<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 2, 2000
REGISTRATION NO. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
TRIQUINT SEMICONDUCTOR, INC.
(Exact name of Registrant as specified in our charter)
<TABLE>
<S> <C>
DELAWARE 95-3654013
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
2300 N.E. BROOKWOOD PARKWAY
HILLSBORO, OREGON 97124
(503) 615-9000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
STEVEN J. SHARP
PRESIDENT, CHIEF EXECUTIVE OFFICER & CHAIRMAN
TRIQUINT SEMICONDUCTOR, INC.
2300 N.E. BROOKWOOD PARKWAY
HILLSBORO, OREGON 97124
(503) 615-9000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
ROBERT P. LATTA
JOHN A. FORE
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
(650) 493-9300
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / / ________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED
OFFERING MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED SECURITY(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
4% Convertible Subordinated Notes due
2007................................ $345,000,000 88.9% $306,618,750 $80,947.35
Common stock, $0.001 par value(2)..... 2,544,237(3) (3) (3) (4)
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based upon the average of the bid and asked prices
of the Convertible Subordinated Notes due 2007 on the Portal Market on
April 26, 2000.
(2) Includes Preferred Share Purchase Rights which, prior to the occurrence of
certain events, will not be exercisable or evidenced separatedly from the
Common Stock.
(3) Includes 2,544,237 shares of common stock issuable upon conversion of the
notes at the conversion price of $135.60 per share of common stock. Pursuant
to Rule 416 under the Securities Act, such number of shares of common stock
registered hereby shall include an indeterminate number of shares of common
stock that may be issued in connection with a stock split, stock dividend,
recapitalization or similar event.
(4) Pursuant to Rule 457(i), there is no additional filing fee with respect to
the shares of common stock issuable upon conversion of the notes because no
additional consideration will be received in connection with the exercise of
the conversion privilege.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY OUR EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION. DATED MAY 2, 2000
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY
PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
PROSPECTUS
$345,000,000
[TRIQUINT LOGO]
4% CONVERTIBLE SUBORDINATED NOTES DUE 2007 AND
THE COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES
We issued the notes in private placements in February 2000 and March 2000.
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, at the option of the holder, at any time on or
prior to maturity into shares of our common stock. The notes are convertible at
a conversion price of $135.60 per share, which is equal to 7.3746 shares per
$1,000 principal amount of notes, subject to adjustment. We will pay interest on
the notes on March 1 and September 1 of each year, beginning September 1, 2000.
The notes will mature on March 1, 2007, unless earlier converted or redeemed.
We may redeem some or all of the notes at any time before March 5, 2003 at a
redemption price of $1,000 per $1,000 principal amount of notes, plus accrued
and unpaid interest, if any, to the redemption date, if the closing price of our
common stock has exceeded 150% of the conversion price then in effect for at
least 20 trading days within a period of 30 consecutive trading days ending on
the trading day before the date of mailing of the provisional redemption notice.
We will make an additional payment in cash with respect to the notes called for
provisional redemption in an amount equal to $166.67 per $1,000 principal amount
of notes, less the amount of any interest actually paid on the notes before the
date of redemption. We may redeem some or all of the notes at any time on or
after March 5, 2003 at the redemption prices described in this prospectus.
TriQuint's common stock is quoted on the Nasdaq National Market under the
symbol "TQNT." On April 28, 2000, the last reported sale price of the common
stock on the Nadsaq National Market was $102.8125 per share.
INVESTING IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 8.
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE
NOT APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
, 2000.
<PAGE>
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information that is different. We
are offering to sell and seeking offers to buy shares of our common stock only
in jurisdictions where offers and sales are permitted. The information contained
in this prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or any sale of our common
stock.
TABLE OF CONTENTS
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Page
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Where You Can Find More Information.... 3
Forward-Looking Statements............. 4
Summary................................ 5
Risk Factors........................... 8
Use of Proceeds........................ 19
Ratio of Earnings to Fixed Charges..... 19
Description of Notes................... 20
</TABLE>
<TABLE>
<CAPTION>
Page
<S> <C>
Description of Capital Stock........... 37
Certain United States Federal Income
Tax Considerations................... 42
Selling Securityholders................ 47
Plan of Distribution................... 51
Legal Matters.......................... 52
Experts................................ 52
</TABLE>
------------------
REFERENCES IN THIS PROSPECTUS TO "TRIQUINT," "WE," "OUR" AND "US" REFER TO
TRIQUINT SEMICONDUCTOR, INC., A DELAWARE CORPORATION.
WE MAINTAIN A WEB SITE AT WWW.TRIQUINT.COM. INFORMATION CONTAINED ON OUR WEB
SITE DOES NOT CONSTITUTE PART OF THIS PROSPECTUS.
EACH TRADEMARK, TRADE NAME OR SERVICE MARK OF ANY OTHER COMPANY APPEARING IN
THIS PROSPECTUS BELONGS TO ITS HOLDER.
2
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the Commission,
in accordance with the Securities Exchange Act of 1934. You may read and copy
our reports, proxy statements and other information filed by us at the public
reference facilities of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices;
7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
materials can be obtained at prescribed rates from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the Commission at 1-800-SEC-0330 for further information about the public
reference rooms. Our reports, proxy statements and other information filed with
the Commission are available to the public over the Internet at the Commission's
World Wide Web site at http://www.sec.gov.
The Commission allows us to "incorporate by reference" into this prospectus
the information we filed with the Commission. This means that we can disclose
important information by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus.
Information that we file later with the Commission will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made by us with the Commission under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act until our offering is complete.
- The description of the common stock in our Registration Statement on
Form 8-A as filed with the Commission on October 21, 1993.
- The description of our common stock in our registration statement on
Form 8-B as filed with the Commission on February 18, 1997.
- The description of our Preferred Share Purchase Rights in our Registration
Statement on Form 8-A as filed with the Commission on July 24, 1998.
- Annual Report on Form 10-K for the fiscal year ended December 31, 1999.
- Current Report on Form 8-K filed on February 14, 2000.
- Current Report on Form 8-K filed on February 18, 2000.
- Schedule 14A filed on April 19, 2000.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Edson H. Whitehurst, Jr.
Vice President, Finance and Administration, Chief Financial Officer and
Secretary
TriQuint Semiconductor, Inc.
2300 N.E. Brookwood Parkway
Hillsboro, Oregon 97124
(503) 615-9000
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume the
information in this prospectus is accurate as of any date other than the date on
the front of those documents.
3
<PAGE>
FORWARD-LOOKING STATEMENTS
This prospectus, including the sections entitled "Prospectus Summary" and
"Risk Factors," contains forward-looking statements. These statements relate to
future events or our future financial performance and involve known and unknown
risks, uncertainties and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. Such risks
and other factors include, among other things, those listed under "Risk Factors"
and elsewhere in this prospectus. In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential," "continue" or the negative of such terms or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially. In evaluating these statements, you should specifically
consider various factors, including the risks outlined under "Risk Factors."
These factors may cause our actual results to differ materially from any
forward-looking statement.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither any other person nor we
assume responsibility for the accuracy and completeness of such statements. We
are under no duty to update any of the forward-looking statements after the date
of this prospectus to conform such statements to actual results.
4
<PAGE>
SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS. THIS SUMMARY IS NOT COMPLETE AND DOES NOT CONTAIN ALL OF THE
INFORMATION THAT YOU SHOULD CONSIDER BEFORE INVESTING IN OUR NOTES. YOU SHOULD
READ THE ENTIRE PROSPECTUS CAREFULLY, INCLUDING OUR FINANCIAL STATEMENTS AND THE
RISKS OF INVESTING IN OUR NOTES DISCUSSED UNDER "RISK FACTORS," BEFORE MAKING AN
INVESTMENT DECISION.
TRIQUINT SEMICONDUCTOR, INC.
We are a leading supplier of high-performance gallium arsenide integrated
circuits for the wireless communications, telecommunications, data
communications and aerospace markets. Our integrated circuits are incorporated
into a variety of communications products, including cellular phones and pagers,
fiber optic telecommunications equipment, satellite communications systems, high
performance data networking products and aerospace applications. We use our
proprietary gallium arsenide technology to enable our products to overcome the
performance barriers of silicon devices in a variety of applications. Gallium
arsenide has inherent physical properties that allow its electrons to move up to
five times faster than those of silicon. This higher electron mobility permits
the manufacture of gallium arsenide integrated circuits that operate at much
higher speeds than silicon devices, or operate at the same speeds with reduced
power consumption. We sell our products worldwide to end user customers,
including Ericsson, Hughes, Lucent, Motorola, Nokia, Nortel, QUALCOMM and
Raytheon.
We own and operate advanced wafer fabrication facilities and utilize
proprietary processes designed to enable us to cost effectively produce analog
and mixed signal integrated circuits in high volumes. We believe that control of
wafer fabrication assures a reliable source of supply and provides greater
opportunities to enhance quality and reliability and achieve manufacturing
efficiency. In addition, this control can facilitate new process and product
development and enables us to be more responsive to customer requirements. Our
wafer fabrication capabilities have allowed us to establish a strategic foundry
business serving leading communications companies. Our foundry business
leverages our extensive library of proprietary analog and mixed signal cells and
our advanced integrated circuit manufacturing processes.
Our strategy is to focus on the communications market by offering a broad
range of standard and custom designed integrated circuits and manufacturing
services which address numerous applications in our target markets. Key elements
of this strategy include:
- focusing on analog and mixed signal design excellence;
- continuing to serve customers across a broad array of applications in
communications markets;
- targeting high growth markets with high performance solutions;
- offering foundry services; and
- capitalizing on partnerships with industry leaders in our target markets.
We are incorporated under the laws of the state of Delaware. Our principal
executive offices are located at 2300 N.E. Brookwood Parkway, Hillsboro, Oregon
97124, and our telephone number is (503) 615-9000.
5
<PAGE>
THE OFFERING
The following is a brief summary of some of the terms of the notes offered
for resale in this prospectus. For a more complete description of the terms of
the notes, see "Description of Notes" in this prospectus.
<TABLE>
<S> <C>
Issuer................................. TriQuint Semiconductor, Inc.
Notes offered.......................... $345,000,000 principal amount of 4% Convertible
Subordinated Notes due 2007.
Maturity............................... March 1, 2007.
Interest............................... We will pay 4% per annum on the principal amount, payable
semiannually on March 1 and September 1, beginning on
September 1, 2000.
Conversion rights...................... The notes are convertible, at the option of the holder, at
any time on or prior to maturity into shares of our common
stock at a conversion price of $135.60 per share, which is
equal to a conversion rate of 7.3746 shares per $1,000
principal amount of notes. The conversion rate is subject
to adjustment.
Ranking................................ The notes are unsecured and subordinated to our existing
and future senior indebtedness, as defined. In addition,
the notes effectively rank junior to our subsidiaries'
liabilities. At December 31, 1999, we had approximately
$55.6 million of senior indebtedness outstanding, and the
aggregate amount of liabilities of our subsidiaries was
approximately $8.8 million. Because the notes are
subordinated, in the event of bankruptcy, liquidation,
dissolution or acceleration of payment on the senior
indebtedness, holders of the notes will not receive any
payment until holders of the senior indebtedness have been
paid in full. The indenture under which the notes were
issued does not prevent us or our subsidiaries from
incurring additional senior indebtedness or other
obligations.
Provisional redemption................. We may redeem the notes, in whole or in part, at any time
before March 5, 2003, at a redemption price equal to
$1,000 per $1,000 principal amount of notes to be redeemed
plus accrued and unpaid interest, if any, to the date of
redemption if (i) the closing price of our common stock
has exceeded 150% of the conversion price then in effect
for at least 20 trading days within a period of 30
consecutive trading days ending on the trading day before
the date of mailing of the provisional redemption notice,
and (ii) the shelf registration statement covering resales
of the notes and the common stock issuable upon conversion
of the notes is effective and available for use and is
expected to remain effective and available for use for the
30 days following the provisional redemption date, unless
registration is no longer required. Upon any provisional
redemption, we will make an additional payment in cash
with respect to the notes called for redemption in an
amount equal to $166.67 per $1,000 principal amount of
notes, less the amount of any interest actually paid on
the note before the date of redemption. We will be
obligated to make this additional payment on all notes
called for provisional
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
redemption, including any notes converted after the notice
date and before the provisional redemption date.
