceeding or the commencement of any case against it;
(iii) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(iv) makes a general assignment for the benefit of its creditors;
(v) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or
-32-
<PAGE> 34
(vi) consents to the filing of such petition or the appointment of or
taking possession by a Custodian; or
(f) a court of competent jurisdiction enters and order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company in an involuntary case or
proceeding, or adjudicates the Company insolvent or bankrupt;
(ii) appoints a Custodian of the Company or for any substantial part
of its property; or
(iii) orders the winding up or liquidation of the Company;
and the order or decree remains unstayed and in effect for 60 days.
"Bankruptcy Law" means Title 11, United States Code, or any similar Federal
or state law for the relief of debtors.
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (c) or clause (d) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate Principal Amount at Maturity of the LYONs at the time outstanding
notify the Company and the Trustee, of the default and the Company does not cure
such default (and such default is not waived) within the time specified in
clause (c) or clause (d) above after actual receipt of such notice. Any such
notice must specify the default, demand that it be remedied and state that such
notice is a "Notice of Default."
Section 5.1 of the Indenture shall not be applicable to the LYONs.
Section 802. ACCELERATION OF THE LYONS.
In the event of acceleration of the LYONs pursuant to Article Five of the
Indenture (other than in the event that the LYONs have been converted to
semiannual coupon notes following a Tax Event pursuant to Article Seven), the
Issue Price plus accrued Original Issue Discount on the LYONs shall be due and
payable upon the occurrence of those specified events resulting in such
acceleration as provided in Article Five of the Indenture.
ARTICLE NINE
MISCELLANEOUS
Section 901. CONSENT OF HOLDERS REQUIRED.
In addition to those modifications or amendments requiring the consent of the
Holder of each Outstanding LYON effected thereby specified in Section 9.2 of the
Indenture, no
-33-
<PAGE> 35
such Supplemental Indenture shall, without the consent of the Holder of each
outstanding LYON affected thereby:
(1) make any change in the manner or rate of accrual in
connection with Original Issue Discount, reduce the rate of interest referred to
in paragraph 1 of the LYONs, reduce the rate of interest referred to in Section
701 upon the occurrence of a Tax Event, or extend the time for payment of
Original Issue Discount or interest, if any, on any LYON;
(2) make any LYON payable in money or securities other than that
stated in the LYON;
(3) make any change that adversely affects the right to require
the Company to purchase the LYONs in accordance with the terms thereof and this
Indenture and Supplemental Indenture.
(4) impair the right to institute suit for the enforcement of
any payment with respect to, or conversion of, the LYONs.
Section 902. APPLICABILITY OF DEFEASANCE PROVISIONS.
Each of the defeasance and covenant defeasance provisions of Article
Thirteen of the Indenture shall apply to the LYONs.
Section 903. RESTRICTIVE COVENANTS NOT APPLICABLE.
The covenants set forth in Section 10.8 and Section 10.9 of the Indenture
shall not apply to the LYONs.
Section 904. REFERENCE TO AND EFFECT ON THE INDENTURE.
This Supplemental Indenture shall be construed as supplemental to the
Indenture and all the terms and conditions of this Supplemental Indenture shall
be deemed to be part of the terms and conditions of the Indenture. Except as set
forth herein, the Indenture heretofore executed and delivered is hereby (i)
incorporated by reference in this Supplemental Indenture and (ii) ratified,
approved and confirmed.
Section 905. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any term,
provision, or condition set forth in Article Three hereof if the Holders of a
majority in principal amount of the outstanding LYONs shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision, or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of
-34-
<PAGE> 36
the Trustee in respect of any such term, provision, or condition shall remain in
full force and effect.
Section 906. SUPPLEMENTAL INDENTURE MAY BE EXECUTED IN COUNTERPARTS.
This instrument 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.
Section 907. EFFECT OF HEADINGS.
The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
-35-
<PAGE> 37
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed all as of the day and year first above written.
Solectron Corporation
By:_______________________________________
Name:
Title:
State Street Bank and Trust Company of
California, N.A., as Trustee
By:_______________________________________
Name:
Title:
-36-
<PAGE> 38
EXHIBIT A-1
[FORM OF FACE OF GLOBAL SECURITY]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF PRINCIPAL
AMOUNT AT MATURITY OF THIS SECURITY IS $420.88, THE ISSUE DATE IS MAY 8, 2000,
THE YIELD TO MATURITY IS 2 3/4%.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER 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 IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), 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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.
