<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 17, 2000
REGISTRATION NO. 333-46774
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FLEXTRONICS INTERNATIONAL LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
SINGAPORE 3672 NOT APPLICABLE
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
11 UBI ROAD 1, #07-01/02
MEIBAN INDUSTRIAL BUILDING
SINGAPORE 408723
(65) 844-3366
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
MICHAEL E. MARKS
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
11 UBI ROAD 1, #07-01/02
MEIBAN INDUSTRIAL BUILDING
SINGAPORE 408723
(65) 844-3366
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
DAVID K. MICHAELS, ESQ.
TRAM T. PHI, ESQ.
ANDREW H. FELLER, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
(650) 494-0600
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As promptly
as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
------------
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 2
PROSPECTUS
FLEXTRONICS INTERNATIONAL LTD.
EXCHANGE OFFER FOR ALL OUTSTANDING
$500,000,000 9 7/8% SENIOR SUBORDINATED NOTES DUE 2010
AND
E150,000,000 9 3/4% SENIOR SUBORDINATED NOTES DUE 2010
TERMS OF EXCHANGE OFFER
EXCHANGE OFFER
We will exchange new notes that are registered under the Securities Act for
old notes that were sold on June 26, 2000. All outstanding notes that are
validly tendered and not validly withdrawn will be exchanged.
We will receive no proceeds from the exchange offer.
EXCHANGE OFFER EXPIRATION
December 22, 2000 at 5:00 p.m., New York City time (10:00 p.m., London
time).
OLD NOTES
On June 26, 2000, we issued and sold $500.0 million of 9 7/8% Senior
Subordinated Notes due 2010 and E150.0 million of 9 3/4% Senior Subordinated
Notes due 2010.
If you tender your old notes in the exchange offer, interest will cease to
accrue after the date that the exchange offer is completed. If you do not tender
in the exchange offer, your old notes will continue to be subject to the same
terms and restrictions except that we will not be required to register your old
notes under the Securities Act.
FLEXTRONICS INTERNATIONAL LTD.
11 Ubi Road 1, #07-01/02, Meiban Industrial Building, Singapore 408723.
NEW NOTES
The new notes will be identical to the old notes except that the new notes
will be registered under the Securities Act.
- Maturity: July 1, 2010.
- Change of Control: You can require us to purchase your notes at 101% of
the principal amount.
- Interest: Paid every six months on January 1 and July 1, starting
January 1, 2001.
- Redemption by Flextronics: Anytime on or after July 1, 2005, except that
redemptions of a portion of the notes may be made at any time prior to
July 1, 2003 with the cash proceeds of some public or private offerings
of our ordinary shares.
- Ranking: The new notes will be general unsecured obligations and will
rank:
- junior to all of our existing and future senior indebtedness;
- junior to all of our secured indebtedness and liabilities of our
subsidiaries;
- equal with all of our existing and future senior subordinated
indebtedness; and
- senior to all of our subordinated indebtedness.
INVESTMENT IN THE NOTES TO BE ISSUED IN THE EXCHANGE OFFER INVOLVES RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 10.
This prospectus and the accompanying letter of transmittal are first being
mailed to holders of outstanding notes on or about November 20, 2000.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE NOTES OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this prospectus is November 20, 2000.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Documents Incorporated by Reference......................... i
Prospectus Summary.......................................... 1
Risk Factors................................................ 10
Disclosure Regarding Forward-Looking Statements............. 18
Use of Proceeds............................................. 19
Capitalization.............................................. 20
Selected Consolidated Financial Data........................ 21
Description of Existing Indebtedness........................ 23
The Exchange Offer.......................................... 24
Description of Notes........................................ 34
Material United States Federal Income Tax Considerations.... 67
Plan of Distribution........................................ 72
Legal Matters............................................... 72
Experts..................................................... 72
Available Information....................................... 73
</TABLE>
DOCUMENTS INCORPORATED BY REFERENCE
This prospectus incorporates business and financial information about us
that is not included in or delivered with this prospectus. We are incorporating
by reference in this prospectus the following documents which we have filed with
the Securities and Exchange Commission, which we will refer to as the
"Commission":
- Our annual report on Form 10-K for the year ended March 31, 2000.
- Our quarterly reports on Form 10-Q for the quarters ended June 30, 2000
and September 30, 2000.
- Our current reports on Form 8-K filed April 18, 2000, June 13, 2000, June
19, 2000, June 22, 2000, June 27, 2000, September 15, 2000, September 20,
2000, September 20, 2000 and November 14, 2000.
- The description of our ordinary shares contained in our registration
statement on Form 8-A dated January 31, 1994.
We are also incorporating by reference in this prospectus all reports and
other documents that we file after the date of this prospectus pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, prior
to the termination of the offering of securities under this prospectus. These
reports and documents will be incorporated by reference in and considered to be
part of this prospectus as of the date of filing of the reports and documents.
Any statement contained in this prospectus or in a document which is
incorporated by reference in this prospectus will be modified or superseded for
purposes of this prospectus to the extent that a statement in any document that
we file after the date of this prospectus that also is incorporated by reference
in this prospectus modifies or supersedes the prior statement. Any statement so
modified or superseded will not, except as so modified or superseded, constitute
a part of this prospectus.
i
<PAGE> 4
You may request, and we will send to you, without charge, copies of
documents that are incorporated by reference, other than exhibits to these
documents, which we will send to you for a reasonable fee. Requests should be
directed to:
Flextronics International Ltd.
2090 Fortune Drive
San Jose, California 95131
Attn: Laurette Slawson
Telephone: (408) 576-7000
IN ORDER TO ASSURE TIMELY DELIVERY OF THE REQUESTED MATERIALS BEFORE THE
EXPIRATION OF THE EXCHANGE OFFER, ANY REQUEST SHOULD BE MADE PRIOR TO DECEMBER
15, 2000.
You may also review copies of documents that are incorporated by reference
at our web site. The address of the site is http://www.flextronics.com.
Information contained in our web site does not constitute part of this
prospectus.
ii
<PAGE> 5
PROSPECTUS SUMMARY
The following summary highlights some information from this prospectus. It
may not contain all of the information that may be important to you. For a more
complete understanding of the exchange offer, we encourage you to read the
entire prospectus and the documents we have referred you to.
FLEXTRONICS INTERNATIONAL LTD.
We are a leading provider of advanced electronics manufacturing services to
original equipment manufacturers, or OEMs, primarily in the telecommunications
and networking, consumer electronics and computer industries. Our strategy is to
provide customers with the ability to outsource, on a global basis, a complete
product where we take responsibility for engineering, supply chain management,
assembly, integration, test and logistics management. We provide complete
product design services, including electrical and mechanical, circuit and
layout, radio frequency and test development engineering services. Our
manufacturing services include the fabrication and assembly of plastic and metal
enclosures, PCBs and backplanes. We believe that we have developed particular
strengths in advanced interconnect, miniaturization and packaging technologies,
and in the engineering and manufacturing of wireless communications products
employing radio frequency technology. Throughout the production process, we
offer logistics services, such as materials procurement, inventory management,
packaging and distribution.
Through a combination of internal growth and acquisitions, we have become
the world's third largest provider of electronics manufacturing services, with
revenues of $6.4 billion and EBITDA (earnings before interest, taxes,
depreciation and amortization) of $435.2 million in fiscal 2000. In addition, we
have increased our manufacturing square footage from 1.5 million square feet on
April 1, 1998 to 14.6 million square feet to date. We offer a complete and
flexible manufacturing solution that provides accelerated time-to-market and
time-to-volume production, reduced production costs and advanced engineering and
design capabilities. By working closely with and being highly responsive to
customers throughout the design, manufacturing and distribution process, we
believe that we can be an integral part of their operations. We believe that our
size, global presence, broad service offerings and expertise enable us to win
large programs from leading multinational OEMs for the manufacture of advanced
electronics products.
Our customers include industry leaders such as Cisco Systems, Inc.,
Ericsson Business Networks AB, Hewlett-Packard Company, Lucent Technologies
Inc., Microsoft Corporation, Motorola, Inc., Nokia Corp., Palm, Inc. and Philips
Electronics. Due to our focus on high growth technology sectors, our prospects
are influenced by such major trends as the upgrade of the communications and
Internet infrastructure, the proliferation of wireless devices, increasing
product miniaturization and other trends in electronics technologies. In
addition, our growth is affected by the pace at which leading OEMs are
continuing to adopt outsourcing as a core business strategy.
We have established an extensive network of manufacturing facilities in the
world's major electronics markets -- Asia, the Americas and Europe -- to serve
the increased outsourcing needs of both multinational and regional OEMs. We
strategically locate facilities near our customers and their end markets. In
fiscal 2000, production in the Americas represented 46% of our net sales,
production in Europe represented 38% of our net sales and production in Asia
represented 16% of our net sales. We have also established fully integrated,
high volume industrial parks in low cost regions near our customers' end
markets. These industrial parks provide total supply chain management by
co-locating our manufacturing and distribution operations with our suppliers at
a single location. This approach to production and distribution is designed to
benefit our customers by reducing logistical barriers and costs, increasing
flexibility, lowering transportation costs and reducing turnaround times. Our
industrial parks are located in China, Hungary and Mexico and we are building
new industrial parks in Brazil, Hungary and Poland. In addition to our
industrial parks, we have established product introduction centers which provide
engineering expertise in developing new products and preparing them for high
volume manufacturing.
Our principal offices are located at 11 Ubi Road 1, #07-01/02, Meiban
Industrial Building, Singapore 408723. Our telephone number is (65) 844-3366.
1
<PAGE> 6
THE EXCHANGE OFFER
Securities Offered............ $500.0 million aggregate principal amount of
9 7/8% Senior Subordinated Notes due 2010 and
E150.0 million aggregate principal amount of
9 3/4% Senior Subordinated Notes due 2010. The
terms of the new notes and the old notes are
identical except for transfer restrictions and
registration rights relating to the old notes
that will not be applicable to the new notes.
The old notes and the new notes are
collectively referred to as the "notes."
Issuance of Old Notes......... $500.0 million aggregate principal amount of
9 7/8% Senior Subordinated Notes due 2010 and
E150.0 million aggregate principal amount of
9 3/4% Senior Subordinated Notes due 2010 were
issued on June 26, 2000 to Salomon Smith Barney
Inc., Morgan Stanley & Co. Incorporated, Banc
of America Securities LLC, ABN AMRO
Incorporated, Bear, Stearns & Co. Inc. and
FleetBoston Robertson Stephens Inc., referred
to collectively as the "initial purchasers,"
which placed the old notes with qualified
institutional buyers and to buyers in offshore
transactions in reliance on Regulation S under
the Securities Act.
The Exchange Offer............ We are offering to exchange $1,000 principal
amount of new dollar notes for each $1,000
principal amount of old dollar notes. Old
dollar notes may only be exchanged in $1,000
principal amount increments. There is $500.0
million aggregate principal amount of old
dollar notes outstanding.
We are also offering to exchange E1,000
principal amount of new euro notes for each
E1,000 principal amount of old euro notes. Old
euro notes may only be exchanged in E1,000
principal amount increments. There is E150.0
million aggregate principal amount of old euro
notes outstanding.
Conditions to the Exchange
Offer......................... The exchange offer is not conditioned upon any
minimum principal amount of old notes being
tendered for exchange. However, the exchange
offer is subject to customary conditions, which
may be waived by us. See "The Exchange
Offer -- Conditions to the Exchange Offer."
Procedures for Tendering...... If you want to tender your old dollar notes in
the exchange offer, you must complete and sign
the letter of transmittal for dollar notes
according to the instructions contained in this
prospectus and the letter of transmittal for
dollar notes. If you want to tender your old
euro notes in the exchange offer, you must
complete and sign the letter of transmittal for
euro notes according to the instructions
contained in this prospectus and the letter of
transmittal for euro notes.
You must then mail, fax or hand deliver the
applicable letter of transmittal, together with
any other required documents, to the applicable
exchange agent, either with the old notes to be
tendered or in compliance with the procedures
specified for guaranteed delivery of old notes.
You should allow sufficient time to ensure
timely delivery. Some brokers, dealers,
commercial banks, trust companies and other
nominees may also effect tenders by book-entry
transfer. Letters of transmittal and
certificates representing
2
<PAGE> 7
the old notes should not be sent to us. These
documents should be sent only to the applicable
exchange agent. Questions regarding how to
tender old notes and requests for information
should also be directed to the exchange agent.
If you own old notes registered in the name of
a broker, dealer, commercial bank, trust
company or other nominee, you are urged to
contact that person promptly if you wish to
tender old notes in the exchange offer.
If you hold old dollar notes through The
Depositary Trust Company or old euro notes
through Euroclear or Clearstream and wish to
accept the exchange offer, you must do so
pursuant to the book-entry transfer facility's
procedures for book-entry transfer, or other
applicable procedures, all in accordance with
this prospectus and the applicable letter of
transmittal.
See "The Exchange Offer -- Procedures for
Tendering Old Notes."
Expiration Date; Withdrawal... The exchange offer will expire on the earlier
of 5:00 p.m., New York City time (10:00 p.m.,
London time) on December 22, 2000 or the date
when all old notes have been tendered, or a
later date and time to which it may be
extended. However, it may not be extended
beyond December 26, 2000. We will accept for
exchange any and all old notes that are validly
tendered in the exchange offer prior to 5:00
p.m., New York City time (10:00 p.m., London
time), on the expiration date. The tender of
old notes may be withdrawn at any time prior to
the expiration date. Any old note not accepted
for exchange for any reason will be returned
without expense to the tendering holder as
promptly as practicable after the expiration or
termination of the exchange offer. The new
notes issued in the exchange offer will be
delivered promptly following the expiration
date. See "The Exchange Offer -- Terms of the
Exchange Offer; Period for Tendering Old Notes"
and "-- Withdrawals of Tenders."
Guaranteed Delivery
Procedures.................... If you wish to tender your old notes and (1)
your old notes are not immediately available or
(2) you cannot deliver your old notes together
with the applicable letter of transmittal to
the applicable exchange agent prior to the
expiration date, you may tender your old notes
according to the guaranteed delivery procedures
contained in the applicable letter of
transmittal. See "The Exchange
Offer -- Procedures for Tendering Old
Notes -- Guaranteed Delivery Procedure."
Tax Considerations............ For U.S. federal income tax purposes, the
exchange of old notes for new notes should not
be considered a sale or exchange or otherwise a
taxable event to the holders of notes. See
"Material United States Federal Income Tax
Considerations."
Use of Proceeds............... We will receive no proceeds from the exchange
offer.
Appraisal Rights.............. Holders of old notes will not have dissenters'
rights or appraisal rights in connection with
the exchange offer.
3
<PAGE> 8
Exchange Agent................ Chase Manhattan Bank & Trust Company, National
Association is serving as exchange agent in
connection with the exchange offer for the
dollar notes, and Chase Manhattan Bank London
is serving as exchange agent in connection with
the exchange offer for the euro notes.
Resales of New Notes.......... Based on an interpretation by the Securities
and Exchange Commission set forth in no-action
letters issued to third parties, we believe
that you may resell or otherwise transfer new
notes issued in the exchange offer in exchange
for old notes without restrictions under the
federal securities laws. However, there are
exceptions to this general statement. You may
not freely transfer the new notes if:
- you are our affiliate;
- you did not acquire the new notes in the
ordinary course of your business;
- you have engaged in, intend to engage in or
have an arrangement or understanding with any
person to participate in the distribution of
the new notes; or
- you are a broker-dealer who acquired the old
notes directly from us.
Any holder subject to any of the exceptions
above and each participating broker-dealer that
receives new notes for its own account in the
exchange offer in exchange for old notes that
were acquired as a result of market making,
must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with the resale of
the new notes.
Consequences of Not Exchanging
the Old Notes................. If you do not tender your old notes or your old
notes are not properly tendered, the existing
transfer restrictions will continue to apply.
The old dollar notes are currently eligible for
sale pursuant to Rule 144A through the Portal
Market and the old euro notes are in the
process of being listed on the Luxembourg Stock
Exchange. We have applied to have the new euro
notes listed on the Luxembourg Stock Exchange,
but we cannot assure you that we will be
successful in the listing or of when the
listing will be complete.
Because we anticipate that most holders will
elect to exchange old notes for new notes due
to the absence of restrictions on the resale of
new notes under the Securities Act in most
cases, we believe that the liquidity of the
market for any old notes remaining after the
consummation of the exchange offer will be
substantially limited. See "Risk
Factors -- There could be negative consequences
to you if you do not exchange your old notes
for new notes" and "The Exchange
Offer -- Consequences of Failure to Exchange
Old Notes."
4
<PAGE> 9
SUMMARY DESCRIPTION OF NEW NOTES
The terms of the new notes and the old notes are identical in all respects,
except that the terms of the new notes do not include the transfer restrictions
and registration rights relating to the old notes.
The new notes will bear interest from the most recent date to which
interest has been paid on the old notes. Accordingly, registered holders of new
notes on the relevant record date for the first interest payment date following
the completion of the exchange offer will receive interest accruing from the
most recent date on which interest has been paid. Old notes accepted for
exchange will cease to accrue interest from and after the date that the exchange
offer is completed. Holders of old notes whose old notes are accepted for
exchange will not receive any payment in respect of interest on the old notes
otherwise payable on any interest payment date that occurs on or after
completion of the exchange offer.
For a more complete description of the terms of the notes, see "Description
of Notes."
Notes Offered................. $500.0 million aggregate principal amount of
9 7/8% Senior Subordinated Notes due 2010,
referred to as the "dollar notes."
E150.0 million aggregate principal amount of
9 3/4% Senior Subordinated Notes due 2010,
referred to as the "euro notes."
The dollar notes and the euro notes will
generally be treated for purposes of the
indentures governing the dollar notes and the
euro notes as a single series of securities
ranking equally with each other.
Maturity...................... July 1, 2010.
Interest Payments............. January 1 and July 1, commencing January 1,
2001.
Optional Redemption........... At any time on or after July 1, 2005, we may
redeem the notes at redemption prices set forth
in "Description of Notes -- Redemption," plus
accrued and unpaid interest, if any, to the
redemption date.
Optional Redemption After Some
Equity Offerings............ At any time and from time to time prior to July
1, 2003, we may redeem up to 35% of the
aggregate principal amount of each of the
dollar notes and the euro notes, determined
separately, at a redemption price equal to
109.875% of the principal amount for the dollar
notes, and 109.75% of the principal amount for
the euro notes, plus accrued and unpaid
interest, if any, through the date of
redemption, if:
- we use the net cash proceeds of some public
or private offerings of our ordinary shares;
and
- at least 65% of the aggregate principal
amount of the dollar notes and the euro
notes, determined separately, originally
issued pursuant to the applicable indenture,
remain outstanding immediately after giving
effect to the redemption.
Change of Control............. Upon a change of control, as defined under
"Description of Notes," you will have the
right, as a holder of notes, to require us to
repurchase all of your notes at a repurchase
price equal to 101% of their principal amount,
plus accrued and unpaid interest, if any, to
the date of repurchase. We might not be able to
pay you the required price for notes you
request us to purchase at that time
5
<PAGE> 10
because we may not have enough funds or the
terms of our other debt may prevent us from
paying you.
Optional Tax Redemption....... We may redeem the notes at any time at a
redemption price equal to the principal amount
plus accrued and unpaid interest, if any, to
the date fixed for redemption, in the event of
a change in tax law which would require us to
pay additional amounts with respect to the
notes. See "Description of Notes -- Payment of
Additional Amounts" and "Description of
Notes -- Redemption -- Optional Redemption in
Circumstances Involving Taxation."
Withholding Taxes............. We will make all payments of principal and
interest for the notes free and clear of, and
without withholding or deduction for, taxes of
the Republic of Singapore. In the event that we
are required to deduct or withhold Singapore
taxes, we will pay additional amounts for that
withholding tax on those principal and interest
payments. This obligation is subject to some
exceptions which are described in "Description
of Notes -- Payment of Additional Amounts."
Ranking....................... The notes will be unsecured and will rank in
right of payment behind all of our existing and
future senior debt and will rank equal in right
of payment to all of our existing and future
senior subordinated debt, including our
existing senior subordinated notes. The notes
will effectively rank in right of payment
behind debt and other liabilities of our
subsidiaries. Because the notes are
subordinated, in the event of our bankruptcy,
liquidation or dissolution, holders of notes
will not be entitled to receive any payment
until all holders of our senior debt have been
paid in full.
As of September 30, 2000, we had approximately:
- $551.3 million of senior debt outstanding and
approximately $228.9 million available for
borrowing under our credit facility;
- $789.0 million of senior subordinated debt;
and
- $2.1 billion of debt and other liabilities of
our subsidiaries.
See "Summary Supplemental Consolidated
Financial Data," "Selected Supplemental
Consolidated Financial Data" and
"Capitalization."
Restrictive Covenants......... The old notes were, and the new notes will be,
issued under indentures between us and Chase
Manhattan Bank and Trust Company, N.A., as
trustee. The indentures limit our ability and
the ability of our restricted subsidiaries to:
- incur more debt;
- create liens;
- pay dividends and make distributions or
repurchase stock;
- make investments;
- merge or consolidate or transfer and sell
substantially all of our assets;
- issue stock of subsidiaries; and
- engage in transactions with affiliates.
6
<PAGE> 11
These covenants are subject to several
important exceptions and limitations, which are
described in "Description of Notes."
Registration Covenant;
Exchange Offer................ We entered into an exchange registration rights
agreement with the initial purchasers in which
we agreed to use all reasonable efforts to:
- effect an exchange offer of unregistered
notes for registered notes by December 26,
2000; and
- file a shelf registration statement for the
resale of the notes if we cannot effect the
exchange offer by December 26, 2000 and in
other circumstances described in "The
Exchange Offer -- Registration Covenant;
Exchange Offer."
The interest rate on the notes will increase if
we do not comply with our obligations under the
exchange and registration rights agreement.
Use of Proceeds............... The net proceeds of the offering of the old
notes were approximately $625.0 million. We
used a portion of these proceeds to refinance
existing debt. We have used, and intend to
continue to use, the remainder of the net
proceeds to fund the further expansion of our
business, including additional working capital
and capital expenditures, and for general
corporate purposes. See "Use of Proceeds."
Risk Factors.................. You should consider carefully all of the
information set forth in this prospectus and,
in particular, should evaluate the specific
factors set forth in "Risk Factors" in deciding
whether to exchange old notes for new notes.
7
<PAGE> 12
SUMMARY CONSOLIDATED FINANCIAL DATA
The following summary consolidated financial data should be read in
conjunction with our consolidated financial statements and related notes and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," which are incorporated by reference into this prospectus. The
consolidated statement of operations data for each of the years in the
three-year period ended March 31, 2000 and the balance sheet data as of March
31, 1999 and 2000 are derived from consolidated financial statements that have
been audited by Arthur Andersen LLP, independent public accountants, and that
are incorporated by reference into this prospectus. Historical results are not
necessarily indicative of the results to be expected in the future.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEAR ENDED MARCH 31, ------------------------------
-------------------------------------- SEPTEMBER 24, SEPTEMBER 30,
1998 1999 2000 1999 2000
---------- ---------- ---------- ------------- -------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales............... $2,322,151 $3,584,556 $6,385,990 $2,494,898 $5,471,771
Cost of sales........... 2,011,873 3,170,665 5,791,658 2,239,810 5,017,658
Unusual charges......... 8,869(1) 77,286(2) 7,519(4) -- 107,989(5)
---------- ---------- ---------- ---------- ----------
Gross profit......... 301,409 336,605 586,813 255,088 346,124
Selling, general and
administrative....... 161,949 227,560 309,634 138,709 196,550
Goodwill and intangibles
amortization......... 10,487 29,156 40,631 18,541 21,875
Acquired in-process
research and
development.......... -- 2,000(3) -- -- --
Unusual charges and
merger-related
expenses............. 12,499(1) -- 3,523(4) 3,523 433,510(5)
Interest and other
expense net.......... 19,892 54,186 70,085 33,812 19,831
---------- ---------- ---------- ---------- ----------
Income (loss) before
income taxes....... 96,582 23,703 162,940 60,503 (325,642)
Provision for (benefit
from) income taxes... 18,914 (14,827) 19,745 8,941 (7,675)
---------- ---------- ---------- ---------- ----------
Net income (loss).... $ 77,668 $ 38,530 $ 143,195 $ 51,562 $ (317,967)
========== ========== ========== ========== ==========
OTHER DATA:
EBITDA(6)............... $ 212,951 $ 335,842 $ 435,176 $ 180,500 $ 399,215
Interest expense........ 30,913 60,488 82,689 37,327 60,088
Capital expenditures.... 237,970 383,686 457,684 179,539 411,104
Depreciation and
amortization......... 64,088 174,365 178,505 79,147 123,270
FINANCIAL RATIOS:
Ratio of EBITDA to interest expense.............................................. 6.6
Ratio of total debt to EBITDA.................................................... 3.5
</TABLE>
8
<PAGE> 13
<TABLE>
<CAPTION>
SEPTEMBER 30,
2000
-------------
(UNAUDITED)
(DOLLARS IN
THOUSANDS)
<S> <C>
BALANCE SHEET DATA:
Working capital........................................... $1,501,226
Total assets.............................................. 6,217,011
Total debt................................................ 1,407,060
Shareholders' equity...................................... 2,749,133
</TABLE>
(1) In fiscal 1998, we incurred plant closing expenses aggregating $8.9 million
in connection with the closure of a manufacturing facility. We also incurred
$12.5 million of merger-related costs as a result of some acquisitions.
(2) In fiscal 1999, we recorded unusual pre-tax charges of $77.3 million, of
which $71.9 million was primarily non-cash and related to the write-down of
a semiconductor wafer fabrication facility to net realizable value, losses
on sales contracts, incremental amounts of uncollectible accounts
receivable, incremental amounts of sales returns and allowances, inventory
write-downs and other exit costs.
(3) In fiscal 1999, we wrote off $2.0 million of in-process research and
development associated with an acquisition.
(4) In fiscal 2000, we incurred $3.5 million of merger-related costs as a result
of some acquisitions and $7.5 million in costs primarily associated with the
closure of some manufacturing facilities.
(5) We recorded unusual pre-tax charges of $541.5 million in the six months
ended September 30, 2000. These unusual pre-tax charges were comprised
primarily of approximately $286.5 million related to the issuance of an
equity instrument to Motorola and approximately $255.0 million in connection
with our acquisitions of The DII Group, Palo Alto Products International,
Chatham Technologies and Lightning Metal Specialties, which were completed
in the first half of fiscal 2001.
(6) EBITDA represents income before interest expense, income taxes, depreciation
and amortization, and unusual charges and merger-related expenses. EBITDA is
included because we believe that investors may find it to be a useful tool
for measuring our ability to service our debt; however, EBITDA does not
represent cash flow from operations, as defined by generally accepted
accounting principles, and should not be considered as a substitute for net
earnings as an indicator of our operating performance or cash flow as a
measure of liquidity. Our EBITDA calculation may not be consistent with
similarly captioned amounts of other companies.