Optional redemption.................... We may redeem all or a portion of the notes on or after
March 5, 2003 at the redemption prices listed in this
offering memorandum, plus accrued and unpaid interest.
Change in control...................... Upon a change in control event, each holder of the notes
may require us to repurchase some or all of its notes at a
purchase price equal to 100% of the principal amount of
the notes plus accrued and unpaid interest. We may, at our
option, instead of paying the change in control purchase
price in cash, pay it in shares of our common stock valued
at 95% of the average of the closing sales prices of our
common stock for the five trading days immediately
preceding and including the third day prior to the date we
are required to repurchase the notes. We cannot pay the
change in control purchase price in common stock unless we
satisfy the conditions described in the indenture under
which the notes will be issued.
Use of proceeds........................ TriQuint will not receive any of the proceeds of the
resale of the notes by the selling stockholders or common
stock to which they may be converted.
Registration rights.................... We agreed to file with the Securities and Exchange
Commission this shelf registration statement for the
resale of the notes and the common stock issuable upon
conversion. We have agreed to keep the shelf registration
statement effective until two years after March 3, 2000.
If we do not comply with these registration obligations,
we will be required to pay liquidated damages to the
holders of the notes or the common stock issuable upon
conversion.
Trading................................ The notes are eligible for trading in the PORTAL Market;
however, we can provide no assurance as to the liquidity
of, or trading markets for, the notes. Our common stock is
quoted on the Nasdaq National Market under the symbol
"TQNT."
Risk Factors........................... See "Risk Factors" and the other information in this
prospectus for a discussion of the factors you should
carefully consider before deciding to invest in the notes
or the common stock into which the notes are convertible.
</TABLE>
7
<PAGE>
RISK FACTORS
ANY INVESTMENT IN OUR NOTES OR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
YOU SHOULD CONSIDER THE RISKS DESCRIBED BELOW CAREFULLY AND ALL OF THE
INFORMATION CONTAINED IN THIS PROSPECTUS BEFORE DECIDING WHETHER TO PURCHASE OUR
NOTES OR THE COMMON STOCK INTO WHICH THEY MAY BE CONVERTED. THE RISKS AND
UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY RISKS AND UNCERTAINTIES WE FACE.
ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US OR THAT WE
CURRENTLY DEEM IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS OPERATIONS. IF ANY OF THE
FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS WOULD SUFFER. IN THAT EVENT, THE PRICE OF OUR NOTES AND COMMON STOCK
COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT IN OUR NOTES AND
COMMON STOCK. THE RISKS DISCUSSED BELOW ALSO INCLUDE FORWARD-LOOKING STATEMENTS
AND OUR ACTUAL RESULTS MAY DIFFER SUBSTANTIALLY FROM THOSE DISCUSSED IN THESE
FORWARD-LOOKING STATEMENTS.
OUR OPERATING RESULTS MAY FLUCTUATE SUBSTANTIALLY, WHICH MAY CAUSE OUR STOCK
PRICE TO FALL.
Our quarterly and annual results of operations have varied in the past and
may vary significantly in the future due to a number of factors including, but
not limited to, the following:
- cancellation or delay of customer orders or shipments;
- our success in achieving design wins in which our products are designed
into those of our customers;
- market acceptance of our products and those of our customers;
- variability of the life cycles of our customers' products;
- variations in manufacturing yields;
- timing of announcements and introduction of new products by us and our
competitors;
- changes in the mix of products we sell;
- declining average sales prices for our products;
- changes in manufacturing capacity and variations in the utilization of
that capacity;
- variations in operating expenses;
- the long sales cycles associated with our customer-specific products;
- the timing and level of product and process development costs;
- the cyclicality of the semiconductor industry;
- the timing and level of nonrecurring engineering revenues and expenses
relating to customer-specific products; and
- significant changes in our and our customers' inventory levels.
We expect that our operating results will continue to fluctuate in the
future as a result of these and other factors. Any unfavorable changes in these
or other factors could cause our results of operations to suffer as they have in
the past, based upon some of these factors. If our operating results are not
within the market's expectations, then our stock price may fall. For example, in
June 1994, Nortel, formerly Northern Telecom, requested that we delay shipment
of some of our products. Nortel was then our largest customer and the delay,
together with lower than expected orders, materially reduced our revenues and
results of operations in the second quarter and for the remainder of 1994. Due
to potential fluctuations, we believe that period to period comparisons of our
results of operations are not necessarily meaningful and should not be relied
upon as indicators of our future performance.
8
<PAGE>
WE RELY ON A LIMITED NUMBER OF CUSTOMERS FOR A SUBSTANTIAL PART OF OUR REVENUES.
Sales to a limited number of customers have accounted for a significant
portion of our revenues in each fiscal period. In recent periods, sales to some
of our major customers as a percentage of total revenues have fluctuated. In
1997, Nortel accounted for approximately 12.0% of total revenues. In 1998, Nokia
accounted for approximately 12.0% and Raytheon accounted for approximately 11.7%
of total revenues. In 1999, Nokia and Nortel accounted for approximately 21.0%
and 17.3%, respectively, of our total revenues. We expect that sales to a
limited number of customers will continue to account for a substantial portion
of our total revenues in future periods. We do not have long-term agreements
with any of our customers. Customers generally purchase our products pursuant to
cancelable short-term purchase orders. Our results of operations have been
negatively affected in the past by the failure of anticipated orders to
materialize and by delays in or cancellations of orders. If we were to lose a
major customer or if orders by or shipments to a major customer were to
otherwise decrease or be delayed, our results of operations would be harmed.
WE FACE RISKS FROM FAILURES IN OUR MANUFACTURING PROCESSES.
The fabrication of integrated circuits, particularly those made of gallium
arsenide, is a highly complex and precise process. Our integrated circuits are
manufactured from four-inch round wafers made of gallium arsenide. During
manufacturing, each wafer is processed to contain numerous die, the individual
integrated circuits. We may reject or be unable to sell a substantial percentage
of wafers or the die on a given wafer because of:
- minute impurities;
- difficulties in the fabrication process;
- defects in the masks used to print circuits on a wafer;
- electrical performance;
- wafer breakage; or
- other factors.
We refer to the proportion of final good integrated circuits that have been
processed, assembled and tested relative to the gross number of integrated
circuits that could be constructed from the raw materials as our manufacturing
yield. Compared to the manufacture of silicon integrated circuits, gallium
arsenide technology is less mature and more difficult to design and manufacture
within specifications in large volume. In addition, the more brittle nature of
gallium arsenide wafers can result in lower manufacturing yields than with
silicon wafers. We have in the past experienced lower than expected
manufacturing yields, which have delayed product shipments and negatively
impacted our results of operations. We may experience difficulty maintaining
acceptable manufacturing yields in the future.
In addition, the maintenance of our two fabrication facilities is subject to
risks, including:
- the demands of managing and coordinating workflow between two
geographically separate production facilities;
- disruption of production in one of our facilities as a result of a
slowdown or shutdown in our other facility; and
- higher operating costs from managing two geographically separate
manufacturing facilities.
9
<PAGE>
IF WE FAIL TO SELL A HIGH VOLUME OF PRODUCTS, OUR OPERATING RESULTS WILL BE
HARMED.
Because the majority of our manufacturing costs are relatively fixed, our
manufacturing volumes are critical to our operating results. If we fail to
achieve acceptable manufacturing volumes or experience product shipment delays,
our results of operations could be harmed. During periods of decreased demand,
our high fixed manufacturing costs could have a negative effect on our results
of operations. We base our expense levels in part on our expectations of future
orders and these expense levels are predominantly fixed in the short-term. If we
receive fewer customer orders than expected, we may not be able to reduce our
manufacturing costs in the short-term and our operating results would be harmed.
IF WE DO NOT SELL OUR CUSTOMER-SPECIFIC PRODUCTS IN LARGE VOLUMES, OUR OPERATING
RESULTS MAY BE HARMED.
We manufacture a substantial portion of our products to address the needs of
individual customers. Frequent product introductions by systems manufacturers
make our future success dependent on our ability to select development projects
which will result in sufficient volumes to enable us to achieve manufacturing
efficiencies. Because customer-specific products are developed for unique
applications, we expect that some of our current and future customer-specific
products may never be produced in volume and may impair our ability to cover our
fixed manufacturing costs. In addition, if we experience delays in completing
designs or if we fail to obtain development contracts from customers whose
products are successful, our revenues could be harmed.
OUR OPERATING RESULTS COULD BE HARMED IF WE LOSE ACCESS TO SOLE OR LIMITED
SOURCES OF MATERIALS OR SERVICES.
We currently obtain some components and services for our products from
limited or single sources, such as ceramic packages from Kyocera. We purchase
these components and services on a purchase order basis, do not carry
significant inventories of these components and do not have any long-term supply
contracts with these vendors. Our requirements are relatively small compared to
silicon semiconductor manufacturers. Because we often do not account for a
significant part of our vendors' business, we may not have access to sufficient
capacity from these vendors in periods of high demand. If we were to change any
of our sole or limited source vendors, we would be required to requalify each
new vendor. Requalification could prevent or delay product shipments that could
negatively affect our results of operations. In addition, our reliance on these
vendors may negatively affect our production if the components vary in
reliability or quality. If we are unable to obtain timely deliveries of
sufficient components of acceptable quality or if the prices of components for
which we do not have alternative sources increase, our results of operations
could be harmed.
IF OUR PRODUCTS FAIL TO PERFORM OR MEET CUSTOMER REQUIREMENTS, WE COULD INCUR
SIGNIFICANT ADDITIONAL COSTS.
The fabrication of gallium arsenide integrated circuits is a highly complex
and precise process. Our customers specify quality, performance and reliability
standards that we must meet. If our products do not meet these standards, we may
be required to rework or replace the products. Gallium arsenide integrated
circuits may contain undetected defects or failures that only become evident
after we commence volume shipments. We have experienced product quality,
performance or reliability problems from time to time. Defects or failures may
occur in the future. If failures or defects occur, we could:
- lose revenue;
- incur increased costs such as warranty expense and costs associated with
customer support;
10
<PAGE>
- experience delays, cancellations or rescheduling of orders for our
products; or
- experience increased product returns or discounts.
OUR OPERATING RESULTS MAY SUFFER IF WE DO NOT EXPAND OUR MANUFACTURING CAPACITY
IN A TIMELY MANNER.
We plan to increase our capacity by converting our existing Hillsboro,
Oregon facility to accommodate equipment that uses six-inch (150 millimeter)
wafer production. We do not have any experience processing six-inch wafers in
our fabrication facilities. Our inexperience may result in lower volume of
production or higher cost of goods sold. We may be required to redesign our
processes and procedures substantially to accommodate the larger wafers. As a
result, implementing additional capacity for six-inch wafers may take longer
than planned, which could harm our results of operations. If we fail to
successfully transition to six-inch wafers in a timely manner or our
manufacturing yields decline, our relationships with our customers may be
harmed.
Our facilities have a level of capacity beyond which we cannot cost
effectively produce our products. Although we are not currently approaching
those constraints, we may be unable to further expand our business if we fail to
plan and build sufficient capacity. The process of building, testing and
qualifying a gallium arsenide integrated circuit fabrication facility is time
consuming. We must begin to design and implement additional manufacturing
facilities well in advance of our needs.
WE MAY FACE FINES OR OUR FACILITIES COULD BE CLOSED IF WE FAIL TO COMPLY WITH
ENVIRONMENTAL REGULATIONS.
Federal, state and local regulations impose various environmental controls
on the storage, handling, discharge and disposal of chemicals and gases used in
our manufacturing process. For our manufacturing facility located in Hillsboro,
Oregon, we provide our own manufacturing waste treatment and contract for
disposal of some materials. We are required by the State of Oregon Department of
Environmental Quality to report usage of environmentally hazardous materials.
At our Texas facility, we utilize Texas Instruments' industrial waste water
treatment facilities and services for the pre-treatment and discharge of waste
water generated by us, pursuant to our Asset Purchase Agreement dated
January 8, 1998 with Raytheon. Our waste water streams are commingled with those
of Texas Instruments and are covered by Texas Instruments' waste water permit.
The failure to comply with present or future regulations could result in
fines being imposed on us and we could be required to suspend production or
cease our operations. These regulations could require us to acquire significant
equipment or to incur substantial other expenses to comply with environmental
regulations. We rely to a great extent on Texas Instruments' hazardous waste
disposal system at our Texas facility. Any failure by us, or by Texas
Instruments with respect to our Texas facility, to control the use of, or to
adequately restrict the discharge of, hazardous substances could subject us to
future liabilities and harm our results of operations.