A-1
<PAGE> 39
SOLECTRON CORPORATION
Liquid Yield Option(TM) Note due 2020
[(Zero Coupon-Senior)]
No. CUSIP:__________
Issue Date: May 8, 2000 Original Issue Discount: $420.88
Issue Price: $579.12 (for each $1,000 Principal
(for each $1,000 Principal Amount at Maturity)
Amount at Maturity)
SOLECTRON CORPORATION, a Delaware corporation, promises to pay to
___________________________ or registered assigns, the Principal Amount at
Maturity of _________________________ Dollars on May 8, 2020.
This Security shall not bear interest except as specified on the other
side of this Security. Original Issue Discount will accrue as specified on the
other side of this Security. This Security is convertible as specified on the
other side of this Security.
A-2
<PAGE> 40
Additional provisions of this Security are set forth on the other side
of this Security.
SOLECTRON CORPORATION
By:__________________________
Title:
Attest:
_______________________________
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
as Trustee, certifies that this is one of the Securities
referred to in the within-mentioned Indenture.
By: ________________________
Authorized Signatory
Dated: ________________________
A-3
<PAGE> 41
[FORM OF REVERSE SIDE OF SECURITY]
Liquid Yield Option(TM) Note Due 2020
(Zero Coupon-Senior)
1. Interest.
This Security shall not bear interest, except as specified in this
paragraph or in paragraph 10 hereof. If the Principal Amount at Maturity hereof
or any portion of such Principal Amount at Maturity is not paid when due
(whether upon acceleration pursuant to Section 5.2 of the Indenture, upon the
date set for payment of the Redemption Price pursuant to paragraph 5 hereof,
upon the date set for payment of the Purchase Price or Change in Control
Purchase Price pursuant to paragraph 6 hereof or upon the Stated Maturity of
this Security) or if interest due hereon or any portion of such interest is not
paid when due in accordance with paragraph 10 hereof, then in each such case the
overdue amount shall, to the extent permitted by law, bear interest at the rate
of 2 3/4% per annum, compounded semi-annually, which interest shall accrue from
the date such overdue amount was originally due to the date payment of such
amount, including interest thereon, has been made or duly provided for. All such
interest shall be payable on demand. The accrual of such interest on overdue
amounts shall be in lieu of, and not in addition to, the continued accrual of
Original Issue Discount.
Original Issue Discount (the difference between the Issue Price and the
Principal Amount at Maturity of the Security), in the period during which a
Security remains outstanding, shall accrue at 2 3/4% per annum, on a semiannual
bond equivalent basis using a 360-day year composed of twelve 30-day months,
from the Issue Date of this Security.
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of Redemption Prices, Purchase Prices, Change in
Control Purchase Prices and at Stated Maturity to Holders who surrender
Securities to a Paying Agent to collect such payments in respect of the
Securities. The Company will pay cash amounts in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
However, the Company may make such cash payments by check payable in such money.
3. Paying Agent, Conversion Agent and Registrar.
Initially, State Street Bank and Trust Company of California, N.A., a
national banking association organized under the laws of the United States (the
"Trustee"), will act as Paying Agent, Conversion Agent and Security Registrar.
The Company or any of its Subsidiaries or any of their Affiliates may act as
Paying Agent, Conversion Agent, Security Registrar or co-registrar.
<PAGE> 42
4. Indenture.
The Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of May 8, 2000 (herein called the
"Indenture," which term shall have the meaning assigned to it in such
instrument), between the Company and State Street Bank and Trust Company of
California, N.A., as Trustee (herein called the "Trustee," which term includes
any successor trustee under the Indenture), and reference is hereby made to the
Indenture and all indentures supplemental thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, and the Holders of Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof, limited in
aggregate Principal Amount at Maturity to $3,500,000,000, subject to Section
101(b) of the Supplemental Indenture, and is issued pursuant to a Supplemental
Trust Indenture supplementing the Indenture, dated as of May 8, 2000, from the
Company to Trustee relating to the issuance of the Liquid Yield Option(TM) Notes
due 2020 (Zero Coupon-Senior) of this series (the "Supplemental Indenture").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture and the Supplemental Indenture. The Securities are
subject to all such terms, and Holders are referred to the Indenture, the
Supplemental Indenture and the Trust Indenture Act for a statement of those
terms.
