<PAGE> 1
Filed Pursuant to Rule 424(b)(3)
File No. 333-84221
[SANMINA LOGO]
$350,000,000
4 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES
We issued the notes in a private placement in May 1999. This prospectus
will be used by selling securityholders to resell their notes and the common
stock issuable upon conversion of their notes.
The notes are convertible prior to maturity into common stock at an
initial conversion price of $88.668 per share, subject to adjustment in certain
events. We will pay interest on the notes on May 1 and November 1 of each year,
beginning on November 1, 1999. The notes will mature on May 1, 2004, unless
earlier converted or redeemed.
We may redeem all or a portion of the notes on or after May 6, 2002. In
addition, the holders may require us to repurchase the notes upon a fundamental
change prior to May 1, 2004.
Our common stock is quoted on the Nasdaq National Market System under the
symbol "SANM." On November 2, 1999, the average for the high and low price of
our common stock on the Nasdaq was $91.59375 per share.
-----------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
-----------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus is dated November 4, 1999
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON
THE FRONT OF THIS PROSPECTUS.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where You Can Find More Information......................................... 2
Prospectus Summary.......................................................... 3
Risk Factors................................................................ 5
Use Of Proceeds............................................................. 11
Ratio Of Earnings To Fixed Charges.......................................... 11
Description Of Notes........................................................ 12
Description Of Capital Stock................................................ 18
Certain Federal Income Tax Considerations................................... 20
Selling Securityholders..................................................... 24
Plan Of Distribution........................................................ 26
Legal Matters............................................................... 28
Experts..................................................................... 28
</TABLE>
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the
Commission, in accordance with the Securities Exchange Act of 1934. You may read
and copy our reports, proxy statements and other information filed by us at the
public reference facilities of the Commission at 450 Fifth Street, Judiciary
Plaza, N.W., Washington, D.C. 20549-1004. Copies of such materials can be
obtained at prescribed rates from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549-1004. Please call the
Commission at 1-800-SEC-0330 for further information about the public reference
rooms. Our reports, proxy statements and other information filed with the
Commission are available to the public over the Internet at the Commission's
World Wide Web site at http://www.sec.gov.
The Commission allows us to "incorporate by reference" into this
prospectus the information we filed with the Commission. This means that we can
disclose important information by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus. Information that we file later with the Commission will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made by us with the Commission
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until our offering
is complete.
Annual Report on Form 10-K/A filed on May 3, 1999 for the fiscal year
ended September 30, 1998.
Current Report on Form 8-K/A filed on February 10, 1999.
Current Reports on Form 8-K filed on April 29, 1999 and April 30, 1999.
Quarterly Report on Form 10-Q/A for the fiscal quarter ended January 2,
1998, filed on May 3, 1999.
Quarterly Reports on Form 10-Q for the fiscal quarters ended January 2,
1999 and April 3, 1999.
Our Current Report on Form 8-K filed December 14, 1998.
Our Proxy Statement for our 1999 meeting of stockholders filed December
30, 1998.
-2-
<PAGE> 3
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Elizabeth Foreman
Chief Financial Officer
Sanmina Corporation
355 East Trimble Road
San Jose, California 95131
(408) 954-5500
You should rely only on the information incorporated by reference or
provided in this prospectus or a prospectus supplement or amendment. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume the information in this prospectus or a
prospectus supplement or amendment is accurate as of any date other than the
date on the front of the documents.
PROSPECTUS SUMMARY
Because this is a summary, it may not contain all information that may be
important to you. You should read the entire prospectus, including the
information incorporated by reference and the financial data and related notes,
before making an investment decision. When used in this prospectus, the terms
"we," "our" and "us" refer to Sanmina Corporation and not to the selling
securityholders.
SANMINA CORPORATION
Sanmina is a leading independent provider of customized integrated
electronics manufacturing services, including turnkey electronic assembly and
manufacturing management services, to original equipment manufacturers in the
electronics industry. Sanmina's electronics manufacturing services consist
primarily of the manufacture of complex printed circuit board assemblies using
surface mount and pin-through hole interconnection technologies, the manufacture
of custom designed backplane assemblies, fabrication of complex multi-layered
printed circuit boards, and testing and assembly of completed systems. In
addition to assembly, turnkey manufacturing management also involves procurement
and materials management, as well as consultation on printed circuit board
design and manufacturing. Sanmina, through its Sanmina Cable Systems subsidiary
(formerly known as Golden Eagle Systems), also manufactures custom cable and
wire harness assemblies for electronic industry original equipment
manufacturers.
Surface mount and pin-through hole printed circuit board assemblies are
printed circuit boards on which various electronic components, such as
integrated circuits, capacitors, microprocessors and resistors have been
mounted. These assemblies are key functional elements of many types of
electronic products. Backplane assemblies are large printed circuit boards on
which connectors are mounted to interconnect printed circuit boards, integrated
circuits and other electronic components. Interconnect products manufactured by
Sanmina generally require greater manufacturing expertise and have shorter
delivery cycles than mass produced interconnect products and therefore typically
have higher profit margins.
Sanmina's customers include leading original equipment manufacturers in
the telecommunications, networking (data communications), industrial and medical
instrumentation and high-speed computer systems sectors. Sanmina's assembly
plants are located in Northern California, Richardson, Texas, Manchester, New
Hampshire, Durham, North Carolina, Guntersville, Alabama, Calgary, Canada, and
Dublin, Ireland. Sanmina's printed circuit board fabrication facilities are
located in Northern California, Southern California, and Nashua, New Hampshire.
Sanmina Cable Systems' manufacturing facility is located in Carrollton, Texas.
As a result of Sanmina's November 1998 merger with Altron Inc. ("Altron"),
Sanmina has added new fabrication and assembly plants in the Boston,
Massachusetts area, Northern California, and Richardson,
-3-
<PAGE> 4
Texas. In addition, as a result of Sanmina's recent merger with Telo Electronics
Incorporated ("Telo") and Manu-Tronics, Inc. ("Manu-Tronics"), Sanmina has added
new assembly plants in San Jose, California and Kenosha, Wisconsin.
Sanmina was formed in 1989 to acquire the printed circuit board and
backplane operations of its predecessor company, which has been in the printed
circuit board and backplane business since 1980. Sanmina's principal offices are
located at 355 East Trimble Road, San Jose, California 95131. Sanmina's
telephone number is (408) 954-5500.
RECENT DEVELOPMENTS
In November 1998, Sanmina completed a merger with Altron in a transaction
accounted for as a pooling of interests. In March 1999, Sanmina completed a
merger with Manu-Tronics in a transaction accounted for as a pooling of
interests. As a result of these pooling transactions, Sanmina has restated its
historical results of operations to combine the results of operations of Altron
and Manu-Tronics. The historical financial information presented in this
prospectus gives effect to such restatement.
During the second quarter of fiscal 1999, which ended April 3, 1999,
Sanmina recorded revenues of $281.1 million, an increase of 17% from the
year-earlier quarter. Gross margin for the second quarter of fiscal 1999
increased to 21.9% from 21.2% in the year-earlier quarter and fiscal second
quarter 1999 operating margin increased to 15.5% from 14.2% in the year-earlier
quarter. Net income increased 28% to $28.8 million from $22.6 million in the
year-earlier quarter, and diluted earnings per share increased 18% to $.47 from
$.40 in the year-earlier quarter.
-4-
<PAGE> 5
THE OFFERING
<TABLE>
<S> <C>
SECURITIES OFFERED.......... $350,000,000 principal amount of 4 1/4% convertible
subordinated notes due 2004.
INTEREST.................... 4 1/4% per year. We will pay interest on May 1 and
November 1 of each year, beginning November 1, 1999.
CONVERSION.................. The notes will be convertible into common stock at the
option of the holder at any time prior to maturity at an
initial conversion price of $88.668 per share, subject to
adjustment in certain events.
SUBORDINATION............... The notes are subordinated to all senior indebtedness. As
of January 2, 1999, we had approximately $67.0 million of
senior indebtedness. As of January 2, 1999, our
subsidiaries had approximately $15.5 million of
indebtedness and other liabilities to which the notes were
effectively subordinated. Neither we nor our subsidiaries
are limited from incurring additional debt under the
indenture.
OPTIONAL REDEMPTION......... On or after May 6, 2002, we may redeem the notes at the
redemption prices listed in this prospectus, together with
accrued interest.
FUNDAMENTAL CHANGE.......... You have the right, at your option, in the event of a
fundamental change to require us to redeem your notes at
100% of the principal amount of the notes to be redeemed
plus accrued interest.
SINKING FUND................ None.
USE OF PROCEEDS ............ We will not receive any of the proceeds from the sale
by any selling securityholder of the notes or the underlying
common stock.
</TABLE>
RISK FACTORS
Before you invest in the notes or shares of common stock underlying the
notes, you should be aware of various risks, including those described below.
You should carefully consider these risk factors, together with all of the other
information included or incorporated by reference in this prospectus, before you
decide whether to purchase the notes. The risks set out below are not the only
risks we face.
If any of the following risks occur, our business, financial condition and
results of operations could be materially adversely affected. In such case, the
trading price of the notes and common stock could decline, and you may lose all
or part of your investment.
Keep these risk factors in mind when you read "forward-looking" statements
elsewhere in this prospectus and in the documents incorporated herein by
reference. These are statements that relate to our expectations for future
events and time periods. Generally, the words "anticipate," "expect," "intend"
and similar expressions identify forward-looking statements. Forward-looking
statements involve risks and uncertainties, and future events and circumstances
could differ significantly from those anticipated in the forward-looking
statements.