WE DEPEND ON THE CONTINUED GROWTH OF COMMUNICATIONS MARKETS.
We derive a substantial portion of our product revenues from sales of
products for communication applications. These markets are characterized by the
following:
- intense competition;
- rapid technological change; and
- short product life cycles, especially in the cellular telephone market.
In addition, although the communications markets have grown rapidly in the
last few years, these markets may not continue to grow or a significant slowdown
in these markets may occur.
Products for communications applications are often based on industry
standards, which are continually evolving. Our future success will depend, in
part, upon our ability to successfully develop and introduce new products based
on emerging industry standards, which could render our existing products
unmarketable or obsolete. If communications markets evolve to new standards, we
may be unable to successfully design and manufacture new products that address
the needs of our customers or that will meet with substantial market acceptance.
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OUR BUSINESS WILL BE IMPACTED IF SYSTEMS MANUFACTURERS DO NOT USE GALLIUM
ARSENIDE COMPONENTS.
Silicon semiconductor technologies are the dominant process technologies for
integrated circuits and the performance of silicon integrated circuits continues
to improve. Our prospective customers may be systems designers and manufacturers
who are evaluating such silicon technologies and, in particular, silicon
germanium, versus gallium arsenide integrated circuits for use in their next
generation high performance systems. Customers may be reluctant to adopt our
products because of:
- their unfamiliarity with designing systems with gallium arsenide products;
- their concerns related to manufacturing costs and yields;
- their unfamiliarity with design and manufacturing processes; and
- uncertainties about the relative cost effectiveness of our products
compared to high-performance silicon components.
Systems manufacturers may not use gallium arsenide components because the
production of gallium arsenide integrated circuits has been and continues to be
more costly than the production of silicon devices. As a result, we must offer
devices that provide superior performance to that of silicon-based devices.
In addition, customers may be reluctant to rely on a smaller company like us
for critical components. We cannot be certain that additional systems
manufacturers will design our products into their systems, that the companies
that have utilized our products will continue to do so in the future or that
gallium arsenide technology will continue to achieve widespread market
acceptance. If our gallium arsenide products fail to achieve market acceptance,
our results of operations would suffer.
CUSTOMERS MAY DELAY OR CANCEL ORDERS DUE TO REGULATORY DELAYS.
The increasing demand for communications products has exerted pressure on
regulatory bodies worldwide to adopt new standards for these products, generally
following extensive investigation of and deliberation over competing
technologies. The delays inherent in the regulatory approval process may in the
future cause the cancellation, postponement or rescheduling of the installation
of communications systems by our customers. These delays have in the past had
and may in the future have a negative effect on our sales and our results of
operations.
OUR REVENUES ARE AT RISK IF WE DO NOT INTRODUCE NEW PRODUCTS AND/OR DECREASE
COSTS.
Historically, the average selling prices of our products have decreased over
the products' lives, and we expect them to continue to do so. To offset these
decreases, we rely primarily on achieving yield improvements and other cost
reductions for existing products and on introducing new products that can often
be sold at higher average selling prices. We believe our future success depends,
in part, on our timely development and introduction of new products that compete
effectively on the basis of price and performance and adequately address
customer requirements. The success of new product and process introductions
depends on several factors, including:
- proper selection of products and processes;
- successful and timely completion of product and process development and
commercialization;
- market acceptance of our or our customers' new products;
- achievement of acceptable manufacturing yields; and
- our ability to offer new products at competitive prices.
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Our product and process development efforts may not be successful and our
new products or processes may not achieve market acceptance. To the extent that
our cost reductions and new product introductions do not occur in a timely
manner, our results of operations could suffer.
WE MUST IMPROVE OUR PRODUCTS AND PROCESSES TO REMAIN COMPETITIVE.
If technologies or standards supported by our or our customers' products
become obsolete or fail to gain widespread commercial acceptance, our results of
operations may be materially impacted. Because of continual improvements in
semiconductor technology, including those in high-performance silicon where
substantially more resources are invested than in gallium arsenide, we believe
that our future success will depend, in part, on our ability to continue to
improve our product and process technologies. We must also develop new
technologies in a timely manner. In addition, we must adapt our products and
processes to technological changes and to support emerging and established
industry standards. We may not be able to improve our existing products and
process technologies, develop new technologies in a timely manner or effectively
support industry standards. If we fail to do so, our customers may select
another gallium arsenide product or move to an alternative technology.
OUR RESULTS OF OPERATIONS MAY SUFFER IF WE DO NOT COMPETE SUCCESSFULLY.
The semiconductor industry is intensely competitive and is characterized by
rapid technological change, rapid product obsolescence and price erosion.
Currently, we compete primarily with manufacturers of high performance silicon
integrated circuits such as Applied Micro Circuits, Motorola and Philips and
with manufacturers of gallium arsenide integrated circuits such as Anadigics,
Conexant, Raytheon, RF MicroDevices and Vitesse. We also face competition from
the internal semiconductor operations of some of our current and potential
customers. We expect increased competition from existing competitors and from a
number of companies that may enter the gallium arsenide integrated circuits
market, as well as future competition from companies that may offer new or
emerging technologies such as silicon germanium. Most of our current and
potential competitors have significantly greater financial, technical,
manufacturing and marketing resources than we do. Manufacturers of high
performance silicon integrated circuits have achieved greater market acceptance
of their existing products and technologies in some applications.
We compete with both gallium arsenide and silicon suppliers in the wireless,
data communications and telecommunications markets. In the microwave and
millimeter wave markets, our competition is primarily from a limited number of
gallium arsenide suppliers, which are in the process of expanding their product
offerings to address commercial applications other than aerospace.
Our prospective customers are typically systems designers and manufacturers
that are considering the use of gallium arsenide integrated circuits for their
high performance systems. Competition is primarily based on performance elements
such as speed, complexity and power dissipation, as well as price, product
quality and ability to deliver products in a timely fashion. Due to the
proprietary nature of our products, competition occurs almost exclusively at the
system design stage. As a result, a design win by us or our competitors
typically limits further competition with respect to manufacturing a given
design.
OUR OPERATING RESULTS MAY SUFFER DUE TO DECLINING DEMAND FOR SEMICONDUCTORS.
From time to time, the semiconductor industry has experienced significant
downturns and wide fluctuations in product supply and demand. This cyclicality
has led to significant imbalances in demand and production capacity. It has also
accelerated the decrease of average selling prices per unit. We may experience
periodic fluctuations in our future financial results because of these or other
industry-wide conditions.
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IF WE FAIL TO INTEGRATE ANY FUTURE ACQUISITIONS, OUR BUSINESS WILL BE HARMED.
We face risks from any future acquisitions, including the following:
- we may fail to combine and coordinate the operations and personnel of
newly acquired companies with our existing business;
- our ongoing business may be disrupted or receive insufficient management
attention;
- we may not cost effectively and rapidly incorporate the technology we
acquire;
- we may not be able to recognize the cost savings or other financial
benefits we anticipated;
- we may not be able to retain the existing customers of newly acquired
operations;
- our corporate culture may clash with that of the acquired businesses; and
- we may incur unknown liabilities associated with acquired businesses.
We may not successfully address these risks or any other problems that arise
in connection with future acquisitions.
We will continue to evaluate strategic opportunities available to us and we
may pursue product, technology or business acquisitions. On January 13, 1998, we
acquired our Millimeter Wave Communications operation, which included
substantially all of the assets of the monolithic microwave integrated circuit
operation of Texas Instruments' former Defense Systems & Electronics Group. In
addition, in connection with any future acquisitions, we may issue equity
securities that could dilute the percentage ownership of our existing
stockholders, we may incur additional debt and we may be required to amortize
expenses related to goodwill and other intangible assets that may negatively
affect our results of operations.
WE MUST MANAGE OUR GROWTH.
Our total number of employees grew from 371 in 1997 to 679 in 1998 and 802
in 1999. The resulting growth has placed, and is expected to continue to place,
significant demands on our personnel, management and other resources. We must
continue to improve our operational, financial and management information
systems to keep pace with the growth of our business.
IF WE DO NOT HIRE AND RETAIN KEY EMPLOYEES, OUR BUSINESS WILL SUFFER.
Our future success depends in large part on the continued service of our key
technical, marketing and management personnel. We also depend on our ability to
continue to identify, attract and retain qualified technical employees,
particularly highly skilled design, process and test engineers involved in the
manufacture and development of our products and processes. We must also recruit
and train employees to manufacture our products without a substantial reduction
in manufacturing yields. There are many other semiconductor companies located in
the communities near our facilities and it may become increasingly difficult for
us to attract and retain those employees. The competition for these employees is
intense, and the loss of key employees could negatively affect us.
OUR BUSINESS MAY BE HARMED IF WE FAIL TO PROTECT OUR PROPRIETARY TECHNOLOGY.
We rely on a combination of patents, trademarks, copyrights, trade secret
laws, confidentiality procedures and licensing arrangements to protect our
intellectual property rights. We currently have patents granted and pending in
the United States and in foreign countries and intend to seek further
international and United States patents on our technology. We cannot be certain
that patents will be issued from any of our pending applications or that patents
will be issued in all countries where our products can be sold or that any
claims allowed from pending applications or will be of sufficient scope
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or strength to provide meaningful protection or any commercial advantage. Our
competitors may also be able to design around our patents. The laws of some
countries in which our products are or may be developed, manufactured or sold,
including various countries in Asia, may not protect our products or
intellectual property rights to the same extent as do the laws of the United
States, increasing the possibility of piracy of our technology and products.
Although we intend to vigorously defend our intellectual property rights, we may
not be able to prevent misappropriation of our technology. Our competitors may
also independently develop technologies that are substantially equivalent or
superior to our technology.
OUR ABILITY TO PRODUCE OUR SEMICONDUCTORS MAY SUFFER IF SOMEONE CLAIMS WE
INFRINGE ON THEIR INTELLECTUAL PROPERTY.
The semiconductor industry is characterized by vigorous protection and
pursuit of intellectual property rights or positions, which have resulted in
significant and often protracted and expensive litigation. If it is necessary or
desirable, we may seek licenses under such patents or other intellectual
property rights. However, we cannot be certain that licenses will be offered or
that we would find the terms of licenses that are offered acceptable or
commercially reasonable. Our failure to obtain a license from a third party for
technology used by us could cause us to incur substantial liabilities and to
suspend the manufacture of products. Furthermore, we may initiate claims or
litigation against third parties for infringement of our proprietary rights or
to establish the validity of our proprietary rights. Litigation by or against us
could result in significant expense and divert the efforts of our technical
personnel and management, whether or not the litigation results in a favorable
determination. In the event of an adverse result in any litigation, we could be
required to:
- pay substantial damages;
- indemnify our customers;
- stop manufacturing, use and sale of the infringing products;
- expend significant resources to develop non-infringing technology;
- discontinue the use of certain processes; or
- obtain licenses to the technology.
We may be unsuccessful in developing non-infringing products or negotiating
licenses upon reasonable terms, or at all. These problems might not be resolved
in time to avoid harming our results of operations. If any third party makes a
successful claim against our customers or us and a license is not made available
to us on commercially reasonable terms, our business could be harmed.
On February 26, 1999, a lawsuit was filed against 88 firms, including
TriQuint, in the United States District Court for the District of Arizona. The
suit alleges that the defendants, including us, infringe upon certain patents
held by The Lemelson Medical, Education and Research Foundation, Limited
Partnership. Although we believe the suit is without merit and intend to
vigorously defend ourselves against the charges, we cannot be certain that we
will be successful. Moreover, this litigation may require us to spend a
substantial amount of time and money and could distract management from our day
to day operations.
OUR BUSINESS MAY SUFFER DUE TO RISKS ASSOCIATED WITH INTERNATIONAL SALES.
Our sales outside of the United States were 34.0% of total revenues in 1997,
24.0% of total revenues in 1998 and 38.4% total revenues in 1999. We face
inherent risks from these sales, including:
- imposition of government controls;
- currency exchange fluctuations;
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- longer payment cycles and difficulties related to the collection of
receivables from international customers;
- reduced protection for intellectual property rights in some countries;
- the impact of recessionary environments in economies outside the United
States;
- unfavorable tax consequences;
- political instability; and
- tariffs and other trade barriers.