The Securities are general unsecured obligations of the Company. The
Indenture does not limit other indebtedness of the Company, secured or
unsecured.
5. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the option
of the Company at the Redemption Prices set forth below, provided that the
Securities are not redeemable prior to May 8, 2003.
The table below shows Redemption Prices of a Security per $1,000
Principal Amount at Maturity on the dates shown below and at Stated Maturity,
which prices reflect accrued Original Issue Discount calculated to each such
date. The Redemption Price of a Security redeemed between such dates shall
include an additional amount reflecting the additional Original Issue Discount
accrued since the next preceding date in the table.
(TM) Trademark of Merrill Lynch & Co., Inc.
-2-
<PAGE> 43
<TABLE>
<CAPTION>
(2)
(1) Accrued Original (3)
LYON Issue Discount Redemption Price
Redemption Date Issue Price at 2 3/4% (1) + (2)
--------------- ----------- --------- ---------
<S> <C> <C> <C>
May 8, 2003........................... $ 579.12 $ 49.45 $ 628.57
May 8, 2004........................... 579.12 66.85 645.97
May 8, 2005........................... 579.12 84.74 663.86
May 8, 2006........................... 579.12 103.12 682.24
May 8, 2007........................... 579.12 122.01 701.13
May 8, 2008........................... 579.12 141.43 720.55
May 8, 2009........................... 579.12 161.38 740.50
May 8, 2010........................... 579.12 181.88 761.00
May 8, 2011........................... 579.12 202.95 782.07
May 8, 2012........................... 579.12 224.60 803.72
May 8, 2013........................... 579.12 246.86 825.98
May 8, 2014........................... 579.12 269.73 848.85
May 8, 2015........................... 579.12 293.23 872.35
May 8, 2016........................... 579.12 317.39 896.51
May 8, 2017........................... 579.12 342.21 921.33
May 8, 2018........................... 579.12 367.72 946.84
May 8, 2019........................... 579.12 393.94 973.06
At Stated Maturity.................... $ 579.12 $ 420.88 $ 1,000.00
</TABLE>
If converted to a semiannual coupon note following the occurrence of
a Tax Event, this Security will be redeemable at the Restated Principal Amount
plus accrued and unpaid interest from the date of such conversion through the
Redemption Date; but in no event will this Security be redeemable before May 8,
2003.
6. Purchase By the Company at the Option of the Holder.
Subject to the terms and conditions of the Supplemental Indenture,
the Company shall become obligated to purchase, at the option of the Holder, the
Securities held by such Holder on the following Purchase Dates and at the
following Purchase Prices per $1,000 Principal Amount at Maturity, upon delivery
of a Purchase Notice containing the information set forth in the Supplemental
Indenture, at any time from the opening of business on the date that is 20
Business Days prior to such Purchase Date until the close of business on such
Purchase Date and upon delivery of the Securities to the Paying Agent by the
Holder as set forth in the Indenture.
<TABLE>
<CAPTION>
Purchase Date Purchase Price
------------- --------------
<S> <C>
May 8, 2003......................... $ 628.57
May 8, 2010......................... $ 761.00
</TABLE>
-3-
<PAGE> 44
The Purchase Price (equal to the Issue Price plus accrued Original
Issue Discount to the Purchase Date) may be paid, at the option of the Company,
in cash or by the issuance and delivery of shares of Common Stock of the
Company, or in any combination thereof.
If prior to a Purchase Date this Security has been converted to a
semiannual coupon note following the occurrence of a Tax Event, the Purchase
Price will be equal to the Restated Principal Amount plus accrued and unpaid
interest from the date of conversion to the Purchase Date.
At the option of the Holder and subject to the terms and conditions
of the Supplemental Indenture, the Company shall become obligated to purchase
the Securities held by such Holder 35 Business Days after the occurrence of a
Change in Control of the Company occurring on or prior to May 8, 2003 for a
Change in Control Purchase Price equal to the Issue Price plus accrued Original
Issue Discount to the Change in Control Purchase Date, which Change in Control
Purchase Price shall be paid in cash. If prior to a Change in Control Purchase
Date this Security has been converted to a semiannual coupon note following the
occurrence of a Tax Event, the Change in Control Purchase Price shall be equal
to the Restated Principal Amount plus accrued and unpaid interest from the date
of conversion to the Change in Control Purchase Date.
Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture.