Sanmina is heavily dependent on the electronics industry. Sanmina's
business is heavily dependent on the health of the electronics industry.
Sanmina's customers are manufacturers in the telecommunications,
-5-
<PAGE> 6
networking (data communications), industrial and medical instrumentation and
high-speed computer systems segments of the electronics industry. These industry
segments, and the electronics industry as a whole, are subject to rapid
technological change and product obsolescence. Sanmina's customers can
discontinue or modify products containing components manufactured by Sanmina.
Such discontinuance or modification could adversely affect Sanmina's results of
operations. The electronics industry is also subject to economic cycles and has
in the past experienced, and is likely in the future to experience, recessionary
periods. A general recession in the electronics industry could have a material
adverse effect on Sanmina's business, financial condition and results of
operations. Sanmina typically does not obtain long-term volume purchase
contracts from its customers and has recently experienced reduced lead times in
customer orders. Customer orders may be canceled and volume levels may be
changed or delayed. In particular, Sanmina experienced certain cancellation and
rescheduling of shipment dates of customer orders during the fourth fiscal
quarter of 1998. The timely replacement of canceled, delayed or reduced
contracts with new business cannot be assured.
Sanmina's results of operations can be affected by a variety of factors.
Sanmina's results of operations have varied and may continue to fluctuate
significantly from period to period, including on a quarterly basis. Sanmina's
operating results are affected by a number of factors. These factors include
timing of orders from major customers, mix of product ordered by and shipped to
major customers, the volume of orders as related to Sanmina's capacity, the
ability of Sanmina to effectively manage inventory and fixed assets, and the
ability of Sanmina to time expenditures in anticipation of future sales.
Sanmina's results are also affected by the mix of products between backplane
assemblies and printed circuit boards. Sanmina's results are also affected by
general economic conditions in the electronics industry. Sanmina's results can
also be significantly influenced by development and introduction of new products
by Sanmina's customers. From time to time, Sanmina experiences changes in the
volume of sales to each of its principal customers, and operating results may be
affected on a period-to-period basis by these changes. Sanmina's customers
generally require short delivery cycles, and a substantial portion of Sanmina's
backlog is typically scheduled for delivery within 120 days. Quarterly sales and
operating results therefore depend in large part on the volume and timing of
bookings received during the quarter, which are difficult to forecast.
Sanmina's backlog also affects its ability to plan production and
inventory levels, which could lead to fluctuations in operating results. In
addition, a significant portion of Sanmina's operating expenses are relatively
fixed in nature and planned expenditures are based in part on anticipated
orders. Any inability to adjust spending quickly enough to compensate for any
revenue shortfall may magnify the adverse impact of such revenue shortfall on
Sanmina's results of operations. Results of operations in any period should not
be considered indicative of the results to be expected for any future period. In
addition, fluctuations in operating results may also result in fluctuations in
the price of Sanmina notes and common stock.
Sanmina experiences customer concentration. A small number of customers
are responsible for a significant portion of Sanmina's net sales. During fiscal
1998 and 1997, sales to Cisco Systems and DSC Communications each accounted for
more than 10% of Sanmina's net sales. In fiscal 1996, sales to DSC
Communications and Alcatel each accounted for more than 10% of Sanmina's net
sales. In addition, during fiscal 1998 and 1997, Sanmina's ten largest customers
accounted for approximately 53% and 43%, respectively, of Sanmina's net sales.
Although there can be no assurance that Sanmina's principal customers will
continue to purchase products and services from Sanmina at current levels, if at
all, Sanmina expects to continue to depend upon its principal customers for a
significant portion of its net sales. Sanmina's customer concentration could
increase or decrease, depending on future customer requirements, which will be
dependent in large part on market conditions in the electronics industry
segments in which Sanmina's customers participate. The loss of one of more major
customers or declines in sales to major customers could have a material adverse
effect on Sanmina's business, financial condition and results of operations.
Sanmina is subject to risks associated with its strategy of acquisitions
and expansions. Sanmina has, for the past several fiscal years, pursued a
strategy of growth. This growth has come in part through acquisitions. These
acquisitions have involved both acquisitions of entire companies, such as the
June 1995
-6-
<PAGE> 7
acquisition of Assembly Solutions in Manchester, New Hampshire, the January 1996
acquisition of Golden Eagle Systems, now known as Sanmina Cable Systems, the
November 1997 merger with Elexsys, the February 1998 acquisition of Pragmatech,
the November 1998 merger with Altron, the December 1998 merger with Telo and the
March 1999 merger with Manu-Tronics. In addition, Sanmina has in other instances
acquired selected assets, principally equipment, inventory and customer
contracts and, in certain cases, facilities or facility leases. Acquisitions of
this nature completed by Sanmina include the November 1996 acquisitions of the
Guntersville, Alabama operations of Comptronix Corporation and certain assets of
the custom manufacturing services division of Lucent Technologies. In addition
to these acquisitions, Sanmina has also grown its operations through internal
expansion, such as the opening of its Richardson, Texas assembly facility, its
Durham, North Carolina assembly facility and its Dublin, Ireland assembly
facility. Acquisitions of companies and businesses and expansion of operations
involves certain risks, including the following:
- the potential inability to successfully integrate acquired operations
and businesses or to realize anticipated synergies, economies of scale
or other value,
- diversion of management's attention,
- difficulties in scaling up production at new sites and coordinating
management of operations at new sites, loss of key employees of
acquired operations.
Accordingly, Sanmina may experience problems in integrating the recently
acquired operations or operations associated with any future acquisition. There
can be no assurance that any recent or future acquisition will result in a
positive contribution to Sanmina's results of operations. Furthermore, there can
be no assurance that Sanmina will realize value from any such acquisition which
equals or exceeds the consideration paid. In particular, the successful
combination of Sanmina and any future acquisition will require substantial
effort from each company, including the integration and coordination of sales
and marketing efforts. The diversion of the attention of management and any
difficulties encountered in the transition process, including, the interruption
of, or a loss of momentum in, the activities of any future acquisition, problems
associated with integration of management information and reporting systems, and
delays in implementation of consolidation plans, could have an adverse impact on
Sanmina's ability to realize the anticipated benefits of any future acquisition.
In addition, there can be no assurance that Sanmina will realize anticipated
strategic and other benefits from expansion of existing operations to new sites.
Any such problems could have a material adverse effect on Sanmina's business,
financial condition and results of operations. In addition, future acquisitions
by Sanmina may result in dilutive issuances of equity securities, the incurrence
of additional debt, large one-time write-offs and the creation of goodwill or
other intangible assets that could result in amortization expense. These factors
could have a material adverse effect on Sanmina's business, financial condition
and results of operations.
Sanmina is subject to competition and technological change. The electronic
interconnect product industry is highly fragmented and it is characterized by
intense competition. Sanmina competes in the technologically advanced segment of
the interconnect product market, which is also highly competitive but is much
less fragmented than the industry as a whole. Sanmina's competitors consist
primarily of larger manufacturers of interconnect products, and some of these
competitors have greater manufacturing and financial resources than Sanmina as
well as greater surface mount assembly capacity. As a participant in the
interconnect industry, Sanmina must continually develop improved manufacturing
processes to accommodate its customers' needs for increasingly complex products.
During periods of recession in the electronics industry, Sanmina's competitive
advantages in the areas of quick turnaround manufacturing and responsive
customer service may be of reduced importance to electronics original equipment
manufacturers, who may become more price sensitive. In addition, captive
interconnect product manufacturers seek orders in the open market to fill excess
capacity, thereby increasing price competition. Sanmina may be at a competitive
-7-
<PAGE> 8
disadvantage with respect to price when compared to manufacturers with lower
cost structures, particularly those with offshore facilities where labor and
other costs are lower.
Environmental matters are a key consideration in Sanmina's business.
Proper waste disposal is a major consideration for printed circuit board
manufacturers because metals and chemicals are used in the manufacturing
process. Water used in the printed circuit board manufacturing process must be
treated to remove metal particles and other contaminants before it can be
discharged into the municipal sanitary sewer system. In addition, although the
electronics assembly process generates significantly less waste water than
printed circuit board fabrication, maintenance of environmental controls is also
important in the electronics assembly process. Each of Sanmina's printed circuit
board and electronics assembly plants has personnel responsible for monitoring
environmental compliance. These individuals report to Sanmina's Director of
Environmental Compliance, who has overall responsibility for environmental
matters. Each plant operates under effluent discharge permits issued by the
appropriate governmental authority. These permits must be renewed periodically
and are subject to revocation in the event of violations of environmental laws.
There can be no assurance that violations will not occur in the future as a
result of human error, equipment failure or other causes. In the event of a
future violation of environmental laws, Sanmina could be held liable for damages
and for the costs of remedial actions and could be also subject to revocation of
effluent discharge permits. Any such revocation could require Sanmina to cease
or limit production at one or more of its facilities, thereby having an adverse
impact on Sanmina's results of operations. Sanmina is also subject to
environmental laws relating to the storage, use and disposal of chemicals, solid
waste and other hazardous materials as well as air quality regulations.
Furthermore, environmental laws could become more stringent over time, and the
costs of compliance with and penalties associated with violation of more
stringent laws could be substantial.