In addition, due to the technological advantages provided by gallium
arsenide integrated circuits in many military applications, all of our sales
outside of North America must be licensed by the Office of Export Administration
of the U.S. Department of Commerce. If we fail to obtain these licenses or
experience delays in obtaining these licenses in the future, our results of
operations could be harmed. Also, because substantially all of our foreign sales
are denominated in U.S. dollars, increases in the value of the dollar would
increase the price in local currencies of our products and make our products
less price competitive.
WE MAY BE SUBJECT TO A SECURITIES CLASS ACTION SUIT IF OUR STOCK PRICE FALLS.
Following periods of volatility in the market price of a company's stock,
some stockholders may file a securities class action litigation. For example, in
1994, a stockholder class action lawsuit was filed against us, our underwriters,
and some of our officers, directors and investors, which alleged that we, our
underwriters, and certain of our officers, directors and investors intentionally
misled the investing public regarding our financial prospects. We settled the
action and recorded a special charge of $1.4 million associated with the
settlement of this lawsuit and related legal expenses, net of accruals in 1998.
Any future securities class action litigation could be expensive and divert our
management's attention and harm our business, regardless of its merits.
OUR STOCK AND THE NOTES WILL LIKELY BE SUBJECT TO SUBSTANTIAL PRICE AND VOLUME
FLUCTUATIONS DUE TO A NUMBER OF FACTORS, MANY OF WHICH WILL BE BEYOND OUR
CONTROL, THAT MAY PREVENT YOU FROM RESELLING OUR NOTES AT A PROFIT.
The securities markets have experienced significant price and volume
fluctuations and the market prices of the securities of semiconductor companies
have been especially volatile. The market price of the notes or our common stock
may experience significant fluctuations in the future. For example, our common
stock price has fluctuated from a high of $258.00 to a low of $10.33 during the
52 weeks ended February 11, 2000. This market volatility, as well as general
economic, market or political conditions, could reduce the market price of our
common stock, or the notes, in spite of our operating performance. In addition,
our operating results could be below the expectations of public market analysts
and investors, and in response, the market price of our common stock or the
notes could decrease significantly. Investors may be unable to resell the notes
at or above the offering price.
WE FACE RISKS FROM THE YEAR 2000 ISSUE.
Many information technology hardware and software systems, as well as other
non-information technology equipment utilizing microprocessors, can accept only
two digit entries in the date code field. To operate using dates after
December 31, 1999, the date code fields will need to accept four digit entries
to distinguish twenty-first century dates from twentieth century dates. This is
commonly referred to as the "Year 2000" issue. Prior to December 31, 1999, we
initiated and completed a comprehensive Year 2000 audit program, which consisted
of a six step plan to inventory and correct any systems that were not Year 2000
compliant. Because of the existence of numerous systems and related components
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within our organization and the interdependency of these systems, it is possible
that some of our systems, or systems at our suppliers, may still fail to operate
in the year 2000. To date, we have not, nor to our knowledge, have our
suppliers, manufacturers and third party vendors, experienced any material Year
2000-related problems. However, we cannot determine if we will be subject to
Year 2000 compliance problems in the future, particularly with respect to
February 29, 2000, or if Year 2000 problems have arisen that we have failed to
detect to date. Our inability to maintain Year 2000 compliance or the failure of
one or more of our systems or our suppliers' systems may have a material impact
on our future operating results.
OUR CERTIFICATE OF INCORPORATION AND BYLAWS INCLUDE ANTITAKEOVER PROVISIONS
WHICH MAY DETER OR PREVENT A TAKEOVER ATTEMPT.
Some provisions of our certificate of incorporation and bylaws and
provisions of Delaware law may deter or prevent a takeover attempt, including a
takeover that might result in a premium over the market price for our common
stock. These provisions include:
CUMULATIVE VOTING. Our stockholders are entitled to cumulate their votes
for directors. This may limit the ability of the stockholders to remove a
director other than for cause.
STOCKHOLDER PROPOSALS AND NOMINATIONS. Our stockholders must give advance
notice, generally 120 days prior to the relevant meeting, to nominate a
candidate for director or present a proposal to our stockholders at a meeting.
These notice requirements could inhibit a takeover by delaying stockholder
action.
STOCKHOLDER RIGHTS PLAN. We may trigger our stockholder rights plan in the
event our board of directors does not agree to an acquisition proposal. The
rights plan may make it more difficult and costly to acquire our company.
PREFERRED STOCK. Our certificate of incorporation authorizes our board of
directors to issue up to 5 million shares of preferred stock and to determine
what rights, preferences and privileges such shares have. No action by our
stockholders is necessary before our board of directors can issue the preferred
stock. Our board of directors could use the preferred stock to make it more
difficult and costly to acquire our company.
DELAWARE ANTI-TAKEOVER STATUTE. The Delaware anti-takeover law restricts
business combinations with some stockholders once the stockholder acquires 15%
or more of our common stock. The Delaware statute makes it harder for our
company to be acquired without the consent of our board of directors and
management.
YOUR RIGHT TO RECEIVE PAYMENTS ON THE NOTES IS SUBORDINATED TO ALL OF OUR
EXISTING AND FUTURE SENIOR INDEBTEDNESS. IN ADDITION, THE NOTES ARE EFFECTIVELY
SUBORDINATED TO INDEBTEDNESS OF OUR SUBSIDIARIES.
The notes are unsecured obligations and are subordinated in right of payment
to the prior payment in full in cash or other payment satisfactory to holders of
senior indebtedness of all of our existing and future senior indebtedness.
Senior indebtedness is defined to include, among other things, all indebtedness
for money borrowed and indebtedness evidenced by securities, debentures, bonds
or other similar instruments. Senior indebtedness does not include indebtedness
that is expressly junior in right of payment to the notes or ranks equally in
right of payment to the notes. As of December 31, 1999, we had $55.6 million of
senior indebtedness. The terms of the notes do not limit the amount of
additional indebtedness, including senior indebtedness, that we, or any of our
presently existing or future subsidiaries, can create, incur, assume or
guarantee. We may have difficulty paying our obligations under the notes if we,
or any of our subsidiaries, incur additional indebtedness. Upon any distribution
of our assets upon any insolvency, dissolution or reorganization, assets will
only be available for the payment of the principal of and interest on the notes
after the payment in full of all
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of our senior indebtedness. As a result, there may not be sufficient assets
remaining to pay amounts due on any or all of the notes then outstanding.
The notes are effectively subordinated to all existing and future
liabilities of our subsidiaries. Any right of ours to receive assets of any
subsidiary upon its liquidation or reorganization, and the consequent right of
the holders of the notes to participate in those assets, will be subject to the
claims of that subsidiary's creditors. If we ourselves are a creditor of that
subsidiary, our claims would still be subordinate to any security interests in
the assets of that subsidiary and any senior indebtedness of that subsidiary. As
of December 31, 1999, our subsidiaries had approximately $8.8 million of
liabilities to which the notes would be effectively subordinated.
WE MAY NOT BE ABLE TO SATISFY A CHANGE IN CONTROL OFFER.
The indenture governing the notes contains provisions that apply to a change
in our control. If someone triggers a change in control as defined in the
indenture, we must offer to purchase those notes with cash, or at our option
with our common stock, subject to the terms and conditions of the indenture. If
we have to make that offer, we cannot be sure that we will have enough funds,
that we will be able to arrange for additional financing or that we will be able
to issue enough common stock to pay for all the notes that the holders could
tender.
WE INCREASED OUR INDEBTEDNESS SUBSTANTIALLY.
As a result of the sale of the notes, we incurred $345.0 million of
additional indebtedness, increasing our ratio of debt to equity (expressed as a
percentage) from approximately 3.0% to approximately 117.3% as of December 31,
1999, on a pro forma basis giving effect to the sale of the notes. Our other
indebtedness is principally comprised of operating, synthetic and capital
leases. We may incur substantial additional indebtedness in the future. The
level of our indebtedness, among other things, could:
- make it difficult for us to make payments on the notes,
- make it difficult for us to obtain any necessary future financing for
working capital, capital expenditures, debt service requirements or other
purposes;
- require us to dedicate a substantial portion of our expected cash flow
from operations to service our indebtedness, which would reduce the amount
of our expected cash flow available for other purposes, including working
capital and capital expenditures;
- limit our flexibility in planning for, or reacting to changes in, our
business; and
- make us more vulnerable in the event of a downturn in our business.
There can be no assurance that we will be able to meet our debt service
obligations, including our obligation under the notes.
WE MAY NOT BE ABLE TO PAY OUR DEBT AND OTHER OBLIGATIONS.
If our cash flow is inadequate to meet our obligations, we could face
substantial liquidity problems. If we are unable to generate sufficient cash
flow or otherwise obtain funds necessary to make required payments on the notes
or our other obligations, we would be in default under the terms thereof. A
default under the indenture would permit the holders of the notes to accelerate
the maturity of the notes and could cause defaults under future indebtedness we
may incur. Any such default could have a material adverse effect on our
business, prospects, financial condition and operating results. In addition, we
can not assure you that we would be able to repay amounts due in respect of the
notes if payment of the notes were to be accelerated following the occurrence of
an event of default as defined in the indenture.
ANY ADVERSE RATING OF THE NOTES MAY CAUSE THEIR TRADING PRICE TO FALL.
We believe that one or more rating agencies may rate the notes. If the
rating agencies rate the notes, they may assign a lower rating than expected by
investors. Rating agencies may also lower ratings on the notes in the future. If
the rating agencies assign a lower than expected rating or reduce their ratings
in the future, the trading price of the notes could decline.
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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
1995 1996 1997 1998(2) 1999 MARCH 31, 2000
-------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(1)....... 6.81x 7.35x 2.85x NM 5.43x 6.10x
</TABLE>
- ------------------------
(1) These ratios are calculated by dividing (i) earnings before taxes adjusted
for fixed charges by (ii) fixed charges, which includes interest expense
plus capitalized interest and the portion of interest expense under
operating leases we deemed to be representative of the interest factor.
(2) In 1998, earnings were insufficient to cover fixed charges by $3.9 million.
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DESCRIPTION OF NOTES
The notes were issued under the indenture (the "Indenture") between us and
State Street Bank and Trust Company of California, N.A., as trustee (the
"Trustee"). Copies of the form of Indenture, notes and registration rights
agreement will be made available to prospective investors in the notes upon
request to us.
We have summarized portions of the Indenture below. This summary is not
complete. We urge you to read the Indenture because it defines your rights as a
holder of the notes. Terms not defined in this description have the meanings
given them in the Indenture. In this section, "TriQuint," "we," "our," and "us"
each refers only to TriQuint Semiconductor, Inc. and not to any of its
subsidiaries.
GENERAL
The notes are unsecured, subordinated obligations of TriQuint in an
aggregate principal amount of $345,000,000 and mature on March 1, 2007. The
principal amount of each note is $1,000 and is payable at the office of the
Paying Agent, which initially is the Trustee, or an office or agency maintained
by us for that purpose in the Borough of Manhattan, The City of New York.
The notes bear interest at the rate of 4% per annum on the principal amount
from the date of issuance of the notes, or from the most recent date to which
interest has been paid or provided for until the notes are paid in full,
converted or funds are made available for payment in full of the notes in
accordance with the Indenture. Interest will be payable at the date of maturity
(or earlier purchase, redemption or, in some circumstances, conversion) and
semiannually on March 1 and September 1 of each year (each an "Interest Payment
Date"), commencing on September 1, 2000, to holders of record at the close of
business on February 15 and August 15 (whether or not a business day)
immediately preceding each Interest Payment Date (each a "Regular Record Date").
Each payment of interest on the notes will include interest accrued through the
day before the applicable Interest Payment Date or the date of maturity (or
earlier purchase, redemption or, in some circumstances, conversion), as the case
may be. Any payment of principal and cash interest required to be made on any
day that is not a business day will be made on the next succeeding business day.
Interest will be computed on the basis of a 360-day year composed of twelve
30-day months.
In the event of the maturity, conversion, purchase by us at the option of a
holder or redemption of a note, interest will cease to accrue on that note under
the terms and subject to the conditions of the Indenture. We may not reissue a
note that has matured or has been converted, redeemed or otherwise cancelled,
except for registration of transfer, exchange or replacement of that note.
You may present the notes for conversion at the office of the Conversion
Agent and for exchange or registration of transfer at the office of the
Registrar. Each of these agents will initially be the Trustee.
