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EXHIBIT 4.1
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SOLECTRON CORPORATION
Liquid Yield Option(TM) Notes due 2020
(Zero Coupon-Senior)
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Supplemental Indenture
Dated as of November 20, 2000
Supplementing that certain
Indenture
Dated as of May 8, 2000
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STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.,
TRUSTEE
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(TM)Trademark of Merrill Lynch & Co., Inc.
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TABLE OF CONTENTS
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PAGE
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ARTICLE ONE ISSUANCE OF LYONS....................................................................2
Section 101 Issuance of LYONs; Principal Amount; Maturity .............................2
Section 102 No Interest on the LYONs; Accrual of Original Issue Discount ..............3
ARTICLE TWO CERTAIN DEFINITIONS..................................................................3
Section 201 Certain Definitions .......................................................3
Section 202 Other Definitions .........................................................5
ARTICLE THREE CERTAIN COVENANTS..................................................................6
Section 301 Registration and Listing ..................................................6
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 ..............................................13
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 .....................................................17
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
Section 5014 The Provisions of Section 14 .............................................19
ARTICLE SIX.....................................................................................19
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 .........26
Section 603 Effect of Purchase Notice or Change in Control Purchase Notice ...........29
Section 604 Deposit of Purchase Price or Change in Control Purchase Price ............30
Section 605 LYONs Purchased in Part ..................................................30
Section 606 Covenant to Comply with Securities Laws Upon Purchase of LYONs ...........30
Section 607 Repayment to the Company .................................................31
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TABLE OF CONTENTS
(CONTINUED)
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PAGE
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ARTICLE SEVEN...................................................................................31
Section 701 Optional Conversion to Semiannual Coupon LYON Upon Tax Event .............31
Section 702 Payment of Interest; Interest Rights Preserved ...........................32
ARTICLE EIGHT...................................................................................33
Section 801 Events of Default ........................................................33
Section 802 Acceleration of the LYONs ................................................35
ARTICLE NINE....................................................................................35
Section 901 Consent of Holders Required ..............................................35
Section 902 Applicability of Defeasance Provisions ...................................36
Section 903 Restrictive Covenants Not Applicable .....................................36
Section 904 Reference to and Effect on the Indenture .................................36
Section 905 Waiver of Certain Covenants ..............................................36
Section 906 Supplemental Indenture May be Executed In Counterparts ...................36
Section 907 Effect of Headings .......................................................36
</TABLE>
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This Supplemental Indenture, dated as of November 20, 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 November 20, 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,
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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 $2,900,000,000 (or such greater amount not to exceed
$3,335,000,000 as required by the exercise of the over-allotment option set
forth in Section 2(b) of the Purchase Agreement and shall mature on November 20,
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 3.25% per annum,
on a semiannual bond equivalent basis using a 360-day year composed of twelve
30-day months, from the Issue Date.
(b) The Company shall promptly make all payments in respect of
the LYONs on the dates and in the manner provided in the LYONs and 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
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specified in this Section 201. All other terms used in this Supplemental
Indenture that are 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 November 20, 2000.
"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.
"Purchase Agreement" means the Purchase Agreement dated November
14, 2000 by and between Merrill Lynch & Co. Inc. and the Company, as amended
from time to time by the parties thereto.
"Redemption Date" or "redemption date" means the date specified
for redemption of the LYONs in accordance with the terms of the LYONs and this
Indenture.
"Redemption Price" or "redemption price" has 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).
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"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.
"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 November 20, 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
November 20, 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.
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Defined in
Term Section
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"Associate".................................................... 602(a)
"Average Quoted Price"......................................... 501
"Bankruptcy Law"............................................... 801
"beneficial owner"............................................. 602(a)
"cash"......................................................... 601(b)
"Cash Amount" ................................................. 501
"Change Event" ................................................ 5010
"Change in Control"............................................ 602(a)
"Change in Control Purchase Date".............................. 602(a)
"Change in Control Purchase Notice"............................ 602(c)
</TABLE>
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<TABLE>
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Defined in
Term Section
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"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)
"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
New York Stock Exchange,
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The Nasdaq National Market or such other exchange or automated quotation, to the
extent so quoted or listed, as the Common Stock is then so quoted or listed at
such date of conversion.