Sanmina is subject to certain environmental contingencies at sites
operated by acquired companies. In November 1997, Sanmina acquired Elexsys
International, Inc. which, by virtue of such acquisition, became a wholly-owned
subsidiary of Sanmina. Several facilities owned or occupied by Elexsys at the
time of the acquisition, or formerly owned or occupied by Elexsys or companies
acquired by Elexsys, had either soil contamination or contamination of
groundwater underneath or near the facility including the following:
contamination was discovered at Elexsys' Irvine, California facility in 1989 and
Elexsys voluntarily installed a groundwater remediation system at the facility
in 1994. The California Regional Water Quality Control Board has requested that
Sanmina extend the investigation of the groundwater contamination at the Irvine
facility to off-site areas. It is unknown what the results of this additional
investigation will be and whether any additional remediation activities will be
required. Sanmina has been required by the California Department of Toxic
Substances Control to undertake investigation of soil and/or groundwater at
certain facilities formerly owned or occupied by a predecessor company to
Elexsys in Mountain View, California. Depending upon the results of this soil
sampling and groundwater testing, Sanmina could be ordered to undertake soil
and/or groundwater cleanup. To date, Sanmina has not been ordered to undertake
any soil or groundwater cleanup activities at the Mountain View facilities, and
does not believe any such activities should be required. Test results received
to date are not sufficient to enable Sanmina to determine whether or not such
cleanup activities are likely to be mandated.
Contamination has also been discovered at other current and former Elexsys
facilities and has been reported to the relevant regulatory agencies. No
remediation or further investigation of such contamination has been required by
regulatory agencies. To date, the cost of the various investigations and the
cost of operating the remediation system at the Irvine facility have not been
material to Sanmina's financial condition. However, in the event Sanmina is
required to undertake additional groundwater or soil cleanup, the costs of such
cleanup are likely to be substantial. Sanmina is currently unable to estimate
the amount of such soil and groundwater cleanup costs because no soil or
groundwater cleanup has been ordered and Sanmina cannot determine from available
test results what remediation activities, if any, are likely to be required.
Sanmina believes, based on the limited information currently available, that the
cost of any groundwater or soil clean-up that may be required would not have a
material adverse effect on Sanmina's business, financial
-8-
<PAGE> 9
condition and results of operations. Nevertheless, the process of remediating
contaminated soil and groundwater is costly, and if Sanmina is required to
undertake substantial remediation activities at one or more of the former
Elexsys facilities, there can be no assurance that the costs of such activities
costs would not have a material adverse effect on Sanmina's business, financial
condition and results of operations.
In November, 1998, Sanmina merged with Altron Incorporated which, by
virtue of such acquisition, became a wholly owned subsidiary of Sanmina. Altron
was advised in 1993 by Olin Corporation that contamination resulting from
activities of prior owners of property owned by Olin Corporation and located
close to the Altron manufacturing plant in Wilmington, Massachusetts, had
migrated under the Altron plant. Olin has assumed full responsibility for any
remediation activities that may be required and has agreed to indemnify and hold
Altron harmless from any and all costs, liabilities, fines, penalties, charges
and expenses arising from and relating to any action or requirement, whether
imposed by statute, ordinance, rule, regulation, order, decree or by general
principles of law to remediate, clean up or abate contamination emanating from
the Olin site. Although Sanmina believes that Olin's assumption of
responsibility will result in no remediation cost to Altron from the
contamination, there can be no assurance that Altron will not be subject to some
costs regarding this matter, but Sanmina does not anticipate that such costs, if
any, will be material to its financial condition.
Sanmina's international operations involve additional risks. Sanmina
opened its first overseas facility, located in Dublin, Ireland, in June 1997. A
number of risks are inherent in international operations and transactions.
International sales and operations may be limited or disrupted by the imposition
of government controls, export license requirements, political instability,
trade restrictions, changes in tariffs, and difficulties in staffing,
coordinating communications among and managing international operations.
Additionally, Sanmina's business, financial condition and results of operations
may be adversely affected by fluctuations in international currency exchange
rates as well as increases in duty rates, difficulties in obtaining export
licenses, constraints on its ability to maintain or increase prices, and
competition. There can be no assurance that Sanmina will realize the anticipated
strategic benefits of its expansion in Ireland or that Sanmina's international
operations will contribute positively to Sanmina's business, financial condition
and results of operations. Furthermore, difficulties encountered in scaling up
production at overseas facilities or in coordinating Sanmina's United States and
international operations, as well as any failure of the international operations
to realize anticipated revenue growth, could, individually or in the aggregate,
have a material adverse effect on Sanmina's business, financial condition and
results of operations.
Sanmina is subject to risks related to Year 2000 problems. Many currently
installed computer systems and software products are unable to distinguish years
beginning with "19" from those beginning with "20." As a result, computer
systems and/or software products used by many companies may need to be upgraded
to comply with such Year 2000 requirements. Sanmina is currently expending
resources to review its products and services, as well as its internal use
software in order to identify and modify those products, services and systems
that are not Year 2000 compliant. Additionally, Sanmina is in the process of
evaluating the need for contingency plans with respect to Year 2000
requirements. The necessity of any contingency plan must be evaluated on a
case-by-case basis and will vary considerably in nature depending on the Year
2000 issue it may need to address. There can be no assurance however, that
Sanmina will be able to solve all potential Year 2000 issues. Sanmina's reliance
on its key suppliers, and therefore on the proper functioning of their
information systems and software, is increasing, and there can be no assurance
that another company's failure to address Year 2000 issues could not have an
adverse effect on Sanmina. Sanmina has initiated formal communications with each
of its significant suppliers and customers to determine the extent to which
Sanmina is vulnerable to those third parties' failure to remediate their own
Year 2000 issues. In particular, in the event a product manufactured by Sanmina
contained Year 2000 problems attributable to a design or product development
flaw, it is likely that sales of such product would be adversely affected, which
would adversely affect Sanmina's manufacturing services revenues attributable to
such product. Such a situation could have a material adverse effect on Sanmina's
business, financial condition and results of operations.
-9-
<PAGE> 10
Sanmina has requested that third party vendors represent their products
and services to be Year 2000 compliant and that they have a program to test for
Year 2000 compliance. Sanmina has received responses from all third party
vendors. Breakdowns in Sanmina's computer systems and applications, such as its
manufacturing application software, its bar-coding systems, and the computer
chips embedded in its plant equipment, as well as other Year 2000 related
problems such as disruptions in the delivery of materials, power, heat or water
to Sanmina's facilities, could prevent Sanmina from being able to manufacture
and ship its products. Sanmina plans to replace or upgrade or otherwise work
around any of its date driven systems that are not Year 2000 compliant.
Sanmina's Year 2000 Project Team has put in place compliance solutions and work
around and intends to complete compliance testing by September 30, 1999. If
Sanmina fails to correct a material Year 2000 problem, its normal business
activities and operations could be interrupted. Such interruptions could
materially and adversely affect Sanmina's results of operations, liquidity and
financial condition. To date, Year 2000 costs are not considered by Sanmina to
be material to its financial condition. Sanmina currently estimates that, in
order to complete Year 2000 compliance, Sanmina will be required to incur
expenditures of approximately $1.7 million. Through January 2, 1999,
approximately $600,000 of this amount had been expended.
The notes are subordinated. The notes are unsecured and subordinated in
right of payment in full to all of Sanmina's existing senior indebtedness. As a
result, in the event of Sanmina's bankruptcy, liquidation or reorganization or
upon acceleration of the notes due to an event of default under the indenture
and in certain other events, Sanmina's assets will be available to pay
obligations on the notes only after all senior indebtedness has been paid in
full. After retiring senior indebtedness, Sanmina may not have sufficient assets
remaining to pay amounts due on any or all of the notes then outstanding.
The indenture does not prohibit or limit Sanmina from incurring senior
indebtedness or incurring other indebtedness and other liabilities. As of
January 2, 1999, Sanmina had approximately $67.0 million of indebtedness
outstanding that would have constituted senior indebtedness, and Sanmina's
subsidiaries had approximately $15.5 million of indebtedness and other
liabilities outstanding to which the notes would have been effectively
subordinated (including trade and other payables). Sanmina anticipates that from
time to time it will incur additional Senior Indebtedness. Sanmina and its
subsidiaries will also from time to time incur other additional indebtedness and
liabilities. See "Description of Notes -- Subordination of Notes."
Sanmina may not be able to redeem the notes upon a fundamental change.
Upon a fundamental change (as defined), each holder of notes will have certain
rights, at the holder's option, to require Sanmina to redeem all or a portion of
such holder's notes. If a fundamental change were to occur, Sanmina may not have
sufficient funds to pay the redemption price for all notes tendered by the
holders. Any future credit agreements or other agreements relating to other
indebtedness (including senior indebtedness) to which Sanmina becomes a party
may restrict or prohibit redemption of the notes. In the event a Fundamental
Change occurs at a time when Sanmina is prohibited from redeeming notes, Sanmina
could seek the consent of its lenders to the redemption of notes or could
attempt to refinance the borrowings that contain such prohibition. If Sanmina
does not obtain such a consent or repay such borrowings, it would remain
prohibited from redeeming notes. In such case, Sanmina's failure to redeem
tendered notes would constitute an event of default under the indenture and may
constitute a default under the terms of other indebtedness that Sanmina may
enter into from time to time. In such circumstances or if the occurrence of a
fundamental change or the triggering of redemption rights as a result of a
fundamental change would constitute an event of default under Sanmina's senior
indebtedness, the subordination provisions in the Indenture would restrict or
prohibit payments to the holders of notes. The term "fundamental change" is
limited to certain specified transactions and may not include other events that
might adversely affect Sanmina's financial condition, nor would the requirement
that Sanmina offer to redeem the Notes upon a fundamental change necessarily
afford holders of
-10-
<PAGE> 11
the notes protection in the event Sanmina engaged in a highly leveraged
transaction, reorganization, merger or similar transaction. See "Description of
Notes -- Redemption at Option of the Holder."