The Indenture does not contain any financial covenants or restrictions on
the payment of dividends, the incurrence of Senior Indebtedness (defined below)
or the issuance or repurchase of securities by us. The Indenture contains no
covenants or other provisions to protect holders of the notes in the event of a
highly leveraged transaction or a change in control, except to the extent
described below under "--Change in Control Permits Purchase of Notes at the
Option of the Holder."
SUBORDINATION
The notes are unsecured obligations and are subordinated in right of
payment, as provided in the Indenture, to the prior payment in full in cash or
other payment satisfactory to holders of Senior Indebtedness of all existing and
future Senior Indebtedness.
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The term "Senior Indebtedness" means that the principal, premium, if any,
interest (including all interest accrued subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and all other amounts
owed in respect of all our Indebtedness (defined below), whether outstanding on
the date of the Indenture or thereafter created, incurred, assumed, guaranteed
or in effect guaranteed by us, including all deferrals, renewals, extensions,
refinancings, replacements, restatements or refundings of, or amendments,
modifications or supplements to, the foregoing, except for:
- any such Indebtedness that is by its terms subordinated to or ranking
equal with the notes; and
- any Indebtedness between or among us and any of our subsidiaries, a
majority of the voting stock of which we directly or indirectly own.
The term "Indebtedness" means:
- all of our indebtedness, obligations and other liabilities, contingent or
otherwise, for borrowed money (including obligations in respect of
overdrafts, foreign exchange contracts, currency exchange or similar
agreements, interest rate protection, hedging or similar agreements, and
any loans or advances from banks, whether or not evidenced by notes or
similar instruments) or evidenced by bonds, debentures, notes or similar
instruments (whether or not the recourse of the holder is to the whole of
the assets or only to a portion thereof), other than any account payable
or other accrued current liability or current obligation, in each case not
constituting indebtedness, obligations or other liabilities for borrowed
money and incurred in the ordinary course of business in connection with
the obtaining of materials or services;
- all of our reimbursement obligations and other liabilities, contingent or
otherwise, with respect to letters of credit, bank guarantees, bankers'
acceptances, security purchase facilities or similar credit transactions;
- all of our obligations and liabilities, contingent or otherwise, in
respect of deferred and unpaid balances on any purchase price of any
property;
- all of our obligations and liabilities, contingent or otherwise, in
respect of leases required, in conformity with generally accepted
accounting principles, to be accounted for as capitalized lease
obligations on our balance sheet and all obligations and other
liabilities, contingent or otherwise, under any lease or related document,
including, without limitation, the balance deferred and unpaid on any
purchase price of any property and a purchase agreement in connection with
the lease of real property that provides that we are contractually
obligated to purchase or cause a third party to purchase the leased
property and thereby guarantee a residual value of the leased property to
the lessor and our obligations under that lease or related document to
purchase or to cause a third party to purchase that leased property;
- all of our obligations, contingent or otherwise, with respect to an
interest rate or other swap, cap or collar agreement or other similar
instrument or agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement;
- all of our direct or indirect guarantees or similar agreements in respect
of, and obligations or liabilities, contingent or otherwise, to purchase
or otherwise acquire or otherwise assure a creditor against loss in
respect of indebtedness, obligations or liabilities of another person of
the kind described in the above clauses;
- recourse or repurchase obligations arising in connection with sales of
assets in transactions that are in the nature of asset-based financings,
whether or not such transactions are treated as sales under generally
accepted accounting principles or bankruptcy, tax or other applicable
laws, where such recourse or repurchase obligations arise out of the
failure of such assets to provide
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the economic benefit to which the purchaser is entitled under the
agreements relating to such transactions;
- any indebtedness, or other obligations described in the above clauses
secured by any mortgage, pledge, lien or other encumbrance existing on
property that is owned or held by us, regardless of whether the
indebtedness or other obligation secured thereby shall have been assumed
by us; and
- any and all deferrals, renewals, extensions, refinancings, replacements,
restatements and refundings of, or amendments, modifications or
supplements to, or any indebtedness or obligation issued in exchange for,
any indebtedness, obligation or liability of the kind described in the
above clauses.
Any Senior Indebtedness will continue to be Senior Indebtedness and will be
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any of its terms.
By reason of the application of the subordination provisions, in the event
of dissolution, winding up, insolvency, bankruptcy or other similar proceedings,
upon any distribution of our assets:
- the holders of the notes are required to pay over their share of that
distribution to the trustee in bankruptcy, receiver or other person
distributing our assets for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all holders
of Senior Indebtedness in full in cash or other payment satisfactory to
the holders of Senior Indebtedness; and
- our unsecured creditors may recover less, ratably, than holders of our
Senior Indebtedness, and may recover more, ratably, than the holders of
notes.
In addition, we may not pay the principal amount, the Change in Control
Purchase Price (defined below), any redemption amounts or interest with respect
to any notes, and we may not acquire any notes for cash or property, except as
provided in the Indenture, if:
- any payment default on any Senior Indebtedness has occurred and is
continuing beyond any applicable grace period (including any payment
default arising from acceleration of any Senior Indebtedness); or
- any default, other than a payment default, with respect to Senior
Indebtedness occurs and is continuing that permits the acceleration of the
maturity of that Senior Indebtedness and that default is either the
subject of judicial proceedings or we receive a written notice of that
default (a "Senior Indebtedness Default Notice").
Notwithstanding the foregoing, payments with respect to the notes may resume
and we may acquire notes for cash when:
- the default with respect to the Senior Indebtedness is cured or waived or
ceases to exist; or
- in the case of a Senior Indebtedness Default Notice, 179 or more days pass
after notice of the default is received by us, provided that the terms of
the Indenture otherwise permit the payment or acquisition of the notes at
that time.
If we receive a Senior Indebtedness Default Notice, then any subsequent
Senior Indebtedness Default Notice received within one year after receiving that
Senior Indebtedness Default Notice relating to the same default on the same
issue of Senior Indebtedness will not be effective to prevent the payment or
acquisition of the notes as provided above. In addition, no payment may be made
on
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the notes if any notes are declared due and payable prior to their Stated
Maturity by reason of the occurrence of an Event of Default until the earlier
of:
- 120 days after the date of acceleration of the notes; or
- the payment in full of all Senior Indebtedness in cash or other
consideration satisfactory to the holders of such Senior Indebtedness;
but only if payment on the notes is then otherwise permitted under the terms of
the Indenture.
The notes are effectively subordinated to all existing and future
liabilities of our subsidiaries. Any rights of ours to receive assets of any
subsidiary upon its liquidation or reorganization, and the consequent right of
the holders of the notes to participate in those assets, will be subject to the
claims of that subsidiary's creditors, including trade creditors, except to the
extent that we ourselves are recognized as a creditor of that subsidiary, in
which case our claims would still be subordinate to any security interests in
the assets of that subsidiary and any indebtedness of that subsidiary senior to
that held by us.
At December 31, 1999, we had $55.6 million of Senior Indebtedness
outstanding. The Indenture does not restrict the incurrence by us or our
subsidiaries of indebtedness or other obligations. As of December 31, 1999, our
subsidiaries had approximately $8.8 million of liabilities to which the notes
would be effectively subordinated.
CONVERSION RIGHTS
You may convert your notes into shares of common stock at any time on or
prior to maturity, provided, that if we call your note for redemption, you are
entitled to convert it at any time before the close of business on the last
business day prior to the redemption date. A note in respect of which you have
delivered a Change in Control Purchase Notice (as defined below) exercising your
option to require us to purchase that holder's note, may be converted only if
the Change in Control Purchase Notice is withdrawn by a written notice of
withdrawal delivered by you to the Paying Agent prior to the close of business
on the Change in Control Purchase Date, in accordance with the terms of the
Indenture.
The initial conversion price is $135.60 per share and the initial Conversion
Rate is 7.3746 shares per $1,000 principal amount of notes. The Conversion Rate
is subject to adjustment upon the occurrence of the events described below. We
will not issue fractional shares of our common stock upon the conversion of the
notes. You will receive cash in an amount equal to the market value of that
fractional share based on the closing sale price on the trading day immediately
preceding the Conversion Date. You may convert a portion of your notes so long
as that portion is $1,000 principal amount or an integral multiple of $1,000.
To convert a note, you must:
- complete and manually sign the conversion notice on the back of the note,
or complete and manually sign a facsimile of the note, and deliver the
conversion notice to the Conversion Agent, initially the Trustee, at the
office maintained by the Conversion Agent for that purpose;
- surrender the note to the Conversion Agent;
- if required, furnish appropriate endorsements and transfer documents; and
- if required, pay all transfer or similar taxes.
Under the Indenture, the date on which all of these requirements have been
satisfied is the Conversion Date.
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Upon conversion of a note, except as provided below, you will not receive
any cash payment representing accrued interest on the note. Our delivery to you
of the fixed number of shares of common stock into which the note is
convertible, together with any cash payment to be made instead of any fractional
shares, will satisfy our obligation to pay the principal amount of the note, and
the accrued and unpaid interest to the Conversion Date. Thus, the accrued but
unpaid interest to the Conversion Date will be deemed to be paid in full rather
than cancelled, extinguished or forfeited. Notwithstanding the foregoing,
accrued but unpaid cash interest will be payable upon any conversion of notes at
the option of the holder made concurrently with or after acceleration of the
notes following an Event of Default described under "--Events of Default" below.
Notes surrendered for conversion during the period from the close of business on
any Regular Record Date next preceding any Interest Payment Date to the opening
of business on that Interest Payment Date, except notes to be redeemed on a date
within that period, must be accompanied by payment of an amount equal to the
interest on the surrendered notes that the registered holder is to receive.
Except where notes surrendered for conversion must be accompanied by payment as
described above, no interest on converted notes will be payable by us on any
Interest Payment Date subsequent to the date of conversion. The Conversion Rate
will not be adjusted at any time during the term of the notes for accrued
interest.
We will deliver to you a certificate for the number of full shares of common
stock into which any note is converted, and any cash payment to be made instead
of any fractional shares, as soon as practicable, but in any event no later than
the seventh business day following the Conversion Date. For a summary of the
U.S. federal income tax treatment that may affect you upon receiving common
stock upon conversion, see "Certain United States Federal Income Tax
Considerations--U.S. Holders--Conversion of the Notes" and "--Special Tax Rules
Applicable Non-U.S. Holders--Conversion of the Notes."
The Conversion Rate is subject to adjustment in some events, including:
- the issuance of shares of our common stock as a dividend or a distribution
with respect to common stock;
- subdivisions and combinations of our common stock;
- the issuance to all holders of common stock of rights, warrants or options
entitling them, for a period not exceeding 45 days from the record date
for such issuance, to subscribe for shares of our common stock at less
than the current market price as defined in the Indenture;
- the distribution to holders of common stock of evidences of our
indebtedness, securities or capital stock, cash or assets, including
securities, but excluding common stock distributions covered above, those
rights, warrants, dividends and distributions referred to above, dividends
and distributions paid exclusively in cash and distributions upon mergers
or consolidations resulting in a reclassification, conversion, exchange or
cancellation of common stock covered in a Transaction adjustment described
below;
- the payment of dividends and other distributions on common stock paid
exclusively in cash, if the aggregate amount of these dividends and other
distributions, when taken together with:
-- other all-cash distributions made within the preceding 12 months not
triggering a Conversion Rate adjustment, and
-- any cash and the fair market value, as of the expiration of the tender
or exchange offer referred to below, of consideration payable in respect
of any tender or exchange offer by us or one of our subsidiaries for the
common stock concluded within the preceding 12 months not triggering a
Conversion Rate adjustment,
exceeds 10% of our aggregate market capitalization on the date of the
payment of those dividends and other distributions. The aggregate market
capitalization is the product of the
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current market price of our common stock as of the trading day immediately
preceding the date of declaration of the applicable dividend multiplied by
the number of shares of common stock then outstanding; and
- payment to holders of common stock in respect of a tender or exchange
offer, other than an odd-lot offer, by us or one of our subsidiaries for
common stock as of the trading day next succeeding the last date tenders
or exchanges may be made pursuant to a tender or exchange offer by us or
one of our subsidiaries, which involves an aggregate consideration that,
together with:
-- any cash and the fair market value of other consideration payable in
respect of any tender or exchange offer by us or one of our subsidiaries
for the common stock concluded within the preceding 12 months not
triggering a Conversion Rate adjustment, and
-- the aggregate amount of any all-cash distributions to all holders of
our common stock made within the preceding 12 months not triggering a
Conversion Rate adjustment,
exceeds 10% of our aggregate market capitalization.