ARTICLE FOUR
REDEMPTION OF LYONS
SECTION 401 RIGHT OF REDEMPTION.
The LYONs will not be subject to redemption prior to May 20, 2004 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;
provided, however, that during the period commencing on May 20, 2004 and ending
on November 20, 2005, the LYONs shall be redeemable by the Company pursuant to
the terms of this Section 401 if and only if the product of the Sale Price of
the shares of Common Stock into which the LYONs to be redeemed are then
convertible multiplied by the Conversion Rate applicable to such shares has
exceeded 150% of the sum of the Issue Price plus the accrued Original Issue
Discount per such LYONs plus the accrued interest, if any, per such LYONs (as
determined based on the then applicable amounts) for at least 20 Trading Days
within a period of 30 consecutive Trading Days prior to the date of the mailing
of the notice of redemption.
The table below shows redemption prices of a LYON on May 20,
2004, at each November 20 thereafter prior to maturity and at maturity on
November 20, 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>
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(2)
Accrued (3)
(1) Original Redemption
LYON Issue Discount Price
Redemption Date Issue Price at 3.25% (1)+(2)
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May 20, 2004 ......................... $ 524.78 $ 62.68 $ 587.46
November 20, 2004 .................... 524.78 72.23 597.01
November 20, 2005 .................... 524.78 91.79 616.57
November 20, 2006 .................... 524.78 111.99 636.77
November 20, 2007 .................... 524.78 132.86 657.64
November 20, 2008 .................... 524.78 154.40 679.18
November 20, 2009 .................... 524.78 176.66 701.44
November 20, 2010 .................... 524.78 199.64 724.42
November 20, 2011 .................... 524.78 223.37 748.15
November 20, 2012 .................... 524.78 247.88 772.66
November 20, 2013 .................... 524.78 273.20 797.98
November 20, 2014 .................... 524.78 299.35 824.13
November 20, 2015 .................... 524.78 326.35 851.13
</TABLE>
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<TABLE>
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November 20, 2016 .................... 524.78 354.23 879.01
November 20, 2017 .................... 524.78 383.03 907.81
November 20, 2018 .................... 524.78 412.78 937.56
November 20, 2019 .................... 524.78 443.50 968.28
At Stated Maturity ................... $ 524.78 $ 475.22 $1,000.00
</TABLE>
If converted to semiannual coupon LYONs following the occurrence
of a Tax Event, the LYONs would be redeemable at the option of the Company at
the restated principal amount plus accrued and unpaid interest from the date of
such conversion to, but not including, the redemption date. However, in no event
may the LYONs be redeemed prior to May 20, 2004.
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, 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.
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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.
The Holders' right to convert Securities into shares of Common Stock is
subject to the Company's right to elect instead to deliver to such Holder the
Cash Amount (as defined below), in lieu of delivering all or a portion of such
shares of Common Stock. Such right will terminate upon the reservation, if
permitted, of authorized shares of Common Stock by the Company in a number
sufficient to enable all of the LYONs to be converted into Common Stock
following the stockholders meeting referred to in Section 5014. The amount of
cash to be delivered for each $1,000 Principal Amount of a Security upon
conversion shall be equal to the average of the Sale Prices of a share of Common
Stock for the five consecutive Trading Days commencing on the date that is one
day after the date of the election notice delivered by the Company referred to
in Section 502 multiplied by the Conversion Rate (less the number of shares to
be delivered as part of such conversion) in effect on the Conversion Date (the
"Cash Amount").
"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 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
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(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"). Subject to Section
501, within two Business Days following the Conversion Date, the Company shall
deliver to the Holder, through the Conversion Agent, written notice of whether
such Security shall be converted into shares of Common Stock or paid in cash. If
the Company shall fail to deliver such notice, the Company shall be required to
satisfy such conversion soly with shares of Common Stock. If the Company shall
have notified the Holder that such Security shall be converted into shares of
Common Stock, as soon as practicable
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after the Conversion Date, the Company shall 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. If the Company shall have notified the Holder
that such Security shall be paid in cash (if permitted under Section 501), the
Company shall deliver to the Holder surrendering such Security the amount of
cash payable with respect to such Security promptly following the determination
of the Cash Amount. 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) or cash in lieu thereof
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) or cash in lieu thereof shall be
treated as delivered, 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 or cash in lieu thereof
shall be based on the total Principal Amount at Maturity of the LYONs converted.