If cash (and/or securities if permitted under the Supplemental
Indenture) sufficient to pay the Purchase Price or Change in Control Purchase
Price, as the case may be, of all Securities or portions thereof to be purchased
as of the Purchase Date or the Change in Control Purchase Date, as the case may
be, is deposited with the Paying Agent on the Business Day following the
Purchase Date or the Change in Control Purchase Date, as the case may be,
Original Issue Discount ceases to accrue on such Securities (or portions
thereof) immediately after such Purchase Date or Change in Control Purchase
Date, as the case may be, and the Holder thereof shall have no other rights as
such (other than the right to receive the Purchase Price or Change in Control
Purchase Price, as the case may be, upon surrender of such Security).
7. Notice of Redemption.
Notice of redemption will be mailed at least 15 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at the Holder's registered address. If money sufficient to pay the
Redemption Price of all Securities (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent prior to or on the Redemption
Date, immediately after such Redemption Date Original Issue Discount ceases to
accrue on such Securities or portions thereof. Securities in denominations
larger than $1,000 of Principal Amount at Maturity may be redeemed in part but
only in integral multiples of $1,000 of Principal Amount at Maturity.
-4-
<PAGE> 45
8. Conversion.
Subject to the next two succeeding sentences, a Holder of a Security
may convert it into Common Stock of the Company at any time before the close of
business on May 8, 2020. If the Security is called for redemption, the Holder
may convert it at any time before the close of business on the Redemption Date.
A Security in respect of which a Holder has delivered a Purchase Notice or
Change in Control Purchase Notice exercising the option of such Holder to
require the Company to purchase such Security may be converted only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture
and the Supplemental Indenture.
The initial Conversion Rate is 12.3309 shares of Common Stock per
$1,000 Principal Amount at Maturity, subject to adjustment in certain events
described in the Indenture. The Company will deliver cash or a check in lieu of
any fractional share of Common Stock.
In the event the Company exercises its option pursuant to Section
701 of the Supplemental Indenture to have interest in lieu of Original Issue
Discount accrue on the Security following a Tax Event, the Holder will be
entitled on conversion to receive the same number of shares of Common Stock such
Holder would have received if the Company had not exercised such option. If the
Company exercises such option, Securities surrendered for conversion during the
period from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business of such Interest Payment Date
(except Securities to be redeemed on a date within such period) must be
accompanied by payment of an amount equal to the interest thereon that the
registered Holder is to receive. Except where Securities surrendered for
conversion must be accompanied by payment as described above, no interest on
converted Securities will be payable by the Company on any Interest Payment Date
subsequent to the date of conversion.
To convert a Security, a Holder must (1) complete and manually sign
the conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the
Security to the Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (4) pay any transfer or similar tax, if required.
A Holder may convert a portion of a Security if the Principal Amount
at Maturity of such portion is $1,000 or an integral multiple of $1,000. No
payment or adjustment will be made for dividends on the Common Stock except as
provided in the Indenture. On conversion of a Security, that portion of accrued
Original Issue Discount (or interest if the Company has exercised its option
provided for in paragraph 10 hereof) attributable to the period from the Issue
Date (or, if the Company has exercised the option referred to in paragraph 10
hereof, the later of (x) the date of such exercise and (y) the date on which
interest was last paid) through the Conversion Date with respect to the
converted Security shall not be cancelled, extinguished or forfeited, but rather
shall be deemed to be paid in full to the Holder thereof through the delivery of
the Common Stock (together with the cash payment, if any, in lieu of fractional
shares) in exchange for the Security being converted pursuant to the terms
hereof; and the fair market value of such shares of Common Stock (together with
any such cash payment in lieu of fractional shares) shall be treated as issued,
to the extent
-5-
<PAGE> 46
thereof, first in exchange for Original Issue Discount (or interest, if the
Company has exercised its option provided for in paragraph 10 hereof) accrued
through the Conversion Date, and the balance, if any, of such fair market value
of such Common Stock (and any such cash payment) shall be treated as issued in
exchange for the Issue Price of the Security being converted pursuant to the
provisions hereof.
The Conversion Rate will be adjusted for dividends or distributions
on Common Stock payable in Common Stock or other Capital Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock for a period
expiring within 60 days at less than the Quoted Price at the Time of
Determination; and distributions to such holders of assets or debt securities of
the Company or certain rights to purchase securities of the Company (excluding
certain cash dividends or distributions). However, no adjustment need be made if
Holders may participate in the transaction or in certain other cases. The
Company from time to time may voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding
share exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a
Security into Common Stock may be changed into a right to convert it into
securities, cash or other assets of the Company or another Person.