9
<PAGE> 14
RISK FACTORS
Holders of old notes should carefully consider the information set forth
under "Risk Factors" and all other information set forth in this prospectus
before tendering their old notes in the exchange offer. The risk factors set
forth in this prospectus, other than "Risk Factors -- There could be negative
consequences to you if you do not exchange your old notes for new notes," are
generally applicable to the old notes as well as the new notes.
THERE COULD BE NEGATIVE CONSEQUENCES TO YOU IF YOU DO NOT EXCHANGE YOUR OLD
NOTES FOR NEW NOTES.
Any old notes tendered and exchanged in the exchange offer will reduce the
aggregate principal amount of old notes outstanding. Because we anticipate that
most holders will elect to exchange their old notes for new notes due to the
absence of most restrictions on the resale of new notes, we anticipate that the
liquidity of the market for any old notes remaining outstanding after the
exchange offer may be substantially limited. Following the consummation of the
exchange offer, holders who did not tender their old notes generally will not
have any further registration rights under the registration rights agreement,
and these old notes will continue to be subject to restrictions on transfer.
The old dollar notes are currently eligible for sale under Rule 144A
through the Portal Market, and the old euro notes are in the process of being
listed on the Luxembourg Stock Exchange. We have applied to have the new euro
notes listed on the Luxembourg Stock Exchange. We cannot assure you that we will
be successful in these listings or of when the listings will be complete.
As a result of making the exchange offer, we will have fulfilled our
obligations under the registration rights agreement. Holders who do not tender
their old notes generally will not have any further registration rights or
rights to receive the additional interest specified in the registration rights
agreement for our failure to register the new notes.
The old notes that are not exchanged for new notes will remain restricted
securities. Accordingly, the old notes may be resold only:
- to us or one of our subsidiaries;
- to a qualified institutional buyer;
- to an institutional accredited investor;
- to a party outside the United States under Regulation S under the
Securities Act;
- under an exemption from registration provided by Rule 144 under the
Securities Act; or
- under an effective registration statement.
IF WE DO NOT MANAGE EFFECTIVELY THE EXPANSION OF OUR OPERATIONS, OUR BUSINESS
MAY BE HARMED.
We have grown rapidly in recent periods. Our workforce has more than
tripled in size over the last year as a result of internal growth and
acquisitions. This growth is likely to strain considerably our management
control system and resources, including decision support, accounting management,
information systems and facilities. If we do not continue to improve our
financial and management controls, reporting systems and procedures to manage
our employees effectively and to expand our facilities, our business could be
harmed.
We plan to increase our manufacturing capacity by expanding our facilities
and adding new equipment. Such expansion involves significant risks, including,
but not limited to the following:
- we may not be able to attract and retain the management personnel and
skilled employees necessary to support expanded operations;
- we may not efficiently and effectively integrate new operations and
information systems, expand our existing operations and manage
geographically dispersed operations;
- we may incur cost overruns;
10
<PAGE> 15
- we may encounter construction delays, equipment delays or shortages,
labor shortages and disputes and production start-up problems that could
harm our growth and our ability to meet customers' delivery schedules;
and
- we may not be able to obtain funds for this expansion, and we may not be
able to obtain loans or operating leases with attractive terms.
In addition, we expect to incur new fixed operating expenses associated
with our expansion efforts, including substantial increases in depreciation
expense and rental expense, that will increase our cost of sales. If our
revenues do not increase sufficiently to offset these expenses, our operating
results would be seriously harmed. Our expansion, both through internal growth
and acquisitions, has contributed to our incurring significant accounting
charges. For example, in connection with our acquisitions of DII, Palo Alto
Products International, Chatham and Lightning, we recorded one-time charges of
approximately $255.0 million, and in connection with the issuance of an equity
instrument to Motorola relating to our alliance with Motorola, we recorded a
one-time non-cash charge of approximately $286.5 million.
WE MAY ENCOUNTER DIFFICULTIES WITH ACQUISITIONS, WHICH COULD HARM OUR BUSINESS.
In the last quarter, we completed a significant number of acquisitions of
businesses and facilities, including our acquisitions of Chatham and Lightning.
We expect to continue to acquire additional businesses and facilities in the
future. We are currently in preliminary discussions to acquire additional
businesses and facilities. Any future acquisitions may require additional debt
or equity financing, which could increase our leverage or be dilutive to our
existing shareholders. We cannot assure the terms of, or that we will complete,
any acquisitions in the future.
To integrate acquired businesses, we must implement our management
information systems and operating systems and assimilate and manage the
personnel of the acquired operations. The difficulties of this integration may
be further complicated by geographic distances. The integration of acquired
businesses may not be successful and could result in disruption to other parts
of our business.
In addition, acquisitions involve a number of other risks and challenges,
including, but not limited to:
- diversion of management's attention;
- potential loss of key employees and customers of the acquired companies;
- lack of experience operating in the geographic market of the acquired
business; and
- an increase in our expenses and working capital requirements.
Any of these and other factors could harm our ability to achieve
anticipated levels of profitability at acquired operations or realize other
anticipated benefits of an acquisition.
We have new customer relationships from which we are not yet receiving
significant revenues, and orders from these customers may not reach anticipated
levels.
We have recently announced major new customer relationships, including our
alliance with Motorola, from which we anticipate significant future sales.
However, similar to our other customer relationships, there are no volume
purchase commitments under these new programs, and the revenues we actually
achieve may not meet our expectations. In anticipation of future activities
under these programs, we are incurring substantial expenses as we add personnel
and manufacturing capacity and procure materials. Our operating results will be
seriously harmed if sales do not develop to the extent and within the time frame
we anticipate.
WE MAY BE ADVERSELY AFFECTED BY SHORTAGES OF REQUIRED ELECTRONIC COMPONENTS.
A substantial majority of our net sales are derived from turnkey
manufacturing in which we are responsible for purchasing components used in
manufacturing our customers products. We generally do not have long-term
agreements with suppliers of components. This typically results in our bearing
the risk of component price increases because we may be unable to procure the
required materials at a price level
11
<PAGE> 16
necessary to generate anticipated margins from our agreements with our
customers. Accordingly, component price changes could seriously harm our
operating results.
At various times, there have been shortages of some of the electronic
components that we use, and suppliers of some components have lacked sufficient
capacity to meet the demand for these components. Component shortages have
recently become more prevalent in our industry. In some cases, supply shortages
and delays in deliveries of particular components have resulted in curtailed
production, or delays in production, of assemblies using that component, which
has contributed to an increase in our inventory levels. We expect that shortages
and delays in deliveries of some components will continue. If we are unable to
obtain sufficient components on a timely basis, we may experience manufacturing
and shipping delays, which could harm our relationships with current or
prospective customers and reduce our sales.
OUR CUSTOMERS MAY CANCEL THEIR ORDERS, CHANGE PRODUCTION QUANTITIES OR DELAY
PRODUCTION.
Electronics manufacturing service providers must provide increasingly rapid
product turnaround for their customers. We generally do not obtain firm,
long-term purchase commitments from our customers and we continue to experience
reduced lead-times in customer orders. Customers may cancel their orders, change
production quantities or delay production for a number of reasons.
Cancellations, reductions or delays by a significant customer or by a group of
customers would seriously harm our results of operations.
In addition, we make significant decisions, including determining the
levels of business that we will seek and accept, production schedules, component
procurement commitments, personnel needs and other resource requirements, based
on our estimates of customer requirements. The short-term nature of our
customers' commitments and the possibility of rapid changes in demand for their
products reduces our ability to estimate accurately future customer
requirements. On occasion, customers may require rapid increases in production,
which can stress our resources and reduce margins. Although we have increased
our manufacturing capacity, and plan further increases, we may not have
sufficient capacity at any given time to meet our customers' demands. In
addition, because many of our costs and operating expenses are relatively fixed,
a reduction in customer demand could harm our gross margins and operating
income.
WE ARE DEPENDENT ON THE CONTINUING TREND OF OUTSOURCING BY OEMS.
A substantial factor in our revenue growth is attributable to the transfer
of manufacturing and supply base management activities from our OEM customers.
Future growth is partially dependent on new outsourcing opportunities. To the
extent that these opportunities are not available, our future growth would be
unfavorably impacted. These outsourcing opportunities may include the transfer
or assets such as facilities, equipment and inventory.
OUR OPERATING RESULTS VARY SIGNIFICANTLY.
We experience significant fluctuations in our results of operations. The
factors which contribute to fluctuations include:
- the timing of customer orders;
- the volume of these orders relative to our capacity;
- market acceptance of customers' new products;
- changes in demand for customers' products and product obsolescence;
- our ability to manage the timing and amount of our procurement of
components to avoid delays in production and excess inventory levels;
- the timing of our expenditures in anticipation of future orders;
- our effectiveness in managing manufacturing processes;
- changes in the cost and availability of labor and components;
12
<PAGE> 17
- changes in our product mix;
- changes in economic conditions;
- local factors and events that may affect our production volume, such as
local holidays; and
- seasonality in customers' product requirements.
One of our significant end-markets is the consumer electronics market. This
market exhibits particular strength towards the end of the calendar year in
connection with the holiday season. As a result, we have historically
experienced relative strength in revenues in our third fiscal quarter.
THE MAJORITY OF OUR SALES COMES FROM A SMALL NUMBER OF CUSTOMERS; IF WE LOSE ANY
OF THESE CUSTOMERS, OUR SALES COULD DECLINE SIGNIFICANTLY.
Sales to our five largest customers have represented a significant
percentage of our net sales in recent periods. Our five largest customers in the
first six months of fiscal 2001 and 2000 accounted for approximately 41% and 38%
of net sales, respectively. Our largest customer during the first six months of
fiscal 2001 was Ericsson, accounting for approximately 10% of net sales. No
other customers accounted for more than 10% of net sales in the six months ended
September 30, 2000. The identity of our principal customers have varied from
year to year, and our principal customers may not continue to purchase services
from us at current levels, if at all. Significant reductions in sales to any of
these customers, or the loss of major customers, would seriously harm our
business. If we are not be able to timely replace expired, canceled or reduced
contracts with new business, our revenues would be harmed.
WE DEPEND ON THE ELECTRONICS INDUSTRY WHICH CONTINUALLY PRODUCES TECHNOLOGICALLY
ADVANCED PRODUCTS WITH SHORT LIFE CYCLES; OUR INABILITY TO CONTINUALLY
MANUFACTURE SUCH PRODUCTS ON A COST-EFFECTIVE BASIS WOULD HARM OUR BUSINESS.
Factors affecting the electronics industry in general could seriously harm
our customers and, as a result, us. These factors include:
- the inability of our customers to adapt to rapidly changing technology
and evolving industry standards, which results in short product life
cycles;
- the inability of our customers to develop and market their products, some
of which are new and untested, the potential that our customers' products
may become obsolete or the failure of our customers' products to gain
widespread commercial acceptance; and
- recessionary periods in our customers' markets.
If any of these factors materialize, our business would suffer.
OUR INDUSTRY IS EXTREMELY COMPETITIVE.
The electronics manufacturing services industry is extremely competitive
and includes hundreds of companies, several of which have achieved substantial
market share. Current and prospective customers also evaluate our capabilities
against the merits of internal production. Some of our competitors have
substantially greater market share and manufacturing, financial and marketing
resources than us.
In recent years, many participants in the industry, including us, have
substantially expanded their manufacturing capacity. If overall demand for
electronics manufacturing services should decrease, this increased capacity
could result in substantial pricing pressures, which could seriously harm our
operating results.
OUR CUSTOMERS MAY BE ADVERSELY AFFECTED BY RAPID TECHNOLOGICAL CHANGE.
Our customers compete in markets that are characterized by rapidly changing
technology, evolving industry standards and continuous improvement in products
and services. These conditions frequently result in
13
<PAGE> 18
short product life cycles. Our success will depend largely on the success
achieved by our customers in developing and marketing their products. If
technologies or standards supported by our customers' products become obsolete
or fail to gain widespread commercial acceptance, our business could be
adversely affected.
WE ARE SUBJECT TO THE RISK OF INCREASED TAXES.
We have structured our operations in a manner designed to maximize income
in countries where (1) tax incentives have been extended to encourage foreign
investment or (2) income tax rates are low. We base our tax position upon the
anticipated nature and conduct of our business and upon our understanding of the
tax laws of the various countries in which we have assets or conduct activities.
However, our tax position is subject to review and possible challenge by taxing
authorities and to possible changes in law which may have retroactive effect. We
cannot determine in advance the extent to which some jurisdictions may require
us to pay tax or make payments in lieu of tax.
Several countries in which we are located allow for tax holidays or provide
other tax incentives to attract and retain business. We have obtained holidays
or other incentives where available. Our taxes could increase if certain tax
holidays or incentives are not renewed upon expiration, or tax rates applicable
to us in such jurisdictions are otherwise increased. In addition, further
acquisitions of businesses may cause our effective tax rate to increase.
WE CONDUCT OPERATIONS IN A NUMBER OF COUNTRIES AND ARE SUBJECT TO RISKS OF
INTERNATIONAL OPERATIONS.
The geographical distances between Asia, the Americas and Europe create a
number of logistical and communications challenges. Our manufacturing operations
are located in a number of countries, including Austria, Brazil, China, the
Czech Republic, Denmark, Finland, France, Germany, Holland, Hungary, Ireland,
Italy, Malaysia, Mexico, Norway, Scotland, Sweden, Switzerland, Taiwan,
Thailand, the United Kingdom and the United States. As a result, we are affected
by economic and political conditions in those countries, including:
- fluctuations in the value of currencies;
- changes in labor conditions;
- longer payment cycles;
- greater difficulty in collecting accounts receivable;
- the burdens and costs of compliance with a variety of foreign laws;
- political and economic instability;
- increases in duties and taxation;
- imposition of restrictions on currency conversion or the transfer of
funds;
- limitations on imports or exports;
- expropriation of private enterprises; and
- a potential reversal of current tax or other policies encouraging foreign
investment or foreign trade by our host countries.
The attractiveness of our services to our U.S. customers can be affected by
changes in U.S. trade policies, such as "most favored nation" status and trade
preferences for some Asian nations. In addition, some countries in which we
operate, such as Brazil, Mexico and Malaysia, have experienced periods of slow
or negative growth, high inflation, significant currency devaluations and
limited availability of foreign exchange. Furthermore, in countries such as
Mexico and China, governmental authorities exercise significant influence over
many aspects of the economy, and their actions could have a significant effect
on us. Finally, we could be seriously harmed by inadequate infrastructure,
including lack of adequate power and water supplies, transportation, raw
materials and parts in countries in which we operate.
14
<PAGE> 19
WE ARE SUBJECT TO RISKS OF CURRENCY FLUCTUATIONS AND HEDGING OPERATIONS.
A significant portion of our business is conducted in the European euro,
the Swedish krona and the Brazilian real. In addition, some of our costs, such
as payroll and rent, are denominated in currencies such as the Austrian
schilling, the British pound, the Chinese renminbi, the German deutsche mark,
the Hong Kong dollar, the Hungarian forint, the Irish pound, the Malaysian
ringgit, the Mexican peso and the Singapore dollar, as well as the euro, the
krona and the real. In recent years, the Hungarian forint, Brazilian real and
Mexican peso have experienced significant devaluations. Changes in exchange
rates between these and other currencies and the U.S. dollar will affect our
cost of sales, operating margins and revenues. We cannot predict the impact of
future exchange rate fluctuations. We use financial instruments, primarily
forward purchase contracts, to hedge Japanese yen, European euro, U.S. dollar
and other foreign currency commitments arising from trade accounts payable and
fixed purchase obligations. Because we hedge only fixed obligations, we do not
expect that these hedging activities will harm our results of operations or cash
flows. However, our hedging activities may be unsuccessful, and we may change or
reduce our hedging activities in the future. As a result, we may experience
significant unexpected expenses from fluctuations in exchange rates.
WE DEPEND ON OUR KEY PERSONNEL.
Our success depends to a large extent upon the continued services of our
key executives, managers and skilled personnel. Generally our employees are not
bound by employment or non-competition agreements, and we cannot assure that we
will retain our key officers and employees. We could be seriously harmed by the
loss of key personnel. In addition, in order to manage our growth, we will need
to recruit and retain additional skilled management personnel and, if we are not
able to do so, our business and our ability to grow could be harmed.
WE ARE SUBJECT TO ENVIRONMENTAL COMPLIANCE RISKS.
We are subject to various federal, state, local and foreign environmental
laws and regulations, including those governing the use, storage, discharge and
disposal of hazardous substances in the ordinary course of our manufacturing
process. In addition, we are responsible for cleanup of contamination at some of
our current and former manufacturing facilities and at some third party sites.
If more stringent compliance or cleanup standards under environmental laws or
regulations are imposed, or the results of future testing and analyses at our
current or former operating facilities indicate that we are responsible for the
release of hazardous substances, we may be subject to additional remediation
liability. Further, additional environmental matters may arise in the future at
sites where no problem is currently known or at sites that we may acquire in the
future. Currently unexpected costs that we may incur with respect to
environmental matters may result in additional loss contingencies, the
quantification of which cannot be determined at this time.
WE HAVE A SUBSTANTIAL AMOUNT OF DEBT OUTSTANDING AND MAY INCUR ADDITIONAL DEBT.
We have significant amounts of outstanding indebtedness and interest
expense. Our level of indebtedness presents risks to investors, including the
possibility that we may be unable to generate cash sufficient to pay the
principal of and interest on the indebtedness when due. At September 30, 2000,
we had consolidated indebtedness of approximately $1.4 billion.
Our ability to make principal and interest payments on the notes will
depend on our future operating performance, which depends on a number of
factors, many of which are outside of our control. These factors include
prevailing economic conditions and financial, competitive and other factors
affecting our business and operations. If we do not have sufficient available
resources to repay any indebtedness we may incur when it becomes due and
payable, we may find it necessary to refinance such indebtedness. We cannot
assure you that refinancing will be available, or available on reasonable terms.
We could incur substantial additional indebtedness in connection with
acquisitions or debt financings, which would further increase our leverage.
15
<PAGE> 20
THE INDENTURES, OUR BANK CREDIT FACILITY AND THE INDENTURE GOVERNING OUR
EXISTING SENIOR SUBORDINATED NOTES CONTAIN RESTRICTIVE COVENANTS THAT, IF NOT
SATISFIED OR WAIVED, COULD RESULT IN ACCELERATION OF OUR OUTSTANDING DEBT
OBLIGATIONS.
The indentures, our bank credit facility and the indenture governing our
existing senior subordinated notes each contain a number of restrictive
covenants. Our failure to comply with these covenants could result in an event
of default which, if not cured or waived, could result in us being required to
repay these borrowings before their due date. If we were able to refinance these
borrowings on less favorable terms, our results of operations and financial
condition could be seriously harmed by increased costs and rates.
OUR STRUCTURE AS A HOLDING COMPANY WILL LIMIT THE ABILITY OF THE HOLDERS OF THE
NOTES TO RECOVER ANY PRINCIPAL AND INTEREST DUE ON THE NOTES BECAUSE THEY ARE
EFFECTIVELY SUBORDINATED TO THE LIABILITIES OF OUR SUBSIDIARIES.
We are a holding company with no business operations other than holding the
capital stock of our subsidiaries and advancing funds to, and receiving funds
from, our subsidiaries. In repaying our indebtedness, including the notes, we
must rely on dividends and other payments made to us by our subsidiaries. The
holders of the notes will have no direct claims against our subsidiaries. The
ability of our subsidiaries to make payments to us will be affected by the
obligations of these subsidiaries to their creditors. Claims of holders of
indebtedness, including the notes, against the cash flow and assets of our
subsidiaries will be effectively subordinated to claims of the creditors.
In addition, the rights of the holders of the notes to participate in the
assets of any subsidiary upon that subsidiary's liquidation or recapitalization
will be subject to the prior claims of that subsidiary's creditors. At September
30, 2000, our subsidiaries had liabilities, including trade payables and capital
lease obligations, aggregating approximately $2.1 billion. The ability of our
subsidiaries to make payments to us will also be subject to, among other things,
applicable state and foreign corporate laws and other laws and regulations. In
order to pay the principal amount at maturity of the notes, we may be required
to adopt one or more alternatives, such as a refinancing of the notes.
THE NOTES ARE SUBORDINATED TO OUR CURRENT AND FUTURE SENIOR DEBT.
The notes are unsecured obligations and rank in right of payment:
- junior to all of our existing and future senior debt;
- junior to all our secured indebtedness and liabilities of our
subsidiaries;
- equal in right of payment to all of our existing and any future senior
subordinated debt, including our existing senior subordinated debt; and
- senior to all other subordinated indebtedness.
As of September 30, 2000, we had outstanding senior debt of approximately
$551.3 million, senior subordinated debt of $789.0 million and, through our
subsidiaries, had additional liabilities, including trade payables and capital
lease obligations, aggregating approximately $2.1 billion.
We may not pay any principal of, premium, if any, or interest on, or any
other amounts owing in respect of, the notes, or purchase, redeem or otherwise
retire the notes, or make any deposit pursuant to the defeasance provisions for
the notes, if designated senior debt, as defined in the indentures, is not paid
when due, unless:
- the default is cured or waived or has ceased to exist; or
- the designated senior debt has been repaid in full.
16
<PAGE> 21
Under some circumstances, if a default, other than a payment default,
exists with respect to designated senior debt, we may not make payments for a
specified period with respect to the principal of, premium, if any, and interest
on, and any other amounts owing in respect of, the notes unless:
- the default is cured, waived or has ceased to exist; or
- the indebtedness has been repaid in full.
If any event of default occurs and is continuing, the trustee or the
holders of at least 25% in principal amount of the then outstanding dollar notes
or euro notes, as the case may be, may declare all the dollar notes or euro
notes, as the case may be, to be due and payable immediately. Such a continuing
event of default, however, may permit the acceleration of our then-outstanding
indebtedness or the then-outstanding indebtedness of our subsidiaries, some of
which indebtedness may be senior debt. In this event, the subordination
provisions of the indentures would prohibit any payments to holders of the
dollar notes or euro notes, as the case may be, unless and until those
obligations, and any other accelerated senior debt, have been repaid in full.
WE MAY NOT BE ABLE TO REPURCHASE THE NOTES UPON A CHANGE OF CONTROL IN
ACCORDANCE WITH THE TERMS OF THE INDENTURES.
Upon the occurrence of a change of control, we may be required to purchase
all or a portion of the notes then outstanding at a purchase price equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the date of purchase. Prior to commencing such an offer to purchase, we may be
required to:
- repay in full all indebtedness that would prohibit the repurchase of the
notes; or
- obtain any consent required to make the repurchase.
If we are unable to repay all of the indebtedness or are unable to obtain
the necessary consents, we will be unable to offer to purchase the notes and
that failure would constitute an event of default under the indentures. We
cannot assure that we will have sufficient funds available at the time of any
change of control to repurchase the notes. The events that require a repurchase
upon a change of control under the indentures may also constitute events of
default under subsequently incurred indebtedness.
YOU MAY FIND IT DIFFICULT TO SELL YOUR NOTES.
The old dollar notes are eligible for trading in the Portal Market. The old
euro notes are in the process of being listed on the Luxembourg Stock Exchange.
There is no existing trading market for the new notes, although we have applied
to have the new euro notes listed on the Luxembourg Stock Exchange. We cannot
assure that we will be successful in these listings or of when the listings will
be complete. Accordingly, we cannot be sure that any market for the new notes
will develop, that the holders of the new notes will be able to sell their notes
or of the prices at which any sales will be made. If a market for the notes were
to develop, the notes could trade at prices that may be higher or lower than the
exchange tender price of the old notes, as our previously registered notes do.
Prevailing market prices from time to time will depend on many factors,
including then existing interest rates, our operating results and cash flow and
the market for similar securities.
In addition, the liquidity of, and trading markets for, the new notes may
be negatively affected by declines in the market for high-yield securities
generally. A decline may negatively affect liquidity and trading markets
independent of our financial performance or prospects.
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<PAGE> 22
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The material included or incorporated by reference in this prospectus
contains forward-looking statements within the meaning of the securities laws.
The words "expects," "anticipates," "believes," "intends," "plans" and similar
expressions identify forward-looking statements. In addition, any statements
which refer to expectations, projections or other characterizations of future
events or circumstances are forward-looking statements. Because these
forward-looking statements are subject to risks and uncertainties, actual
results may differ materially from the expectations expressed in the
forward-looking statements. Factors that could cause actual results to differ
materially from the expectations reflected in the forward-looking statements
include:
- our ability to expand our facilities and operations;
- our ability to hire and retain skilled employees;
- our ability to integrate the operations of acquired businesses and to
retain customers and employees of the acquired business;
- the continued outsourcing of manufacturing by original equipment
manufacturers;
- our ability to win new customer programs and maintain our customer
relationships;
- difficulties in production of new products;
- changing demand for our customers' products;
- currency fluctuations; and
- the risk of component shortages.
In addition, these forward-looking statements are subject to the other
risks and uncertainties discussed under "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Certain Factors Affecting
Operating Results" in our most recent reports filed with the Securities and
Exchange Commission on Form 10-K and Form 10-Q. We undertake no obligation to
update or revise these forward-looking statements to reflect subsequent events
or circumstances.
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<PAGE> 23
USE OF PROCEEDS
We will not receive any proceeds from the issuance of the new notes offered
in the exchange offer. In consideration for issuing the new notes, we will
receive in exchange old notes in like principal amount, the terms of which are
identical in all respects to the new notes except for transfer restrictions and
registration rights. The old notes surrendered in exchange for new notes will be
retired and cancelled and cannot be reissued. Accordingly, issuance of the new
notes will not result in any increase in our indebtedness.
The net proceeds from the sale of the old notes, after deducting the
underwriting discounts and offering expenses, were approximately $625.0 million.
We used a portion of the net proceeds of the offering to refinance existing
indebtedness. We have used, and intend to continue to use, the remainder of the
net proceeds to fund the expansion of our business, including additional working
capital and capital expenditures, and for general corporate purposes. We
incurred the indebtedness under our credit facility, which had a weighted
average interest rate of 7.459% at May 31, 2000, $173.3 million of which would
have matured on April 3, 2001 and $175.0 million of which would have matured on
April 3, 2004. The indebtedness was incurred to fund the expansion of our
business, to provide working capital and to repurchase DII's 8.50% Senior
Subordinated Notes due 2007. Until the net proceeds are used, they will be
invested in short-term marketable securities.
19
<PAGE> 24
CAPITALIZATION
The following table sets forth our unaudited capitalization as of September
30, 2000.