However, adjustment is not necessary if you may participate in the
transactions otherwise giving rise to an adjustment on a basis and with notice
that our Board of Directors determines to be fair and appropriate, or in some
other cases specified in the Indenture. In cases where the fair market value of
the portion of assets, debt securities or rights, warrants or options to
purchase our securities applicable to one share of common stock distributed to
stockholders exceeds the Average Sale Price (as defined in the Indenture) per
share of common stock, or the Average Sale Price per share of common stock
exceeds the fair market value of that portion of assets, debt securities or
rights, warrants or options so distributed by less than $1.00, rather than being
entitled to an adjustment in the Conversion Rate, you will be entitled to
receive upon conversion, in addition to the shares of common stock into which
your note is convertible, the kind and amounts of assets, debt securities or
rights, options or warrants comprising the distribution you would have received
if you had converted your note immediately prior to the record date for
determining the stockholders entitled to receive the distribution. The Indenture
permits us to increase the Conversion Rate from time to time.
Under the provisions of our rights agreement, you will receive, in addition
to the common stock issuable upon such conversion, the rights, whether or not
the rights have separated from the common stock at the time of the conversion.
In addition, if we implement a new shareholder rights plan, this new rights plan
must provide that upon conversion of the existing notes you will receive, in
addition to the common stock issuable upon such conversion, the rights whether
or not such rights have separated from the common stock at the time of such
conversion.
In the event that we become a party to any transaction, including, and with
some exceptions:
- any recapitalization or reclassification of the common stock;
- any consolidation of us with, or merger of us into, any other person, or
any merger of another person into us;
- any sale, transfer or lease of all or substantially all of our assets; or
- any compulsory share exchange,
pursuant to which the common stock is converted into the right to receive other
securities, cash or other property (each of the above being referred to as a
"Transaction"), then you will have the right to convert your notes that are then
outstanding only into the kind and amount of securities, cash or other property
receivable upon the consummation of that Transaction by you of the number of
shares of common stock issuable upon conversion of those notes immediately prior
to that Transaction.
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This calculation will be made based on the assumption that you, as a holder
of common stock, failed to exercise any rights of election that you may have to
select a particular type of consideration. The adjustment will not be made for a
merger that does not result in any reclassification, conversion, exchange or
cancellation of our common stock.
In the case of a Transaction, each note will become convertible into the
securities, cash or property receivable by you of the number of shares of the
common stock into which the note was convertible immediately prior to that
Transaction. This change could substantially lessen or eliminate the value of
the conversion privilege associated with the notes in the future. For example,
if we were acquired in a cash merger each note would become convertible solely
into cash and would no longer be convertible into securities whose value would
vary depending on our future prospects and other factors.
In the event of a taxable distribution to holders of common stock that
results in an adjustment of the Conversion Rate, or in which you otherwise
participate, or in the event the Conversion Rate is increased at our discretion,
you may, in some circumstances, be deemed to have received a distribution
subject to United States federal income tax as a dividend. Moreover, in some
other circumstances, the absence of an adjustment to the Conversion Rate may
result in a taxable dividend to you. See "Certain United States Federal Income
Tax Considerations--U.S. Holders--Dividends."
PROVISIONAL REDEMPTION
We may redeem the notes, in whole or in part, at any time before March 5,
2003, at a redemption price equal to $1,000 per $1,000 principal amount of notes
to be redeemed plus accrued and unpaid interest, if any, to the provisional
redemption date if
- the closing price of our common stock has exceeded 150% of the conversion
price then in effect (as determined based on the then effective Conversion
Rate) for at least 20 trading days within a period of 30 consecutive
trading days ending on the trading day prior to the date of mailing of the
provisional redemption notice (which date shall be not less than 30 nor
more than 60 days prior to the provisional redemption date) and
- this shelf registration statement covering resales of the notes and the
common stock issuable upon conversion of the notes is effective and
available for use and is expected to remain effective for the 30 days
following the provisional redemption date unless registration is no longer
required.
Upon any provisional redemption, we will make an additional payment in cash
with respect to the notes called for redemption to the holders of those notes on
the notice date in an amount equal to $166.67 per $1,000 principal amount of
notes, less the amount of any interest actually paid per $1,000 principal amount
of notes prior to the redemption date. We are obligated to make this additional
payment on all notes called for provisional redemption, including any notes
converted after the notice date and before the provisional redemption date.
REDEMPTION OF NOTES AT OUR OPTION
There is no sinking fund for the notes. On or after March 5, 2003, we are
entitled to redeem the notes for cash as a whole at any time, or from time to
time, in part, upon not less than 30 days' nor more than 60-days' notice of
redemption given by mail to the record holders of notes, unless a shorter notice
is satisfactory to the trustee, at the redemption prices set out below plus
accrued cash interest to the redemption date. Any redemption of the notes in
part must be in integral multiples of $1,000 principal amount.
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The table below shows redemption prices of a note per $1,000 principal
amount if redeemed during the following periods:
<TABLE>
<CAPTION>
REDEMPTION
PERIOD PRICE
------ -----
<S> <C>
March 5, 2003 through February 29, 2004..................... 102.286%
March 1, 2004 through February 28, 2005..................... 101.714%
March 1, 2005 through February 28, 2006..................... 101.143%
March 1, 2006 through February 28, 2007..................... 100.571%
</TABLE>
and 100% of the principal amount on March 1, 2007, in each case together with
accrued interest to the redemption date.
If fewer than all of the notes are to be redeemed, the trustee will select
the notes to be redeemed in principal amounts at maturity of $1,000 or integral
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 those notes prior to the redemption, the
converted portion will be deemed, solely for purposes of determining the
aggregate principal amount of the notes to be redeemed by us, to be of the
portion selected for redemption.
CHANGE IN CONTROL PERMITS PURCHASE OF NOTES AT THE OPTION OF THE HOLDER
In the event of any change in control (as defined below) of TriQuint, you
have the right, at your option, subject to the terms and conditions of the
Indenture, to require us to purchase all or any part of your notes provided that
the principal amount must be $1,000 or an integral multiple of $1,000. You will
have the right to require us to make that purchase on the date that is 45
business days after the occurrence of the change in control (the "Change in
Control Purchase Date") at a price equal to 100% of the principal amount of your
notes plus accrued interest to the Change in Control Purchase Date (the "Change
in Control Purchase Price").
We may, at our option, instead of paying the Change in Control Purchase
Price in cash, pay the Change in Control Purchase Price in our common stock
valued at 95% of the average of the closing sales prices of our common stock for
the five trading days immediately preceding and including the third day prior to
the Change in Control Date. We cannot pay the Change in Control Purchase Price
in common stock unless we satisfy the conditions described in the Indenture.
Within 25 business days after the Change in Control, we will mail to the
trustee, all record holders of the notes, and beneficial owners as required by
applicable law, a notice regarding the Change in Control, which will state,
among other things:
- the date of the Change in Control and, briefly, the events causing the
Change in Control;
- the date by which the Change in Control Purchase Notice (as defined below)
must be given;
- the Change in Control Purchase Date;
- the Change in Control Purchase Price;
- the name and address of the Paying Agent and the Conversion Agent;
- the Conversion Rate and any adjustments to the Conversion Rate;
- that notes with respect to which a Change in Control Purchase Notice is
given by the record holder may be converted only if the Change in Control
Purchase Notice has been withdrawn in accordance with the terms of the
Indenture;
- the procedures that you must follow to exercise these rights;
- the procedures for withdrawing a Change in Control Purchase Notice;
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- that record holders who want to convert notes must satisfy the
requirements provided in the notes; and
- briefly, the conversion rights of holders of notes.
To exercise the purchase right, you must deliver written notice of the
exercise of the purchase right (a "Change in Control Purchase Notice") to the
Paying Agent or an office or agency maintained by us for that purpose in the
Borough of Manhattan, The City of New York, prior to the close of business, on
the business day prior to the Change in Control Purchase Date. Any Change in
Control Purchase Notice must state:
- the name of the record holder of the notes;
- the certificate numbers of the notes to be delivered by you for purchase
by us;
- the portion of the principal amount of notes to be purchased, which
portion must be $1,000 or an integral multiple of $1,000; and
- that the notes are to be purchased by us pursuant to the applicable
provisions of the notes.
You may withdraw any Change in Control Purchase Notice by a written notice
of withdrawal delivered to the Paying Agent prior to the close of business on
the business day immediately preceding the Change in Control Purchase Date. Your
notice of withdrawal must state the principal amount and the certificate numbers
of the notes as to which the withdrawal notice relates and the principal amount,
if any, which remains subject to a Change in Control Purchase Notice.
In order for us to pay the Change in Control Purchase Price, you must
deliver your notes together with necessary endorsements, and your Change in
Control Purchase Notice has been delivered and not withdrawn, to the Paying
Agent or an office or agency maintained by us for that purpose in the Borough of
Manhattan, The City of New York, at any time, whether prior to, on or after the
Change in Control Purchase Date, after the delivery of the Change in Control
Purchase Notice. We will pay the Change in Control Purchase Price for the note
promptly following the later of the business day following the Change in Control
Purchase Date and the time of delivery of the note. If the Paying Agent holds,
in accordance with the terms of the Indenture, money sufficient to pay the
Change in Control Purchase Price of your note on the business day following the
Change in Control Purchase Date, then, immediately after the Change in Control
Purchase Date, your note will cease to be outstanding and interest on your note
will cease to accrue and will be deemed paid, whether or not that note is
delivered to the Paying Agent, and all of your other rights will terminate,
other than the right to receive the Change in Control Purchase Price upon
delivery of your note.
Under the Indenture, a "change in control" of TriQuint is deemed to have
occurred upon the occurrence of any of the following events:
- any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "Exchange Act")),
acquires the beneficial ownership (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, directly or indirectly, through a purchase, merger
or other acquisition transaction, of more than 50% of the total voting
power of our total outstanding voting stock other than an acquisition by
us, any of our subsidiaries or any of our employee benefit plans;
- we consolidate with, or merge with or into another person or convey,
transfer, lease or otherwise dispose of all or substantially all of our
assets to any person, or any person consolidates with or merges with or
into us, in any such event pursuant to a transaction in which our
outstanding voting stock is converted into or exchanged for cash,
securities or other property, other than where:
-- our voting stock is not converted or exchanged at all, except to the
extent necessary to reflect a change in our jurisdiction of
incorporation, or is converted into or exchanged for
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voting stock, other than redeemable capital stock, of the surviving or
transferee corporation; and
-- immediately after such transaction, no "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act), other
than one or more Persons who were the "beneficial owner" (as described
below), directly or indirectly, of more than 50% of the total voting
power of all of our voting stock immediately before such transaction, is
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person will be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire,
whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total
outstanding voting stock of the surviving or transferee corporation;
- during any consecutive two-year period, individuals who at the beginning
of that two-year period constituted our Board of Directors (together with
any new directors whose election to such Board of Directors, or whose
nomination for election by our stockholders, was approved by a vote of a
majority of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of our Board of Directors then in office; or
- our stockholders pass a special resolution approving a plan of liquidation
or dissolution and no additional approvals of our stockholders are
required under applicable law to cause a liquidation or dissolution.
"Redeemable capital stock" means any class or series of capital stock that,
either by its terms, by the terms of any security into which it is convertible
or exchangeable or by contract or otherwise, is, or upon the happening of an
event or passage of time would be, required to be redeemed prior to the final
stated maturity of the notes or is redeemable at the option of the holder of the
notes at any time prior to such final stated maturity, or is convertible into or
exchangeable for debt securities at any time prior to such final stated
maturity. Redeemable capital stock does not include any common stock the holder
of which has a right to put to us upon some terminations of employment.
The definition of change in control includes a phrase relating to the lease,
transfer, conveyance or other disposition of "all or substantially all" of our
assets. There is no precise established definition of the phrase "substantially
all" under applicable law. Accordingly, your ability to require us to repurchase
such notes as a result of a lease, transfer, conveyance or other disposition of
less than all of our assets may be uncertain.
The Indenture does not permit our Board of Directors to waive our obligation
to purchase notes at your option in the event of a change in control of
TriQuint.