A public market may not develop for the notes. Prior to this offering,
there has been no trading market for the notes. Although the initial purchasers
have advised Sanmina that they currently intend to make a market in the notes,
they are not obligated to do so and may stop such market making at any time
without notice. In addition, such market making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act. Therefore, it is
possible that no market for the notes will develop. Even if a market does
develop, the market may not be maintained. If an active market for the notes
does not develop or is not sustained, the trading price of such notes could be
materially adversely affected.
The notes and the common stock issuable upon conversion of the notes have
not been registered and until so registered, may not be offered or sold except
pursuant to an exemption from, or in a transaction not subject to, registration
under the Securities Act and applicable state securities laws. See "Description
of Notes -- Registration Rights of the Noteholders", "Plan of Distribution" and
"Transfer Restrictions."
Sanmina's notes may not be rated or may receive a lower rating than
anticipated. Sanmina believes it is likely that one or more rating agencies may
rate the notes. If one or more rating agencies assign the notes a rating lower
than expected by investors, the market price of the notes and Sanmina's common
stock would be materially and adversely affected.
Sanmina's stock price may be volatile. The trading price of the Sanmina
Common Stock has been and could in the future be subject to significant
fluctuations in response to variations in quarterly operating results,
developments in the electronics industry, general economic conditions, changes
in securities analysts' recommendations regarding Sanmina's securities and other
factors. In addition, the stock market in recent years has experienced
significant price and volume fluctuations which have affected the market prices
of technology companies and which have often been unrelated to or
disproportionately impacted by the operating performance of such companies.
These broad market fluctuations may adversely affect the market price of
Sanmina's Common Stock.
Sanmina's management will have broad discretion to allocate the proceeds
of this offering. Sanmina expects that the proceeds of this offering will be
used for general corporate purposes including working capital. The proceeds may
also be used to acquire complementary businesses, if appropriate acquisition
opportunities arise. The Company is not currently able to estimate the
allocation of the proceeds among such uses, and the timing and amount of
expenditures will vary depending upon numerous factors. The Company's management
will have broad discretion to allocate the proceeds of this offering and to
determine the timing of expenditures. See "Use of Proceeds."
USE OF PROCEEDS
We will not receive any proceeds from the sale by any selling
securityholder of the notes or the underlying common stock.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods indicated
is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED SEPTEMBER 30, -------------------------
----------------------------------------------- DECEMBER 27, JANUARY 2,
1994 1995 1996 1997 1998 1997 1999
---- ----- ----- ----- ----- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges........... 3.0x 11.0x 10.4x 11.3x 13.3x 12.2x --
</TABLE>
-11-
<PAGE> 12
These computations include us and our consolidated subsidiaries. For these
ratios, "earnings" represents income before taxes plus fixed charges. "Fixed
charges" consists of:
- interest on all indebtedness and amortization of debt issuance costs,
- capitalized interest, and
- an interest expense under operating leases deemed by us to be
representative of the interest factor.
For the three months ended January 2, 1999, earnings were inadequate to
cover fixed charges by $562,000.
DESCRIPTION OF NOTES
The notes are issued under an indenture dated as of May 5, 1999, between
us and Norwest Bank Minnesota, N.A., as trustee. The following summary of
certain provisions of the indenture is not complete. You should look at the
indenture and the form of note that has been filed as an exhibit to this
registration statement.
GENERAL
We issued $350,000,000 of notes in a private placement in May 1999. The
notes are unsecured and are subordinated to our senior indebtedness. The notes
were issued in denominations of $1,000 and multiples of $1,000. The notes mature
on May 1, 2004.
The interest rate on the notes is 4 1/4% per year. We will pay interest on
May 1 and November 1 of each year, beginning on November 1, 1999. Interest is
based on a 360-day year composed of twelve 30-day months. Interest will be paid
to record holders:
- on April 15 in the case of the May 1 interest payment date, and
- on October 15 in the case of the November 1 interest payment date,
subject to certain exceptions if notes are converted or redeemed prior to the
interest payment date.
Payments on the notes will be made at the office of the paying agent. The
paying agent office will initially be an office or agency of the trustee in the
Borough of Manhattan, the City of New York.
CONVERSION OF NOTES
You may convert your note, in whole or in part, into common stock at any
time prior to maturity. However, if we call a note for redemption, a holder may
convert a note only until the close of business on the business day prior to the
redemption date unless we fail to pay the redemption price. If you have
submitted your notes for redemption upon a fundamental change, you may convert
your note only if you withdraw your conversion election.
The initial conversion price is $88.668 per share of common stock, subject
to adjustment as described below. We will not issue fractional shares of common
stock upon conversion of notes. Instead, we will pay cash equal to the market
price of the common stock on the business day prior to the conversion date.
Except as described below, you will not receive any accrued interest or
dividends upon conversion. If you convert your notes during the period from the
record date to the next interest payment date, you will be required to pay us
the interest on conversion unless we have called the notes for redemption on a
redemption date during this time period.
-12-
<PAGE> 13
We will adjust the conversion price if the following events occur:
(1) the issuance of common stock as a dividend or distribution on common
stock;
(2) the issuance of rights or warrants to purchase common stock to all
holders of common stock;
(3) certain subdivisions and combinations of common stock;
(4) distributions of capital stock, other than common stock, or debt
instruments or assets to all holders of common stock, including
securities but excluding the following:
- rights or warrants listed in (2) above;
- dividend or distributions listed in (1) above; and
- cash distributions listed in (5) below;
(5) distributions of cash, excluding any quarterly cash dividends on the
common stock if the quarterly distribution does not exceed the
greater of:
- the cash dividend per share from the previous quarter not
requiring an adjustment under this provision; or
- 3.75% of the sale price of common stock during the ten trading
days prior to the dividend declaration date;
(6) payment on a tender offer or exchange offer by us or our subsidiary
for the common stock if the payment exceeds the current market price
of the common stock on the trading day next succeeding the last date
for tenders or exchanges; and
(7) payment on certain tender offers or exchange offers by a third party
if, as of the closing date of the offer, the board of directors does
not recommend rejection of the offer. We will make this adjustment
only if:
- the tender offer or exchange offer increases the share
ownership of the person making the offer to more than 25% of
our common stock; and
- the cash and other consideration paid exceeds the current
market price of the common stock.
We will not make this adjustment if as of closing we will engage in a
merger, consolidation or sale of all or substantially all of our assets.
In the event of:
- any reclassification of our common stock; or
- a consolidation, merger or combination involving Sanmina; or
- a sale or conveyance to another person of our property and assets as an
entirety or substantially as an entirety
in which common stock holders would be entitled to receive stock, other
securities or property or assets or cash with respect to their common stock, the
noteholders will generally be allowed to convert their notes into
-13-
<PAGE> 14
the same type of consideration received by common stock holders immediately
prior to one of the types of events.
Holders may as a result of certain types of conversion price adjustments
be subject to U.S. income tax. See "Certain Federal Income Tax Considerations."
We may reduce the conversion price for a period of at least 20 days. If we
reduce the conversion price, we must give you at least 15 days' prior notice. We
may, at our option, also reduce the conversion price to reduce any income tax to
holders of common stock resulting from any dividend or distribution of stock.
See "Certain Federal Income Tax Considerations."
We will not make any adjustment in the conversion price unless the
adjustment would require a change of at least 1% in the conversion price. We
will carry forward any adjustments less than 1% of the conversion price.
OPTIONAL REDEMPTION BY SANMINA CORPORATION
No sinking fund exists for the notes. On or after May 6, 2002, we may
redeem the notes, in whole or in part, on at least 30 days' notice at the
following redemption prices:
- if redeemed from May 6, 2002 through April 30, 2003, at 101.70% of the
principal amount;
- if redeemed from May 1, 2003 through April 30, 2004, at 100.85% of the
principal amount.
Holders in each case will receive accrued interest to, but excluding, the
redemption date. If the redemption date is an interest payment date, then
interest shall be paid to the record holder.
If we redeem less than all of the notes, the trustee will select the notes
to be redeemed in multiples of $1,000:
- by lot,
- pro rata, or
- by another method the trustee considers fair and appropriate.
If a portion of your notes is selected for partial redemption and you
convert a portion of your notes, the converted portion shall be deemed to be the
portion selected for redemption.
We may not give notice of any redemption of notes if we have defaulted in
payment of interest on the notes and there is an event of default.
HOLDERS MAY REQUIRE US TO REDEEM THE NOTES IN THE EVENT OF A FUNDAMENTAL CHANGE
If a fundamental change occurs prior to May 1, 2004, you may require us to
redeem, in whole or in part, your notes 30 days after our notice of the
fundamental change. We will redeem the notes at 100% of the principal amount
plus accrued interest to, but excluding, the repurchase date. If the repurchase
date is an interest payment date, then interest shall be paid to the
recordholder.
We will mail to all record holders a notice within 10 days after the
occurrence of a fundamental change. We will also deliver a notice to the
trustee. You must deliver to us, on or before the 30th day after the
-14-
<PAGE> 15
date of our fundamental change notice, your redemption notice together with the
notes duly endorsed for transfer.
We will comply with any applicable provisions of Rule l3e-4 and any other
tender offer rules under the Exchange Act in the event of a fundamental change.