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000
----------------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C>
Cash and cash equivalents................................... $ 540,831
==========
Long-term debt, including current portion:
Capital lease obligations................................. 66,844
8.75% Senior Subordinated Notes due 2007.................. 150,000
9.875% Senior Subordinated Notes due 2010, less $3,802
discount............................................... 496,198
9.75% Senior Subordinated Notes due 2010.................. 142,755
Other..................................................... 551,263
----------
Total debt........................................ 1,407,060
----------
Shareholders' equity:
Ordinary shares, S$.01 par value;
authorized -- 1,500,000,000 shares;
issued and outstanding -- 418,109,636 shares.............. 2,528
Additional paid-in capital.................................. 2,841,968
Retained deficit............................................ (36,430)
Accumulated other comprehensive loss........................ (58,933)
----------
Total shareholders' equity........................ 2,749,133
----------
Total capitalization........................................ 4,156,193
==========
</TABLE>
20
<PAGE> 25
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data should be read in
conjunction with our consolidated financial statements and related notes and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," which are incorporated by reference into this prospectus. The
consolidated statement of operations data for each of the years in the
three-year period ended March 31, 2000 and the balance sheet data as of March
31, 1999 and 2000 are derived from consolidated financial statements that have
been audited by Arthur Andersen LLP, independent public accountants, and that
are incorporated by reference into this prospectus. The unaudited consolidated
statement of operations data for each year in the two-year period ended March
31, 1997 and the unaudited balance sheet data as of March 31, 1996, 1997 and
1998 are derived from consolidated financial statements that are not included in
this prospectus. Historical results are not necessarily indicative of the
results to be expected in the future.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEAR ENDED MARCH 31, ------------------------------
-------------------------------------------------------------------- SEPTEMBER 24, SEPTEMBER 30,
1996 1997 1998 1999 2000 1999 2000
----------- ----------- ---------- ---------- ---------- ------------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:
Net sales............. $1,291,541 $1,498,332 $2,322,151 $3,584,556 $6,385,990 $2,494,898 $5,471,771
Cost of sales......... 1,116,119 1,289,567 2,011,873 3,170,665 5,791,658 2,239,810 5,017,658
Unusual charges....... 1,254(1) 16,443(2) 8,869(3) 77,286(4) 7,519(6) -- 107,989(10)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit........ 174,168 192,322 301,409 336,605 586,813 255,088 346,124
Selling, general and
administrative...... 83,458 113,308 161,949 227,560 309,634 138,709 196,550
Goodwill and
intangible
amortization........ 3,777 5,979 10,487 29,156 40,631 18,541 21,875
Acquired in-process
research and
development......... 29,000(1) -- -- 2,000(5) -- -- --
Unusual charges and
merger-related
expenses............ -- 4,649(2) 12,499(3) -- 3,523(6) 3,523 433,510(10)
Interest and other
expense net......... 6,088 8,398 19,892 54,186 70,085 33,812 19,831
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before
income taxes and
extraordinary
item.............. 51,845 59,988 96,582 23,703 162,940 60,503 (325,642)
Provision for (benefit
from) income
taxes............... 22,069 16,415 18,914 (14,827) 19,745 8,941 (7,675)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before
extraordinary
item.............. 29,776 43,573 77,668 38,530 143,195 51,562 (317,967)
Extraordinary loss.... 708 -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)... $ 29,068 $ 43,573 $ 77,668 $ 38,530 $ 143,195 $ 51,562 $ (317,967)
========== ========== ========== ========== ========== ========== ==========
Ratio of earnings to
fixed charges(7).... 5.55 4.45 3.57 1.34 2.64 2.33 (3.58)
</TABLE>
21
<PAGE> 26
<TABLE>
<CAPTION>
AS OF MARCH 31,
--------------------------------------------------------------------- SEPTEMBER 30,
1996 1997 1998 1999 2000 2000
----------- ----------- ----------- ---------- ---------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Working capital................... $142,868 $ 87,855 $ 352,774 $ 366,363 $1,162,262 $1,501,226
Total assets...................... 756,473 937,865 1,758,971 2,604,651 4,859,128 6,217,011
Total long-term debt, excluding
current portion................. 134,058 139,383 571,754 780,394 628,067(8) 901,213
Shareholders' equity.............. 266,229 331,622 589,425 839,224 2,286,092(8)(9) 2,749,133(11)
</TABLE>
---------------
(1) In fiscal 1996, we wrote off $29.0 million of in-process research and
development associated with an acquisition and also recorded charges
totaling $1.3 million for costs associated with the closing of some
operations.
(2) In fiscal 1997, we incurred $4.6 million of merger-related expenses
associated with an acquisition and $16.4 million in costs associated with
the closing and sale of some operations.
(3) In fiscal 1998, we incurred plant closing expenses aggregating $8.9 million
in connection with the closure of a manufacturing facility. We also
incurred $12.5 million of merger-related costs as a result of some
acquisitions.
(4) In fiscal 1999, we recorded unusual pre-tax charges of $77.3 million, of
which $71.9 million was primarily non-cash and related to the write-down of
a semiconductor wafer fabrication facility to net realizable value, losses
on sales contracts, incremental amounts of uncollectible accounts
receivable, incremental amounts of sales returns and allowances, inventory
write-downs and other exit costs.
(5) In fiscal 1999, we wrote off $2.0 million of in-process research and
development associated with an acquisition.
(6) In fiscal 2000, we incurred $3.5 million of merger-related costs as a
result of some acquisitions and $7.5 million in costs primarily associated
with the closure of some manufacturing facilities.
(7) Earnings are defined as income before provisions for income taxes and fixed
charges. Fixed charges consist of interest expense, amortization of debt
issuance costs and the portion of the rental expenses representative of the
interest expense component.
(8) In fiscal 2000, substantially all of DII's convertible subordinated notes
were converted into approximately 7,406,000 ordinary shares and the
unconverted portion was redeemed for $100,000.
(9) In February 2000, we sold a total of 8,600,000 ordinary shares, resulting
in net proceeds of approximately $494.1 million. In October 1999, we sold a
total of 13,800,000 ordinary shares, resulting in net proceeds of
approximately $448.9 million. In September 1999, DII completed an offering
of 6,900,000 shares of its common stock, resulting in net proceeds of
approximately $215.7 million.
(10) We recorded unusual pre-tax charges of $541.5 million in the six months
ended September 30, 2000. These unusual pre-tax charges were comprised
primarily of approximately $286.5 million related to the issuance of an
equity instrument to Motorola and approximately $255.0 million in
connection with our acquisitions of DII, Palo Alto Products International,
Chatham and Lightning, which were completed in the first half of fiscal
2001.
(11) In June 2000, we sold a total of 6,325,000 ordinary shares, resulting in
net proceeds of approximately $432.2 million.
22
<PAGE> 27
DESCRIPTION OF EXISTING INDEBTEDNESS
SENIOR CREDIT FACILITY
In October 1999, we entered into a credit facility with a syndicate of
banks providing for revolving credit borrowings by us and a number of our
subsidiaries of up to $200.0 million. On April 3, 2000, we replaced our $200.0
million credit facility and a DII credit facility of $210.0 million with a
$500.0 million credit facility with a syndicate of domestic and foreign banks.
This new credit facility consists of two separate credit agreements, one
providing for up to $150.0 million principal amount of revolving credit loans to
us and designated subsidiaries and one providing for up to $350.0 million
principal amount of revolving credit loans to our primary United States
subsidiary. Both agreements are split equally between a 364-day facility and a
three-year facility. At the maturity of the 364-day facility, outstanding
borrowings under that facility may be converted into one-year term loans.
Borrowings under the credit facility bear interest, at our option, at either the
agent's base rate or the LIBOR Rate, as defined in the credit facility, plus a
margin for LIBOR loans ranging between 0.625% and 1.75%, based on our ratio of
total debt to EBITDA. The credit facility is secured by a pledge of stock of
some of our subsidiaries.
The credit facility contains covenants that restrict our ability to (1)
incur secured debt, other than purchase money debt and capitalized leases, (2)
incur liens on our property, (3) make dispositions of assets, and (4) make
investments in companies that are not our subsidiaries. The credit facility also
prohibits us from paying dividends. The credit facility also requires that we
maintain a maximum ratio of total debt to EBITDA, and maintain a minimum ratio
of EBITDA to the sum of our net interest expense plus the current portion of our
long-term debt and a specified portion of other debt.
We plan to increase the size of our credit facility, or enter into
additional credit facilities, to fund anticipated growth in our operations. We
cannot provide any assurances that we will be able to complete any such
transaction, or as to its potential terms. In addition, we maintain smaller
credit facilities for a number of our non-U.S. subsidiaries, typically on an
uncommitted basis. We have also entered into relationships with financial
institutions for the sale of accounts receivable, and for leasing transactions.
8 3/4% SENIOR SUBORDINATED NOTES
General. On October 15, 1997, we issued $150.0 million of 8 3/4% Senior
Subordinated Notes pursuant to an indenture between us and Chase Manhattan Bank
and Trust Company, N.A. as trustee. The 8 3/4% Senior Subordinated Notes will
mature of October 15, 2007. Interest on the 8 3/4% Senior Subordinated Notes
accrues at 8 3/4% per annum and is payable semi-annually in arrears on April 15
and October 15 of each year.
Redemption. We may redeem the 8 3/4% Senior Subordinated Notes on or after
October 15, 2002 at specified redemption prices. In addition, at any time on or
before October 15, 2000, we may redeem up to $52.5 million in aggregate
principal amount of the 8 3/4% Senior Subordinated Notes with the net proceeds
of a public or private offering of our ordinary shares. We are not required to
make mandatory redemption or sinking fund payments with respect to the 8 3/4%
Senior Subordinated Notes.
Covenants. The indenture relating to the 8 3/4% Senior Subordinated Notes
restricts, among other things, our ability to:
- pay dividends, redeem capital stock or prepay some subordinated debt;
- incur additional debt or issue preferred stock;
- grant liens;
- merge, consolidate or transfer substantially all of our assets;
- enter into some transactions with affiliates;
- impose restrictions on any subsidiary's ability to pay dividends or
transfer assets to us;
- enter into some sale and leaseback transactions; and
- permit subsidiaries to guarantee debt.
23
<PAGE> 28
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES
We sold the old notes on June 26, 2000 to Salomon Smith Barney Inc., Morgan
Stanley & Co., Incorporated, Banc of America Securities LLC, ABN AMRO
Incorporated, Bear, Stearns & Co. Inc. and FleetBoston Robertson Stephens, Inc.,
referred to in this prospectus as the "initial purchasers," pursuant to a
purchase agreement dated June 26, 2000 between us and the initial purchasers. As
set forth in this prospectus and in the accompanying letter of transmittal, we
will accept for exchange any and all old notes that are properly tendered on or
prior to the expiration date and not withdrawn as permitted below. The term
"expiration date" means 5:00 p.m., New York City time (10:00 p.m., London time)
on December 22, 2000; however, if we extend the period of time for which the
exchange offer is open, the term "expiration date" means the latest time and
date to which the exchange offer is extended.
As of the date of this prospectus, $500.0 million aggregate principal
amount of the old dollar notes and E150.0 million aggregate principal amount of
the old euro notes are outstanding. This prospectus and the accompanying letter
of transmittal are first being sent on or about November 20, 2000 to all holders
of old notes at the addresses set forth in the security register maintained by
the trustee or other applicable registrar. Our obligation to accept old notes
for exchange is subject to conditions as set forth under "-- Conditions to the
Exchange Offer" below.
We expressly reserve the right, at any time or from time to time, to extend
the period of time during which the exchange offer is open, and thereby delay
acceptance for exchange of any old notes, by mailing written notice of an
extension to the holders of old notes as described below. During any extension,
all old notes previously tendered will remain subject to the exchange offer and
may be accepted for exchange by us. Any old notes not accepted for exchange for
any reason will be returned without expense to the tendering holder as promptly
as practicable after the expiration or termination of the exchange offer.
Old dollar notes tendered in the exchange offer must be $1,000 in principal
amount or any integral multiple of $1,000, and old euro notes tendered in the
exchange offer must be E1,000 in principal amount or any integral multiple of
E1,000.
We will mail written notice of any extension, amendment, non-acceptance or
termination to the holders of the old notes as promptly as practicable. This
notice will be mailed to the holders of record of the old notes no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled expiration date of other event giving rise to the notice requirement.
REGISTRATION COVENANT; EXCHANGE OFFER
We entered into an exchange and registration rights agreement with the
initial purchasers pursuant to which we agreed, for the benefit of the holders
of the notes:
- to use all reasonable efforts to file with the Commission, within 90 days
following June 29, 2000, a registration statement (the "exchange offer
registration statement") under the Securities Act relating to an exchange
offer pursuant to which notes substantially identical to the old notes,
except that such notes will not contain terms with respect to the special
interest payments described below or transfer restrictions, would be
offered in exchange for the then outstanding notes tendered at the option
of the holders of the notes; and
- to use all reasonable efforts to cause the exchange offer registration
statement to become effective as soon as practicable after it is filed.
We have further agreed to commence the exchange offer promptly after the
exchange offer registration statement has become effective, hold the offer open
for at least 20 business days, and exchange new notes for all notes validly
tendered and not withdrawn before the expiration of the offer.
Under existing Commission interpretations, the new notes would in general
be freely transferable after the exchange offer without further registration
under the Securities Act, except that broker-dealers
24
<PAGE> 29
("participating broker-dealers") receiving new notes in the exchange offer may
be subject to a prospectus delivery requirement with respect to resales of the
new notes. The Commission has taken the position that participating
broker-dealers may fulfill their prospectus delivery requirements with respect
to the new notes, other than a resale of an unsold allotment from the original
sale of the notes, by delivery of the prospectus contained in the exchange offer
registration statement. Under the exchange and registration rights agreement, we
are required to allow participating broker-dealers and other persons, if any,
subject to similar prospectus delivery requirements to use the prospectus
contained in the exchange offer registration statement in connection with the
resale of the new notes. The exchange offer registration statement will be kept
effective for a period of up to 180 days after the exchange offer has been
consummated in order to permit resales of new notes acquired by broker-dealers
in after-market transactions. Each holder of notes, other than certain specified
holders, who wishes to exchange such notes for new notes in the exchange offer
will be required to represent that:
- any new notes to be received by it will be acquired in the ordinary
course of its business;
- at the time of the commencement of the exchange offer it has no
arrangement with any person to participate in the distribution, within
the meaning of the Securities Act, of the new notes; and
- it is not Flextronics or an affiliate of Flextronics.
However, if:
(1) on or before the date of consummation of the exchange offer, the
existing Commission interpretations are changed such that the new notes
would not in general be freely transferable in such manner on such date; or
(2) the exchange offer is not available to any holder of the notes,
we will, in lieu of or, in the case of clause (2), in addition to, effecting
registration of new notes, use our reasonable best efforts to cause a
registration statement under the Securities Act relating to a shelf registration
of the notes for resale by holders or, in the case of clause (2), of the notes
held by the initial purchasers for resale by the purchasers (the "resale
registration") to become effective and to remain effective until two years
following the effective date of such registration statement or such shorter
period that will terminate when all the securities covered by the shelf
registration statement have been sold pursuant to the shelf registration
statement.
We will, in the event of the resale registration, provide to the holders of
the applicable notes copies of the prospectus that is a part of the registration
statement filed in connection with the resale registration, notify such holders
when the resale registration for the applicable notes has become effective and
take certain other actions as are required to permit unrestricted resales of the
applicable notes. A holder of notes that sells such notes pursuant to the resale
registration generally would be required to be named as a selling securityholder
in the related prospectus and to deliver a prospectus to initial purchasers,
will be subject to certain of the civil liability provisions under the
Securities Act in connection with such sales and will be bound by the provisions
of the exchange and registration rights agreement that are applicable to such a
holder, including certain indemnification obligations.
In the event of a registration default, as defined below, then the annual
interest rate on the applicable notes will increase, for the period from the
occurrence of the registration default until such time as no registration
default is in effect, at which time the interest rate will be reduced to its
initial rate, by .25% during the first 90-day period following the occurrence
and during the continuation of such registration default, which rate shall
increase by an additional .25% for each subsequent 90-day period during which
such registration default continues up to a maximum of 1.0% ("additional
interest").
Each of the following is a "registration default":
- we have not filed the registration statement relating to the exchange
offer or, if applicable, the resale registration, within 90 days
following June 29, 2000; or
- such registration statement has not become effective within 150 days
following June 29, 2000; or
25
<PAGE> 30
- the exchange offer has not been consummated within 180 business days
after June 29, 2000; or
- any registration statement required by the exchange and registration
rights agreement is filed and declared effective but shall thereafter
cease to be effective, except as specifically permitted in the exchange
and registration rights agreement, without being succeeded immediately by
an additional registration statement filed and declared effective.
The summary in this prospectus of certain provisions of the exchange and
registration rights agreement does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, all the provisions of the
exchange and registration rights agreement, a copy of which will be available
upon request to us.
The old notes and the new notes will be considered collectively to be a
single class for all purposes under the indentures, including, without
limitation, waivers, amendments, redemptions and offers to purchase, and (except
under "-- Registration Covenant; Exchange Offer") all references in this
prospectus to "notes" shall be deemed to refer collectively to old notes and any
new notes, unless the context otherwise requires.
INTEREST ON EXCHANGE NOTES
Each new note will bear interest from the most recent date to which
interest has been paid or duly provided for on the old note surrendered in
exchange for a new note or, if no interest has been paid or duly provided for on
the old note, from June 26, 2000, the date of issuance of the old note. Holders
of the old notes whose old notes are accepted for exchange will not receive
accrued interest on the old notes for any period from and after the last
interest payment date to which interest has been paid or duly provided for on
the old notes prior to the original issue date of the new notes, or, if no
interest has been paid or duly provided for, will not receive any accrued
interest on the old notes. These holders will be deemed to have waived the right
to receive any interest on the old notes accrued from and after that interest
payment date or, if no interest has been paid or fully provided for, from and
after June 26, 2000. Interest on the notes is payable semi-annually in arrears
on each January 1 and July 1.
PROCEDURES FOR TENDERING OLD NOTES
To tender in the exchange offer, a holder must complete, sign and date the
applicable letter of transmittal, or a facsimile of the applicable letter of
transmittal, have the signatures guaranteed if required by the applicable letter
of transmittal, and mail or otherwise deliver the applicable letter of
transmittal or a facsimile, together with the old notes and any other required
documents, to the applicable exchange agent. The applicable exchange agent must
receive these documents at the address set forth below prior to 5:00 p.m., New
York City time (10:00 p.m., London time) on the expiration date. Delivery of the
old notes may be made by book-entry transfer in accordance with the procedures
described below. Confirmation of book-entry transfers must be received by the
applicable exchange agent prior to the expiration date.
By executing a letter of transmittal, each holder will make to us the
representations set forth below in the fourth paragraph under "-- Resale of New
Notes."
The tender by a holder and the acceptance by us will constitute an
agreement between the holder and us in accordance with the terms subject to the
conditions set forth in this prospectus and in the applicable letter of
transmittal.
THE METHOD OF DELIVERY OF OLD NOTES AND THE APPLICABLE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE APPLICABLE EXCHANGE AGENT IS
AT THE ELECTION AND RISK OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS
RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE APPLICABLE
EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR NOTES
SHOULD BE SENT TO US. HOLDERS MAY REQUEST THEIR BROKERS, DEALERS, COMMERCIAL
BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR THEM.
26
<PAGE> 31
Any beneficial owner whose old notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct the
registered holder to tender on the beneficial owner's behalf.
Signatures on a letter of transmittal or a notice of withdrawal must be
guaranteed by an eligible institution, as defined below, unless the old notes
tendered are:
- signed by the registered holder, unless the holder has completed the box
entitled "Special Exchange Instructions" or "Special Delivery
Instructions" on the applicable letter of transmittal; or
- tendered for the account of an eligible institution.
In the event that signatures on a letter of transmittal or a notice of
withdrawal are required to be guaranteed, the guarantee must be by a member firm
of a registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Exchange Act (an "eligible institution").
If a letter of transmittal is signed by a person other than the registered
holder of any old notes listed on the letter of transmittal, the old notes must
be endorsed or accompanied by a properly completed bond power, signed by the
registered holder as the registered holder's name appears on the old notes, with
the signature guaranteed by an eligible institution.
If a letter of transmittal or any old notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or other acting in a fiduciary or representative capacity, the
persons should so indicate when signing. Unless waived by us, evidence
satisfactory to us of their authority to so act must be submitted with the
letter of transmittal.
All questions as to the validity, form, eligibility, including time or
receipt, acceptance of tendered old notes and withdrawal of tendered old notes
will be determined by us in our sole discretion. This determination will be
final and binding. We reserve the absolute right to reject any and all old notes
that are not properly tendered or any old notes our acceptance of which would,
in the opinion of our counsel, be unlawful. We also reserve the right to waive
any defects, irregularities or conditions of tender as to particular old notes.
Our interpretation of the terms and conditions of the exchange offer, including
the instructions in the letters of transmittal, will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of old notes must be cured within the time period we determine. Although we
intend to notify holders of defects or irregularities with respect to tenders of
old notes, none of Flextronics, the exchange agents or any other person will
incur any liability for failure to give this notification. Tenders of old notes
will not be deemed to have been made until defects or irregularities have been
cured or waived. Any old notes received by the exchange agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the applicable exchange agent to the
tendering holders, unless otherwise provided in applicable letter of
transmittal, as soon as practicable following the expiration date.
Book-Entry Delivery Procedures
Promptly after the date of this prospectus, the exchange agent for the old
dollar notes will establish accounts with respect to the old dollar notes at
DTC, and the exchange agent for the old euro notes will establish accounts with
respect to the old euro notes at each of Euroclear and Clearstream (DTC,
Euroclear and Clearstream are collectively referred to as the "book-entry
transfer facilities" and, individually as a "book-entry transfer facility") for
purposes of the exchange offer. Any financial institution that is a participant
in the applicable book-entry transfer facility's systems may make book-entry
delivery of the old notes by causing the applicable book-entry transfer facility
to transfer old notes into the applicable exchange agent's account at the
book-entry transfer facility in accordance with the book-entry transfer
facility's procedures for transfers. Timely book-entry delivery of old notes
pursuant to the exchange offer, however, requires receipt of a book-entry
confirmation prior to the expiration date. In addition, to receive new notes for
tendered old notes, the applicable letter of transmittal, together with any
required signature guarantees and any other required documents, or an agent's
message in connection with a book-entry transfer, must be
27
<PAGE> 32
delivered or transmitted to and received by the applicable exchange agent at its
address set forth under "-- Exchange Agent" below prior to the expiration date.
Alternatively, the guaranteed delivery procedures described below must be
complied with. Tender will not be considered made until the documents are
received by the applicable exchange agent. Delivery of documents to any of the
book-entry transfer facilities does not constitute delivery to the exchange
agent.
Tender of Existing Notes Held Through Book-Entry Transfer Facilities
The exchange agent and each of the book-entry transfer facilities have
confirmed that the exchange offer is eligible for each of the book-entry
transfer facility's Automated Tender Offer Program, or ATOP. Accordingly,
participants in the applicable book-entry transfer facility's ATOP may, in lieu
of physically completing and signing the applicable letter of transmittal and
delivering it to the applicable exchange agent, electronically transmit their
acceptance of the exchange offer by causing the book-entry transfer facility to
transfer old notes to the applicable exchange agent in accordance with the
book-entry transfer facility's ATOP procedures for transfer. The book-entry
transfer facility will then send an agent's message to the applicable exchange
agent.
The term "agent's message" means a message transmitted by a book-entry
transfer facility, received by exchange agent and forming party of the
book-entry confirmation, which states that:
- the book-entry transfer facility has received an express acknowledgement
from a participant in its ATOP that is tendering old notes which are the
subject of the book-entry conformation;
- the participant has received and agrees to be bound by the terms of the
applicable letter of transmittal or, in the case of an agent's message
relating to guaranteed delivery, the participant has received and agrees
to be bound by the applicable notice of guaranteed delivery; and
- we may enforce the agreement against the participant.
Guaranteed Delivery Procedure
Holders who wish to tender their old notes and (1) whose old notes are not
immediately available, (2) who cannot deliver their old notes, the applicable
letter of transmittal or any other required documents to the applicable exchange
agent, or (3) who cannot complete the procedures for book-entry transfer, prior
to the expiration date, may effect a tender if:
- the tender is made through an eligible institution;
- prior to the expiration date, the applicable agent receives from the
eligible institution a properly completed and duly executed notice of
guaranteed delivery by facsimile transmission, mail or hand delivery:
- setting forth the name and address of the holder,
- setting forth the certificate number(s) of the old notes and the
principal amount of old notes tendered, stating that the tender is
being made, and
- guaranteeing that, within three New York Stock Exchange trading days
after the expiration date, the applicable letter of transmittal
together with the certificate(s) representing the old notes or a
book-entry confirmation of the old notes into the applicable exchange
agent's account at the applicable book-entry transfer facility and any
other documents required by the applicable letter of transmittal, will
be deposited by the eligible institution with the applicable exchange
agent; and
- a properly completed and executed letter of transmittal, as well as the
certificate(s) representing all tendered old notes in proper form for
transfer or a book-entry confirmation transfer of the old notes into the
applicable exchange agent's account at the applicable book-entry transfer
facility and all other documents required by the applicable letter of
transmittal, are received by the applicable exchange agent within three
New York Stock Exchange trading days after the expiration date.
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<PAGE> 33
Upon request to the applicable exchange agent, a notice of guaranteed
delivery will be sent to holders who wish to tender their old notes according to
the guaranteed delivery procedures set forth above.
WITHDRAWALS OF TENDERS
Except as otherwise provided in this prospectus, tenders of old notes may
be withdrawn at any time prior to 5:00 p.m., New York City time (10:00 p.m.,
London time), on the expiration date.
To withdraw a tender of old notes in the exchange offer, a notice of
withdrawal must be received by the applicable exchange agent at the address set
forth below prior to 5:00 p.m., New York City time (10:00 p.m., London time), on
the expiration date. Any notice of withdrawal must:
- specify the name of the person having deposited the old notes to be
withdrawn (the "depositor");
- identify the old notes to be withdrawn, including the certificates
number(s) and principal amount of the old notes or, in the case of old
notes transferred by book-entry transfer, the name and number of the
account at the applicable book-entry transfer facility to be credited;
- be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the old notes were tendered, including
any required signature guarantees, or be accompanied by documents of
transfer sufficient to have the trustee or other applicable registrar
register transfer of the old notes into the name of the person
withdrawing the tender; and
- specify the name in which any of the old notes are to be registered, if
different from that of the depositor.