We are not required to make an offer to purchase the notes upon a change in
control if a third party makes an offer to purchase the notes in the manner, at
the times and otherwise in compliance with the requirements set forth in the
Indenture for the offer to purchase we would otherwise be required to make and
that third party purchases all notes validly tendered to it and not withdrawn.
We will comply with the provisions of any tender offer rules under the
Exchange Act which may then be applicable, and will file any schedule required
under the Exchange Act in connection with any offer by us to purchase notes at
the option of the holders of notes upon a change in control. In some
circumstances, the change in control purchase feature of the notes may make more
difficult or discourage a takeover of us and thus the removal of incumbent
management. The change in control purchase feature, however, is not the result
of our knowledge of any specific effort to accumulate shares of common stock or
to obtain control of us by means of a merger, tender offer, solicitation or
otherwise, or part of a plan by management to adopt a series of anti-takeover
provisions. Instead, the change in control purchase feature was the result of
negotiations between us and the initial purchasers.
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<PAGE>
If a change in control were to occur, we do not know whether we would have
funds sufficient to pay the Change in Control Purchase Price for all of the
notes that might be delivered by holders seeking to exercise the purchase right,
because we or our subsidiaries might also be required to prepay some
indebtedness or obligations having financial covenants with change of control
provisions in favor of the holders of that indebtedness or those obligations. In
addition, our other indebtedness or obligations may have cross-default
provisions that could be triggered by a default under the change in control
provisions thereby possibly resulting in acceleration of the maturity of that
other indebtedness or those obligations. In any of these circumstances, the
holders of the notes would be subordinated to the prior claims of the holders of
other indebtedness or obligations. In addition, our ability to purchase the
notes with cash may be limited by the terms of our then-existing borrowing
agreements. No notes may be purchased pursuant to the provisions described above
if there has occurred and is continuing an Event of Default described under
"--Events of Default" below (other than a default in the payment of the Change
in Control Purchase Price with respect to those notes).
CONSOLIDATION, MERGER AND SALE OR LEASE OF ASSETS
Without your consent, we may consolidate with or merge into or transfer or
lease our assets substantially as an entirety to, any individual, corporation,
partnership, limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof (each a "person"), and any person is entitled to
consolidate with or merge into, or transfer or lease its assets substantially as
an entirety to us, provided that:
- the person, if other than us, formed by a consolidation or into which we
are merged, or the person, if other than one of our subsidiaries, which
receives the transfer of our assets substantially as an entirety, is a
corporation, partnership, limited liability company or trust organized and
existing under the laws of any United States jurisdiction and expressly
assumes our obligations on the notes and under the Indenture;
- immediately after giving effect to the consolidation, merger, transfer or
lease, no Event of Default (as defined above), and no event which, after
notice or lapse of time or both, would become an Event of Default,
happened and is continuing; and
- if required by the Indenture, an officer's certificate and an opinion of
counsel, each stating that the consolidation, merger, transfer or lease
complies with the provisions of the Indenture, have been delivered by us
to the Trustee.
EVENTS OF DEFAULT
The Indenture provides that, if an Event of Default specified in the
Indenture occurs and is continuing, either the trustee or the holders of not
less than 25% in aggregate principal amount of the notes then outstanding may
declare the principal amount of, and accrued interest to the date of that
declaration, on all the notes to be immediately due and payable. In the case of
some events of bankruptcy or insolvency, the principal of, and accrued interest
on all the notes to the date of the occurrence of that event, will automatically
become and be immediately due and payable. Upon any acceleration of the payment
of principal and accrued interest with respect to the notes, the subordination
provisions of the Indenture will preclude any payment being made to you until
the earlier of:
- 120 days or more after the date of that acceleration; and
- the payment in full of all Senior Indebtedness in cash or other
consideration satisfactory to such Senior Indebtedness.
but only if such payment is then otherwise permitted under the terms of the
Indenture. See "--Subordination."
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Under some circumstances, the holders of a majority in aggregate principal
amount of the notes may rescind any acceleration with respect to the notes and
its consequences.
Interest will continue to accrue and be payable on demand upon a default in:
- the payment of:
-- principal and interest when due,
-- redemption amounts, or
-- Change in Control Purchase Price;
- the delivery of shares of common stock to be delivered on conversion of
notes; or
- the payment of cash in lieu of fractional shares to be paid on conversion
of notes,
in each case to the extent that the payment of interest that is due is legally
enforceable.
Under the Indenture, Events of Default include:
- default in payment of the principal amount, interest when due (if that
default in payment of interest continues for 30 days), any redemption
amounts or the Change in Control Purchase Price with respect to any note,
when that principal amount, interest, redemption amount or Change in
Control Purchase Price becomes due and payable (whether or not that
payment is prohibited by the provisions of the Indenture);
- failure by us to deliver shares of common stock, together with cash
instead of fractional shares, when those shares of common stock, or cash
instead of fractional shares, are required to be delivered following
conversion of a note, and that default continues for 10 days;
- failure by us to comply with any of our other agreements in the notes or
the Indenture, the receipt by us of notice of that default from the
trustee or from holders of not less than 25% in aggregate principal amount
of the notes then outstanding and our failure to cure that default within
60 days after our receipt of that notice;
- default under any bond, note or other evidence of indebtedness for money
borrowed by us having an aggregate outstanding principal amount in excess
of $35 million, which default shall have resulted in that indebtedness
being accelerated, without that indebtedness being discharged or that
acceleration having been rescinded or annulled within 60 days after our
receipt of the notice of default from the trustee or receipt by us and the
trustee of the notice of default from the holders of not less than 25% in
aggregate principal amount of the notes then outstanding, unless that
default has been cured or waived; or
- some events of bankruptcy or insolvency.
The trustee will, within 90 days after the occurrence of any default, mail
to all holders of the notes notice of all defaults of which the trustee is
aware, unless those defaults have been cured or waived before the giving of that
notice. The trustee may withhold notice as to any default other than a payment
default, if it determines in good faith that withholding the notice is in the
interests of the holders. The term "default" for the purpose of this provision
means any event that is, or after notice or lapse of time or both would become,
an Event of Default with respect to the notes.
The holders of a majority in aggregate principal amount of the outstanding
notes may direct the time, method and place of conducting any proceeding for any
remedy available to the trustee or exercising any trust or power conferred on
the trustee, provided that the direction must not be in conflict with any law or
the Indenture and the direction is subject to some other limitations. The
trustee may refuse to perform any duty or exercise any right or power or extend
or risk its own funds or otherwise incur any financial liability unless it
receives indemnity satisfactory to it against any loss,
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liability or expense. You will not have any right to pursue any remedy with
respect to the Indenture or the notes, unless:
- you have previously given the trustee written notice of a continuing Event
of Default;
- the holders of at least 25% in aggregate principal amount of the
outstanding notes have made a written request to the trustee to pursue the
relevant remedy;
- you have, or the holders making that written request have, offered to the
trustee reasonable security or indemnity against any loss, liability or
expense satisfactory to it;
- the trustee has failed to comply with the request within 60 days after
receipt of that notice, request and offer of security or indemnity; and
- the holders of a majority in aggregate principal amount of the outstanding
notes have not given the trustee a direction inconsistent with that
request within 60 days after receipt of that request.
Your right:
- to receive payment of principal, any redemption amounts, the Change in
Control Purchase Price or interest in respect of the notes you hold on or
after the respective due dates expressed in the notes;
- to convert those notes; or
- to bring suit for the enforcement of any payment of principal, any
redemption amounts, the Change in Control Purchase Price or interest in
respect of those notes held by you on or after the respective due dates
expressed in the notes, or the right to convert;
will not be impaired or adversely affected without your consent.
The holders of a majority in aggregate principal amount of notes at the time
outstanding may waive any existing default and its consequences except:
- any default in any payment on the notes;
- any default with respect to the conversion rights of the notes; or
- any default in respect of the covenants or provisions in the Indenture
that may not be modified without the consent of the holder of each note as
described in "--Modification, Waiver and Meetings" below.
When a default is waived, it is deemed cured and will cease to exist, but
that waiver does not extend to any subsequent or other default or impair any
consequent right.
We are required to furnish to the trustee annually a statement as to any
default by us in the performance and observance of our obligations under the
Indenture. In addition, we are required to file with the trustee written notice
of the occurrence of any default or Event of Default within five business days
of our becoming aware of the occurrence of any default or Event of Default.
MODIFICATION, WAIVER AND MEETINGS
The Indenture or the notes may be modified or amended by us and the Trustee
with the consent of the holders of not less than a majority in aggregate
principal amount of the notes then outstanding except as specified below. The
Indenture or the notes may not be modified or amended by us without the consent
of each holder affected thereby, to, among other things:
- reduce the principal amount, Change in Control Purchase Price or any
redemption amounts with respect to any note, or extend the stated maturity
of any note or alter the manner of payment or rate of interest on any note
or make any note payable in money or securities other than that stated in
the note;
- make any reduction in the principal amount of notes whose holders must
consent to an amendment or any waiver under the Indenture or modify the
Indenture provisions relating to those amendments or waivers;
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- make any change that adversely affects the right of a holder to convert
any note;
- modify the provisions of the Indenture relating to the ranking of the
notes in a manner adverse to the holders of the notes; or
- impair the right to institute suit for the enforcement of any payment with
respect to, or conversion of, the notes.
Without the consent of any holder of notes, we and the Trustee may amend the
Indenture to:
- cure any ambiguity, defect or inconsistency, provided, however, that the
amendment to cure any ambiguity, defect or inconsistency does not
materially adversely affect the rights of any holder of notes;
- provide for the assumption by a successor of our obligations under the
Indenture;
- provide for uncertificated notes in addition to certificated notes, as
long as those uncertificated notes are in registered form for United
States federal income tax purposes;
- make any change that does not adversely affect the rights of any holder of
notes;
- make any change to comply with any requirement of the Securities and
Exchange Commission in connection with the qualification of the Indenture
under the Trust Indenture Act of 1939, as amended;
- add to our covenants or our obligations under the Indenture for the
protection of holders of the notes; or
- surrender any right, power or option conferred by the Indenture on us.
FORM, DENOMINATION, EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
We initially issued the notes in the form of one or more global notes. The
global notes were deposited with, or on behalf of, The Depository Trust Company
("DTC"), and registered in the name of DTC or its nominee. The notes were issued
in denominations of $1,000 and integral multiples of $1,000.
The principal, any premium and any interest on the notes are payable,
without coupons, and the exchange of and the transfer of the notes are
registrable, at our office or agency maintained for that purpose in the Borough
of Manhattan, The City of New York and at any other office or agency maintained
for that purpose.
You may present the notes for exchange, and for registration of transfer,
with the form of transfer endorsed on those notes, or with a satisfactory
written instrument of transfer, duly executed, at the office of the appropriate
securities registrar or at the office of any transfer agent designated by us for
that purpose, without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. We appointed the trustee of
the notes as securities registrar under the Indenture. We may at any time
rescind designation of any transfer agent or approve a change in the location
through which any transfer agent acts, provided that we maintain a transfer
agent in each place of payment for the notes. We may at any time designate
additional transfer agents for the notes.
All monies paid by us to a paying agent for the payment of principal, any
premium or any interest, on any note which remains unclaimed for two years after
the principal, premium or interest has become due and payable may be repaid to
us, and after the two-year period, you may look only to us for payment.
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In the event of any redemption, we are not required to:
- issue, register the transfer of or exchange notes during a period
beginning at the opening of business 15 days before the day of the mailing
of a notice of redemption of notes to be redeemed and ending at the close
of business on the day of that mailing; or
- register the transfer of or exchange any note called for redemption,
except, in the case of any notes being redeemed in part, any portion not
being redeemed.
BOOK-ENTRY SYSTEM
Upon the issuance of a global note, DTC credited, on its book-entry
registration and transfer system, the respective principal amounts of the notes
represented by that global note to the accounts of institutions or persons,
commonly known as participants, that have accounts with DTC or its nominee. The
accounts to be credited will be designated by the underwriters, dealers or
agents. Ownership of beneficial interests in a global note will be limited to
participants or persons that may hold interests through participants. Ownership
of interests in a global note will be shown on, and the transfer of those
ownership interests will be effected only through, records maintained by DTC
(with respect to participants' interests) and the participants (with respect to
the owners of beneficial interests in that global note). The laws of some
jurisdictions may require that some purchasers of securities take physical
delivery of the securities in definitive form. These limits and laws may impair
the ability to transfer beneficial interests in a global note.