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<PAGE> 14
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.
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
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<PAGE> 15
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:
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.
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<PAGE> 16
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.
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.
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<PAGE> 17
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.
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
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<PAGE> 18
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 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.
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<PAGE> 19
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 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 (a "Change Event"), 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.
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<PAGE> 20
The supplemental indenture referred to in the preceding paragraph 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 by virtue
of 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.
The right of the Company to satisfy the conversion privilege described
in Section 501 for cash (as described in the third paragraph of Section 501)
shall terminate upon the occurrence of a Change Event.
If this Section applies, neither Section 503 nor 504 applies.
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 (or cash in lieu thereof), 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.
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<PAGE> 21
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 (or Holder receiving cash in lieu thereof) 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.
SECTION 5014 RESERVATION OF SHARES OF COMMON STOCK.
The provisions of Section 14.6 of the Indenture shall not be applicable
to the LYONs.
The Company shall initially reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for purposes
of effecting the conversion of the LYONs, four million shares of Common Stock of
the Company. The Company shall seek from its stockholders at the next scheduled
annual meeting of stockholders after the date hereof, an approval of an
amendment to the Company's charter to increase the number of authorized shares
of Common Stock in an amount at least great enough to enable the Company to
reserve a sufficient number of such shares to permit the conversion of all of
the LYONs into Common Stock. In addition, the Company shall, from and after the
effectiveness of such amendment, if forthcoming, at all times cause to be
reserved and keep available, free from preemptive rights, out of its authorized
but unissued Common Stock, for purposes of effecting the conversion of the
LYONs, the full number of shares of Common Stock of the Company then issuable
upon the conversion of all outstanding LYONs.
ARTICLE SIX
PURCHASE OF LYONS AT OPTION OF HOLDER
SECTION 601 PURCHASE OF LYONS AT OPTION OF THE HOLDER.
(a) General. LYONs shall be purchased by the Company pursuant to
paragraph 6 of the LYONs as of May 20, 2004, November 20, 2005, and November 20,
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
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<PAGE> 22
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).
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
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<PAGE> 23
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,
(ii) the information required by Section 601(e),
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<PAGE> 24
(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;
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<PAGE> 25
(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
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Automated Quotation System, or, if not so listed or quoted, as determined in
good faith by the Board of Directors of the Company.
(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
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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;
(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.
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(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.
SECTION 602 PURCHASE OF LYONS AT OPTION OF THE HOLDER UPON CHANGE IN
CONTROL.
(a) If on or prior to May 20, 2004 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.
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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.
(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);
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(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:
(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
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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 (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.
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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 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.
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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 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 3.25% 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 20 and November 20 of each year (each an "Interest
Payment Date") to holders of record at the close of business on May 5 or
November 5 (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
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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 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.
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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
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
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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 discharged 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
(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 an 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
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(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 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;
-35-
<PAGE> 38
(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 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.
-36-
<PAGE> 39
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: /s/ Susan Wang
-------------------------------------
Name: Susan Wang
Title: Senior Vice President,
Chief Financial Officer
and Secretary
State Street Bank and Trust Company of
California, N.A., as Trustee
By: /s/ Stephen Rivero
-------------------------------------
Name: Stephen Rivero
Title: Vice President
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<PAGE> 40
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 $475.22, THE ISSUE DATE IS NOVEMBER 20,
2000, THE YIELD TO MATURITY IS 3.25%.
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> 41
SOLECTRON CORPORATION
Liquid Yield Option(TM) Note due 2020
[(Zero Coupon-Senior)]
No. CUSIP:__________
Issue Date: November 20, 2000 Original Issue Discount: $475.22
Issue Price: $524.78 (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 November 20, 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> 42
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> 43
[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 3.25% 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 3.25% 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.