All questions as to the validity, form and eligibility, including time or
receipt, of the notices will be determined by us. Our determination will be
final and binding on all parties. Any old notes so withdrawn will be deemed not
to have been validly tendered for purposes of the exchange offer and no new
notes will be issued in exchange unless the old notes so withdrawn are validly
retendered. Any old notes which have been tendered but which are not accepted
for exchange will be returned to their holder without cost to the holder as soon
as practicable after withdrawal, rejection of tender or termination of the
exchange offer. Properly withdrawn old notes may be retendered by following one
of the procedures described above under "-- Procedures for Tendering Old Notes"
at any time prior to the expiration date.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other terms of the exchange offer, we will not be
required to accept for exchange, or exchange new notes for, any old notes, and
may terminate the exchange offer before the acceptance of the old notes if, in
our sole judgment, the exchange offer would violate any law, statute, rule or
regulation or an interpretation thereof of the Staff of the Commission. If we
determine in our sole discretion that this condition is not satisfied, we may:
- refuse to accept any old notes and return all tendered old notes to the
tendering holders;
- extend the exchange offer and retain all old notes tendered prior to the
expiration date, subject, however, to the rights of holders to withdraw
the old notes (see "-- Withdrawals of Tenders"); or
- waive the unsatisfied conditions with respect to the exchange offer and
accept all validly tendered old notes which have not been withdrawn. If
the waiver constitutes a material change to the exchange offer, we will
promptly disclose the waiver by means of a prospectus supplement that
will be distributed to the registered holders, and we will extend the
exchange offer for a period of five to ten business days, depending upon
the significance of the waiver and the manner of disclosure to the
registered holders, if the exchange offer would otherwise expire during
that five to ten business-day period.
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<PAGE> 34
EXCHANGE AGENT
Chase Manhattan Bank & Trust Company, National Association has been
appointed as the exchange agent for the exchange offer of the old dollar notes.
Chase Manhattan Bank London has been appointed as the exchange agent for the
exchange offer of the euro notes. All executed letters of transmittal should be
directed to the applicable exchange agent at the address set forth below.
Questions and requests for assistance, requests for additional copies of this
prospectus or of the letter of transmittal and requests for notices of
guaranteed delivery should be directed to the applicable exchange agent,
addressed as follows:
If to the Chase Manhattan Bank & Trust Company, National Association:
By Mail or by Hand:
Chase Manhattan Bank & Trust Company, National Association, Exchange
Agent
Suite 2725
101 California Street
San Francisco, California 94111
By Facsimile:
(415) 693-8850
Confirm Facsimile by Telephone:
(415) 954-9551
If to Chase Manhattan Bank London:
By Mail or by Hand:
Chase Manhattan Bank
Trinity Tower
9 Thomas More Street
London, E1 9YT
By Facsimile:
44 171 777 5410
Confirm Facsimile by Telephone:
44 171 777 5418
Delivery of a letter of transmittal to an address other than that for the
applicable exchange agent as set forth above or transmission of instructions via
facsimile other than as set forth above does not constitute a valid delivery of
a letter of transmittal.
FEES AND EXPENSES
We will not make any payment to brokers, dealers or others soliciting
acceptances of the exchange offer.
TRANSFER TAXES
Holders who tender their old notes for exchange generally will not be
obligated to pay any transfer tax in connection with the exchange. However,
holders who instruct us to register new notes in the name of a person other than
the registered tendering holders, or request that old notes not tendered or not
accepted in the exchange offer be returned to a person other than the registered
tendering holder, will be responsible for the payment of any applicable transfer
tax.
ACCOUNTING TREATMENT
The new notes will be recorded at the same carrying value as the old notes.
This is the aggregate principal amount of the old notes, as reflected in our
accounting records on the date of exchange. Accordingly, no gain
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<PAGE> 35
or loss for accounting purposes will be recognized in connection with the
exchange offer. The expenses of the exchange offer will be amortized over the
term of the new notes.
APPRAISAL RIGHTS
Holders of old notes will not have dissenters' rights or appraisal rights
in connection with the exchange offer.
RESALE OF NEW NOTES
The new notes are being offered to satisfy our obligations contained in the
exchange and registration rights agreement. We are making the exchange offer in
reliance on the position of the Staff of the Commission as set forth in the
Exxon Capital No-Action Letter (available on May 13, 1988), the Morgan Stanley
No-Action Letter (available on June 5, 1991), the Shearman & Sterling No-Action
Letter (available on July 2, 1993), and other interpretive letters addressed to
third parties in other transactions. However, we have not sought our own
interpretive letter addressing these matters and there can be no assurance that
the Staff would make a similar determination with respect to the exchange offer
as it has in those interpretive letters to third parties. Based on these
interpretations by the Staff, and subject to the two immediately following
sentences, we believe that new notes issued pursuant to this exchange offer in
exchange for old notes may be offered for resale, resold and otherwise
transferred by holders, other than a holder who is a broker-dealer, without
further compliance with the registration and prospectus delivery requirements of
the Securities Act, provided that:
- the new notes are acquired in the ordinary course of the holder's
business; and
- the holder is not participating, and has no arrangement or understanding
with any person to participate, in a distribution within the meaning of
the Securities Act of the new notes.
However, any holder who:
- is our "affiliate," within the meaning of Rule 405 under the Securities
Act;
- does not acquire new notes in the ordinary course of its business;
- intends to participate in the exchange offer for the purpose of
distributing new notes; or
- is a broker-dealer who purchased old notes directly from us,
will not be able to rely on the interpretations of the Staff set forth in the
above-mentioned interpretive letters, will not be permitted or entitled to
tender old notes in the exchange offer, and must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any sale or other transfer of old notes unless the sale is made pursuant to an
exemption from those requirements.
In addition, as described below, if any broker-dealer holds old notes
acquired for its own account as a result of market-making or other trading
activities and exchanges the old notes for new notes (a "participating
broker-dealer"), the participating broker-dealer may be deemed to be a statutory
"underwriter" within the meaning of the Securities Act and must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales of new notes. See "Plan of Distribution."
Each holder who wishes to exchange old notes for new notes in the exchange
offer will be required to represent that:
- it is not our affiliate;
- any new notes to be received by it are being acquired in the ordinary
course of its business; and
- it has no arrangement or understanding with any person to participate in
a distribution, within the meaning of the Securities Act, of new notes.
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<PAGE> 36
Each broker-dealer that receives new notes for its own account pursuant to
the exchange offer must:
- acknowledge that it acquired the old notes for its own account as a
result of market-making activities or other trading activities, and not
directly from us; and
- agree that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of new notes.
The letters of transmittal state that by so acknowledging and by delivering
a prospectus, a participating broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act. Based on the
position taken by the Staff in the interpretive letters referred to above, we
believe that participating broker-dealers may fulfill their prospectus delivery
requirements with respect to the new notes received upon exchange of old notes
with a prospectus meeting the requirements of the Securities Act, which may be
the prospectus prepared for an exchange offer so long as it contains a
description of the plan of distribution with respect to the resale of new notes.
Accordingly, this prospectus, as it may be amended or supplemented from time to
time, may be used by a participating broker-dealer during the period referred to
below in connection with the resales of new notes received in exchange for old
notes where the old notes were acquired by the participating broker-dealer for
its own account as a result of market-making or other trading activities.
Subject to provisions set forth in the exchange and registration rights
agreement, we shall use our best efforts to:
- keep the exchange offer registration statement continuously effective,
supplemented and amended to the extent necessary to ensure that it is
available for sales of new notes by participating broker-dealers; and
- ensure that the exchange offer registration statement conforms with the
requirements of the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for a
period ending upon the earlier of 180 days after the exchange offer has
been completed or at the time the participating broker-dealers no longer
own any transfer restricted securities. See "Plan of Distribution."
Any participating broker-dealer who is our affiliate may not rely on the
interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction.
Each participating broker-dealer who surrenders old notes pursuant to the
exchange offer will be deemed to have agreed, by execution of a letter of
transmittal, that, upon receipt of notice from us of the occurrence of any event
or the discovery of any fact which makes any statement contained or incorporated
by reference into this prospectus untrue in any material respect or which causes
this prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference into this prospectus, in light
of the circumstances under which they were made, not misleading or of the
occurrence of other events specified in the exchange and registration rights
agreement, the participating broker-dealer will suspend the sale of new notes
pursuant to this prospectus until we have amended or supplemented this
prospectus to correct the misstatement or omission and have furnished copies of
the amended or supplemented prospectus to the participating broker-dealer or we
have given notice that the sale of the new notes may be resumed, as the case may
be.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES
Any old notes tendered and exchanged in the exchange offer will reduce the
aggregate principal amount of old notes outstanding. Following the consummation
of the exchange offer, holders who did not tender their old notes generally will
not have any further registration rights under the exchange and registration
rights agreement, and these old notes will continue to be subject to
restrictions on transfer. Accordingly, the liquidity of the market for the old
notes may diminish. The old dollar notes are currently eligible for sale under
Rule 144A through the Portal Market and the old euro notes are in the process of
being listed on the
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<PAGE> 37
Luxembourg Stock Exchange. We have applied to have the new euro notes listed on
the Luxembourg Stock Exchange. Because we anticipate that most holders will
elect to exchange their old notes for new notes due to the absence of most
restrictions on the resale of new notes, we believe that the liquidity of the
market for any old notes remaining outstanding after the exchange offer may be
substantially limited.
As a result of the making and completion of the exchange offer, we will
have fulfilled our obligations under the exchange and registration rights
agreement, and holders who do not tender their old notes generally will not have
any further registration rights or rights to receive the additional interest
specified in the exchange and registration rights agreement for our failure to
register the new notes.
The old notes that are not exchanged for new notes will remain restricted
securities. Accordingly, the old notes may be resold only:
- to us or one of our subsidiaries;
- to a qualified institutional buyer;
- to an institutional accredited investor;
- to a party outside the United States under Regulation S under the
Securities Act;
- under an exemption from registration provided by Rule 144 under the
Securities Act; or
- under an effective registration statement.
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<PAGE> 38
DESCRIPTION OF NOTES
GENERAL
The old notes were, and the new notes will be, issued under two separate
indentures, each dated as of June 29, 2000, which we refer to in this prospectus
as the indentures, between us and Chase Manhattan Bank and Trust Company,
National Association, as trustee. We refer to Chase Manhattan Bank and Trust in
this prospectus as the trustee. The following summary of the material provisions
of the indentures does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all provisions of the indentures and
those made part of the indentures by reference to the Trust Indenture Act of
1939. A copy of the indentures may be obtained from us. The definitions of some
of the terms used in this section are set forth below under "-- Certain
Definitions."
TERMS OF NOTES
The dollar notes will be limited to $1.0 billion in aggregate principal
amount, of which $500.0 million were issued on June 29, 2000. The dollar notes
will mature on July 1, 2010. The euro notes will be limited to E300.0 million in
aggregate principal amount, of which E150.0 million were issued on June 29,
2000. The euro notes will mature on July 1, 2010. The notes will not be entitled
to any sinking fund. The notes will be redeemable at our option as described
below under "-- Redemption."
The notes will bear interest from the date of issuance at the yearly rate
set forth on the cover page of this prospectus, payable semiannually in arrears
on January 1 and July 1 of each year commencing on January 1, 2001. Interest
payments will be made to holders of record at the close of business on the
December 15 and June 15 immediately preceding the interest payment date until
the principal is paid. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months. The circumstances under which the interest
rate may increase from the rate set forth on the cover page of this prospectus
are described under "The Exchange Offer -- Registration Covenant; Exchange
Offer."
Principal of, premium, if any, and interest on the notes will be payable at
the office or agency of the trustee maintained for such purpose within the City
and State of New York or, at our option, payment of interest may be made by
check mailed to the holders of the notes at their addresses set forth in the
register of holders of notes; provided that for any holders who have given us
wire instruction, all payments of principal of, premium, if any, and interest
must be made by wire transfer of immediately available funds to the accounts
specified in the wire instructions. Until otherwise designated by us, our office
or agency in New York will be the office of the trustee maintained for that
purpose. We have applied to have the new euro notes listed on the Luxembourg
Stock Exchange. As long as the euro notes are listed on the Luxembourg Stock
Exchange and as long as the rules of this exchange require, we will also
maintain a paying agent and a transfer agent in Luxembourg.
The dollar notes will be issued only in fully registered form, without
coupons, in denominations of $1,000 and any integral multiple of $1,000. The
euro notes will be issued only in fully registered form, without coupons, in
denominations of E1,000 and any integral multiple of E1,000. Initially, the
notes will be issued in the form of one or more global notes. See "-- Form,
Denomination, Book-Entry Procedures and Transfer." No service charge will be
made for any registration of transfer or exchange of notes, but we may require
payment of a sum sufficient to cover any transfer tax or other similar
governmental charge payable in connection with a transfer or exchange of notes.
All references in this prospectus to payments of principal of, premium, if
any, and interest on the notes is intended to include any applicable additional
amounts that may become payable in respect of the notes. See "-- Payment of
Additional Amounts."
SUBORDINATION
The notes are our unsecured obligations and, for purposes of right of
payment, are ranked behind all of our current and future senior debt, including
our obligations under our credit facility. The notes rank equally
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<PAGE> 39
with any existing and future senior subordinated indebtedness and rank ahead of
all of our other subordinated indebtedness. As of September 30, 2000, we have
approximately $551.3 million of senior debt outstanding, $789.0 million of
senior subordinated debt outstanding and, through our subsidiaries, we have
additional liabilities, including trade payables and capital lease obligations,
aggregating approximately $2.1 billion, which would rank ahead of, or
effectively ahead of, as the case may be, in right of payment to the notes.
We have a credit facility under which we and our specified subsidiaries may
borrow up to an aggregate of $500.0 million of revolving credit loans, subject
to compliance with covenants and financial ratios. We have guaranteed the
obligations of specified subsidiaries under the credit facility. Our senior debt
is comprised of our borrowings under our credit facility, and our guarantees of
borrowings by our subsidiaries. We plan to increase the size of our credit
facility, or enter into additional credit facilities, to fund anticipated growth
in our operations. We cannot provide any assurances that we will be able to
complete any such transaction, or as to its potential terms. See "Description of
Existing Indebtedness."
We are a holding company with no business operations other than:
- holding the equity interests of our subsidiaries; and
- advancing funds to, and receiving funds from, our subsidiaries.
In repaying our indebtedness, including the notes, we must rely on
dividends and other payments made to us by our subsidiaries.
The holders of the notes will have no direct claims against our
subsidiaries. The ability of our subsidiaries to make payments to us will be
affected by the obligations of those subsidiaries to their creditors. Claims of
holders of our debt, including the notes, against the cash flow and assets of
our subsidiaries will be effectively subordinated to claims of creditors of our
subsidiaries.
In order to pay the principal amount at maturity of the notes, we may be
required to adopt one or more alternatives, such as a refinancing of the notes.
See "Risk Factors -- Our structure as a holding company will limit the ability
of the holders of the notes to recover any principal and interest due on the
notes because they are effectively subordinated to the liabilities of our
subsidiaries."
Upon any distribution to our creditors in the case of our liquidation,
winding up, reorganization or dissolution or in a bankruptcy, insolvency,
receivership or similar proceeding, the holders of senior debt will be entitled
to receive payment in full in cash before the holders of the notes will be
entitled to receive any payment, and until all obligations with respect to
senior debt are paid in full in cash, any distribution to which the holders of
the notes would be entitled shall instead be made to the holders of senior debt.
We also may not make any payment on the notes if:
- a default in the payment of the principal of, premium, if any, or
interest on designated senior debt occurs and is continuing beyond any
applicable period of grace; or
- any other default occurs and is continuing with respect to designated
senior debt that permits holders of that debt to accelerate the maturity
and the trustee receives a notice of this default (a "payment blockage
notice").
Payments on the notes may and shall be resumed:
- in the case of a payment default, upon the date on which the default is
cured or waived; and
- in case of a nonpayment default, the earliest of (1) the date on which
the nonpayment default is cured or waived, (2) 179 days after the date on
which the applicable payment blockage notice is received, (3) the date
the designated senior debt shall have been discharged or paid in full in
cash, or (4) the date the payment blockage period shall have been
terminated by written notice from the holders of the designated senior
debt initiating the payment blockage period.
No new payment blockage period may be commenced unless and until 360 days
have elapsed since the effectiveness of the last payment blockage notice. No
nonpayment default that existed on the date of delivery
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<PAGE> 40
of any payment blockage notice shall be the basis for a subsequent payment
blockage notice unless the default shall have been cured or waived for a period
of not less than 90 days.
As a result of the subordination provisions described above, in the event
of a liquidation or insolvency, holders of the notes may recover less ratably
than our creditors who are holders of senior debt.
REDEMPTION
Optional Redemption After July 1, 2005
The dollar notes and the euro notes are redeemable at our option, in whole
or in part, at any time on or after July 1, 2005 at the redemption prices,
expressed as percentages of principal amount, set forth below plus accrued and
unpaid interest to the applicable redemption date, if redeemed during the
twelve-month period beginning on July 1, of the years indicated below:
<TABLE>
<CAPTION>
DOLLAR NOTE EURO NOTE
YEAR PERCENTAGE PERCENTAGE
---- ----------- ----------
<S> <C> <C>
2005 ................................................... 104.938% 104.875%
2006 ................................................... 103.292 103.250
2007 ................................................... 101.646 101.625
2008 and thereafter..................................... 100.000% 100.000%
</TABLE>
We are not required to make mandatory redemption or sinking fund payments
with respect to the notes.
Optional Redemption After Ordinary Shares Offering
Notwithstanding the foregoing, during the first 36 months after June 29,
2000, we may on any one or more occasions redeem up to an aggregate of $175.0
million in aggregate principal amount of the dollar notes at a redemption price
of 109.875% of the principal amount thereof, plus accrued and unpaid interest
thereon to the redemption date; or up to an aggregate of E52.5 million in
aggregate principal amount of the euro notes at a redemption price of 109.75% of
the principal amount, plus accrued and unpaid interest thereon to the redemption
date, with the net cash proceeds of a public or private offering of our ordinary
shares, which we refer to as an equity sale; provided that:
- at least $325.0 million in aggregate principal amount of dollar notes or
E97.5 million in aggregate principal amount of euro notes remains
outstanding immediately after the occurrence of such redemption; and
- the redemption occurs within 90 days of the date of the closing of the
equity sale.
Optional Redemption in Circumstances Involving Taxation
We may, at our option, redeem the notes in whole at any time at a
redemption price equal to 100% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date fixed for redemption (the "tax redemption
price") if a change in tax law occurs.
A change in tax law is any change in or any amendment to the laws,
including any applicable double taxation treaty or convention, of Singapore, or
any other jurisdiction, as defined below under "-- Payment of Additional
Amounts," or of any political subdivision or taxing authority thereof, affecting
taxation, or any change in the application or interpretation or official
position regarding the application of such laws, double taxation treaty or
convention that:
- becomes effective on or after June 26, 2000 or, in some circumstances, a
later date on which any of our assignees or the assignee of one of our
successor corporations becomes such as permitted under the indentures;
and
- would require that we, our assignee or any relevant successor make
payments of additional amounts on the next succeeding date for the
payment thereof following the determination by us, our assignee or
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<PAGE> 41
any relevant successor that the effect of the change in tax law cannot be
avoided through any reasonable measures available to us.
Notice
Notices of redemption shall be mailed by first class mail at least 30 but
not more than 60 days before the redemption date to each holder of notes to be
redeemed at its registered address. For so long as the euro notes are listed on
the Luxembourg Stock Exchange, notices of redemption of the euro notes will be
published in accordance with the procedures described under "-- Notices."
Notices of redemption may not be conditional.
If any note is to be redeemed in part only, the notice of redemption that
relates to the note shall state the portion of the principal amount to be
redeemed. A new note in principal amount equal to the unredeemed portion will be
issued in the name of the holder of the note upon cancellation of the original
note.
REPURCHASE AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL
Upon the occurrence of a change of control, each holder of notes will have
the right to require us to repurchase all or part of the holder's notes pursuant
to the offer described below (the "change of control offer") at an offer price
in cash equal to 101% of the aggregate principal amount thereof, plus accrued
and unpaid interest thereon, if any, to the date of purchase (the "change of
control payment").
Within 30 days following any change of control, we will mail a notice to
each holder of notes describing the change of control and offering to repurchase
notes on the date specified in the notice, which date shall be no earlier than
30 days and no later than 60 days from the date such notice is mailed (the
"change of control payment date"). For so long as the euro notes are listed on
the Luxembourg Stock Exchange, notice of a change of control offer with respect
to the euro notes will also be published in accordance with the procedures
described under "-- Notices." We will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of the notes as a result of a change of control.
On the change of control payment date, we will, to the extent lawful:
- accept for payment all notes or portions thereof properly tendered
pursuant to the change of control offer;
- deposit with the paying agent an amount equal to the change of control
payment in respect of all notes or portions of notes so tendered; and
- deliver or cause to be delivered to the trustee the notes so accepted
together with an officers' certificate stating the aggregate principal
amount of notes or portions of the notes being purchased by us.
The paying agent will promptly mail to each holder of notes so tendered the
change of control payment for the notes, and the trustee will promptly
authenticate and mail, or cause to be transferred by book entry, to each holder
a new note equal in principal amount to any unpurchased portion of the notes
surrendered, if any. However, each new dollar note must be in a principal amount
of $1,000 or a multiple of $1,000, and each new euro note must be in a principal
amount of E1,000 or a multiple of E1,000. The indentures provide that, prior to
complying with the provisions of this covenant, but in any event within 90 days
following a change of control, we will either repay in full in cash all
outstanding senior debt or obtain the requisite consents, if any, under all
agreements governing outstanding senior debt to permit the repurchase of notes
required by this covenant.
Our credit facility restricts our ability to purchase any notes and other
senior subordinated or subordinated debt, and also provides that some change of
control events constitute a default under the credit facility. Any future credit
agreements or other agreements relating to senior debt to which we become a
party may contain similar restrictions and provisions. In the event any
restrictions would prohibit us from repurchasing notes upon a change of control,
we could seek the consent of our lenders to the purchase of notes or could
attempt to refinance the borrowings that contain these restrictions. If we do
not obtain such a
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consent or repay these borrowings, we will be prohibited from purchasing notes.
In this case, our failure to purchase tendered notes would constitute an event
of default under the indentures which would, in turn, constitute a default under
the credit facility. In these circumstances, the subordination provisions in the
indentures would likely restrict payments to the holders of notes.
"Change of control" means the occurrence of any of the following:
- the sale, lease, transfer, conveyance or other disposition of all or
substantially all of our assets and those of our subsidiaries taken as a
whole to any "person," as used in Section 13(d)(3) of the Exchange Act;
- our adoption of a plan relating to our liquidation or dissolution;
- the consummation of any transaction, including any merger or
consolidation, the result of which is that any "person," as defined
above, becomes the "beneficial owner," as defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act, directly or indirectly, of more than 50% of
our voting stock, measured by voting power rather than number of shares;
or
- the first day on which a majority of the members of our board of
directors are not continuing directors.
"Continuing director" means, as of any date of determination, any member of
our board of directors who was:
- a member of our board of directors on the date of the indentures; or
- nominated for election or elected to our board of directors with the
approval of a majority of the continuing directors who were members of
our board at the time of the nomination or election and who voted with
respect to the nomination or election; provided that a majority of the
members of the board voting with respect thereto shall at the time have
been continuing directors.
The change of control provision of the notes may in some circumstances make
more difficult or discourage a takeover of us and, as a result, may make removal
of incumbent management more difficult. The change of control provision,
however, is not the result of our knowledge of any specific effort to accumulate
our shares or to obtain control of us by means of a merger, tender offer,
solicitation or otherwise, or part of a plan by management to adopt a series of
anti-takeover provisions. Instead, the change of control provision is a result
of negotiations between the initial purchasers and us. We are not presently in
discussions or negotiations with respect to any pending offers which, if
accepted, would result in a transaction involving a change of control, although
it is possible that we would decide to do so in the future.
The provisions of the indentures would not necessarily afford holders of
the notes protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction involving us that
may negatively affect holders of the notes.
The definition of change of control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of our assets and those of our subsidiaries taken as a whole. Although there is
a developing body of case law interpreting the phrase "substantially all," there
is no precise established definition of the phrase under applicable law.
Accordingly, the ability of a holder of notes to require us to repurchase notes
as a result of a sale, lease, transfer, conveyance or other disposition of less
than all of our assets and those of our subsidiaries taken as a whole to another
person or group may be uncertain.
CERTAIN COVENANTS
Restricted Payments
The indentures provide that we will not, and will not permit any of our
restricted subsidiaries to, directly or indirectly, make a restricted payment,
as defined below, unless, at the time of and after giving effect to the
restricted payment:
- no default or event of default shall have occurred and be continuing or
would occur as a consequence of the payment;
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- we would, at the time of the restricted payment and after giving effect
to that restricted payment as if the restricted payment had been made at
the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional debt pursuant to the covenant
described below under "-- Incurrence of Debt and Issuance of Preferred
Stock;" and
- the restricted payment, together with the aggregate amount of all other
restricted payments made by us and our restricted subsidiaries after the
date of the indentures, excluding restricted payments permitted by clause
(2) of the penultimate paragraph of this covenant, is less than the sum
of:
- 50% of our consolidated net income or, if consolidated net income
shall be a loss, minus 100% of the loss, of for the period, taken as
one accounting period, from and including the fiscal quarter
commencing June 30, 2000 to the end of our most recently ended fiscal
quarter for which internal financial statements are available at the
time of such restricted payment, plus
- 100% of the aggregate fair market value received by us from the issue
or sale since the date of the indentures of our capital stock, other
than disqualified stock, or of our disqualified stock or debt
securities that have been converted into our capital stock, other than
capital stock or disqualified stock or convertible debt securities,
sold to one of our restricted subsidiaries and other than disqualified
stock or convertible debt securities that have been converted into
disqualified stock, plus
- $25.0 million.
Each of the following is a "restricted payment":
(1) the declaration or payment of any dividend or the making of any
other payment or distribution on account of our or any of our restricted
subsidiaries' equity interests, including any payment in connection with
any merger or consolidation involving us, or to the holders of our or any
of our restricted subsidiaries' equity interests in their capacity as such,
other than dividends or distributions payable in our equity interests,
other than disqualified stock, except to the extent the entirety of the
dividend or distribution is actually paid to us or one of our restricted
subsidiaries, and in the case of a dividend or distribution by any of our
non-wholly owned restricted subsidiaries, to any other holder of equity
interests of that non-wholly owned restricted subsidiary on a pro rata
basis;
(2) the purchase, redemption or other acquisition or retirement for
value, including in connection with any merger or consolidation involving
us, any of our equity interests or any direct or indirect parent of us;
(3) the making any payment on or with respect to, or purchase,
redemption, defeasement or other acquisition or retirement for value, of
any subordinated debt, except a payment of interest or principal at stated
maturity; or
(4) the making of any restricted investment.
The foregoing provisions do not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the payment
would have complied with the provisions of the indentures;
(2) the redemption, repurchase, retirement or other acquisition of any
of our equity interests or of any of our subsidiaries or any subordinated
debt, in each case in exchange for, or out of the net proceeds of the
substantially concurrent sale, other than to one of our subsidiaries, of,
other equity interests of ours, other than any disqualified stock;
provided, however, that the amount of any of the net proceeds that are used
for any redemption, repurchase, retirement or other acquisition shall be
excluded from clause (2) of the immediately preceding paragraph; and
(3) the redemption, repurchase, refinancing or defeasance of
subordinated debt in exchange for, or with the net cash proceeds from, an
incurrence of permitted refinancing debt.