A "fundamental change" is any transaction or event in which substantially
all of our common stock is exchanged for, converted into, acquired for or
constitutes solely the right to receive consideration that is not substantially
all common stock listed, or that will be listed, on:
- a U.S. national securities exchange;
- approved for quotation on the Nasdaq National Market; or
- any similar U.S. system of automated dissemination of quotations of
securities prices.
SUBORDINATION OF NOTES
The notes are subordinated to the prior payment in full of all of our
senior indebtedness.
If we dissolve, wind up, liquidate or reorganize our business, we will
repay the senior indebtedness before we make any payments on the notes. If the
notes are accelerated because of an event of default, we will first pay the
holders of any senior indebtedness in full before we can pay the noteholders.
The indenture requires us to promptly notify the holders of senior indebtedness
if payment of the notes accelerates because of an event of default.
We may not make any payment on the notes if there is:
- a default in the payment of senior indebtedness occurs,
- any other default of designated senior indebtedness that permits the
holders of designated senior indebtedness to accelerate its maturity
and the trustee receives a payment blockage notice, or
- any judicial proceeding shall be pending with respect to any payment
default or non-payment default.
We may resume payments on the notes:
- in case of a payment default, upon the date on which such default is
cured or waived or ceases to exist, and
- in the case of a non-payment default, the earlier of:
- the date on which the non-payment default is cured or waived or ceases
to exist, or
- 179 days after the date on which the payment blockage notice is
received.
No new period of payment blockage may be commenced unless 365 days have
passed since the initial effectiveness of the immediately prior payment blockage
notice. No non-payment default that existed on the date of delivery of any
payment blockage notice to the trustee shall be the basis for any later payment
blockage notice.
-15-
<PAGE> 16
If the trustee or any holder of the notes receives any payment or
distribution, then he or she must hold the payment or distribution in trust for
the benefit of holders of senior indebtedness to pay all senior indebtedness.
In the event of our bankruptcy, dissolution or reorganization, holders of
senior indebtedness may receive more, ratably, and holders of the notes may
receive less, ratably, than our other creditors.
We will pay the trustee reasonable compensation and will indemnify the
trustee against certain losses, liabilities or expenses it may incur in
connection with its duties. The trustee's claims for such payments will
generally be senior to the claims of the holders of the notes.
EVENTS OF DEFAULT; NOTICE AND WAIVER
An event of default on the notes includes any of the following:
- default in payment of the principal or premium;
- default for 30 days in payment of interest;
- default for 60 days after notice in the observance or performance of
any other covenants in the indenture; or
- certain events involving bankruptcy, insolvency or reorganization of us
or any of our significant subsidiaries.
The trustee may withhold notice to the holders of the notes of any
default, except defaults in payment of principal, premium or interest on the
notes. However, the trustee must consider it to be in the interest of the
holders of the notes to withhold this notice.
If an event of default occurs and continues, the trustee or the holders of
at least 25% in principal amount of the notes may declare the principal,
premium, and accrued interest on the notes to be immediately due and payable. If
Sanmina experiences bankruptcy or insolvency, the principal, premium and accrued
interest on the notes automatically become due and payable.
If we cure all defaults other than nonpayment defaults and meet certain
other conditions, the holders of a majority of the principal amount of the notes
may cancel any acceleration with respect to the notes and waive past defaults.
Payments of principal, premium, or interest on the notes that are not made
when due will accrue interest at the annual rate of 4 1/4% from the required
payment date.
The holders of a majority of the notes will have the right to direct the
time, method and place of any proceedings for any remedy available to the
trustee, subject to limitations specified in the indenture.
No holder of the notes may pursue any remedy under the indenture, except
in the case of a default in the payment of principal, premium or interest on the
notes, unless:
- the holder has given the trustee written notice of an event of default;
- the holders of at least 25% in principal amount of the notes make a
written request, and offer reasonable indemnity, to the trustee to
pursue the remedy;
-16-
<PAGE> 17
- the trustee does not receive an inconsistent direction from the holders
of a majority in principal amount of the notes; and
- the trustee fails to comply with the request within 60 days after
receipt.
MODIFICATION OF THE INDENTURE
With the consent of the holders of a majority in principal amount of the
notes, we may modify the indenture or enter into any supplemental indenture that
shall:
- extend the fixed maturity of any note;
- reduce the rate or extend the time for payment of interest of any note;
- reduce the principal amount or premium of any note;
- reduce any amount payable upon redemption of any note;
- adversely change our obligation to redeem any note upon a fundamental
change;
- impair the right of a holder to institute suit for payment on the note;
- change the currency in which any note is payable;
- impair the right to convert the notes;
- adversely modify the subordination provisions of the indenture; or
- reduce the percentage of notes required for consent to any modification
of the indenture.
The indenture also permits certain types of modifications of its terms without
the consent of the holders of the notes.
DEFINITIONS USED IN THE DESCRIPTION OF NOTES
"Senior indebtedness" means the principal, premium and interest on, rent
payable under, and any other amounts due on all of our current and future
indebtedness. However, senior indebtedness does not include:
- indebtedness evidenced by the notes,
- our indebtedness to any of our majority-owned subsidiaries if the
indebtedness is pledged by the subsidiary as security for any senior
indebtedness,
- our accounts payable to trade creditors, and
- any particular indebtedness in which the instrument evidencing the
indebtedness provides that the indebtedness shall not be senior in
right of payment to, or is subordinated to, the notes.
The indenture defines "indebtedness" as:
- all obligations of any person:
-17-
<PAGE> 18
- for borrowed money,
- evidenced by a note, debenture, bond or written instrument,
- leases of the person required to be accounted for as capitalized lease
obligations on the balance sheet of the person and all obligations and
other liabilities under any lease or related document in connection
with the lease of real property that provides that the person is
contractually obligated to purchase or cause a third party to purchase
the leased property, or
- letters of credit, local guarantees or bankers' acceptances;
- all obligation of others of the type described in the above clause or
clauses below guaranteed in any manner by the person;
- all obligations secured by a lien affecting title or resulting in a
lien to which the property of such person is subject;
- all obligations of any person under interest rate and currency swap
agreements, cap, floor and collar agreements, spot and forward
contracts and similar agreements and arrangements; and
- all obligations, contingent or otherwise, of any person under any and
all deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any liability described above.
INFORMATION CONCERNING THE TRUSTEE
We have appointed Norwest Bank Minnesota, N.A., as trustee under the
indenture, paying agent, conversion agent, note registrar and custodian for the
notes. The trustee or its affiliates may provide banking and other services to
us in the ordinary course of their business.
Norwest Bank Minnesota, N.A., is the transfer agent for the common stock.
The indenture contains certain limitations on the rights of the trustee, as long
as it or any of its affiliates remains our creditor, to obtain payment of claims
in certain cases or to realize on certain property received on any claim as
security or otherwise. The trustee and its affiliates will be permitted to
engage in other transactions with us. However, if the trustee or any affiliate
continues to have any conflicting interest and a default occurs with respect to
the notes, the trustee must eliminate such conflict or resign.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 200,000,000 shares of common
stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par
value $0.01 per share.
COMMON STOCK. As of November 2, 1999, there were 58,891,231 shares of
common stock outstanding held by approximately 837 holders of record. Each
holder of common stock is entitled to one vote per share on all matters to be
voted upon by the stockholders. Holders of common stock are entitled to receive
dividends declared by the board of directors, out of funds legally available for
the payment of dividends subject to preferences that may be applicable to the
holders of preferred stock. Upon liquidation, dissolution or winding up of our
business, the holders of common stock are entitled to share equally in all
assets available for distribution after payment of liabilities, subject to prior
distribution rights of preferred stock. The holders of common stock have no
preemptive or conversion rights or other subscription rights. No redemption or
sinking fund provisions apply to the common stock.
All outstanding shares of common stock are fully paid and nonassessable.
-18-
<PAGE> 19
DELAWARE GENERAL CORPORATION LAW SECTION 203
We are a Delaware corporation subject to Section 203 of the Delaware
General Corporation Law, an anti-takeover law. In general, Section 203 prohibits
a publicly held Delaware corporation from engaging in a "business combination"
transaction with an "interested stockholder" for a period of three years after
the person became an interested stockholder, unless the business combination or
the transaction in which the person became an interested stockholder is approved
in the manner described below.
The Section 203 restrictions do not apply if:
(1) the business combination or transaction is approved by our board of
directors before the date the interested stockholder obtained the
status;
(2) upon consummation of the transaction which resulted in the
stockholder obtaining the status, the stockholder owned at least 85%
of the shares of stock entitled to vote in the election of
directors, the "voting stock". The 85% calculation does not include
those shares:
- owned by directors who are also officers of the target
corporation; and
- held by employee stock plans which do not permit employees to
decide confidentially whether to accept a tender or exchange
offer; or
- on or after the date the interested stockholder obtained its
status, the business combination is approved by our board of
directors and at a stockholder meeting by the affirmative vote of
at least 66 2/3% of the outstanding voting stock which is not
owned by the interested stockholder.
Generally, a "business combination" includes a merger, asset sale, or
other transaction resulting in a financial benefit to the interested
stockholder. Generally, an "interested stockholder" is a person who, together
with affiliates and associates, owns, or within three years prior to the
determination of interested stockholder status, did own, 15% or more of a
corporation's voting stock. Section 203 may prohibit or delay mergers or other
takeover or change in control attempts with respect to Sanmina Corporation. As a
result, Section 203 may discourage attempts to acquire us even though such
transaction may offer our stockholders the opportunity to sell their stock at a
price above the prevailing market price.