A-4
<PAGE> 44
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 $2,900,000,000, subject to Section
101(b) of the Supplemental Indenture, and is issued pursuant to a Supplemental
Trust Indenture supplementing the Indenture, dated as of November 20, 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 20, 2004; provided, further, that
during the period commencing on May 20, 2004 and ending on November 20, 2005,
the Securities shall be redeemable by the Company pursuant to the terms of
Section 401 of the Supplemental Indenture if and only if the product of the Sale
Price of the shares of Common Stock into which the Securities to be redeemed are
then convertible multiplied by the Conversion Rate applicable to such shares has
exceeded 150% of the sum of the Issue Price plue the accrued Original Discount
per such Securities plus the accrued interest, if any, per such Securities (as
determined based on the then applicable amounts) for at least 20 Trading Days
within the period of 30 consecutive Trading Days ending on the Trading Day prior
to the date of the mailing of the notice of redemption.
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.
A-5
<PAGE> 45
<TABLE>
<CAPTION>
(2)
(1) Accrued Original (3)
LYON Issue Discount Redemption Price
Redemption Date Issue Price at 3.25% (1) + (2)
--------------- ----------- ---------------- ----------------
<S> <C> <C> <C>
May 20, 2004 ......................... $ 524.78 $ 62.68 $ 587.46
November 20, 2004 .................... 524.78 72.23 597.01
November 20, 2005 .................... 524.78 91.79 616.57
November 20, 2006 .................... 524.78 111.99 636.77
November 20, 2007 .................... 524.78 132.86 657.64
November 20, 2008 .................... 524.78 154.40 679.18
November 20, 2009 .................... 524.78 176.66 701.44
November 20, 2010 .................... 524.78 199.64 724.42
November 20, 2011 .................... 524.78 223.37 748.15
November 20, 2012 .................... 524.78 247.88 772.66
November 20, 2013 .................... 524.78 273.20 797.98
November 20, 2014 .................... 524.78 299.35 824.13
November 20, 2015 .................... 524.78 326.35 851.13
November 20, 2016 .................... 524.78 354.23 879.01
November 20, 2017 .................... 524.78 383.03 907.81
November , 2018 ...................... 524.78 412.78 937.56
November 20, 2019 .................... 524.78 443.50 968.28
At Stated Maturity ................... $ 524.78 $ 475.22 $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
20, 2004; and the Company may not redeem this Security during the period
commencing on May 20, 2004 and ending on November 20, 2005, the Securities shall
be redeemable by the Company pursuant to the terms of Section 401 of the
Supplemental Indenture if and only if the product of the Sale Price of the
shares of Common Stock into which the Securities to be redeemed are then
convertible multiplied by the Conversion Rate applicable to such shares has
exceeded 150% of the sum of the Issue Price plus the accrued Original Discount
per such Securities plus the accrued interest, if any, per such Securities (as
determined based on the then applicable amounts) for at least 20 Trading Days
within the period of 30 consecutive Trading Days ending on the Trading Day prior
to the date of the mailing of the notice of redemption.
A-6
<PAGE> 46
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 20, 2004........................ $ 587.46
November 20, 2005................... $ 616.57
November 20, 2010................... $ 724.42
</TABLE>
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 20, 2004 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
A-7
<PAGE> 47
(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.
8. Conversion.
Subject to the next three succeeding sentences, a Holder of a
Security may convert it into Common Stock of the Company at any time on or after
December 15, 2000 and before the close of business on November 20, 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 Holders' right to convert Securities into shares of Common
Stock is subject to the Company's right to elect instead to deliver to such
Holder the Cash Amount. Such right will terminate upon the reservation, if
permitted, of authorized shares of Common Stock by the Company in a number
sufficient to enable all of the Securities to be converted into Common Stock
following the stockholders meeting referred to in Section 5014 of the
Supplemental Indenture.
The initial Conversion Rate is 11.7862 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.
A-8
<PAGE> 48
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 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
A-9
<PAGE> 49
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
3.25% 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 20 and
November 20 of each year (each an "Interest Payment Date") to holders of record
at the close of business on May 5 and November 5 (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.
(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.
A-10
<PAGE> 50
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.
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
A-11
<PAGE> 51
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.
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 GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS.
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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
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<PAGE> 52
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
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(Insert assignee's soc. sec. or tax ID no.)
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(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:
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Your Signature:
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(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.
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<PAGE> 53
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:
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(Insert other Person's soc. sec. or tax ID no.)
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(Print or type assignee's name, address and zip code)
Date:
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Your Signature:
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(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.
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