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The amount of all restricted payments, other than cash, shall be the fair
market value on the date of the restricted payment of the asset(s) or securities
proposed to be transferred or issued by us or the subsidiary, as the case may
be, pursuant to the restricted payment. The fair market value of any non-cash
restricted payment having a fair market value in excess of $10.0 million shall
be determined by our board of directors, whose resolution shall be delivered to
the trustee. Not later than the date of making any restricted payment, we shall
deliver to the trustee an officers' certificate stating that the restricted
payment is permitted and setting forth the basis upon which the calculations
required by the covenant "Restricted Payments" were computed.
Incurrence of Debt and Issuance of Preferred Stock
The indentures provide that we will not, and will not permit any of our
restricted subsidiaries to create, incur, issue, assume, guarantee or otherwise
become liable, contingently or otherwise, with respect to (collectively,
"incur") any debt, including acquired debt, and that we will not permit any of
our restricted subsidiaries to issue any shares of preferred stock. However, we
and any of our restricted subsidiaries may incur debt, including acquired debt,
if the fixed charge coverage ratio for our and our restricted subsidiaries' most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which the additional debt is
incurred would have been at least 2.0 to 1.0, determined on a pro forma basis,
including a pro forma application of the net proceeds of the additional debt, as
if the additional debt had been incurred at the beginning of the four-quarter
period.
The provisions of the first paragraph of this covenant will not apply to
the incurrence of any of the following items of debt (collectively, "permitted
debt"):
(1) the incurrence by us or any of our restricted subsidiaries of credit
facility debt and letters of credit, with letters of credit being deemed to
have a principal amount equal to our maximum potential liability and that
of our restricted subsidiaries thereunder, under credit agreements;
provided that the aggregate principal amount of all credit facility debt
outstanding under all credit agreements and incurred pursuant to this
clause (1), after giving effect to the incurrence, including all permitted
refinancing debt incurred to refund, refinance or replace any other debt
incurred pursuant to this clause (1), together with all amounts outstanding
under clause (2) below, does not exceed the greater of $700.0 million and
the borrowing base as of the most recent fiscal quarter ended for which
financial statements are available;
(2) the incurrence by us or any of our restricted subsidiaries of
receivables program debt in an aggregate amount at any one time outstanding
not to exceed, together with the amounts outstanding under clause (1)
above, the greater of $700.0 million or the borrowing base as of the most
recent fiscal quarter ended for which financial statements are available;
(3) the incurrence by us and our restricted subsidiaries of existing
debt;
(4) the incurrence by us or any of our restricted subsidiaries of debt
represented by the notes;
(5) the incurrence by us or any of our restricted subsidiaries of
permitted refinancing debt in exchange for, or the net proceeds of which
are used to refund, refinance or replace, debt that was permitted by the
indentures to be incurred;
(6) the incurrence by us or any of our restricted subsidiaries of
intercompany debt between or among us and any of our wholly owned
restricted subsidiaries; provided, however, that (i) if we are the obligor
on the debt, (ii) the debt is expressly subordinated to the prior payment
in full in cash of all obligations with respect to the notes, and (iii)(A)
any subsequent issuance or transfer of equity interests that results in any
of the debt being held by a person other than us or a wholly owned
restricted subsidiary and (B) any sale or other transfer of any of the debt
to a person that is not either us or a wholly owned restricted subsidiary
shall be deemed, in each case, to constitute an incurrence of debt by us or
the restricted subsidiary, as the case may be;
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(7) the incurrence by us or any of our restricted subsidiaries of
hedging obligations that are incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate debt that is permitted
by the terms of the indentures to be outstanding or for the purpose of
fixing or hedging currency exchange risk with respect to any currency
exchanges;
(8) our capitalized lease obligations and purchase money obligations and
those of our restricted subsidiaries in aggregate principal amount, or
accreted value, as applicable, at any time outstanding not to exceed 10% of
total assets;
(9) guarantees by us or any of our restricted subsidiaries of our debt
or any restricted subsidiary permitted to be incurred under another
provision of this covenant;
(10) our debt or that of any restricted subsidiary in respect of
performance bonds, bankers' acceptances, trade letters of credit, surety
bonds and guarantees provided by us or any restricted subsidiary in the
ordinary course of business, not to exceed at any given time 2.5% of total
assets; and
(11) the incurrence by us or any of our restricted subsidiaries of
additional debt in an aggregate principal amount, or accreted value, as
applicable, at any time outstanding, including all permitted refinancing
debt incurred to refund, refinance or replace any other debt incurred
pursuant to this clause (11), not to exceed $50.0 million.
For purposes of determining compliance with this covenant, in the event
that an item of debt meets the criteria of more than one of the categories of
permitted debt described in clauses (1) through (11) above or is entitled to be
incurred pursuant to the first paragraph of this covenant, we may classify that
item of debt in any manner that complies with this covenant and that item of
debt or portion thereof will be treated as having been incurred pursuant to only
one of such clauses or pursuant to the first paragraph of this covenant.
Liens
The indentures provide that we will not, and will not permit any of our
restricted subsidiaries to create, incur, assume or suffer to exist any lien
that secures obligations under any pari passu debt or subordinated debt on any
of our assets or properties or the assets or properties of that restricted
subsidiary, or any income or profits therefrom, or assign or convey any right to
receive income therefrom, unless the notes are equally and ratably secured with
the obligations so secured or until such time as the obligations are no longer
secured by a lien.
Merger, Consolidation or Sale of Assets
The indentures provide that we will not consolidate or merge with or into,
whether or not we are the surviving corporation, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of our properties
or assets in one or more related transactions, to another corporation, person or
entity unless:
- we are the surviving corporation or the entity or the person formed by or
surviving the consolidation or merger, if other than us, or to which the
sale, assignment, transfer, lease, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of
either (1) the United States, any state thereof, the District of Columbia
or Singapore or (2) a subject country, in which case we will have
satisfied our obligations as set forth below under "-- Restrictions Upon
Reincorporating, Merging or Consolidating Into a Subject Country;"
- the entity or person formed by or surviving the consolidation or merger,
if other than us, or the entity or person to which the sale, assignment,
transfer, lease, conveyance or other disposition shall have been made
assumes all of our obligations under the notes and the indentures
pursuant to a supplemental indenture in a form reasonably satisfactory to
the trustee;
- immediately after the transaction no default or event of default exists;
and
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- except in the case of the merger of us with or into one of our wholly
owned restricted subsidiaries, we or the entity or person formed by or
surviving any consolidation or merger, if other than us, or to which the
sale, assignment, transfer, lease, conveyance or other disposition shall
have been made:
- will have consolidated net worth immediately after the transaction
equal to or greater than our consolidated net worth immediately
preceding the transaction; and
- will, at the time of the transaction and after giving effect to the
transaction as if it had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of
additional debt pursuant to the fixed charge coverage ratio test set
forth in the first paragraph of the covenant described above under
"-- Incurrence of Debt and Issuance of Preferred Stock."
Transactions with Affiliates
The indentures provide that we will not, and will not permit any of our
restricted subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of our properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any affiliate (each of the foregoing, an "affiliate transaction"),
unless:
(1) the affiliate transaction is on terms that are no less favorable to
us or the relevant restricted subsidiary than those that would have been
obtained in a comparable transaction by us or the restricted subsidiary
with an unrelated person; and
(2) we deliver to the trustee, with respect to any affiliate transaction
or series of related affiliate transactions involving aggregate
consideration in excess of $10.0 million, a resolution of our board of
directors setting forth in an officers' certificate certifying that the
affiliate transaction complies with clause (1) above and that the affiliate
transaction has been approved by a majority of the disinterested members of
our board of directors.
However, the following shall not be deemed to be affiliate transactions:
- any employment agreement or compensation arrangement entered into by us
or any of our restricted subsidiaries in the ordinary course of business
and consistent with our past practice or that of the restricted
subsidiary that is not otherwise prohibited by the indentures;
- transactions between or among us and/or our restricted subsidiaries that
are not otherwise prohibited by the indentures;
- restricted payments and permitted investments that are permitted by the
provisions of the indentures described above under "-- Restricted
Payments;" and
- indemnification of officers and directors.
Dividend and Other Payment Restrictions Affecting Subsidiaries
The indentures provide that we will not, and will not permit any of our
restricted subsidiaries to create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any restricted
subsidiary to:
(1) pay dividends or make any other distributions to us or any of our
restricted subsidiaries on our capital stock or with respect to any other
interest or participation in, or measured by, our profits, or pay any
indebtedness owed to us or any of our restricted subsidiaries;
(2) make loans or advances to us or any of our restricted subsidiaries;
or
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(3) transfer any of our properties or assets to us or any of our
restricted subsidiaries, except for encumbrances or restrictions existing
under or by reason of:
- existing debt as in effect on the date of the indentures,
- the credit facility as in effect as of the date of the indentures, and
any amendments, renewals, increases, replacements or refinancings of
the credit facility, provided that they are not more restrictive taken
as a whole with respect to the dividend and other payment restrictions
than those contained in the existing debt as in effect on the date of
the indentures, as determined by our board of directors in its
reasonable and good faith judgment,
- the indentures and the notes,
- applicable law,
- any instrument governing debt or capital stock of a person acquired by
us or any of our restricted subsidiaries as in effect at the time of
the acquisition, except to the extent the debt was incurred in
connection with or in contemplation of the acquisition, which
encumbrance or restriction is not applicable to any person, or the
properties or assets of any person, other than the person, or the
property or assets of the person, so acquired, provided that, in the
case of debt, the debt was permitted by the terms of the indentures to
be incurred,
- customary non-assignment provisions in leases and other agreements
entered into in the ordinary course of business and consistent with
past practices, restricting assignment or restricting transfers of
non-cash assets,
- purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in
clause (3) above on the property so acquired,
- permitted refinancing debt, provided that the restrictions contained
in the agreements governing the permitted refinancing debt are not
more restrictive taken as a whole than those contained in the
agreements governing the debt being refinanced, as determined by our
board of directors in its reasonable and good faith judgment,
- contracts for the sale of assets,
- customary provisions in agreements with respect to permitted joint
ventures,
- any debt or any agreement pursuant to which the debt was issued if (i)
the encumbrance or restriction applies only upon a payment or
financial covenant default or event of default contained in the debt
or agreement, and (ii) the encumbrance or restriction is not
materially more disadvantageous to the holders of the notes than is
customary in comparable financings, as determined in good faith by our
board of directors, or
- reasonable and customary borrowing base, net worth and similar
covenants set forth in agreements evidencing debt otherwise permitted
by the indentures.
Designation of Unrestricted Subsidiaries
Our board of directors may designate any subsidiary to be an unrestricted
subsidiary if:
- that designation would not cause a default;
- we will, on the date of the designation after giving effect to the
designation as if the designation had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional indebtedness pursuant to the fixed charge coverage ratio test
set forth in the first paragraph of the covenant under "-- Incurrence of
Debt and Issuance of Preferred Stock;" and
- we would be permitted to make an investment equal to the sum of the (1)
fair market value, as determined in good faith by our board of directors,
of the capital stock of the subsidiary plus (2) the
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amount of debt the subsidiary owes to us, pursuant to the first paragraph
of the covenant under "-- Restricted Payments."
Asset Sales
The indentures provide that we will not, and will not permit any of our
restricted subsidiaries to, consummate an asset sale unless:
- we or our restricted subsidiary, as the case may be, receive
consideration at the time of the asset sale at least equal to the fair
market value, evidenced by a resolution of our board of directors set
forth in an officers' certificate delivered to the trustee, of the assets
or equity interests issued or sold or otherwise disposed of; and
- at least 75% of the consideration for the asset sale received by us or
our restricted subsidiary is in the form of cash. For purposes of this
provision, the following shall be deemed to be cash:
- any of our liabilities, as shown on our or our restricted subsidiary's
most recent balance sheet, or those of any restricted subsidiary,
other than contingent liabilities and liabilities that are by their
terms subordinated to the notes or any guarantee of the notes, that
are assumed by the transferee of any assets pursuant to a customary
novation agreement or other agreement that releases or indemnifies us
or the restricted subsidiary from further liability, and
- any securities, notes or other obligations received by us or our
restricted subsidiary from the transferee that are immediately
converted by us or the restricted subsidiary into cash, to the extent
of the cash received.
Within 365 days after the receipt of any net proceeds from an asset sale,
we may apply the net proceeds at our option:
- to permanently repay, reduce or secure letters of credit in respect of
senior debt and to correspondingly reduce commitments with respect
thereto in the case of revolving borrowings; and/or
- to the acquisition of a controlling interest in another business, the
making of a capital expenditure or permitted investment or the
acquisition of other assets,
in each case, for use in the same or a similar line of business as we were
engaged in on the date of the asset sale or reasonable extensions of our line of
business. Pending the final application of any of the net proceeds, we may
temporarily reduce indebtedness under the credit facility, or any alternative or
subsequent revolving credit agreement where borrowings thereunder constitute
senior debt or debt of a subsidiary, or otherwise invest the net proceeds in any
manner that is not prohibited by the indentures. Any net proceeds from asset
sales that are not applied or invested as provided in this paragraph will be
deemed to constitute "excess proceeds."
When the aggregate amount of excess proceeds exceeds $10.0 million, we will
be required to make an offer (an "asset sale offer") to all holders of notes and
holders of any other pari passu debt outstanding with provisions requiring us to
make an offer to purchase or redeem the indebtedness with the proceeds from any
asset sale as follows:
- we will make an offer to purchase from all holders of the notes in
accordance with the procedures set forth in the indentures in the maximum
principal amount, expressed as a multiple of $1,000, of notes that may be
purchased out of an amount (the "note amount") equal to the product of
the excess proceeds multiplied by a fraction, the numerator of which is
the outstanding principal amount of the notes, and the denominator of
which is the sum of the outstanding principal amount of the notes and
pari passu debt, subject to proration in the event the amount is less
than the aggregate asset sale offered price, as defined in this
prospectus, of all notes tendered; and
- to the extent required by pari passu debt to permanently reduce the
principal amount of pari passu debt, we will make an offer to purchase or
otherwise repurchase or redeem pari passu debt (an "asset sale pari passu
offer") in an amount (the "pari passu debt amount") equal to the excess
of the excess
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proceeds over the note amount; provided that in no event will we be
required to make an asset sale pari passu offer in a pari passu debt
amount exceeding the principal amount of pari passu debt plus accrued and
unpaid interest thereon plus the amount of any premium required to be
paid to repurchase such pari passu debt.
The offer price for the notes will be payable in cash in an amount equal to
100% of the principal amount of the notes, plus accrued and unpaid interest, if
any, to the date (the "asset sale offer date") the asset sale offer is
consummated (the "asset sale offered price"), in accordance with the procedures
set forth in the indentures. To the extent that the aggregate asset sale offered
price of the notes tendered pursuant to the asset sale offer is less than the
note amount relating thereto or the aggregate amount of pari passu debt that is
purchased in an asset sale pari passu offer is less than the pari passu debt
amount, we may use any remaining excess proceeds for general corporate purposes.
If the aggregate principal amount of notes and pari passu debt surrendered by
holders thereof exceeds the amount of excess proceeds, the trustee shall select
the notes to be purchased on a pro rata basis. Upon the completion of the
purchase of all the notes tendered pursuant to an asset sale offer and the
completion of an asset sale pari passu offer, the amount of excess proceeds, if
any, shall be reset at zero.
The indentures provide that, if we become obligated to make an asset sale
offer pursuant to the immediately preceding paragraph, the notes and the pari
passu debt shall be purchased by us, at the option of the holders thereof, in
whole or in part in multiples of $1,000 or E1,000, as the case may be, on a date
that is not earlier than 30 days and not later than 60 days from the date the
notice of the asset sale offer is given to holders, or such later date as may be
necessary for us to comply with the requirements under the Exchange Act.
The indentures provide that we will comply with the applicable tender offer
rules, including Rule 14e-1 under the Exchange Act, and any other applicable
securities laws or regulations in connection with an asset sale offer.
Limitation on Senior Subordinated Debt
The indentures provide that we will not incur, create, issue, assume,
guarantee or otherwise become liable for any debt that is subordinate or junior
in right of payment to any senior debt and senior in any respect in right of
payment to the notes.
Limitations on Issuances of Guarantees of Debt
The indentures provide that we will not permit any of our restricted
subsidiaries to guarantee or pledge any assets to secure the payment of any of
our pari passu debt or debt junior to or subordinated in right of payment to any
pari passu debt unless we cause each such restricted subsidiary to execute and
deliver to the trustee, prior to or concurrently with the issuance of the
guarantee, a supplemental indenture, in form satisfactory to the trustee,
pursuant to which the restricted subsidiary unconditionally guarantees on a
senior subordinated basis the payment of principal of, premium, if any, and
interest on the notes.
Notwithstanding the foregoing, any such guarantee by a restricted
subsidiary of the notes shall provide by its terms that it, and all liens
securing the same, shall be automatically and unconditionally released and
discharged upon any sale, exchange or transfer, to any person not an affiliate
of us, of all of our capital stock in, or all or substantially all the assets
of, such restricted subsidiary, which sale, exchange or transfer is made in
compliance with the applicable provisions of the indentures.
No Payments for Consents
The indentures provide that neither we nor any of our subsidiaries will pay
or cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any holder of any notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of the indentures or the
notes unless the consideration is offered to be paid or is paid to all holders
of the notes that consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to the consent, waiver or agreement.
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Provision for Financial Statements
The indentures provide that, whether or not required by the rules and
regulations of the Commission, so long as any notes are outstanding, we will
furnish to the holders of notes:
- all quarterly and annual financial information that would be required to
be contained in a filing with the Commission on Forms 10-Q and 10-K if we
were required to file those Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with
respect to the annual information only, a report thereon by our certified
independent accountants; and
- all current reports that would be required to be filed with the
Commission on Form 8-K if we were required to file current reports.
In addition, whether or not required by the rules and regulations of the
Commission, we will file a copy of all such information and reports with the
Commission for public availability, unless the Commission will not accept such a
filing, and make the information available to securities analysts and
prospective investors upon request. In addition, we have agreed that, for so
long as any notes remain outstanding, we will furnish to the holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
CERTAIN DEFINITIONS
Set forth below are some of the defined terms used in the indentures.
Reference is made to the indentures for a full disclosure of all these terms, as
well as any other terms used in this prospectus for which no definition is
provided.
"Acquired debt" means, with respect to any specified person:
- debt of any other person existing at the time the other person is merged
with or into or became a restricted subsidiary of the specified person,
including debt incurred in connection with, or in contemplation of, the
other person merging with or into or becoming a restricted subsidiary of
the specified person; and
- debt secured by a lien encumbering any asset acquired by the specified
person which, in each case, is not repaid at or within five days
following the date of the acquisition.
"Additional amounts" shall have the definition set forth under "Payment of
Additional Amounts." All references in this prospectus to payments of principal
of, premium, if any, and interest on the notes shall be deemed to include any
applicable additional amounts that may become payable in respect of the notes.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the specified person. For purposes of this definition, "control,"
including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with," as used with respect to any person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a person, whether through the
ownership of voting securities, by agreement or otherwise.
"Asset sale" means:
- the sale, lease, transfer, conveyance or other disposition of any assets
or rights, including by way of a sale and leaseback, other than in the
ordinary course of business; provided that the sale, lease, transfer,
conveyance or other disposition of all or substantially all of our assets
and those of our restricted subsidiaries taken as a whole will be
governed by the provisions of the indentures described above under
"-- Repurchase at the Option of Holders Upon Change of Control" and/or
the provisions described above under "-- Certain Covenants -- Merger,
Consolidation or Sale of Assets" and not by the provisions of the asset
sale covenant; and
- the issue or sale by us or any of our restricted subsidiaries of equity
interests of any of our restricted subsidiaries,
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in either case, whether in a single transaction or a series of related
transactions (1) that have a fair market value in excess of $10.0 million or (2)
net proceeds in excess of $10.0 million.
Notwithstanding the foregoing, the following will not be deemed to be asset
sales:
- a transfer of assets by us to a restricted subsidiary or by a restricted
subsidiary to us or to another restricted subsidiary;
- a disposition of goods held for sale in the ordinary course of business
or obsolete equipment in the ordinary course of business consistent with
our past practices and our restricted subsidiaries' past practices;
- assets transferred or disposed of in connection with a receivables
program;
- an issuance of equity interests by a restricted subsidiary to us or to
another restricted subsidiary; and
- a restricted payment or permitted investment that is permitted by the
covenant described above under "-- Certain Covenants -- Restricted
Payments."
"Asset sale offer" shall have the definition set forth under "-- Certain
Covenants -- Asset Sales."
"Asset sale offer date" shall have the definition set forth under
"-- Certain Covenants -- Asset Sales."
"Asset sale offered price" shall have the definition set forth under
"-- Certain Covenants -- Asset Sales."
"Asset sale pari passu offer" shall have the definition set forth under
"-- Certain Covenants -- Asset Sales."
"Attributable debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value, discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP, of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in the sale and leaseback transaction, including any
period for which the lease has been extended or may, at the option of the
lessor, be extended.
"Board of directors" means, as to any person, the board of directors of the
person or any duly authorized committee thereof or any other similar duly
authorized governing body of the person.
"Board resolution" means, with respect to any person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of the person to
have been duly adopted by the board of directors of the person and to be in full
force and effect on the date of the certification, and delivered to the trustee.
"Borrowing base" means an amount equal to the sum of:
- 85% of the value of accounts receivable, before giving effect to any
related reserves, shown on our most recent consolidated balance sheet
that are not more than 90 days past due in accordance with GAAP; and
- 60% of the value of the inventory shown on our consolidated balance sheet
in accordance with GAAP.
"Capital lease obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital stock" means:
- in the case of a corporation, corporate stock;
- in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents, however
designated, of corporate stock;
- in the case of a partnership or limited liability company, partnership or
membership interests, whether general or limited; and
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- any other interest or participation that confers on a person the right to
receive a share of the profits and losses of, or distributions of assets
of, the issuing person.
"Cash equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality thereof having
maturities of not more than six months from the date of acquisition;
(3) certificates of deposit and euro dollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any lender party to the credit facility or with
any domestic commercial bank having capital and surplus in excess of $500.0
million and a Keefe Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (1) and (2) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above; and
(5) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Corporation and in each case
maturing within six months after the date of acquisition.
"Consolidated cash flow" means, with respect to any person for any period:
- the consolidated net income of the person for the period; plus
- an amount equal to any extraordinary loss plus any net loss realized in
connection with an asset sale, to the extent the losses were deducted in
computing the consolidated net income; plus
- provision for taxes based on income or profits of the person and our
restricted subsidiaries for the period, to the extent that the provision
for taxes was included in computing the consolidated net income; plus
- consolidated interest expense of the person and our restricted
subsidiaries for the period, whether paid or accrued and whether or not
capitalized, including amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments
associated with capital lease obligations, imputed interest with respect
to attributable debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance
financings, and net payments, if any, pursuant to hedging obligations, to
the extent that any such expense was deducted in computing the
consolidated net income; plus
- depreciation, amortization, including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period, and other non-cash expenses, excluding any
non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period, of the person and
our restricted subsidiaries for the period to the extent that the
depreciation, amortization and other non-cash expenses were deducted in
computing the consolidated net income; minus
- other non-recurring non-cash items increasing the consolidated net income
for the period, which will be added back to consolidated cash flow in any
subsequent period to the extent cash is received in respect of such item
in such subsequent period, in each case, on a consolidated basis and
determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or
profits of, and the depreciation and amortization and other non-cash charges of,
a restricted subsidiary of the referent person shall be added to consolidated
net income to compute consolidated cash flow only to the extent that a
corresponding amount
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would be permitted at the date of determination to be dividended to us by the
restricted subsidiary without prior governmental approval, that has not been
obtained, and without direct or indirect restriction pursuant to the terms of
our charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that restricted
subsidiary or our shareholders.
"Consolidated net income" means, with respect to any person for any period,
the aggregate of the net income of the person and our restricted subsidiaries
for the period, on a consolidated basis, determined in accordance with GAAP;
provided that:
(1) the net income, but not loss, of any person that is not a restricted
subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent person or a wholly owned
restricted subsidiary of the referent person;
(2) the net income of any unrestricted subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that restricted subsidiary of that net income is not at
the date of determination permitted without any prior governmental
approval, that has not been obtained, or by operation of the terms of our
charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that subsidiary or our
shareholders;
(3) the net income of any person acquired in a pooling of interests
transaction for any period prior to the date of the acquisition shall be
excluded; and
(4) the cumulative effect of a change in accounting principles shall be
excluded.
"Consolidated net worth" means, with respect to any person as of any date:
- the sum of (1) the consolidated equity of the ordinary shareholders of
such person and our consolidated restricted subsidiaries as of such date
plus (2) the respective amounts reported on such person's balance sheet
as of such date with respect to any series of preferred stock, other than
disqualified stock, that by its terms is not entitled to the payment of
dividends unless the dividends may be declared and paid only out of net
earnings in respect of the year of the declaration and payment, but only
to the extent of any cash received by the person upon issuance of the
preferred stock; less
- all write-ups, other than write-ups resulting from foreign currency
translations and write-ups of tangible assets of a going concern business
made within 12 months after the acquisition of the business, subsequent
to the date of the indentures in the book value of any asset owned by the
person or a consolidated restricted subsidiary of the person; less
- all investments as of the date in unconsolidated restricted subsidiaries
and in persons that are not restricted subsidiaries except, in each case,
permitted investments; and less
- all unamortized debt discount and expense and unamortized deferred
charges as of such date, all of the foregoing determined in accordance
with GAAP.
"Credit agreements" means, with respect to us or any of our restricted
subsidiaries, one or more debt facilities, including, without limitation, the
credit facility, or commercial paper facilities with banks or other
institutional lenders providing for revolving credit loans, term loans,
receivables financing, including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables, or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced. Debt under credit agreements
outstanding on the date on which notes are first issued and authenticated under
the indentures shall be deemed to have been incurred on such date in reliance on
the exception provided by clause (1) of the definition of permitted debt.
"Credit facility" means, collectively, the Revolving Credit and Term Loan
Agreement dated as of April 3, 2000 by and among us, certain agents and certain
lending institutions party thereto and the Revolving Credit and Term Loan
Agreement dated as of April 3, 2000 by and among Flextronics International
U.S.A.
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Inc., DII, certain agents and certain lending institutions party thereto and, in
each case, as amended, modified, renewed, restated, refunded, replaced or
refinanced.