9. Conversion Arrangement on Call for Redemption.
Any Securities called for redemption, unless surrendered for
conversion before the close of business on the Redemption Date, may be deemed to
be purchased from the Holders of such Securities at an amount not less than the
Redemption Price, by one or more investment bankers or other purchasers who may
agree with the Company to purchase such Securities from the Holders, to convert
them into Common Stock of the Company and to make payment for such Securities to
the Trustee in trust for such Holders.
10. Tax Event
(a) From and after (i) the date (the "Tax Event Date") of the
occurrence of a Tax Event and (ii) the date the Company exercises such option,
whichever is later (the "Option Exercise Date"), at the option of the Company,
interest in lieu of future Original Issue Discount shall accrue at the rate of 2
3/4% per annum on a principal amount per Security (the "Restated Principal
Amount") equal to the Issue Price plus Original Issue Discount accrued through
the Option Exercise Date and shall be payable semiannually on May 8 and November
8 of each year (each an "Interest Payment Date") to holders of record at the
close of business on April 23 and October 24 (each a "Regular Record Date") or
immediately preceding such Interest Payment Date. Interest will be computed on
the basis of a 360-day year comprised of twelve 30-day months and will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from the Option Exercise Date.
-6-
<PAGE> 47
(b) Interest on any Security that is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Security is registered at the close of business on the
Regular Record Date for such interest at the office or agency of the Company
maintained for such purpose. Each installment of interest on any Security shall
be paid in same-day funds by transfer to an account maintained by the payee
located inside the United States.
(c) Except as otherwise specified with respect to the Securities,
any Defaulted Interest on any Security shall forthwith cease to be payable to
the registered Holder thereof on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company
as provided for in Section 702(b) of the Supplemental Indenture.
11. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount at Maturity and integral multiples
of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Security Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Security Registrar need
not transfer or exchange any Securities selected for redemption (except, in the
case of a Security to be redeemed in part, the portion of the Security not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given and not withdrawn (except, in the case of
a Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before a selection of
Securities to be redeemed.
12. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner
of this Security for all purposes.
13. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture and the
Supplemental Indenture, (i) the Indenture, the Supplemental Indenture or the
Securities may be amended with the written consent of the Holders of at least a
majority in aggregate Principal Amount at Maturity of the Securities at the time
outstanding and (ii) certain defaults may be waived with the written consent of
the Holders of a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding. Subject to certain exceptions set forth in
the Indenture, without the consent of any Holder, the Company and the Trustee
may amend the Indenture, the Supplemental Indenture or the Securities as set
forth in the Indenture.
-7-
<PAGE> 48
14. Defaults.
Events of Default include (i) if the Securities have been converted
to semiannual coupon notes following a Tax Event, default in the payment of
interest which default continues for a period of 30 days; (ii) default in
payment of the Principal Amount at Maturity (or, if the Securities have been
converted to semiannual coupon notes following a Tax Event, the Restated
Principal Amount), Issue Price plus accrued Original Issue Discount, Redemption
Price, Purchase Price or Change in Control Purchase Price, as the case may be,
in respect of the Securities when the same becomes due and payable; (iii)
failure by the Company to comply with other agreements in the Indenture, the
Supplemental Indenture or the Securities, subject to notice and lapse of time;
(iv) failure of the Company to make any payment by the end of any applicable
grace period after maturity of Debt in an amount in excess of $100,000,000, or
(b) the acceleration of Debt in an amount in excess of $100,000,000 because of a
default with respect to such Debt without such Debt having been discharged or
such acceleration having been cured, waived, rescinded or annulled, subject to
notice and lapse of time; provided, however, that if any such failure or
acceleration referred to in (a) or (b) above shall cease or be cured, waived,
rescinded or annulled, then the Event of Default by reason thereof shall be
deemed not to have occurred; and (v) certain events of bankruptcy or insolvency.
If an Event of Default occurs and is continuing, the Trustee, or the Holders of
at least 25% in aggregate Principal Amount at Maturity of the Securities at the
time outstanding, may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities becoming due and payable immediately upon
the occurrence of such Events of Default.
15. Trustee Dealings with the Company.
Subject to certain limitations imposed by the Trust Indenture Act,
the Trustee, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or the Supplemental Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Holder waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the
Securities.