CHARTER AND BYLAW PROVISIONS
Our charter and bylaws include provisions that may have the effect of
discouraging, delaying or preventing a change in control or an unsolicited
acquisition proposal that a stockholder might consider favorable, including a
proposal that might result in the payment of a premium over the market price for
the shares held by stockholders as follows:
- our board has the power to establish the rights, preferences and
privileges of authorized and unissued shares;
- our charter limits the liability of our directors, in their capacity as
directors but not in their capacity as officers, to Sanmina or its
stockholders to the fullest extent permitted by Delaware law.
INDEMNIFICATION ARRANGEMENTS
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officer. Such indemnification covers our directors and
-19-
<PAGE> 20
officers under certain circumstances for liabilities arising under the
Securities Act of 1933, as amended, including reimbursement for expenses.
Article X of Sanmina's Bylaws provide for indemnification of our directors and
officers, employees and other agents to the maximum extent permitted by law.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons, we have been
advised that in the opinion of the Commission, such indemnification is against
public policy, as stated by the Commission, and is, therefore, unenforceable.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is Norwest Bank
Minnesota, N.A.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
This section summarizes certain U.S. federal income tax considerations
relating to the purchase, ownership and disposition of the notes and of common
stock into which you may convert the notes. This is not a complete analysis of
all the potential tax consequences that you may need to consider before
investing. This summary is based on current laws, regulations, rulings and
decisions. All of these may change, possibly with retroactive effect. This
summary applies only to beneficial owners who hold notes and common stock as
"capital assets". This discussion does not address tax considerations applicable
to an investor's particular circumstances or to investors that may be subject to
special tax rules, such as banks, holders subject to the alternative minimum
tax, tax-exempt organizations, insurance companies, non-U.S. persons or entities
except to the extent specifically set forth below, dealers in securities or
currencies, persons that will hold notes as a position in a hedging transaction,
"straddle" or "conversion transaction" for tax purposes or persons deemed to
sell notes or common stock under the constructive sale provisions of the
Internal Revenue Code of 1986, as amended (the "Code"). This summary also does
not discuss the tax considerations applicable to subsequent purchasers of the
notes. We have not sought any ruling from the Internal Revenue Service (the
"IRS") or an opinion of counsel with respect to the statements made and the
conclusions reached in the following summary. We cannot guarantee that the IRS
will agree with these statements and conclusions. This summary does not consider
the effect of the federal estate or gift tax laws or the tax laws, except as set
forth below with respect to non-U.S. holders, of any applicable foreign, state,
local or other jurisdiction.
BEFORE YOU INVEST IN THESE SECURITIES, YOU SHOULD CONSULT YOUR OWN TAX
ADVISORS TO DETERMINE THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX
LAWS TO YOUR PARTICULAR SITUATION AND FOR INFORMATION ABOUT ANY TAX CONSEQUENCES
ARISING UNDER THE FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY
STATE, LOCAL, OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
U.S. HOLDERS
Taxation of Interest
You generally must include interest on the notes in your income as
ordinary income at the time you receive or accrue interest, depending on your
method of accounting for U.S. federal income tax purposes. Under Treasury
Regulations, the possibility of an additional payment under a note will not
affect the amount of interest income you recognize if the likelihood of the
payment, as of the date the notes are issued, is remote. We must pay liquidated
damages to holders of the notes in certain circumstances. In addition, a holder
may require us to redeem any of his notes in the event of a fundamental change.
We believe that the likelihood of a liquidated damages payment with respect to
the notes is remote. Therefore, we do not intend to treat the potential payment
as part of the yield to maturity of any note. Similarly, we intend to take the
position that a "fundamental change" is remote under the Treasury Regulations,
and likewise do not intend to treat the possibility of a "fundamental change" as
affecting the yield to maturity of any note. In the event
-20-
<PAGE> 21
either contingency occurs, it would affect the amount and timing of the income
that must be recognized by a U.S. holder of notes. There can be no assurance
that the IRS will agree with such positions.
Sale, Exchange or Redemption of the Notes
Except as described below under "Conversion of the Notes", upon the sale,
exchange or redemption of a note, you generally will recognize capital gain or
loss equal to the difference between (i) the amount of cash proceeds and the
fair market value of any property you receive on the sale, exchange or
redemption, except any portion that is accrued interest income, which is taxable
as ordinary income, and (ii) your adjusted tax basis in the note. Your adjusted
tax basis generally will equal the cost of the note to you. This capital gain or
loss will be long-term if you have held the note for more than one year.
Long-term capital gains recognized by certain non-corporate U.S. holders,
including individuals, will generally taxed at your maximum rate of tax of 20%.
The deductibility of capital losses is subject to limitations.
Conversion of the Notes
You generally will not recognize any income, gain or loss upon conversion
of a note into common stock except to the extent the common stock is considered
attributable to accrued interest not previously included in income or with
respect to cash you receive instead of a fractional share of common stock. Your
tax basis in the common stock received on conversion of a note will be the same
as your adjusted tax basis in the note at the time of conversion, reduced by any
basis allocable to a fractional share interest for which you receive cash. Your
holding period for the common stock received on conversion will generally
include the holding period of the note converted. However, your tax basis in
shares of common stock considered attributable to accrued interest generally
will equal the amount of such accrued interest included in income. The holding
period for such shares shall begin on the date of conversion.
You should treat cash you receive instead of a fractional share of common
stock upon conversion as a payment in exchange for the fractional share of
common stock. This generally will result in capital gain or loss, measured by
the difference between the cash received for the fractional share and your
adjusted tax basis in the fractional share.
Dividends
Distributions made on the common stock after a conversion generally will
be included in your income as ordinary dividend income to the extent of our
current or accumulated earnings and profits. Distributions in excess of our
current and accumulated earnings and profits will be treated as a return of
capital to the extent of your basis in the common stock and thereafter as
capital gain.
Constructive Dividends
The conversion price of our notes may change under certain circumstances.
In such a case, you may be treated as having received constructive
distributions. Adjustments to the conversion price made pursuant to a reasonable
adjustment formula which has the effect of preventing the dilution of the
interest of the holders of the debt instruments, however, will generally not
result in a constructive distribution of stock. Certain of the possible
adjustments provided in the notes will not qualify as being pursuant to a
reasonable adjustment formula. If such adjustments are made, you will be deemed
to have received constructive distributions taxable as dividends to the extent
of our current and accumulated earnings and profits even though you did not
receive any cash or property. In certain circumstances, the failure to provide
for such an adjustment may result in taxable dividend income to you.
-21-
<PAGE> 22
Sale of Common Stock
On the sale or exchange of common stock, you generally will recognize
capital gain or loss equal to the difference between (i) the amount of cash and
the fair market value of any property received on the sale or exchange and (ii)
your adjusted tax basis in the common stock. This capital gain or loss will be
long-term if your holding period in common stock is more than one year.
Long-term capital gains for certain non-corporate taxpayers, including
individuals, are taxed at a maximum rate of 20%. A U.S. Holder's basis and
holding period in common stock received upon conversion of a note are determined
as discussed above under "Conversion of the Notes." The deductibility of capital
losses is subject to limitations.
SPECIAL TAX RULES APPLICABLE TO NON-U.S. HOLDERS
In general, subject to the discussion below concerning backup withholding:
(a) Payments of principal or interest on the notes by us to a
beneficial owner of a note that is a non-U.S. holder will not be subject
to U.S. withholding tax, provided that, in the case of interest, (i) the
non-U.S. holder does not own, actually or constructively, 10% or more of
the total combined voting power of all classes of our stock entitled to
vote, within the meaning of Section 871(h)(3) of the Code, (ii) the
non-U.S. holder is not a "controlled foreign corporation" with respect to
which we are a "related person" within the meaning of the Code, (iii) the
non-U.S. holder is not a bank receiving interest described in Section
881(c)(3)(A) of the Code, and (iv) the certification requirements under
Section 871(h) or Section 881(c) of the Code and Treasury Regulations are
satisfied;
(b) A non-U.S. holder of a note or common stock will not be subject
to U.S. federal income tax on gains realized on the sale, exchange or
other disposition of any note or common stock unless (i) the non-U.S.
holder is an individual who is present in the U.S. for 183 days or more in
the taxable year of sale, exchange or other disposition, and certain
conditions are met, (ii) the gain is effectively connected with the
conduct by the non-U.S. holder of a trade or business in the U.S. and, if
certain U.S. income tax treaties apply, is attributable to a U.S.
permanent establishment maintained by the non-U.S. holder, (iii) the
non-U.S. holder is subject to Code provisions applicable to certain U.S.
expatriates or, (iv) in the case of common stock held by a person who
holds more than 5% of the stock, we are or have been, at any time within
the shorter of the five-year period preceding the sale or other
disposition or the period the non-U.S. holder held the common stock, a
U.S. real property holding corporation for U.S. federal income tax
purposes. We do not believe that we are currently a U.S. real property
holding corporation or that we will become one in the future;
(c) Interest on notes not excluded from U.S. withholding tax as
described in (a) above and dividends on common stock after conversion
generally will be a subject to U.S. withholding tax at a 30% rate, except
where an applicable tax treaty provides for the reduction or elimination
of the withholding tax.