"Debt" means, with respect to any person, any indebtedness of the person in
respect of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit, or reimbursement agreements in respect
thereof, or banker's acceptances or representing capital lease obligations or
the balance deferred and unpaid of the purchase price of any property or
representing any hedging obligations, except any balance that constitutes an
accrued expense or trade payable, if and to the extent any of the foregoing
indebtedness, other than letters of credit and hedging obligations, would appear
as a liability upon a balance sheet of the person prepared in accordance with
GAAP, as well as all debt of others secured by a lien on any asset of the
person, whether or not the debt is assumed by the person, and, to the extent not
otherwise included, the guarantee by the person of any debt of any other person.
The amount of any debt outstanding as of any date shall be (1) the accreted
value thereof, in the case of any debt that does not require current payments of
interest, and (2) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other debt.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an event of default.
"Designated senior debt" means:
- any debt under the credit facility and any guarantees thereof; and
- any other senior debt otherwise designated by us, which designation shall
have been approved in writing by the representative under the credit
facility, and the approval shall have been delivered to the trustee, so
long as (1) the credit facility is in effect and (2) we shall not then be
a party to a credit facility or similar arrangement, other than the
credit facility, that provides for loans in an aggregate principal amount
that is greater than the aggregate principal amount of loans to us that
may be made under the credit facility and that are not entered into in
violation of the credit facility, and the representative thereunder, as
"designated senior debt" and, in the case of the designation by us,
certified in an officer's certificate delivered to the trustee; provided
that not less than $5.0 million aggregate principal amount is outstanding
under designated senior debt at the date of the designation and at the
date of determination.
"Disqualified stock" means any capital stock that, by its terms, or by the
terms of any security into which it is convertible or for which it is
exchangeable, or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof on or prior to the date that is 91 days after
the date on which the notes mature.
"Equity interests" means capital stock and all warrants, options or other
rights to acquire capital stock, but excluding any debt security that is
convertible into, or exchangeable for, capital stock.
"Equity sale" shall have the definition set forth under
"-- Redemption -- Optional Redemption After Ordinary Shares Offering."
"Euro" or "E" means the currency adopted by the European Union.
"European Union" means the member nations to the third stage of European
Monetary Union pursuant to the Treaty of Rome establishing the European
Community, as amended by the Treaty on European Union, signed at Maastricht on
February 7, 1992.
"Existing debt" means our debt and that of our restricted subsidiaries,
other than debt under the credit facility, in existence on the date of the
indentures, until the amounts are repaid.
"Existing notes" means our debt under our 8 3/4% Senior Subordinated Notes
due 2007 in an aggregate principal amount of $150.0 million.
"Fair market value" means, with respect to any asset or property, the price
that could be negotiated in an arm's-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither
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of whom is under undue pressure or compulsion to complete the transaction. Fair
market value shall be determined by our board of directors acting reasonably and
in good faith and shall be evidenced by a board resolution of our board of
directors.
"Fixed charge coverage ratio" means, with respect to any person for any
period, the ratio of the consolidated cash flow of the person for the period to
the fixed charges of the person for the period. In the event that we or any of
our restricted subsidiaries incurs, assumes, guarantees or redeems any debt,
other than revolving credit borrowings, or issues preferred stock subsequent to
the commencement of the period for which the fixed charge coverage ratio is
being calculated but prior to the date on which the event for which the
calculation of the fixed charge coverage ratio is made (the "calculation date"),
then the fixed charge coverage ratio shall be calculated giving effect to the
incurrence, assumption, guarantee or redemption of debt, or the issuance or
redemption of preferred stock, as if the same had occurred at the beginning of
the applicable four-quarter reference period.
In addition, for purposes of making the computation referred to above:
(1) acquisitions that have been made by us or any of our restricted
subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to the reference period and on or prior to the calculation date
shall be deemed to have occurred on the first day of the four-quarter
reference period and consolidated cash flow for the reference period shall
be calculated without giving effect to clause (3) of the proviso set forth
in the definition of consolidated net income;
(2) the consolidated cash flow attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
disposed of prior to the calculation date, shall be excluded; and
(3) the fixed charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the calculation date, shall be excluded, but only to the extent
that the obligations giving rise to such fixed charges will not be
obligations of the referent person or any of our subsidiaries following the
calculation date.
"Fixed charges" means, with respect to any person for any period, the sum,
without duplication, of:
- the consolidated interest expense of the person and our restricted
subsidiaries for the period, whether paid or accrued, including
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with
capital lease obligations, imputed interest with respect to attributable
debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net
payments, if any, pursuant to hedging obligations;
- the consolidated interest expense of the person and our restricted
subsidiaries that was capitalized during such period;
- any interest expense on debt of another person that is guaranteed by the
person or one of our restricted subsidiaries or secured by a lien on
assets of the person or one of our restricted subsidiaries, whether or
not such guarantee or lien is called upon; and
- the product of (1) all dividend payments, whether or not in cash, on any
series of preferred stock of the person or any of our restricted
subsidiaries, other than dividend payments on equity interests payable
solely in our equity interests, times (2) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of the person,
expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect.
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"Guarantee" means a guarantee, other than by endorsement of negotiable
instruments for collection in the ordinary course of business including letters
of credit and reimbursement agreements in respect thereof, of all or any part of
any debt.
"Hedging obligations" means, with respect to any person, the obligations of
the person under:
- currency exchange or interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements; and
- other agreements or arrangements designed to protect such person against
fluctuations in interest rates or currency exchange rates.
"Investments" means, with respect to any person, all investments by the
person in other persons, including affiliates, in the forms of loans, including
guarantees of debt or other obligations, advances or capital contributions,
excluding commission, travel and other advances to officers and employees made
in the ordinary course of business, purchases or other acquisitions for
consideration of debt, equity interests or other securities, together with all
items that are or would be classified as investments on a balance sheet prepared
in accordance with GAAP. If we or any of our restricted subsidiaries sells or
otherwise disposes of any equity interests of any of our direct or indirect
restricted subsidiaries such that, after giving effect to the sale or
disposition, the person is no longer our subsidiary, we shall be deemed to have
made an investment on the date of the sale or disposition equal to the fair
market value of the equity interests of the subsidiary not sold or disposed of
in an amount determined as provided in the final paragraph of the covenant
described above under "-- Restricted Payments."
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code, or equivalent statutes, of any jurisdiction.
"Net income" means, with respect to any person, the net income (loss) of
the person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding:
- any gain, but not loss, together with any related provision for taxes on
the gain, but not loss, realized in connection with (1) any asset sale,
including dispositions pursuant to sale and leaseback transactions, or
(2) the disposition of any securities by the person or any of our
subsidiaries or the extinguishment of any debt of the person or any of
our subsidiaries; and
- any extraordinary or nonrecurring gain, but not loss, together with any
related provision for taxes on the extraordinary or nonrecurring gain,
but not loss.
"Net proceeds" means the aggregate cash proceeds received by us or any of
our restricted subsidiaries in respect of any asset sale, including any cash
received upon the sale or other disposition of any non-cash consideration
received in any asset sale, net of:
- the direct costs relating to the asset sale, including legal, accounting
and investment banking fees, and sales commissions, and any relocation
expenses incurred as a result of the asset sale;
- taxes paid or payable as a result of the asset sale, after taking into
account any available tax credits or deductions and any tax sharing
arrangements;
- any reserve for adjustment in respect of the sale price of such asset or
assets established in accordance with GAAP, or against any liabilities
associated with the asset sale, or the assets subject to the asset sale,
and retained by us or any of our restricted subsidiaries; and
- amounts required to be applied to the repayment of debt secured by a lien
on the asset or assets that were the subject of the asset sale, or to the
satisfaction of contractual obligations either existing at the date of
the indentures, or entered into after the date of the indentures in
connection with the payment of deferred purchase price of the properties
or assets that were the subject of the asset sale.
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"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any debt.
"Pari passu debt" shall mean:
- any of our debt that is equal in right of payment to the notes; and
- with respect to any guarantee of the notes, debt which ranks equally in
right of payment to the guaranty.
"Pari passu debt amount" shall have the definition set forth under
"-- Certain Covenants -- Asset Sales."
"Permitted investments" means:
(1) any investment in us or in any of our restricted subsidiaries that
is engaged in the same or a similar line of business as us and our
restricted subsidiaries, or reasonable extensions or expansions thereof;
(2) any investment in cash equivalents;
(3) any investment by us or any of our restricted subsidiaries in a
person, if as a result of the investment:
- the person becomes a restricted subsidiary of us that is engaged in
the same or a similar line of business as us and our restricted
subsidiaries, or reasonable extensions or expansions thereof, or
- the person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of our assets to, or is
liquidated into, us or any of our restricted subsidiaries that is
engaged in the same or a similar line of business as us and our
restricted subsidiaries, or reasonable extensions or expansions
thereof;
(4) any restricted investment made as a result of the receipt of
non-cash consideration from an asset sale that was made pursuant to and in
compliance with the covenant described above under "-- Certain
Covenants -- Asset Sales;"
(5) any acquisition of assets solely in exchange for the issuance of our
equity interests, other than disqualified stock;
(6) investments made in exchange for accounts receivable arising in the
ordinary course of business which have not been collected for 120 days and
which are, in our good faith judgment, substantially impaired, provided
that any such investments in excess of $5.0 million shall be approved by
our board of directors, evidenced by a resolution of our board of directors
set forth in an officers' certificate delivered to the trustee;
(7) investments in permitted joint ventures, and investments in our
suppliers and those of our restricted subsidiaries, in an aggregate amount
which when taken together with all other investments pursuant to this
clause (7) does not exceed the greater of $10.0 million or 10% of total
assets at any one time outstanding;
(8) other investments in any person having an aggregate fair market
value, measured on the date each such investment was made and without
giving effect to subsequent changes in value, when taken together with all
other investments made pursuant to this clause (8) that are at the time
outstanding, not to exceed $25.0 million;
(9) loans to our employees not to exceed $10.0 million at any one time
outstanding;
(10) investments received in connection with any bankruptcy or
reorganization proceeding, or as a result of foreclosure, perfection or
enforcement of any lien or any judgment or settlement of any person in
exchange for or satisfaction of indebtedness or other obligations or other
property received from the
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person, or for other liabilities or obligations of the person created, in
accordance with the terms of the indentures, and
(11) investments in hedging obligations as permitted by the covenant
under "-- Incurrence of Debt and Issuance of Preferred Stock."
For purposes of calculating the aggregate amount of permitted investments
permitted to be outstanding at any one time pursuant to clauses (7) and (8) and
for calculating the amount of restricted investments made pursuant to and in
compliance with the covenant described under "-- Certain Covenants -- Restricted
Payments":
- to the extent the consideration for any such investment consists of our
equity interests, other than disqualified stock, the value of the equity
interests so issued will be ignored in determining the amount of such
investment; and
- the aggregate amount of the investments made by us and our restricted
subsidiaries on or after the date of the indentures will be decreased,
but not below zero, by an amount equal to the lesser of (1) the cash
return of capital to us or our restricted subsidiary with respect to the
investment that is sold for cash or otherwise liquidated or repaid for
cash, less the cost of disposition, including applicable taxes, if any,
and (2) the initial amount of the investment.
"Permitted joint venture" means any person which is, directly or indirectly
through our subsidiaries or otherwise, engaged principally in our principal
business, or a reasonably related or complementary business, and the capital
stock, or securities convertible into capital stock, of which is owned by us and
one or more persons other than us or any of our affiliates.
"Permitted junior securities" means our equity interests or debt securities
that are subordinated to all senior debt, and any debt securities issued in
exchange for senior debt, to substantially the same extent as, or to a greater
extent than, the notes are subordinated to senior debt pursuant to the
indentures.
"Permitted refinancing debt" means any of our debt or any debt of our
restricted subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund, any of our other
debt or the debt of any of our restricted subsidiaries, provided that:
- the principal amount, or accreted value, if applicable, of the permitted
refinancing debt does not exceed the principal amount of or accreted
value, if applicable, plus accrued interest on, the debt so extended,
refinanced, renewed, replaced, defeased or refunded, plus the amount of
reasonable expenses incurred in connection therewith;
- the permitted refinancing debt has a final maturity date later than the
final maturity date of, and has a weighted average life to maturity equal
to or greater than the weighted average life to maturity of, the debt
being extended, refinanced, renewed, replaced, defeased or refunded;
- if the debt being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the notes, the permitted
refinancing debt has a final maturity date later than the final maturity
date of, and is subordinated in right of payment to, the notes on terms
at least as favorable to the holders of notes as those contained in the
documentation governing the debt being extended, refinanced, renewed,
replaced, defeased or refunded; and
- the debt is incurred either by us or by the subsidiary that is the
obligor on the debt being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Purchase money obligations" of a person means debt of the person incurred
in connection with the purchase, construction or improvement of property, plant
or equipment used in the business of the person.
"Receivables program" means, with respect to any person, an agreement or
other arrangement or program providing for the advance of funds to the person
against the pledge, contribution, sale or other transfer
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of encumbrances of receivables program assets of the person or the person and/or
one or more of our restricted subsidiaries.
"Receivables program assets" means all of the following property and
interests in property, whether now existing or existing in the future or
hereafter arising or acquired:
- accounts;
- accounts receivable, general intangibles, instruments, contract rights,
documents and chattel paper, including all rights to payment created by
or arising from sales of goods, leases of goods, or the rendition of
services, no matter how evidenced, whether or not earned by performance;
- all unpaid seller's or lessor's rights, including, without limitation,
rescission, replevin, reclamation and stoppage in transit, relating to
any of the foregoing or arising therefrom;
- all rights to any goods or merchandise represented by any of the
foregoing, including returned or repossessed goods;
- all reserves and credit balances with respect to any such accounts
receivable or account debtors;
- all letters of credit, security or guarantees of any of the foregoing;
- all insurance policies or reports relating to any of the foregoing;
- all collection or deposit accounts relating to any of the foregoing;
- all books and records relating to any of the foregoing;
- all instruments, contract rights, chattel paper, documents and general
intangibles related to any of the foregoing; and
- all proceeds of any of the foregoing.
"Receivables program debt" means, with respect to any person, the
unreturned portion of the amount funded by the investors under a receivables
program of that person.
"Restricted investment" means an investment other than a permitted
investment.
"Restricted subsidiary" of a person means any subsidiary of the referent
person that is not an unrestricted subsidiary. On the date the notes are issued,
all subsidiaries will be restricted subsidiaries.
"Senior debt" means:
- all of our debt outstanding under credit facilities and all hedging
obligations with respect to credit facilities;
- any other debt permitted to be incurred by us under the terms of the
indentures, unless the instrument under which that debt is incurred
expressly provides that it is on a parity with or subordinated in right
of payment to the notes; and
- all obligations with respect to the foregoing.
Notwithstanding anything to the contrary in the foregoing, senior debt will
not include:
- any liability for federal, state, local or other taxes owed or owing by
us;
- any of our debt to any of our restricted subsidiaries or other
affiliates;
- any trade payables; or
- any debt that is incurred in violation of the indentures.
"Significant subsidiary" means any subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as that Regulation is in effect on the date of
this prospectus.
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"Stated maturity" means, with respect to any installment of interest or
principal on any series of debt, the date on which the payment of interest or
principal was scheduled to be paid in the original documentation governing the
debt, and shall not include any contingent obligations to repay, redeem or
repurchase any such interest or principal prior to the date originally scheduled
for the payment thereof.
"Subject country" shall mean any jurisdiction other than the country of
Singapore and the United States of America, or any state thereof or the District
of Columbia.
"Subordinated debt" means any of our debt that is by our terms subordinated
in right of payment to the notes.
"Subsidiary" means, with respect to any person:
- any corporation, association or other business entity of which more than
50% of the total voting power of shares of capital stock entitled,
without regard to the occurrence of any contingency, to vote in the
election of directors, managers or trustees thereof is at the time owned
or controlled, directly or indirectly, by the person or one or more of
the other subsidiaries of that person, or a combination thereof; and
- any partnership (1) the sole general partner or the managing general
partner of which is the person or a subsidiary of the person or (2) the
only general partners of which are the person or one or more subsidiaries
of the person, or any combination thereof.
"Total assets" means, with respect to any date of determination, our total
assets shown on our consolidated balance sheet in accordance with GAAP on the
last day of the fiscal quarter prior to the date of determination.
"Unrestricted subsidiary" means any of our subsidiaries that is designated
by our board of directors as an unrestricted subsidiary in accordance with the
covenant described under "-- Certain Covenants -- Designation of Unrestricted
Subsidiaries."
"Voting stock" of any person means capital stock of the person which
ordinarily has voting power for the election of directors, or persons performing
similar functions, of the person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Weighted average life to maturity" means, when applied to any debt at any
date, the number of years obtained by dividing:
- the sum of the products obtained by multiplying (1) the amount of each
then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (2) the number of years, calculated to the nearest
one-twelfth, that will elapse between such date and the making of such
payment; by
- the then outstanding principal amount of the debt.
"Wholly owned subsidiary" of any person means a subsidiary of the person
all of the outstanding equity interests or other ownership interests of which,
other than directors' qualifying shares, shall at the time be owned by the
person or by one or more wholly owned subsidiaries of the person or by the
person and one or more wholly owned subsidiaries of the person.
PAYMENT OF ADDITIONAL AMOUNTS
The indentures provide that any amounts paid, or caused to be paid, by us
or our assignee, or any of our successors or such assignee as permitted under
the indentures, will be paid without deduction or withholding for any and all
present and future taxes, levies, imposts or other governmental charges
whatsoever imposed, assessed, levied or collected by or for the account of
Singapore, including any political subdivision or taxing authority thereof, or
the jurisdiction of incorporation or residence, other than the United States or
any political subdivision or taxing authority thereof, of any of our assignees
or any of our successors, or any subsidiary, branch, division or other entity
through which we may from time to time direct any payments of principal,
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premium, if any, and interest on the notes or any political subdivision or
taxing authority thereof (an "other jurisdiction"). If deduction or withholding
of any taxes, levies, imposts or other governmental charges ("taxes") shall at
any time be required by Singapore or another jurisdiction, we, our assignee or
any relevant successor will, subject to timely compliance by the holders or
beneficial owners of the relevant notes with any relevant administrative
requirements pay or cause to be paid such additional amounts ("additional
amounts") in respect of principal of, premium, if any, or interest, as may be
necessary in order that the net amounts paid to the holders of the notes or the
trustee under the indentures, as the case may be, pursuant to the indentures,
after the deduction or withholding, shall equal the respective amounts that the
holder would have received if the taxes had not been withheld or deducted.
However, the foregoing shall not apply to:
(1) any present or future taxes which would not have been so imposed,
assessed, levied or collected but for the fact that the holder or
beneficial owner of the relevant note is or has been a domiciliary,
national or resident of, engages or has been engaged in business, maintains
or has maintained a permanent establishment, or is or has been physically
present in Singapore or the other jurisdiction, or otherwise has or has had
some connection with Singapore or the other jurisdiction, other than the
holding or ownership of a note, or the collection of principal of, premium,
if any, and interest on, or the enforcement of, a note;
(2) any present or future taxes which would not have been so imposed,
assessed, levied or collected but for the fact that, where presentation is
required, the relevant note was presented more than thirty days after the
date such payment became due or was provided for, whichever is later;
(3) any present or future taxes which are payable otherwise than by
deduction or withholding on or in respect of the relevant note;
(4) any present or future taxes which would not have been so imposed,
assessed, levied or collected but for the failure to comply, on a
sufficiently timely basis, with any certification, identification or other
reporting requirements concerning the nationality, residence, identity or
connection with Singapore or the other jurisdiction or any other relevant
jurisdiction of the holder or beneficial owner of the relevant note, if
such compliance is required by a statute or regulation of Singapore, the
other jurisdiction or any other relevant jurisdiction, or by a relevant
treaty, as a condition to relief or exemption from such taxes;
(5) any present or future taxes (i) which would not have been so
imposed, assessed, levied or collected if the beneficial owner of the
relevant note had been the holder of such note, or (ii) which, if the
beneficial owner of such note had held the note as the holder of such note,
would have been excluded pursuant to clauses (1) through (4) above; or
(6) any estate, inheritance, gift, sale, transfer, personal property or
similar tax, assessment or other governmental charge.
Notwithstanding the foregoing, the indentures do not provide for the
payment of additional amounts due to any deduction or withholding requirement
imposed by any governmental unit other than Singapore, another jurisdiction or a
taxing authority or political subdivision thereof.
All references herein to payments of principal of, premium, if any, and
interest on the notes shall be deemed to include any applicable additional
amounts that may become payable in respect of the notes.
RESTRICTIONS UPON REINCORPORATING, MERGING OR CONSOLIDATING INTO A SUBJECT
COUNTRY
The indentures provide that we may not consolidate or merge with or into,
whether or not we are the surviving corporation, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of our properties
or assets (a "subject transaction") to another corporation, person or entity
unless it satisfies specified conditions. If the surviving or resulting
transferee, lessee or successor person (the "successor corporation") in a
subject transaction is incorporated in a subject country, then we must satisfy
the conditions
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specified in the clauses below as promptly as practicable, but no later than 60
days following the date of the subject transaction:
- we shall have delivered to the trustee a written opinion, in form and
substance satisfactory to the trustee, of independent legal counsel of
recognized standing, as to the continued validity, binding effect and
enforceability of the indentures and the notes and to the further effect
that the counsel is not aware of any pending change in, or amendment to,
the laws, or any regulations promulgated thereunder, of any subject
country in which the proposed successor corporation is incorporated or
maintains our principal place of business or principal executive office,
or any taxing authority thereof or therein, affecting taxation, or any
pending execution of or amendment to, or any pending change in
application of or official position regarding, any treaty or treaties
affecting taxation to which any subject country is a party, which, in any
such case, would permit us to redeem the notes as described above under
"-- Redemption," it being understood that the counsel may, in rendering
the opinion, rely, to the extent appropriate, on opinions of independent
local counsel of recognized standing and we may instead deliver two or
more opinions of counsel which together cover all of the foregoing
matters;
- we shall have delivered to the trustee a certificate, in form and
substance satisfactory to the trustee, signed by two executive officers
of the successor corporation, as to the continued validity, binding
effect and enforceability of the indentures and the notes; and
- the successor corporation shall, promptly but no later than 60 days
following the date of the subject transaction, consent to the
jurisdiction of the Courts of the State of New York.
In the event of any subject transaction in which the successor corporation
is organized and existing under the laws of a subject country, we will indemnify
and hold harmless the holder of each note from and against any and all present
and future taxes, levies, imposts, charges and withholdings, including estate,
inheritance, capital gains and other similar taxes, and any and all present and
future registration, stamp, issue, documentary or other similar taxes, duties,
fees or charges, imposed, assessed, levied or collected by or for the account of
any jurisdiction or political subdivision or taxing or other governmental agency
or authority thereof or therein on or in respect of the notes, the indentures or
any other agreement relating to calculations to be performed with respect to the
notes or any amount paid or payable under any of the foregoing which, in any
such case, would not have been imposed had the subject transaction not occurred.
EVENTS OF DEFAULT AND REMEDIES
The indentures provide that each of the following constitutes an event of
default:
- default for 30 days in the payment when due of interest on the notes,
whether or not prohibited by the subordination provisions of the
indentures;
- default in payment when due of the principal of, or premium, if any, on
the notes, whether or not prohibited by the subordination provisions of
the indentures;
- our failure to comply with the provisions described under "-- Repurchase
at the Option of Holders Upon Change of Control," "-- Certain
Covenants -- Asset Sales," "-- Certain Covenants -- Restricted Payments,"
"-- Certain Covenants -- Incurrence of Debt and Issuance of Preferred
Stock" or "-- Certain Covenants -- Merger, Consolidation or Sale of
Assets" for 30 days after notice from either the trustee or the holders
of at least 25% in principal amount of the then outstanding dollar notes
or euro notes, as the case may be;
- our failure to comply with any of our other agreements in the indentures
or the notes for 60 days after notice from either the trustee or the
holders of at least 25% in principal amount of the then outstanding
dollar notes or euro notes, as the case may be;
- default under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any debt for
money borrowed by us or any of our restricted subsidiaries, or the
payment of which is guaranteed by us or any of our restricted
subsidiaries, whether the debt or guarantee now exists, or is created
after the date of the indentures, which default (1) is
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caused by a failure to pay principal of or premium, if any, or interest
on such debt prior to the expiration of the grace period provided in the
debt on the date of the default (a "payment default") or (2) results in
the acceleration of the debt prior to our express maturity and, in each
case, the principal amount of the debt, together with the principal
amount of any other such debt the maturity of which has been so
accelerated, aggregates $10.0 million or more;
- our failure or the failure of any of our restricted subsidiaries to pay
final judgments aggregating in excess of $10.0 million, which judgments
are not paid, discharged or stayed for a period of 60 days; and
- specified events of bankruptcy or insolvency with respect to us or any of
our restricted significant subsidiaries.
If any event of default occurs and is continuing, the trustee or the
holders of at least 25% in principal amount of the then outstanding notes may
declare all the notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an event of default arising from some events of
bankruptcy or insolvency, with respect to us, any restricted subsidiary, any
significant subsidiary or any group of restricted subsidiaries that, taken
together, would constitute a significant subsidiary, all outstanding notes will
become due and payable without further action or notice. Holders of the notes
may not enforce the indentures or the notes except as provided in the
indentures. Subject to limitations, holders of a majority in principal amount of
the then outstanding notes may direct the trustee in our exercise of any trust
or power. The trustee may withhold from holders of the notes notice of any
continuing default or event of default, except a default or event of default
relating to the payment of principal or interest, if it determines that
withholding notice is in their interest.
In the case of any event of default occurring by reason of any willful
action, or inaction, taken, or not taken, by us or on our behalf with the
intention of avoiding payment of the premium that we would have had to pay if we
then had elected to redeem the notes on July 1, 2005 pursuant to the optional
redemption provisions of the indentures, an equivalent premium shall also become
and be immediately due and payable to the extent permitted by law upon the
acceleration of the notes. If an event of default occurs prior to July 1, 2005
by reason of any willful action, or inaction, taken, or not taken by us or on
our behalf with the intention of avoiding the prohibition on redemption of the
notes prior to July 1, 2005, then the premium specified in the indentures shall
also become immediately due and payable to the extent permitted by law upon the
acceleration of the notes.
The holders of a majority in aggregate principal amount of the notes then
outstanding by notice to the trustee may on behalf of the holders of all of the
notes waive any existing default or event of default and our consequences under
the indentures except a continuing default or event of default in the payment of
interest on, or the principal of, the notes.
We are required to deliver to the trustee annually a statement regarding
compliance with the indentures, and we are required upon becoming aware of any
default or event of default, to deliver to the trustee a statement specifying
the default or event of default.
All references in this prospectus to payments of principal of, premium, if
any, and interest on the notes shall be deemed to include any applicable
additional amounts that may become payable in respect of the notes.