17. Authentication.
This Security shall not be valid until an authorized officer of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
-8-
<PAGE> 49
18. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE, THE
SUPPLEMENTAL INDENTURE AND THIS SECURITY, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.
---------------
The Company will furnish to any Holder upon written request and
without charge a copy of the Supplemental Indenture which has in it the text of
this Security in larger type. Requests may be made to:
Solectron Corporation
777 Gibraltar Drive
Milpitas, California 95035
Attention: Chief Financial Officer
-9-
<PAGE> 50
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
________________________________________________
________________________________________________
(Insert assignee's soc. sec. or tax ID no.)
________________________________________________
________________________________________________
________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________ agent to
transfer this Security on the books of the Company. The
agent may substitute another to act for him.
Date: _____________________
Your Signature:_________________________________________________________
____________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
Signature(s) must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Securities and
Exchange Commission Rule 17Ad-15.
-10-
<PAGE> 51
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check the box:
[ ]
To convert only part of this Security, state the Principal Amount at Maturity to
be converted (which must be $1,000 or an integral multiple of $1,000)
$__________________________
If you want the stock certificate made out in another Person's name, fill in the
form below:
________________________________________________________________________________
________________________________________________________________________________
(Insert other Person's soc. sec. or tax ID no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
Date: _______________________
Your Signature:_________________________________________________________
________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
Signature(s) must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program) pursuant to
Securities and Exchange Commission Rule 17Ad-15.
-11-
<PAGE> 1
Exhibit 8.1
May 15, 2000
Solectron Corporation
777 Gibraltar Drive
Milpitas, CA 95035
RE: REGISTRATION STATEMENT ON FORM S-3
(REGISTRATION NO. 333-34494)
Ladies and Gentlemen:
We have acted as special United States federal income tax counsel to
Solectron Corporation, a Delaware corporation (the "Company"), in connection
with the registration under the Securities Act of 1933, as amended, of
$3,500,000,000 aggregate principal amount at maturity of Liquid Yield Option
Notes due 2020 (Zero Coupon-Senior) (the "Securities") of the Company. In that
capacity, we have examined the Registration Statement on Form S-3 (Registration
No. 333-34494), as amended by Amendment No. 1 thereto, which was declared
effective by the Securities and Exchange Commission (the "Commission") on April
14, 2000, and the related Prospectus and Prospectus Supplement filed by the
Company with the Commission on May 4, 2000 with respect to the distribution of
the Securities (such Prospectus, as supplemented by such Prospectus Supplement,
herein the "Prospectus").
For the purpose of rendering this opinion, we have examined and relied
upon the current and continued truth and accuracy of the statements, covenants,
representations and warranties contained in the Senior Indenture, dated as of
May 8, 2000 (the "Senior Indenture") between the Company and State Street Bank
and Trust Company of California, N.A., as trustee (the "Trustee"), as
supplemented by the Supplemental Trust Indenture, dated as of May 8 ,2000 (the
"Supplemental Indenture" and the Senior Indenture, as supplemented by the
Supplemental Indenture, the "Indenture") and the tax representation letter
delivered to us by the Company. We have also assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to original documents of all copies of documents submitted to us.
In addition, we have assumed that the Securities will have such terms as set
forth in, and the issuance and sale of such Securities will be consummated in
the manner contemplated by and in accordance with, the Prospectus.
Based upon and subject to the qualifications and limitations contained
herein and in the Prospectus, it is our opinion that (i) the Securities will be
treated as indebtedness for United States federal income tax purposes; and (ii)
the information in the Prospectus under the caption "Federal Income Tax
-12-
<PAGE> 2
Considerations," while not purporting to discuss all tax matters relating to the
Securities, based upon the Securities being treated as indebtedness, sets forth
the material federal income tax consequences to holders of the Securities.
This opinion does not address the various state, local or foreign tax
consequences that may result from holding the Securities.
This opinion merely represents our best judgment and is not binding on
the Internal Revenue Service or the courts. The Internal Revenue Service is not
precluded from successfully asserting a contrary position. Further, there can be
no assurance that changes in the law or its interpretation will not take place
that could affect the United States federal income tax consequences of
acquiring, holding or disposing of the Securities. Nevertheless, we undertake no
responsibility to advise you of any new developments.
We consent to the use of this opinion as an exhibit to be incorporated
by reference into the Registration Statement and further consent to the
reference to our firm as special United States federal income tax counsel to the
Company.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
-13-