To satisfy the certification requirements referred to in (a)(iv) above,
Sections 871(h) and 881(c) of the Code and currently effective Treasury
Regulations require that either (i) the beneficial owner of a note must certify,
under penalties of perjury, to us that the owner is a non-U.S. holder and must
provide the owner's name and address, and U.S. taxpayer identification number,
if any, or (ii) a securities clearing organization, bank or other financial
institution that holds customer securities in the ordinary course of its trade
or business and holds the note on behalf of the beneficial owner thereof must
certify, under penalties of perjury, to us that the certificate has been
received from the beneficial owner and must furnish the pay or with a copy
thereof. This requirement will be fulfilled if the beneficial owner of a note
certifies on IRS Form W-8, under penalties of perjury, that it is a non-U.S.
holder and provides its name and address or any financial institution holding
-22-
<PAGE> 23
the note on behalf of the beneficial owner files a statement with the
withholding agent to the effect that it has received a statement from the
beneficial owner and furnishes the withholding agent with a copy thereof.
Treasury Regulations effective for payments made after December 31, 2000,
will provide alternative methods for satisfying the certification requirements
described above and below, subject to certain grandfathering provisions. These
new regulations also require, in the case of notes held by a foreign
partnership, that (i) the certification be provided by the partners rather than
by the foreign partnership and (ii) the partnership provide certain information,
including a U.S. taxpayer identification number. A look-through rule will apply
in the case of tiered partnerships.
Provided that the certification requirements discussed below are met, if
anon-U.S. holder of a note or common stock is engaged in a trade or business in
the U.S. and if interest on the note, dividends on the common stock, or gain
realized on the sale, exchange or other disposition of the note or common stock
is effectively connected with the conduct of the trade or business, the non-U.S.
holder, although exempt from U.S. withholding tax, will generally be subject to
U.S. federal income tax on the interest, dividends or gain on a net income basis
in the same manner as if it were a U.S. holder. Instead of the certificate
described above, the non-U.S. holder will be required, under currently effective
Treasury Regulations, to provide us with a properly executed IRS Form 4224 in
order to claim an exemption from withholding tax. In addition, if the non-U.S.
holder is a foreign corporation, it may be subject to a branch profits tax equal
to 30%, or a lower rate if provided by an applicable treaty, of its effectively
connected earnings and profits for the taxable year, subject to certain
adjustments.
U.S. Federal Estate Tax
A note held by an individual who at the time of death is not a citizen or
resident of the U.S. will not be subject to U.S. federal estate tax if the
individual did not actually or constructively own 10% or more of the total
combined voting power of all our classes of stock and, at the time of the
individual's death, payments with respect to the note would not have been
effectively connected with the conduct by the individual of a trade or business
in the U.S. common stock held by an individual who at the time of death is not a
citizen or resident of the U.S. will be included in the individual's estate for
U.S. federal estate tax purposes, unless an applicable estate tax treaty
otherwise applies.
Non-U.S. holders should consult with their tax advisors regarding U.S. and
foreign tax consequences with respect to the notes and common stock.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding of U.S. federal income tax at a rate of 31% may apply
to payments made to a U.S. holder of a note or common stock if the payee is
not an "exempt recipient" and fails to provide certain identifying information
in the manner required. Generally, individuals are not exempt recipients,
whereas corporations and certain other entities are exempt recipients. Payments
made in respect of a note or common stock must be reported to the IRS, unless
the U.S. holder is an exempt recipient or otherwise establishes an exemption.
In the case of payments of interest on a note to a non-U.S. holder,
Treasury Regulations provide that backup withholding and information reporting
will not apply to payments with respect to which either requisite certification
has been received or an exemption has otherwise been established.
Dividends on the common stock paid to non-U.S. holders that are subject to
U.S. withholding tax, as described above, generally will be exempt from U.S.
backup withholding tax but will be subject to certain information reporting.
-23-
<PAGE> 24
Payments of the proceeds of the sale of a note or common stock to or
through a foreign office of a broker that is a "controlled foreign corporation"
as defined in the Code, or a foreign person, 50% or more of whose gross income
from all sources for the three-year period ending with the close of its taxable
year preceding the payment was effectively connected with the conduct of a trade
or business within the U.S. are currently subject to certain information
reporting requirements. If the payee is an exempt recipient or the broker has
evidence in its records that the payee is a non-U.S. holder and no actual
knowledge that the evidence is false and certain other conditions are met, the
reporting requirements do not apply. Temporary Treasury Regulations indicate
that the payments are not currently subject to backup withholding. Under current
Treasury Regulations, payments of the proceeds of a sale of a note or common
stock to or through the U.S. office of a broker will be subject to information
reporting and backup withholding unless the payee certifies under penalties of
perjury as to his or her status as a non-U.S. holder and satisfies certain other
qualifications and provides his or her name and address or the payee otherwise
establishes an exemption.
You may credit any amounts withheld under the backup withholding rules
against your U.S. federal income tax, if the required information is furnished
to the IRS in a timely manner.
New regulations will generally be applicable to payments made after
December 31, 2000. In general, these new regulations attempt to unify current
certification procedures and forms and clarify reliance standards. Under these
new regulations, special rules apply which permit the shifting of primary
responsibility for withholding to certain financial intermediaries acting on
behalf of beneficial owners. You should consult with your tax advisor regarding
the application of the backup withholding rules to your particular situation,
the availability of an exemption, the procedure for obtaining an exemption and
the impact of these new regulations on payments made with respect to notes or
common stock after December 31, 2000.
THE PRECEDING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
IS FOR YOUR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY, YOU
SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE PARTICULAR U.S. FEDERAL, STATE,
AND LOCAL TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF THE NOTES AND
COMMON STOCK. TAX ADVISORS SHOULD ALSO BE CONSULTED AS TO THE U.S. ESTATE AND
GIFT TAX CONSEQUENCES AND THE FOREIGN TAX CONSEQUENCES OF PURCHASING, HOLDING
AND DISPOSING OF THE NOTES AND COMMON STOCK, AS WELL AS THE CONSEQUENCES OF ANY
PROPOSED CHANGE IN APPLICABLE LAWS.
SELLING SECURITYHOLDERS
We originally issued the notes in a private placement in May, 1999. The
notes were resold by the initial purchasers to qualified institutional buyers
under Rule 144A under the Securities Act in transactions exempt from
registration under the Securities Act. Selling securityholders may offer and
sell the notes and the underlying common stock pursuant to this prospectus.
The following table contains information as of November 2, 1999, with
respect to the selling securityholders and the principal amount of notes and the
underlying common stock beneficially owned by each selling security holders that
may be offered using this prospectus.
-24-
<PAGE> 25
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT AT
MATURITY OF NUMBER OF
NOTES SHARES OF
BENEFICIALLY PERCENTAGE OF COMMON STOCK PERCENTAGE OF
OWNED THAT MAY NOTES THAT MAY BE COMMON STOCK
NAME BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
- --------------------------------- -------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C>
Any other holder of Notes or
future transferee, pledgee, donee
or successor of any holder(3)(4) 176,570,000 50.4 1,991,361 3.3
Chrysler Corporation Master
Retirement Trust ................ 5,720,000 1.6 64,510 *
Delta AirLines Master Trust ..... 2,315,000 * 26,108 *
Motion Picture Industry Health
Plan - Active Member Fund ....... 670,000 * 7,556 *
Motion Picture Industry Health
Plan - Retiree Member Fund ...... 335,000 * 3,778 *
OCM Convertible Trust ........... 3,085,000 * 34,792 *
Partner Reinsurance Company, Ltd. 1,160,000 * 13,082 *
State Employees' Retirement Fund
of the State of Delaware ........ 3,265,000 * 36,822 *
State of Connecticut Combines
Investment Funds ................ 6,605,000 1.9 74,491 *
Vanguard Convertible Securities
Fund, Inc. ...................... 4,005,000 1.1 45,168 *
Bear, Stearns & Co. Inc. ........ 2,625,000 * 29,604 *
Declaration of Trust for the
Defined Benefit Plans of ICI
American Holdings Inc. .......... 980,000 * 11,052 *
Declaration of Trust for the
Defined Benefit Plans of ZENECA
Holdings Inc. ................... 655,000 * 7,387 *
Delaware State Employee's
Retirement Fund ................. 1,310,000 * 14,774 *
First Church of Christ, Scientist
- - Endowment ..................... 590,000 * 6,654 *
Christian Science Trustees for
Gifts and Endowments ............ 525,000 * 5,920 *
Summer Hill Global
Partners, L.P. .................. 165,000 * 1,860 *
White River Securities .......... 2,625,000 * 29,604 *
Greyhound Lines ................. 100,000 * 1,127 *
LDG Limited ..................... 250,000 * 2,819 *
TQA Arbitrage Fund, L.P. ........ 625,000 * 7,048 *
TQA Leverage Fund, L.P. ......... 875,000 * 9,868 *
TQA Vantage Fund, Ltd. .......... 2,650,000 * 29,886 *
TQA Vantage Plus Fund, Ltd. ..... 500,000 * 5,639 *
AIG/National Union Fire Insurance 900,000 * 10,150 *
Aloha Airlines Non-Pilots Pension
Trust ........................... 145,000 * 1,635 *
Aloha Airlines Pilots Retirement
Trust ........................... 85,000 * 958 *
Arkansas PERS ................... 2,650,000 * 29,886 *
C&H Sugar Company, Inc. ......... 225,000 * 2,537 *
Delaware PERS ................... 2,325,000 * 26,221 *
Pension Plan - IAM ............... 130,000 * 1,466 *
for Salaried Employees ........... 30,000 * 338 *