MODIFICATION OF THE INDENTURES
Except as provided in the next paragraph, either indenture or the
applicable notes may be amended or supplemented with the consent of the holders
of at least a majority in principal amount of the then outstanding notes issued
under the applicable indenture, including consents obtained in connection with a
purchase of, or tender offer or exchange offer for, notes, and any existing
default or compliance with any provision of either indenture or the applicable
notes may be waived with the consent of the holders of a majority in principal
amount of the then outstanding notes, including consents obtained in connection
with a tender offer or exchange offer for notes.
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Without the consent of each holder affected, an amendment or waiver may
not, with respect to any notes held by a non-consenting holder:
- reduce the principal amount of notes whose holders must consent to an
amendment, supplement or waiver;
- reduce the principal of or change the fixed maturity of any note or alter
or waive the provisions with respect to the redemption of the notes,
other than provisions relating to the covenants described above under
"-- Repurchase at the Option of Holders Upon Change of Control;"
- reduce the rate of or change the time for payment of interest, including
default interest, on any note;
- waive a default or event of default in the payment of principal of or
premium, if any, or interest on the notes, except a rescission of
acceleration of the notes by the holders of at least a majority in
aggregate principal amount of the notes and a waiver of the payment
default that resulted from the acceleration;
- make any note payable in money other than that stated in the notes;
- make any change in the provisions of the indentures relating to waivers
of past defaults or the rights of holders of notes to receive payments of
principal of or premium, if any, or interest on the notes;
- waive a redemption payment with respect to any note, other than a payment
required by one of the covenants described above under "-- Repurchase at
the Option of Holders Upon Change of Control;" or
- make any change in the foregoing amendment and waiver provisions.
In addition, any amendment or supplement to the provisions of Article 10 of
the indentures, which relate to subordination, will require the consent of the
holders of at least 75% in aggregate principal amount of the notes then
outstanding if the amendment would negatively affect the rights of holders of
notes.
Notwithstanding the foregoing, without the consent of any holder of notes,
we and the trustee may amend or supplement each indenture or the notes to cure
any ambiguity, defect or inconsistency, to provide for the assumption of our
obligations to holders of notes in the case of a merger or consolidation, to
make any change that would provide any additional rights or benefits to the
holders of notes or that does not negatively affect the legal rights under the
indentures of any such holder, or to comply with requirements of the Commission
in order to effect or maintain the qualification of the indentures under the
Trust Indenture Act.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
We may, at our option and at any time, elect to have all of our obligations
discharged with respect to the outstanding notes ("legal defeasance") except
for:
- the rights of holders of outstanding notes to receive payments in respect
of the principal of, premium, if any, and interest on such notes when
such payments are due from the trust referred to below;
- our obligations with respect to the notes concerning issuing temporary
notes, registration of notes, mutilated, destroyed, lost or stolen notes
and the maintenance of an office or agency for payment and money for
security payments held in trust;
- the rights, powers, trusts, duties and immunities of the trustee, and our
obligations in connection therewith; and
- the legal defeasance provisions of the applicable indenture.
In addition, we may, at our option and at any time, elect to have our
obligations released with respect to specified covenants that are described in
either indenture ("covenant defeasance") and thereafter any omission to comply
with such obligations shall not constitute a default or event of default with
respect to the notes.
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In the event a covenant defeasance occurs, some events, not including
non-payment, bankruptcy, receivership, rehabilitation and insolvency events,
described under "Events of Default and Remedies" will no longer constitute an
event of default with respect to the notes.
In order to exercise either legal defeasance or covenant defeasance:
- we must irrevocably deposit with the trustee, in trust, for the benefit
of the holders of the dollar notes or euro notes, as the case may be, (1)
in the case of the dollar notes, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, and (2) in the case of
the euro notes, cash in euros, some direct non-callable obligations of or
guaranteed by the government of a member of the European Union, or a
combination thereof, in amounts as will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants, to pay
the principal of, premium, if any, and interest on the outstanding notes
on the stated maturity or on the applicable redemption date, as the case
may be, and we must specify whether the notes are being defeased to
maturity or to a particular redemption date;
- in the case of legal defeasance, we shall have delivered to the trustee
an opinion of counsel in the United States reasonably acceptable to the
trustee confirming that (1) we have received from, or there has been
published by, the Internal Revenue Service a ruling or (2) since the date
of the indentures, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon the
opinion of counsel shall confirm that, the holders of the outstanding
notes will not recognize income, gain or loss for federal income tax
purposes as a result of the legal defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if the legal defeasance had not
occurred;
- in the case of covenant defeasance, we shall have delivered to the
trustee an opinion of counsel in the United States reasonably acceptable
to the trustee confirming that the holders of the outstanding notes will
not recognize income, gain or loss for federal income tax purposes as a
result of the covenant defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if the covenant defeasance had not occurred;
- no default or event of default shall have occurred and be continuing on
the date of the deposit, other than a default or event of default
resulting from the borrowing of funds to be applied to the deposit, or
insofar as events of default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the
date of deposit;
- the legal defeasance or covenant defeasance will not result in a breach
or violation of, or constitute a default under, any material agreement or
instrument, other than the indentures, to which we or any of our
subsidiaries is a party or by which we or any of our subsidiaries are
bound;
- we must have delivered to the trustee an opinion of counsel to the effect
that on and after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
- we must deliver to the trustee an officers' certificate stating that the
deposit was not made by us with the intent of preferring the holders of
notes over our other creditors or with the intent of defeating,
hindering, delaying or defrauding our creditors or the creditors of
others; and
- we must deliver to the trustee an officers' certificate and an opinion of
counsel, each stating that all conditions precedent provided for relating
to the legal defeasance or the covenant defeasance have been complied
with.
GOVERNING LAW
Each indenture will provide that such indenture and the notes will be
governed by, and construed in accordance with, the law of the State of New York
but without giving effect to applicable principles of conflicts of law to the
extent that the application of the law of another jurisdiction would be required
thereby.
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CONCERNING THE TRUSTEE
Each indenture contains limitations on the rights of the trustee, should it
become our creditor, to obtain payment of claims in some cases, or to realize on
certain property received in respect of any claim as security or otherwise. The
trustee will be permitted to engage in other transactions; however, if it
acquires any conflicting interest, it must eliminate the conflict within 90
days, apply to the Commission for permission to continue or resign.
The holders of a majority in principal amount of the then outstanding notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the trustee, subject to
exceptions. Each indenture provides that in case an event of default shall
occur, which shall not be cured, the trustee will be required, in the exercise
of our power, to use the degree of care of a prudent man in the conduct of his
own affairs. Subject to such provisions, the trustee will be under no obligation
to exercise any of its rights or powers under such indenture at the request of
any holder of notes, unless the holder shall have offered to the trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
The old notes were offered and sold to qualified institutional buyers in
reliance on Rule 144A of the Securities Act. Old notes were also offered and
sold in offshore transactions in reliance on Regulation S of the Securities Act.
The new notes initially will be represented by one or more notes in
registered global form without interest coupons (collectively, the "new global
notes"). The new global notes which are dollar notes will be deposited upon
issuance with the trustee as custodian for DTC in New York, New York, and
registered in the name of DTC or its nominee, in each case for credit to an
account of a direct or indirect participant in DTC as described below. The new
global notes which are euro notes will be deposited with a common depositary
(the "common depositary") for Morgan Guaranty Trust Company of New York as
operator of the Euroclear System ("Euroclear") and Clearstream Banking S.A.
("Clearstream, Luxembourg," formerly Cedelbank) and registered in the name of a
nominee of the common depositary.
The original notes are currently represented by global notes and the
procedures described in this section currently apply to the original notes.
Except as set forth below, the new global notes which are dollar notes may
be transferred, in whole and not in part, only to another nominee of DTC or a
successor of DTC or its nominee, and the new global notes which are euro notes
may be transferred, in whole and not in part, only to another nominee of the
common depositary or a successor of the common depositary or its nominee. Except
in the limited circumstances described below, owners of beneficial interests in
global notes will not be entitled to receive physical delivery of certificated
notes. Transfers of beneficial interests in the global notes will be subject to
the applicable rules and procedures of DTC, Euroclear and Clearstream,
Luxembourg and their respective direct or indirect participants, which rules and
procedures may change from time to time.
Global Notes
The following description of the operations and procedures of DTC,
Euroclear and Clearstream, Luxembourg are provided solely as a matter of
convenience. These operations and procedures are solely within the control of
the respective settlement systems and are subject to changes by them from time
to time. We take no responsibility for these operations and procedures and urge
investors to contact the systems or their participants directly to discuss these
matters.
Upon the issuance of the dollar global notes, DTC will credit, on our
internal system, the respective principal amount of the individual beneficial
interests represented by such global notes to the accounts of persons who have
accounts with such depositary. Such accounts initially will be designated by or
on behalf of the purchasers. Ownership of beneficial interests in a dollar
global note will be limited to our participants or persons who hold interests
through our participants. Ownership of beneficial interests in the dollar global
notes will be shown on, and the transfer of that ownership will be effected only
through, records maintained
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by DTC or our nominee, with respect to interests of participants, and the
records of participants, with respect to interests of persons other than
participants.
Upon the issuance of the euro global note, the common depositary will
credit, on our internal system, the respective principal amount of the
beneficial interests represented by the global note to the accounts of Euroclear
and Clearstream, Luxembourg. Euroclear and Clearstream, Luxembourg will credit,
on their internal systems, the respective principal amounts of the individual
beneficial interests in the global notes to the accounts of persons who have
accounts with Euroclear and Clearstream, Luxembourg. These accounts initially
will be designated by or on behalf of the initial purchasers. Ownership of
beneficial interests in the euro global note will be limited to participants or
persons who hold interests through participants in Euroclear or Clearstream,
Luxembourg. Ownership of beneficial interests in the euro global note will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by Euroclear and Clearstream, Luxembourg or their nominees,
with respect to interests of participants, and the records of participants, with
respect to interests of persons other than participants.
AS LONG AS DTC OR THE COMMON DEPOSITARY, OR THEIR RESPECTIVE NOMINEE, IS
THE REGISTERED HOLDER OF A GLOBAL NOTE, DTC OR THE COMMON DEPOSITARY OR SUCH
NOMINEE, AS THE CASE MAY BE, WILL BE CONSIDERED THE SOLE OWNER AND HOLDER OF THE
NOTES REPRESENTED BY SUCH GLOBAL NOTES FOR ALL PURPOSES UNDER THE INDENTURES AND
THE NOTES.
Owners of beneficial interests in a global note will not (1) be entitled to
have any portions of such global note registered in their names, (2) receive or
be entitled to receive physical delivery of notes in certificated form, and (3)
be considered the owners or holders of the global note, or any notes represented
thereby, under the indentures or the notes unless:
- in the case of a dollar global note, DTC notifies us that it is unwilling
or unable to continue as depositary for a global note or ceases to be a
"Clearing Agency" registered under the Exchange Act;
- in the case of a euro global note, Euroclear and Clearstream, Luxembourg
notify us they are unwilling or unable to continue as clearing agency;
- in the case of a euro global note, the common depositary notifies us that
it is unwilling or unable to continue as common depositary and a
successor common depositary is not appointed within 120 days of such
notice;
- in the case of any note, an event of default has occurred and is
continuing with respect to such note, described below under
"-- Certificated Notes."
In addition, no beneficial owners of an interest in a global note will be
able to transfer that interest except in accordance with DTC's and/or
Euroclear's and Clearstream, Luxembourg's applicable procedures, in addition to
those under the indentures referred to in this prospectus.
Investors may hold their interests in the dollar global note issued under
Regulation S and the euro global note through Euroclear or Clearstream,
Luxembourg, if they are participant in such systems, or indirectly through
organizations which are participants in such systems. After the expiration of
the restricted period, but not earlier, investors may also hold interests in the
dollar global note issued under Regulation S through organizations other than
Euroclear and Clearstream, Luxembourg that are participants in the DTC system.
Clearstream, Luxembourg and Euroclear will hold interests in the global note
issued under Regulation S on behalf of their participants through customers'
securities accounts in their respective names on the books of the common
depositary. Investors may hold their interests in the restricted dollar global
note directly through DTC, if they are participants in such system, or
indirectly through organizations, including Euroclear and Clearstream,
Luxembourg, which are participants in such system. All interests in a global
note may be subject to the procedures and requirements of DTC and/or Euroclear
and Clearstream, Luxembourg.
Payments of the principal of and interest on dollar global notes will be
made to DTC or our nominee as the registered owner of the dollar global notes.
Payments of the principal of and interest on the euro global notes will be made
to the order of the common depositary or our nominee as the registered owner of
the euro global notes. Neither we, the trustee, the common depositary nor any of
their respective agents will have any
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responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global notes
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
We expect that DTC or its nominee, upon receipt of any payment of principal
or interest in respect of a global note representing any notes held by DTC or
its nominee, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such global note for such notes as shown on the records of DTC or its
nominee. We expect that the common depositary, in its capacity as paying agent,
upon receipt of any payment of principal or interest in respect of a global note
representing any notes held by the common depositary or its nominee, will
immediately credit the accounts of Euroclear and Clearstream, Luxembourg, which
in turn will immediately credit accounts of participants in Euroclear and
Clearstream, Luxembourg with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such global note for
such notes as shown on the records of Euroclear and Clearstream, Luxembourg. We
also expect that payments by participants to owners of beneficial interests in
such global note held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in "street name." Such payments will be
the responsibility of such participants.
Because DTC, Euroclear and Clearstream, Luxembourg can only act on behalf
of their respective participants, who in turn act on behalf of indirect
participants and certain banks, the ability of a holder of a beneficial interest
in global notes to pledge its interest to persons or entities that do not
participate in the DTC, Euroclear or Clearstream, Luxembourg systems, or
otherwise take actions in respect of its interest, may be limited by the lack of
a definitive certificate for its interest. The laws of some countries and some
states in the United States require that certain persons take physical delivery
of securities in certificated form. Consequently, the ability to transfer
beneficial interests in a global note to such persons may be limited. Because
DTC, Euroclear and Clearstream, Luxembourg can act only on behalf of
participants, which in turn, act on behalf of indirect participants and certain
banks, the ability of a person having a beneficial interest in a global note to
pledge its interest to persons or entities that do not participate in the DTC
system or in Euroclear and Clearstream, Luxembourg, as the case may be, or
otherwise take actions in respect of its interest, may be affected by the lack
of a physical certificate evidencing its interest.
Except for trades involving only Euroclear and Clearstream, Luxembourg
participants, interests in the dollar global notes will trade in DTC's Same-Day
Funds Settlement System and secondary market trading activity in such interests
will therefore settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its participants. Transfers of interests in
dollar global notes between participants in DTC will be effected in accordance
with DTC's procedures, and will be settled in same-day funds. Transfers of
interests in euro global notes and dollar global notes between participants in
Euroclear and Clearstream, Luxembourg will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the
notes described above, cross-market transfers of dollar notes between DTC
participants, on the one hand, and Euroclear or Clearstream, Luxembourg
participants, on the other hand, will be effected in DTC in accordance with
DTC's rules on behalf of Euroclear or Clearstream, Luxembourg, as the case may
be, by our respective depositary. However, such crossmarket transactions will
require delivery of instructions to Euroclear or Clearstream, Luxembourg, as the
case may be, by the counterparty in such system in accordance with the rules and
procedures and within the established deadlines (Brussels time) of such system.
Euroclear or Clearstream, Luxembourg, as the case may be, will, if the
transaction meets its settlement requirements, deliver instructions to its
respective depositary to take action to effect final settlement on its behalf by
delivering or receiving interests in the relevant global note in DTC, and making
or receiving payment in accordance with normal procedures for same-day funds
settlement applicable to DTC. Euroclear participants and Clearstream, Luxembourg
participants may not deliver instructions directly to the depositaries for
Euroclear or Clearstream, Luxembourg.
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Because of time zone differences, the securities account of a Euroclear or
Clearstream, Luxembourg participant purchasing an interest in a dollar global
note from a DTC participant will be credited, and any such crediting will be
reported to the relevant Euroclear or Clearstream, Luxembourg participant,
during the securities settlement processing day, which must be a business day
for Euroclear and Clearstream, Luxembourg immediately following the DTC
settlement date. Cash received in Euroclear or Clearstream, Luxembourg as a
result of sales of interests in a global note by or through a Euroclear or
Clearstream, Luxembourg participant to a DTC participant will be received with
value on the DTC settlement date but will be available in the relevant Euroclear
or Clearstream, Luxembourg cash account only as of the business day for
Euroclear or Clearstream, Luxembourg following the DTC settlement date.
DTC, Euroclear and Clearstream, Luxembourg have advised us that they will
take any action permitted to be taken by a holder of notes, including the
presentation of notes for exchange as described below, only at the direction of
one or more participants to whose account with DTC or Euroclear or Clearstream,
Luxembourg, as the case may be, interests in the global notes are credited and
only in respect of such portion of the aggregate principal amount of the notes
as to which such participant or participants has or have given such direction.
However, if there is an event of default under the notes, DTC, Euroclear and
Clearstream, Luxembourg reserve the right to exchange the global notes for
legended notes in certificated form, and to distribute such notes to their
respective participants.
DTC has advised us that it is:
- a limited purpose trust company organized under the laws of the State of
New York;
- a member of the Federal Reserve system;
- a "clearing corporation" within the meaning of the Uniform Commercial
Code; and
- a "Clearing Agency" registered pursuant to the provisions of Section 17A
of the Exchange Act.
DTC was created to hold securities for its participants and facilitate the
clearance and settlement of securities transactions between participants through
electronic book-entry changes in accounts of its participants, thereby
eliminating the need for physical transfer and delivery of certificates.
Participants include securities brokers and dealers, banks, trust companies and
clearing corporations and may include certain other organizations. Indirect
access to the DTC system is available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("indirect
participants").
Euroclear and Clearstream, Luxembourg have advised us that each of
Euroclear and Clearstream, Luxembourg (1) holds securities for their account
holders and (2) facilitates the clearance and settlement of securities
transactions by electronic book-entry transfer between their respective account
holders, thereby eliminating the need for physical movements of certificates and
any risk from lack of simultaneous transfers of securities.
Euroclear and Clearstream, Luxembourg each provide various services,
including safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Euroclear and Clearstream, Luxembourg each also deals with domestic securities
markets in several countries through established depository and custodial
relationships. The respective systems of Euroclear and Clearstream, Luxembourg
have established an electronic bridge between their two systems across which
their respective account holders may settle trades with each other.
Account holders in both Euroclear and Clearstream, Luxembourg are worldwide
financial institutions including underwriters, securities brokers and dealers,
trust companies and clearing corporations. Indirect access to both Euroclear and
Clearstream, Luxembourg is available to other institutions that clear through or
maintain a custodial relationship with an account holder of either system.
An account holder's overall contractual relations with either Euroclear or
Clearstream, Luxembourg are governed by the respective rules and operating
procedures of Euroclear or Clearstream, Luxembourg and any applicable laws. Both
Euroclear and Clearstream, Luxembourg act under such rules and operating
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procedures only on behalf of their respective account holders, and have no
record of or relationship with persons holding through their respective account
holders.
Although DTC, Euroclear and Clearstream, Luxembourg currently follow the
foregoing procedures to facilitate transfers of interests in global notes among
participants of DTC, Euroclear and Clearstream, Luxembourg, they are under no
obligation to do so, and such procedures may be discontinued or modified at any
time. Neither we nor the trustee will have any responsibility for the
performance by DTC, Euroclear or Clearstream, Luxembourg or their respective
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
Certificated Notes
If any depositary is at any time unwilling or unable to continue as a
depositary for notes for the reasons set forth above under "-- Global Notes," we
will issue certificates for such notes in definitive, fully registered,
non-global form without interest coupons in exchange for the dollar global note
or the euro global note, as the case may be. Certificates for notes delivered in
exchange for any global note or beneficial interests in any global note will be
registered in the names, and issued in any approved denominations, requested by
DTC, Euroclear, Clearstream, Luxembourg or the common depositary, in accordance
with their customary procedures.
SAME-DAY SETTLEMENT AND PAYMENT
The indentures require that payments in respect of the notes represented by
the global notes, including principal, premium, if any, interest and additional
interest, if any, be made by wire transfer of immediately available funds to the
accounts specified by the global note holder. With respect to notes in
certificated form, we will make all payments of principal, premium, if any,
interest and additional interest, if any, by wire transfer of immediately
available funds to the accounts specified by the holders thereof or, if no such
account is specified, by mailing a check to each the holder's registered
address. Certificated notes may be surrendered for payment at the offices of the
trustee or, so long as the notes are listed on the Luxembourg Stock Exchange,
the paying agent in Luxembourg on the maturity date of the notes. The notes
represented by the global notes are expected to be eligible to trade in DTC's
Same-Day Firm Settlement System, and any permitted secondary market trading
activity in such notes will, therefore, be required by DTC to be settled in
immediately available funds. We expect that secondary trading in any
certificated notes will also be settled in immediately available funds.
Because of time zone differences, the securities account of Euroclear or
Clearstream, Luxembourg participant purchasing an interest in a global note from
a participant in DTC will be credited, and any such crediting will be reported
to the relevant Euroclear or Clearstream, Luxembourg participant, during the
securities settlement processing day, which must be a business day for Euroclear
and Clearstream, Luxembourg, immediately following the settlement date of DTC.
Cash received in Euroclear or Clearstream, Luxembourg as a result of sales of
interests in a global note by or through a Euroclear or Clearstream, Luxembourg
participant to a participant in DTC will be received with value on the
settlement date of DTC but will be available in the relevant Euroclear or
Clearstream, Luxembourg cash account only as of the business day for Euroclear
or Clearstream, Luxembourg following DTC's settlement date.
NOTICES
Notices to holders of the notes will be made by first class mail, postage
prepaid, to the addresses that appear on the register of us. So long as the euro
notes are listed on the Luxembourg Stock Exchange, notices to holders of the
euro notes will be made by publication in authorized newspapers in Luxembourg.
It is expected that publication will be made in Luxembourg in the Luxembourg
Wort. Any notice will be deemed to have been given on the date of publication
or, if published more than once, on the date of the first publication.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of material U.S. federal income tax
considerations relevant to holders of the notes, including material U.S. federal
income tax consequences of the exchange of the old notes for new notes pursuant
to the exchange offer. This discussion is based upon the Internal Revenue Code
of 1986, as amended (the "Code"), Treasury Regulations, Internal Revenue Service
("IRS") rulings and judicial decisions now in effect, all of which are subject
to change, possibly with retroactive effect, or different interpretations. We
cannot assure that the IRS will not challenge one or more of the tax
consequences described in this section, and we have not obtained, nor do we
intend to obtain, a ruling from the IRS with respect to the U.S. federal income
tax, state tax, local tax, foreign tax or other tax consequences of acquiring or
holding notes.
This discussion does not purport to deal with all aspects of U.S. federal
income taxation that may be relevant to a particular holder in light of the
holder's circumstances (for example, persons subject to the alternative minimum
tax provisions of the Code). Also, it is not intended to be wholly applicable to
all categories of investors, some of which, such as dealers in securities,
banks, insurance companies, tax-exempt (employment, charitable or other)
organizations, and persons holding notes as part of a hedging or conversion
transaction or straddle or persons deemed to sell notes under the constructive
sale provisions of the Code, may be subject to special rules. This discussion
also does not discuss any aspect of state, local or foreign law, or U.S. federal
estate and gift tax law as applicable to U.S. holders, as defined below. In
addition, this discussion is limited to holders who acquired the notes at their
original issue price and who hold the notes as "capital assets" within the
meaning of Section 1221 of the Code.
All holders of the notes are advised to consult their own tax advisors
regarding the federal, state, local and foreign tax consequences of the
purchase, ownership and disposition of the notes.
U.S. HOLDERS OF DOLLAR NOTES
As used in this section, the term "U.S. holder" means the beneficial holder
of a note that for U.S. federal income tax purposes is:
- a citizen or resident alien, as defined in Section 7701(b) of the Code,
of the U.S.;
- a corporation or other entity treated as a corporation formed under the
laws of the U.S. or any political subdivision of the U.S.;
- an estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
- a trust which is subject to the supervision of a court within the U.S.
and the control of a U.S. person as described in Section 7701(a)(30) of
the Code.
A "non-U.S. holder" is any holder of a note other than a U.S. holder.
Interest
Interest on the dollar notes will generally be includible in a U.S.
holder's gross income and taxable as ordinary income for U.S. federal income tax
purposes at the time it is paid or accrued in accordance with the U.S. holder's
regular method of accounting. If additional amounts are paid, the payment will
be taxable as ordinary income in accordance with the U.S. holder's regular
method of tax accounting. Interest and any additional amounts will be income
from sources outside the U.S. for foreign tax credit limitation purposes.
Subject to generally applicable limitations, a U.S. holder may elect to claim
either a deduction or foreign tax credit in computing our U.S. federal income
tax liability for Singapore withholding taxes, if any, withheld from interest
paid on the dollar notes.
Sale, Exchange or Redemption
A U.S. holder will recognize gain or loss for U.S. federal income tax
purposes upon the sale or other disposition of the dollar notes in an amount
equal to the difference between the amount realized (other than
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amounts attributable to accrued but unpaid interest) and the U.S. holder's
adjusted tax basis in the dollar notes. Assuming that the U.S. holder has held
the dollar notes as a capital asset, such gain or loss will be capital gain or
loss and will be long-term capital gain or loss if the dollar notes have been
held for more than one year. Long-term capital gain realized by an individual
U.S. holder is generally subject to a maximum tax rate of 20%. Capital gain or
loss will be short-term capital gain or loss if the dollar notes have been held
for one year or less. Short-term capital gain realized by an individual U.S.
holder is taxed at ordinary income rates. Gain generally will be income from
U.S. sources for foreign tax credit limitation purposes.
Generally, loss is allocated to reduce U.S. source income. However loss, or
a portion of the loss, may be used to offset foreign source income if
attributable to accrued but unpaid interest. If a U.S. holder receives any
foreign currency on the sale, redemption or other taxable disposition of notes,
the holder may recognize ordinary gain or loss due to the currency exchange
fluctuation.
The exchange of the old dollar notes for the new dollar notes pursuant to
the exchange offer should not be treated as an "exchange" for federal income tax
purposes because the new dollar notes should not differ materially in either
kind or extent from the old dollar notes and because the exchange will occur by
operation of the terms of the old dollar notes. A U.S. holder's adjusted tax
basis in the new dollar notes should be the same as the holder's adjusted tax
basis in the old dollar notes. A U.S. holder's holding period for the new dollar
notes received pursuant to the exchange offer should include its holding period
for the old dollar notes surrendered for the new dollar notes.
Information Reporting and Backup Withholding
Payments in respect of dollar notes (that is, interest and proceeds from
the sale of the dollar notes) may be subject to information reporting to the
U.S. Internal Revenue Service and to a 31% U.S. backup withholding tax. Backup
withholding will generally not apply, however, to a holder who furnishes a
correct taxpayer identification number or who is otherwise exempt from backup
withholding (such as a corporation). Generally, a U.S. holder will provide such
certification on Form W-9 (request for Taxpayer Identification Number and
Certification).
We will report to the U.S. holders of dollar notes and to the IRS the
amount of any "reportable payments" for each calendar year and the amount of tax
withheld, if any, with respect to the payments.
U.S. HOLDERS OF EURO NOTES
In addition to the information described above regarding U.S. holders, the
following applies to U.S. holders who hold euro notes.
Interest
The interest on the euro notes generally will be taxable to a U.S. holder
as ordinary income at the time that it is paid or accrued, in accordance with
the holder's method of accounting for federal income tax purposes.
Interest paid on a euro note will be includible in income by a U.S. holder
in an amount equal to the U.S. dollar value of the payment, regardless of
whether the payment is in fact converted to U.S. dollars at that time. The U.S.
dollar value of the payment is determined using:
- the spot rate at the time the payment is received, if the U.S. holder
uses the cash method of accounting for tax purposes; and
- the average exchange rate during the relevant accrual period, or partial
accrual period with respect to interest paid in a subsequent taxable
year, or, if elected, the spot rate (1) on the last day of the relevant
accrual period, or partial accrual period, or (2) on the payment date, if
the date is within five business days of the last day of the accrual
period or taxable year, if a U.S. holder uses the accrual method of
accounting for tax purposes.
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Any differences in the exchange rate between the rate at which interest on
a euro note is included in income and the spot rate on the payment (or
disposition) date for interest will result in exchange gain or loss with respect
to the related amount of interest, and will generally be treated as ordinary
income or loss for U.S. federal income tax purposes. The U.S. dollar value of
interest accrued or received, adjusted for any exchange gain or loss with
respect to the amount accrued, generally will be a U.S. holder's tax basis in
the euros received as interest on a euro note.
Sale, Exchange and Redemption
The cost of a euro note to a U.S. holder will be the U.S. dollar value of
the euro purchase price translated at the spot rate on the date of purchase or,
in some cases, the settlement date. The conversion of U.S. dollars into euros
and the immediate use of those euros to purchase a euro note generally will not
result in a taxable gain or loss for a U.S. holder. A U.S. holder will have a
tax basis in any euro received on the sale, exchange or retirement of a euro
note equal to the U.S. dollar value of the euro on the date of receipt or when
the euro note is disposed of or deemed disposed of.
Upon the sale, exchange, retirement or repayment of a euro note, a U.S.
holder will also recognize exchange gain or loss to the extent that the rate of
exchange on the date of retirement or disposition differs from the rate of
exchange on the date the euro note was acquired, or deemed acquired. Exchange
gain or loss is recognized, however, only to the extent of total gain or loss on
the transaction. For purposes of determining the total gain or loss on the
transaction, a U.S. holder's tax basis in a euro note will generally equal the
U.S. dollar cost of the euro note. Exchange gain or loss recognized by a U.S.
holder will generally be treated as ordinary income or loss.
NON-U.S. HOLDERS
The following discussion is limited to certain U.S. federal income tax
consequences relevant to a non-U.S. holder. Non-U.S. holders should consult
their own tax advisors concerning the state, local, foreign and other tax
consequences of the purchase, ownership and disposition of the notes.
For purposes of U.S. federal income tax on interest discussed below, a
non-U.S. holder includes a non-resident fiduciary of an estate or trust. For
purposes of the following discussion, interest and gain on the sale, exchange or
other disposition of a note will be considered to be "U.S. trade or business
income" if the income or gain is:
- effectively connected with the conduct of a trade or business within the
U.S. of the non-U.S. holder; or
- in the case of some residents of some countries which have an income tax
treaty in force with the U.S., attributable to a permanent establishment
or, in the case of an individual, a fixed base, in the U.S. as the terms
are defined in the applicable treaty.
Interest
Generally any interest paid to a non-U.S. holder of a note that is not U.S.
trade or business income will not be subject to U.S. federal income tax if the
interest qualifies as "portfolio interest." Generally interest on the notes will
qualify as portfolio interest if:
- the non-U.S. holder does not actually or constructively own 10% or more
of the total combined voting power of all our classes of shares entitled
to vote and is not a "controlled foreign corporation" with respect to
which we are a "related person" within the meaning of the appropriate
provisions of the Code;
- the non-U.S. holder, under penalty of perjury, in general certifies that
the non-U.S. holder is not a U.S. person on a Form W-8 and the
certificate provides the non-U.S. holder's name and address;
- the non-U.S. holder is not a bank receiving interest on an extension of
credit made pursuant to a loan agreement made in the ordinary course of
its trade or business; and
- the notes are in registered form.
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The gross amount of payments of interest to a non-U.S. holder that do not
qualify for the portfolio interest exemption and that are not U.S. trade or
business income will be subject to U.S. federal income tax at the rate of 30%,
unless a U.S. income tax treaty applies to reduce or eliminate the tax. Interest
payments that are considered as U.S. trade or business income will be taxed at
regular U.S. income tax rates rather than the 30% gross rate. In the case of a
non-U.S. holder that is a corporation, the U.S. trade or business income may
also be subject to the branch profits tax, which is generally imposed on a
foreign corporation on the actual or deemed repatriation from the United States
of earnings and profits attributable to U.S. trade or business income, at a 30%
rate unless a U.S. income tax treaty applies to reduce or eliminate the tax. To
claim the benefit of a tax treaty or to claim exemption from withholding because
the income is U.S. trade or business income, the non-U.S. holder must provide a
properly executed IRS Form 1001 or IRS Form 4224, or the successor forms as the
IRS designates, as applicable, prior to the payment of interest. Under U.S.
Treasury Regulations that will generally be effective on and after January 1,
2001 (the "withholding regulations"), Forms 1001 and 4224 will be replaced by a
new requirement to provide a properly executed Form W-8. Under the withholding
regulations, a non-U.S. holder may under some circumstances be required to
obtain a U.S. taxpayer identification number and make certain certifications to
us. Special procedures are provided in the withholding regulations for payments
through qualified intermediaries. Prospective investors should consult their tax
advisors regarding the effect, if any, of the withholding regulations.
Sale, Exchange or Redemption of Notes
Except as described below and subject to the discussion concerning backup
withholding, any gain realized by a non-U.S. holder on the sale, exchange or
redemption of a note generally will not be subject to U.S. federal income tax,
unless:
- the gain is U.S. trade or business income;
- subject to exceptions, the non-U.S. holder is an individual who holds the
note as a capital asset and is present in the United States for 183 days
or more in the taxable year of the disposition; or
- the non-U.S. holder is subject to tax pursuant to the provisions of U.S.
tax law applicable to certain U.S. expatriates, including certain former
citizens or residents of the U.S.
The exchange of the old notes for the new notes pursuant to the exchange
offer should not be treated as an "exchange" for federal income tax purposes
because the new notes should not differ materially in either kind or extent from
the old notes and because the exchange will occur by operation of the terms of
the old notes. A U.S. holder's adjusted tax basis in the new notes should be the
same as the holder's adjusted tax basis in the old notes. A U.S. holder's
holding period for the new notes received pursuant to the exchange offer should
include its holding period for the old notes surrendered for the new notes.
INFORMATION REPORTING AND BACKUP WITHHOLDING
We must report annually to the IRS and to each non-U.S. holder any interest
that is subject to withholding, or that is exempt from U.S. withholding tax
pursuant to a tax treaty, or interest that is exempt from U.S. tax under the
portfolio interest exception or because it is U.S. trade or business income.
Copies of these information returns may also be made available under the
provisions of a specific treaty or agreement to the tax authorities of the
country in which the non-U.S. holder resides. Under some circumstances, we will
have to report to the IRS payments of principal.
Generally, information reporting and backup withholding of U.S. federal
income tax at a rate of 31% may apply to payments made by us or our agent to
non-U.S. holders if the payee fails to make the appropriate certification that
the holder is a non-U.S. person or if we or our paying agent has actual
knowledge that the payee is a U.S. person.
The payment of the proceeds from the disposition of notes to or through a
U.S. office of a U.S. or foreign broker will be subject to information reporting
and backup withholding unless the owner provides certification as to its
non-U.S. holder status under penalty of perjury or otherwise establishes an
exemption, provided that the broker does not have actual knowledge that the
holder is a U.S. person or that the conditions of any other
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exemption are not, in fact, satisfied. The proceeds of the disposition by a
non-U.S. holder of the notes to or through a foreign office of a broker will
generally not be subject to backup withholding. However, if the broker is a U.S.
person, a controlled foreign corporation for U.S. tax purposes, or a foreign
person 50% or more of whose gross income from all sources for certain periods is
effectively connected with a United States trade or business, information
reporting will apply unless the broker has documentary evidence in its files of
the non-U.S. holder's foreign status and has no actual knowledge to the contrary
or unless the non-U.S. holder otherwise establishes an exemption. Both backup
withholding and information reporting will apply to the proceeds of the
dispositions if the broker has actual knowledge that the payee is a U.S. holder.
The withholding regulations alter the foregoing rules in some respects.
Prospective investors should consult their tax advisors regarding the effect, if
any, of the withholding regulations.
Any amounts withheld under the backup withholding rules from a payment to a
non-U.S. holder will be allowed as a refund or a credit against the non-U.S.
holder's U.S. federal income tax liability, provided that the requisite
procedures for claiming the refund or credit are followed.
THE PRECEDING DISCUSSION OF MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY, EACH
INVESTOR SHOULD CONSULT ITS OWN TAX ADVISERS AS TO PARTICULAR U.S. FEDERAL,
STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES TO IT OF PURCHASING, HOLDING
AND DISPOSING OF THE NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE,
LOCAL OR FOREIGN TAX LAWS, AND OF ANY PROPOSED CHANGES IN APPLICABLE LAWS.
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PLAN OF DISTRIBUTION
We will receive no proceeds in connection with the exchange offer.
Each broker-dealer that receives new notes for its own account in
connection with the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of new notes. This prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of new notes received in exchange for old notes where
the old notes were acquired as a result of market-making activities or other
trading activities. We have agreed that for a period ending upon the earlier of
(1) 180 days after the exchange offer has been completed and (2) the date on
which broker-dealers no longer own any transfer restricted securities, we will
make available and provide promptly upon reasonable request this prospectus as
amended or supplemented, in a form meeting the requirements of the Securities
Act to any broker-dealer for use in connection with any resale.
New notes received by broker-dealers for their own account in the exchange
offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the new notes or a combination of these methods of resale, at market
prices prevailing at the time of resale, at prices related to prevailing market
prices or negotiated prices. Any resale may be made directly to purchasers or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any broker-dealer and/or the purchasers of any
new notes. Any broker-dealer that resells new notes that were received by it for
its own account in the exchange offer and any broker or dealer that participates
in a distribution of new notes may be deemed to be an "underwriter" within the
meaning of the Securities Act, and any profit on any such resale of new notes
and any commissions or concessions received by these persons may be deemed to be
underwriting compensation under the Securities Act. The letters of transmittal
state that by acknowledging that it will deliver, and by delivering, a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. We have agreed to
indemnify broker-dealers against various liabilities, including liabilities
under the Securities Act.
LEGAL MATTERS
The validity of the notes offered by this prospectus will be passed upon on
behalf of Flextronics by Allen & Gledhill, Singapore, and Winthrop, Stimson,
Putnam & Roberts, New York City, New York.
EXPERTS
Our consolidated audited financial statements and our supplemental
consolidated audited financial statements and schedules appearing in our Current
Report (Form 8-K) filed with the SEC on September 20, 2000 have been audited by
Arthur Andersen LLP, independent public accountants, as set forth in their
reports. In those reports, that firm states that with respect to certain
subsidiaries its opinion is based on the reports of other independent public
accountants. The audited financial statements and supporting schedules referred
to above have been included in this prospectus in reliance upon the authority of
those firms as experts in giving said reports.
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AVAILABLE INFORMATION
We are currently subject to the informational requirements of the Exchange
Act, and file reports, proxy statements and other information with the
Commission. These reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at:
<TABLE>
<S> <C> <C>
Room 1024 Suite 1400 13th Floor
450 Fifth Street, N.W Northwest Atrium Center Seven World Trade Center
Judiciary Plaza 500 West Madison Street New York, New York 10048
Washington, D.C. 20549 Chicago, Illinois 60661
</TABLE>
Copies of material can be obtained at prescribed rates from the Public
Reference Section of the Commission at:
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
The Commission maintains a web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The address of the site is
http://www.sec.gov. Our ordinary shares are quoted for trading on the Nasdaq
National Market and reports, proxy statements and other information concerning
us also may be inspected at the offices of the National Association of
Securities Dealers at:
9513 Key West Avenue
Rockville, Maryland 20850
73
<PAGE> 78
$500,000,000
AND
E150,000,000
FLEXTRONICS INTERNATIONAL LTD.
EXCHANGE OFFER FOR ALL OUTSTANDING
$500,000,000 9 7/8% SENIOR SUBORDINATED NOTES DUE 2010
AND
E150,000,000 9 3/4% SENIOR SUBORDINATED NOTES DUE 2010
<PAGE> 79
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Article 155 of the Flextronics articles provides that, subject to the
Singapore Companies Act, every director or other officer shall be entitled to be
indemnified by Flextronics against all liabilities incurred by him in the
execution and discharge of his duties or in relation thereto, including any
liability in defending any proceedings, civil or criminal, which relate to
anything done or omitted or alleged to have been done or omitted by him as an
officer or employee of Flextronics and in which judgment is given in his favor,
or the proceedings otherwise disposed of without finding or admission of any
material breach of duty; in which he is acquitted; or in connection with any
application under any statute for relief from liability for any act or omission
in which relief is granted to him by the court.
In addition, no director or other officer shall be liable for the acts,
receipts, neglects or defaults of any other director or officer, joining in any
receipt or other act for conformity, or for any loss or expense happening to
Flextronics, through the insufficiency or deficiency of title to any property
acquired by order of the directors for Flextronics or for the insufficiency or
deficiency of any security upon which any of the moneys of Flextronics are
invested or for any loss or damage arising from the bankruptcy, insolvency or
tortious act of any person with whom any moneys, securities or effects are
deposited, or any other loss or misfortune which happens in the execution of his
duties, unless the same happens through his own negligence, willful default,
breach of duty or breach of trust.
Section 172 of the Companies Act prohibits a company from indemnifying its
directors or officers against liability which by law would otherwise attach to
them for any negligence, default, breach of duty or breach of trust of which
they may be guilty relating to the company. However, a company is not prohibited
from (a) purchasing and maintaining for any such officer insurance against any
such liability except where the liability arises out of conduct involving
dishonesty or a willful breach of duty, or (b) from indemnifying such officer
against any liability incurred by him in defending any proceedings, whether
civil or criminal, in which judgment is given in his favor or in which he is
acquitted, or in connection with any application in relation to liability in
which relief is granted to him by the court.
Flextronics has entered into indemnification agreements with its officers
and directors. These indemnification agreements provide Flextronics' officers
and directors with indemnification to the maximum extent permitted by the
Companies Act. Flextronics has also obtained a policy of directors' and
officers' liability insurance that will insure directors and officers against
the cost of defense, settlement or payment of a judgment under certain
circumstances which are permitted under the Companies Act.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
2.1 Exchange Agreement dated October 19, 1997 among the
Registrant, Neutronics Electronic Industries Holding A.G.
and the named shareholders of Neutronics Electronic
Industries Holding A.G. Certain schedules have been omitted.
The Registrant agrees to furnish supplementally a copy of
any omitted schedule to the Commission upon request.
(Incorporated by reference to Exhibit 2 of the Registrant's
Current Report on Form 8-K for event reported on October 30,
1997.)
2.2 Agreement and Plan of Merger dated November 22, 1999 among
the Registrant, Slalom Acquisition Corp. and The DII Group,
Inc. Certain schedules have been omitted. The Registrant
agrees to furnish supplementally a copy of any omitted
schedule to the Commission upon request. (Incorporated by
reference to Exhibit 2.1 of the Registrant's Current Report
on Form 8-K for event reported on November 22, 1999.)
</TABLE>
II-1
<PAGE> 80
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
2.3 Agreement and Plan of Reorganization dated July 31, 2000
among the Registrant, Chatham Acquisition Corporation, and
Chatham Technologies, Inc. Certain schedules have been
omitted. The Registrant agrees to furnish supplementally a
copy of any omitted schedule to the Commission upon request.
(Incorporated by reference to Exhibit 2.1 of the
Registrant's Current Report on Form 8-K for the event
reported on September 15, 2000.)
2.4 Merger Agreement dated August 10, 2000 among the Registrant,
JIT Holdings Limited, Goh Thiam Poh Tommie and Goh Mui Teck
William, as amended.*
4.1 Memorandum of Association of the Registrant. (Incorporated
by reference to Exhibit 3.1 of the Registrant's Registration
Statement on Form S-1, No. 33-74622.)
4.2 Articles of Association of the Registrant. (Incorporated by
reference to Exhibit 3.2 of the Registrant's Registration
Statement on Form S-1, No. 33-85842.)
4.3 Indenture dated October 15, 1997 between the Registrant and
State Street Bank and Trust Company of California, N.A., as
trustee. (Incorporated by reference to Exhibit 10.1 of the
Registrant's Current Report on Form 8-K for event reported
on October 15, 1997.)
4.4 Credit Agreement dated April 3, 2000 among the Registrant,
and its subsidiaries designated under the Credit Agreement
as borrowers from time to time, the lenders named in
Schedule I to the Credit Agreement, ABN AMRO Bank N.V. as
agent for the lenders, Fleet National Bank as documentation
agent, Bank of America, National Association and Citicorp
USA, Inc. as managing agents, and The Bank of Nova Scotia as
co-agent. Certain schedules have been omitted. The
Registrant agrees to furnish supplementally a copy of any
omitted schedule to the Commission upon request.
(Incorporated by reference to Exhibit 10.26 of the
Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 2000.)
4.5 Credit Agreement dated as of April 3, 2000 among Flextronics
International USA, Inc., The DII Group, Inc., the lenders
named in Schedule I to the Credit Agreement, ABN AMRO Bank
N.V. as agent for the lenders, Fleet National Bank, as
documentation agent, Bank of America, National Association
and Citicorp USA, Inc. as managing agents, and The Bank of
Nova Scotia as co-agent. Certain schedules have been
omitted. The Registrant agrees to furnish supplementally a
copy of any omitted schedule to the Commission upon request.
(Incorporated by reference to Exhibit 10.27 of the
Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 2000.)
4.6 U.S. Dollar Indenture dated June 29, 2000 between Registrant
and Chase Manhattan Bank and Trust Company, N.A., as
trustee. (Incorporated by reference to Exhibit 4.1 of the
Registrant's Annual Report on Form 10-K for fiscal year
ended March 31, 2000.)
4.7 Euro Indenture dated June 29, 2000 between the Registrant
and Chase Manhattan Bank and Trust Company, N.A., as
trustee. (Incorporated by reference to Exhibit 4.2 of the
Registrant's Annual Report on Form 10-K for fiscal year
ended March 31, 2000.)
5.1 Opinion of Allen & Gledhill with respect to the securities
being registered.+
5.2 Opinion of Winthrop, Stimson, Putnam & Roberts.+
12.1 Statement regarding Computation of Ratios.+
23.1 Consent of Arthur Andersen LLP.+
23.2 Consent of Deloitte & Touche LLP.+
23.3 Consent of Allen & Gledhill (included in Exhibit 5.1).+
23.4 Consent of Winthrop, Stimson, Putnam & Roberts (included in
Exhibit 5.2).+
24.1 Power of Attorney (included in the signature page of this
Registration Statement).+
</TABLE>
II-2
<PAGE> 81
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
25.1 Statement of Eligibility of Trustee relating to the
Registrant's $500,000,000 9 7/8% Senior Subordinated Notes
Due 2010.*
25.2 Statement of Eligibility of Trustee relating to the
Registrant's E150,000,000 9 3/4% Senior Subordinated Notes
Due 2010.*
99.1 Letter of Transmittal for the dollar notes.+
99.2 Letter of Transmittal for the euro notes.+
99.3 Notice of Guaranteed Delivery for the dollar notes.+
99.4 Notice of Guaranteed Delivery for the euro notes.+
</TABLE>
---------------
+ Filed herewith.
* Previously filed.
ITEM 22. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
II-3
<PAGE> 82
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(c) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11 or 13 of this form, within one business day of receipt
of such request, and to send the incorporated documents by first class mail
or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration
statement through the date of responding to the request.
(d) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(e) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-4
<PAGE> 83
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Jose, State of California, on the 17th day of
November, 2000.
FLEXTRONICS INTERNATIONAL LTD.
By: /s/ MICHAEL E. MARKS
------------------------------------
Michael E. Marks
Chairman of the Board,
Chief Executive Officer and
Authorized Representative in
the United States
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons and in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ MICHAEL E. MARKS Chairman of the Board, and November 17, 2000
--------------------------------------------------- Chief Executive Officer
Michael E. Marks (principal executive officer)
/s/ ROBERT R.B. DYKES President, Systems Group and November 17, 2000
--------------------------------------------------- Chief Financial Officer
Robert R.B. Dykes (principal financial
officer)
/s/ THOMAS J. SMACH* Vice President, Finance November 17, 2000
--------------------------------------------------- (principal accounting officer)
Thomas J. Smach
/s/ TSUI SUNG LAM* Director November 17, 2000
---------------------------------------------------
Tsui Sung Lam
/s/ MICHAEL J. MORITZ* Director November 17, 2000
---------------------------------------------------
Michael J. Moritz
/s/ RICHARD L. SHARP* Director November 17, 2000
---------------------------------------------------
Richard L. Sharp
/s/ PATRICK FOLEY* Director November 17, 2000
---------------------------------------------------
Patrick Foley
/s/ CHUEN FAH ALAIN AHKONG* Director November 17, 2000
---------------------------------------------------
Chuen Fah Alain Ahkong
/s/ MICHAEL E. MARKS November 17, 2000
---------------------------------------------------
Michael E. Marks
Attorney-in-fact
</TABLE>
II-5
<PAGE> 84
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
2.1 Exchange Agreement dated October 19, 1997 among the
Registrant, Neutronics Electronic Industries Holding A.G.
and the named shareholders of Neutronics Electronic
Industries Holding A.G. Certain schedules have been omitted.
The Registrant agrees to furnish supplementally a copy of
any omitted schedule to the Commission upon request.
(Incorporated by reference to Exhibit 2 of the Registrant's
Current Report on Form 8-K for event reported on October 30,
1997.)
2.2 Agreement and Plan of Merger dated November 22, 1999 among
the Registrant, Slalom Acquisition Corp. and The DII Group,
Inc. Certain schedules have been omitted. The Registrant
agrees to furnish supplementally a copy of any omitted
schedule to the Commission upon request. (Incorporated by
reference to Exhibit 2.1 of the Registrant's Current Report
on Form 8-K for event reported on November 22, 1999.)
2.3 Agreement and Plan of Reorganization dated July 31, 2000
among the Registrant, Chatham Acquisition Corporation, and
Chatham Technologies, Inc. Certain schedules have been
omitted. The Registrant agrees to furnish supplementally a
copy of any omitted schedule to the Commission upon request.
(Incorporated by reference to Exhibit 2.1 of the
Registrant's Current Report on Form 8-K for the event
reported on September 15, 2000.)
2.4 Merger Agreement dated August 10, 2000 among the Registrant,
JIT Holdings Limited, Goh Thiam Poh Tommie and Goh Mui Teck
William, as amended.*
4.1 Memorandum of Association of the Registrant. (Incorporated
by reference to Exhibit 3.1 of the Registrant's Registration
Statement on Form S-1, No. 33-74622.)
4.2 Articles of Association of the Registrant. (Incorporated by
reference to Exhibit 3.2 of the Registrant's Registration
Statement on Form S-1, No. 33-85842.)
4.3 Indenture dated October 15, 1997 between the Registrant and
State Street Bank and Trust Company of California, N.A., as
trustee. (Incorporated by reference to Exhibit 10.1 of the
Registrant's Current Report on Form 8-K for event reported
on October 15, 1997.)
4.4 Credit Agreement dated April 3, 2000 among the Registrant
and its subsidiaries designated under the Credit Agreement
as borrowers from time to time, the lenders named in
Schedule I to the Credit Agreement, ABN AMRO Bank N.V. as
agent for the lenders, Fleet National Bank as documentation
agent, Bank of America, National Association and Citicorp
USA, Inc. as managing agents, and The Bank of Nova Scotia as
co-agent. Certain schedules have been omitted. The
Registrant agrees to furnish supplementally a copy of any
omitted schedule to the Commission upon request.
(Incorporated by reference to Exhibit 10.26 of the
Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 2000.)
4.5 Credit Agreement dated as of April 3, 2000 among Flextronics
International USA, Inc., The DII Group, Inc., the lenders
named in Schedule I to the Credit Agreement, ABN AMRO Bank
N.V. as agent for the lenders, Fleet National Bank, as
documentation agent, Bank of America, National Association
and Citicorp USA, Inc. as managing agents, and The Bank of
Nova Scotia as co-agent. Certain schedules have been
omitted. The Registrant agrees to furnish supplementally a
copy of any omitted schedule to the Commission upon request.
(Incorporated by reference to Exhibit 10.27 of the
Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 2000.)
4.6 U.S. Dollar Indenture dated June 29, 2000 between the
Registrant and Chase Manhattan Bank and Trust Company, N.A.,
as trustee. (Incorporated by reference to Exhibit 4.1 of the
Registrant's Annual Report on Form 10-K for fiscal year
ended March 31, 2000.)
</TABLE>
<PAGE> 85
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
4.7 Euro Indenture dated June 29, 2000 between the Registrant
and Chase Manhattan Bank and Trust Company, N.A., as
trustee. (Incorporated by reference to Exhibit 4.2 of the
Registrant's Annual Report on Form 10-K for fiscal year
ended March 31, 2000.)
5.1 Opinion of Allen & Gledhill with respect to the securities
being registered.+
5.2 Opinion of Winthrop, Stimson, Putnam & Roberts.+
12.1 Statement regarding Computation of Ratios.+
23.1 Consent of Arthur Andersen LLP.+
23.2 Consent of Deloitte & Touche LLP.+
23.3 Consent of Allen & Gledhill (included in Exhibit 5.1).+
23.4 Consent of Winthrop, Stimson, Putnam & Roberts (included in
Exhibit 5.2).+
24.1 Power of Attorney (included in the signature page of this
Registration Statement).*
25.1 Statement of Eligibility of Trustee relating to the
Registrant's $500,000,000 9 7/8% Senior Subordinated Notes
Due 2010.*
25.2 Statement of Eligibility of Trustee relating to the
Registrant's E150,000,000 9 3/4% Senior Subordinated Notes
due 2010.*
99.1 Letter of Transmittal for the dollar notes.+
99.2 Letter of Transmittal for the euro notes.+
99.3 Notice of Guaranteed Delivery for the dollar notes.+
99.4 Notice of Guaranteed Delivery for the euro notes.+
</TABLE>
---------------
+ Filed herewith.
* Previously filed.