Retirement Plan .................. 195,000 * 2,199 *
ICI American Holdings Trust ...... 1,025,000 * 11,559 *
Island Holdings .................. 15,000 * 169 *
Kapiolani Medical Center ......... 275,000 * 3,101 *
Nalco Chemical Company ........... 520,000 * 5,864 *
PRIM Board ....................... 4,360,000 1.2 49,172 *
Queen's Health Plan .............. 50,000 * 563 *
Starvest Combined Portfolio ...... 1,275,000 * 14,379 *
State of Oregon / SAIF Corporation 7,000,000 2.0 78,946 *
State of Oregon Equity ........... 11,460,000 3.3 129,246 *
Zeneca Holdings Trust ............ 1,025,000 * 11,559 *
Cona Bond Debenture Fund ......... 600,000 * 6,766 *
Elf Aquitaine .................... 100,000 * 1,127 *
Lord Abbett Bond Deb. Fund ....... 10,000,000 2.9 112,780 *
Oxford, Lord Abbett & Co. ........ 1,250,000 * 14,097 *
University of South Florida ...... 250,000 * 2,819 *
Argent Classic Convertible
Arbitrage Fund (Bermuda) L.P. .... 5,250,000 1.5 59,209 *
Argent Classic Convertible
Arbitrage Fund L.P. .............. 1,750,000 * 19,736 *
Lipper Convertibles
Series II, L.P. .................. 4,000,000 1.1 45,112 *
Lipper Convertibles, L.P. ........ 5,000,000 1.4 56,390 *
Lipper Offshore Convertibles, L.P. 6,500,000 1.9 73,307 *
Allstate Insurance Company ....... 3,000,000 * 33,834 *
Insurance Services, Ltd. ......... 700,000 * 7,894 *
Banc of America Securities LLC ... 5,350,000 1.5 60,337 *
Bancroft Convertible Fund, Inc. .. 1,000,000 * 11,278 *
BBT Fund, L.P. ................... 9,000,000 2.6 101,502 *
Conseco Direct Life Insurance .... 500,000 * 5,639 *
CPR (USA), Inc. .................. 550,000 * 6,202 *
Ellsworth Convertible Growth and
Income Fund, Inc. ................ 1,000,000 * 11,278 *
First Franklin Convertible
Securities Fund .................. 3,000,000 * 33,834 *
FSS Franklin Strategic Income Fund 2,000,000 * 22,556 *
Goldman Sachs and Company ........ 445,000 * 5,018 *
Jackson Investment Fund Ltd. ..... 2,460,000 * 27,743 *
Libertyview Plus Fund ............ 450,000 * 5,075 *
National Bank of Canada .......... 1,500,000 * 16,917 *
New York Life Insurance and
Annuity Corporation .............. 1,200,000 * 13,533 *
New York Life Insurance Company .. 9,300,000 2.7 104,885 *
Palladin Securities, LLC ......... 600,000 * 6,766 *
Paloma Securities LLC ............ 5,000,000 1.4 56,390 *
Pell Rudman Trust Company ........ 1,500,000 * 16,917
PGEP III LLC ..................... 400,000 * 4,511 *
PIMCO Convertible Bond Fund ...... 700,000 * 7,894 *
PIMCO Total Return Fund .......... 3,000,000 * 33,834 *
Quattro Offshore Fund Ltd. ....... 500,000 * 5,639 *
Robertson Stephens ............... 6,000,000 1.7 67,668 *
SG Cowen Securities Corp. ........ 1,000,000 * 11,278 *
The Northwestern Mutual Life
Insurance Company ................ 5,000,000 1.4 56,390 *
</TABLE>
<PAGE> 26
- ----------
* Less than 1%.
(1) Assumes conversion of all of the holder's notes at a conversion price of
$88.668 per share of common stock. However, this conversion price will be
subject to adjustment as described under "Description of Notes -- Right of
Conversion." As a result, the amount of common stock issuable upon
conversion of the notes may increase or decrease in the future.
(2) Calculated based on Rule 13d-3(d)(i) of the Exchange Act using 58,891,231
shares of common stock outstanding as of November 2, 1999. In calculating
this amount, we treated as outstanding the number of shares of common
stock issuable upon conversion of all of that particular holder's notes.
However, we did not assume the conversion of any other holder's notes.
(3) Information about other selling security holders will be set forth in
prospectus supplements, if required.
(4) Assumes that any other holders of notes, or any future transferees,
pledgees, donees or successors of or from any such other holders of notes,
do not beneficially own any common stock other than the common stock
issuable upon conversion of the notes at the initial conversion rate.
We prepared this table based on the information supplied to us by the
selling securityholders named in the table.
The selling securityholders listed in the above table may have sold or
transferred, in transactions exempt from the registration requirements of the
Securities Act, some or all of their notes since the date on which the
information in the above table is presented. Information about the selling
securityholders may change from over time. Any changed information will be set
forth in prospectus supplements.
Because the selling securityholders may offer all or some of their notes
or the underlying common stock from time to time, we cannot estimate the amount
of the notes or underlying common stock that will be held by the selling
securityholders upon the termination of any particular offering. See "Plan of
Distribution."
PLAN OF DISTRIBUTION
We will not receive any of the proceeds of the sale of the notes and the
underlying common stock offered by this prospectus. The notes and the underlying
common stock may be sold from time to time to purchasers:
- directly by the selling securityholders;
- through underwriters, broker-dealers or agents who may receive
compensation in the form of discounts, concessions or commissions from
the selling securityholders or the purchasers of the notes and the
underlying common stock.
The selling securityholders and any such broker-dealers or agents who
participate in the distribution of the notes and the underlying common stock may
be deemed to be "underwriters." As a result, any profits on the sale of the
notes and underlying common stock by selling securityholders and any discounts,
commissions or concessions received by any such broker-dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities Act.
If the selling securityholders were to be deemed underwriters, the selling
securityholders may be subject to certain statutory liabilities of, including,
but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act.
-26-
<PAGE> 27
If the notes and underlying common stock are sold through underwriters or
broker-dealers, the selling securityholders will be responsible for underwriting
discounts or commissions or agent's commissions.
The notes and underlying common stock may be sold in one or more
transactions at:
- fixed prices;
- prevailing market prices at the time of sale;
- varying prices determined at the time of sale; or
- negotiated prices.
These sales may be effected in transactions:
- on any national securities exchange or quotation service on which the
notes and underlying common stock may be listed or quoted at the time
of the sale, including the Nasdaq National Market System in the case of
the common stock;
- in the over-the-counter market;
- in transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
- through the writing of options.
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as an agent on both sides of the
trade.
In connection with sales of the notes and underlying common stock or
otherwise, the selling securityholders may enter into hedging transactions with
broker-dealers. These broker-dealers may in turn engage in short sales of the
notes and underlying common stock in the course of hedging their positions. The
selling securityholders may also sell the notes and underlying common stock
short and deliver notes and underlying common stock to close out short
positions, or loan or pledge notes and underlying common stock to broker-dealers
that in turn may sell the notes and underlying common stock.
To our knowledge, there are currently no plans, arrangement or
understandings between any selling securityholders and any underwriter,
broker-dealer or agent regarding the sale of the notes and the underlying common
stock by the selling securityholders. Selling securityholders may not sell any
or all of the notes and the underlying common stock offered by them pursuant to
this prospectus. In addition, we cannot assure you that any such selling
securityholder will not transfer, devise or gift the notes and the underlying
common stock by other means not described in this prospectus.
Our common stock trades on the Nasdaq National Market under the symbol
"SANM.". No assurance can be given as to the development of liquidity or any
trading market for the notes. See "Risk Factors -- A public market may not
develop for the notes."
There can be no assurance that any selling securityholder will sell any or
all of the notes or underlying common stock pursuant to this prospectus. In
addition, any notes or underlying common stock covered by this prospectus that
qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be
sold under Rule 144 or Rule 144A rather than pursuant to this prospectus.
The selling securityholders and any other person participating in such
distribution will be subject to the Exchange Act. The Exchange Act rules
include, without limitation, Regulation M, which may limit the
-27-
<PAGE> 28
timing of purchases and sales of any of the notes and the underlying common
stock by the selling securityholders and any other such person. In addition,
Regulation M of the Exchange Act may restrict the ability of any person engaged
in the distribution of the notes and the underlying common stock to engage in
market-making activities with respect to the particular notes and the underlying
common stock being distributed for a period of up to five business days prior to
the commencement of such distribution. This may affect the marketability of the
notes and the underlying common stock and the ability of any person or entity to
engage in market-making activities with respect to the notes and the underlying
common stock.
Pursuant to the registration rights agreement filed as an exhibit to this
registration statement, we and the selling securityholders will be indemnified
by the other against certain liabilities, including certain liabilities under
the Securities Act or will be entitled to contribution in connection with these
liabilities.
We have agreed to pay substantially all of the expenses incidental to the
registration, offering and sale of the notes and underlying common stock to the
public other than commissions, fees and discounts of underwriters, brokers,
dealers and agents.
LEGAL MATTERS
The validity of the issuance of Sanmina Corporation's securities offered
by this prospectus will be passed upon for Sanmina Corporation by Wilson Sonsini
Goodrich & Rosati, Professional Corporation, Palo Alto, California.
EXPERTS
The financial statements and schedule incorporated by reference in this
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect hereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
giving said reports.
-28-
<PAGE> 29
INDEMNIFICATION OF DIRECTORS AND OFFICERS OF SANMINA
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933. Article X, Section 1 of the
Registrant's Bylaws provides for indemnification of its directors and officers
to the maximum extent permitted by law.