So long as DTC, or its nominee, is the registered holder and owner of the
global note, DTC or its nominee, as the case may be, is considered the sole
owner and holder for all purposes of the notes and for all purposes under the
Indenture. Except as described below, owners of beneficial interests in a global
note is not entitled to have the notes represented by that global note
registered in their names, will not receive or be entitled to receive physical
delivery of notes in definitive form and are not be considered to be the owners
or holders of any notes under the Indenture or that global note. Accordingly,
each person owning a beneficial interest in a global note must rely on the
procedures of DTC and, if that person is not a participant, on the procedures of
the participant through which that person owns its interest, to exercise any
rights of a holder of notes under the Indenture of that global note. We
understand that under existing industry practice, in the event we request any
action of holders of notes or if an owner of a beneficial interest in a global
note desires to take any action that DTC, as the holder of that global note is
entitled to take, DTC would authorize the participants to take that action, and
that the participants would authorize beneficial owners owning through them to
take those actions or would otherwise act upon the instructions of beneficial
owners owning through them.
Payments of principal of and any premium and any interest on the notes
represented by a global note will be made to DTC or its nominee, as the case may
be, as the registered owner and holder of that global note, against surrender of
the notes at the principal corporate trust office of the trustee. Interest
payments will be made at the principal corporate trust office of the trustee or
by a check mailed to the holder at its registered address.
We expect that DTC, upon receipt of any payment of principal, and any
premium and any interest, in respect of a global note, will immediately credit
the participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of that global note as
shown on the records of DTC. We expect that payments by participants to owners
of beneficial interests in a global note held through those participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of those participants. We, our
agent, the trustee and its agent do not have any responsibility or liability for
any aspect of the records relating to, or payments made on account of,
beneficial ownership interests in a global note or for maintaining, supervising
or reviewing any records relating to those beneficial ownership interests or for
any other
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aspect of the relationship between DTC and its participants or the relationship
between those participants and the owners of beneficial interests in that global
note owning through those participants.
Unless and until it is exchanged in whole or in part for notes in definitive
form, a global note may not be transferred except as a whole by DTC to a nominee
of DTC or by a nominee of DTC to DTC or a successor to DTC selected or approved
by us or to a nominee of that successor to DTC.
The notes represented by a global note will be exchangeable for notes in
definitive form of like tenor as that global note in denominations of $1,000 and
in any greater amount that is an integral multiple of $1,000 if:
- DTC notifies us and the trustee that it is unwilling or unable to continue
as DTC for that global note or if at any time DTC ceases to be a clearing
agency registered under the Exchange Act and a successor depositary is not
appointed by us within 90 days;
- we, in our sole discretion, determine not to have all of the notes
represented by a global note and notify the trustee of that determination;
or
- there is, or continues to be, an Event of Default or there is an event
which, with the giving of notice or lapse of time, or both, would
constitute an Event of Default with respect to the notes.
Any note that is exchangeable pursuant to the preceding sentence is
exchangeable for notes registered in the names which DTC will instruct the
trustee. It is expected that DTC's instructions may be based upon directions
received by DTC from its participants with respect to ownership of beneficial
interests in that global note. Subject to the foregoing, a global note is not
exchangeable except for a global note or global notes of the same aggregate
denominations to be registered in the name of DTC or its nominee.
NOTICES
Except as otherwise provided in the Indenture, notices to holders of notes
will be given by mail to the addresses of holders of the notes as they appear in
the security register.
REPLACEMENT OF NOTES
Any mutilated note will be replaced by us at the expense of the holder upon
surrender of that note to the trustee. Notes that become destroyed, stolen or
lost will be replaced by us at the expense of the holder upon delivery to the
trustee of notes or evidence of the destruction, loss or theft of the notes
satisfactory to us and the trustee. In the case of a destroyed, lost or stolen
note, an indemnity satisfactory to the trustee and us may be required at the
expense of the holder of that note before a replacement note will be issued.
GOVERNING LAW
The Indenture, the notes and the registration rights agreement is governed
by, and construed in accordance with, the laws of the State of New York.
INFORMATION REGARDING THE TRUSTEE
State Street Bank and Trust Company of California, N.A. is the trustee,
securities registrar, paying agent and conversion agent under the Indenture.
REGISTRATION RIGHTS OF HOLDERS OF THE NOTES
We and the initial purchasers entered into the registration rights agreement
on February 24, 2000.
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Under the registration rights agreement, we generally are required to:
- File, within 90 days after February 24, 2000, a shelf registration
statement covering the notes and the common stock issuable upon conversion
of the notes;
- use our reasonable efforts to cause the shelf registration to become
effective as promptly as practicable; and
- use our reasonable efforts to keep the shelf registration statement
effective except as specified below until the earlier of the sale of all
the transfer restricted securities or two years after March 3, 2000.
When we use the term "transfer restricted securities" in this section, we
mean the common stock issued upon conversion until the earlier of the following
events:
- the date the note or common stock issued upon conversion has been
effectively registered under the Securities Act of 1933 and sold or
transferred pursuant to the shelf registration statement;
- the date on which the note or common stock issued upon conversion is
distributed to the public pursuant to Rule 144 under the Securities Act of
1933 or is available for sale pursuant to Rule 144(k) under the Securities
Act of 1933; or
- the date the note or common stock issued upon conversion ceases to be
outstanding.
We will be required to pay predetermined liquidated damages if one of the
following "registration defaults" occurs:
- we do not file the shelf registration statement within 90 days after
February 24, 2000;
- the Securities and Exchange Commission does not declare the shelf
registration statement effective within 180 days after February 24, 2000;
or
- after it has been declared effective, the shelf registration statement
ceases to be effective or available for more than 90 days in any period of
365 consecutive days.
If a registration default occurs, liquidated damages initially accrue
(a) for the notes that are transfer restricted securities, at the rate of $.05
per week per $1,000 principal amount of the notes and (b) for any common stock
issued on conversion of the notes that are transfer restricted securities, at an
equivalent rate based on the conversion price. If the registration default has
not been cured within 90 days, the liquidated damages rate will increase by $.05
per week per $1,000 principal amount of the notes that are transfer restricted
securities (and an equivalent amount for any common stock issued upon conversion
that are transfer restricted securities) for each subsequent 90-day
noncompliance period, up to a maximum rate of $.25 per week per $1,000 principal
amount of the notes that are transfer restricted securities. Liquidated damages
generally are payable at the same time as interest payments on the notes.
We may suspend the use of the shelf registration statement in certain
circumstances described in the registration rights agreement upon notice to the
holders of the transfer restricted securities, subject to the rights of the
holders of transfer restricted securities to receive liquidated damages in
accordance with the registration rights agreement.
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DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
Our authorized capital stock consists of 200,000,000 shares of common stock,
$.001 par value, and 5,000,000 shares of preferred stock, $.001 par value.
COMMON STOCK
Subject to preferences that may be applicable to any outstanding preferred
stock, holders of common stock are entitled to receive ratably such dividends as
may be declared by our board of directors out of funds legally available
therefor. We have not paid any cash dividends on our common stock. Each holder
of our common stock is entitled to one vote for each share held of record on all
matters submitted to a vote of stockholders, except that upon giving notice
required by law and in our bylaws, stockholders may cumulate their votes in the
election of directors. In the event of a liquidation, dissolution or winding up
of TriQuint, holders of our common stock are entitled to share ratably in all
assets remaining after payment of liabilities and the liquidation preference of
any outstanding preferred stock. Holders of our common stock have no preemptive
or conversion rights or other subscription rights. There are no redemption or
sinking fund provisions available to the common stock. All outstanding shares of
common stock are fully paid and nonassessable, and the shares of common stock to
be issued upon completion of this offering will be fully paid and nonassessable.
Pursuant to our shareholder rights plan, each share of common stock
currently outstanding and all shares of common stock to be issued upon
conversion of the notes offered herein has received or will receive, as the case
may be, one preferred share purchase right per share of common stock, which
until such right becomes exercisable, trades with the shares of our common
stock.
At December 31, 1999, 37,843,440 shares of common stock were outstanding.
There were 225 stockholders of record at February 1, 2000. At December 31, 1999,
options to purchase an aggregate of 6,755,038 shares of common stock were also
outstanding.
PREFERRED STOCK
Our board of directors has the authority to issue up to 5,000,000 shares of
preferred stock (less 25,000 shares which have been designated series A
participating preferred stock) in one or more series and to determine the
powers, preferences and rights and the qualifications, limitations or
restrictions, any or all of which may be greater than the rights of our common
stock, granted to or imposed upon any wholly unissued shares of undesignated
preferred stock and to fix the number of shares constituting any series and the
designation of such series, without any further vote or action by our
stockholders. It is not possible to state the actual effect of the issuance of
any shares of preferred stock upon the rights of holders of the common stock
until the board of directors determines the specific rights of the holders of
the preferred stock. However, these effects might include:
- restricting dividends on the common stock;
- diluting the voting power of the common stock;
- impairing the liquidation rights of the common stock; and
- delaying or preventing a change in control of our company without further
action by the stockholders.
In connection with our shareholder rights plan, 25,000 shares of such
preferred stock have been designated series A participating preferred stock. No
shares of the series A participating preferred stock have been issued or are
issuable until the occurrence of certain triggering events. See "--Shareholder
Rights Plan." The issuance of preferred stock may have the effect of delaying,
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deferring or preventing a change in control of TriQuint without further action
by the stockholders, may adversely affect the voting and other rights of the
holders of common stock and may have the effect of decreasing the market price
of the common stock. At present, we have no plans to issue any shares of
preferred stock.
ANTI-TAKEOVER EFFECTS OF SOME PROVISIONS OF DELAWARE LAW AND OUR CHARTER
DOCUMENTS
A number of the provisions of Delaware law and our certificate of
incorporation and bylaws could make the acquisition of our company through a
tender offer, a proxy contest or other means more difficult and could make the
removal of incumbent officers and directors more difficult. These provisions
include our failure to "opt out" of the protections of Section 203 of the
Delaware General Corporation Law, as described below, as well as our reservation
of 5,000,000 shares of blank check preferred and our staggered board of
directors. We expect these provisions to discourage coercive takeover practices
and inadequate takeover bids and to encourage persons seeking to acquire control
of our company to first negotiate with our board of directors. We believe that
the benefits provided by our ability to negotiate with the proponent of an
unfriendly or unsolicited proposal outweigh the disadvantages of discouraging
such proposals. We believe the negotiation of an unfriendly or unsolicited
proposal could result in an improvement of its terms.
DELAWARE LAW
We are 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" with an "interested
stockholder" for a period of three years following the date the person became an
interested stockholder, unless:
- prior to the date of the transaction, the board of directors of the
corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder;
- the stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding for purposes
of determining the number of shares outstanding (a) shares owned by
persons who are directors and also officers, and (b) shares owned by
employee stock plans in which employee participants do not have the right
to determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer; or
- on or subsequent to the date of the transaction, the business combination
is approved by the board and authorized at an annual or special meeting of
stockholders, and not by written consent, 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 or stock sale,
or other transaction resulting in a financial benefit to the interested
stockholder. 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 outstanding voting securities. We expect the existence of this
provision to have an anti-takeover effect with respect to transactions our board
of directors does not approve in advance. We also anticipate that Section 203
may also discourage attempts that might result in a premium over the market
price for the shares of common stock held by stockholders.
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CHARTER DOCUMENTS
Our certificate of incorporation provides for cumulative voting for the
election of directors. Section 141 of the Delaware General Corporation Law
provides that a director elected by cumulative voting may not be removed without
cause if the number of votes cast against removal would be sufficient to elect
such director under cumulative voting. Our bylaws define "cause" for the purpose
of these provisions to mean:
- continued willful failure to perform the obligations of a director,
- gross negligence by the director,
- engaging in transactions that defraud our company,
- fraud or intentional misrepresentation including falsifying use of funds
and intentional misstatements made in financial statements, books, records
or reports to stockholders or governmental agencies,
- material violation of any agreement between the director and TriQuint,
- knowingly causing us to commit violations of applicable law (including by
failure to act),
- acts of moral turpitude or
- conviction of a felony.
Our bylaws establish an advance notice procedure for stockholder proposals
to be brought before an annual meeting of our stockholders, including proposed
nominations of persons for election to the board of directors. At an annual
meeting, stockholders may only consider proposals or nominations specified in
the notice of meeting or brought before the meeting by or at the direction of
the board of directors. Stockholders may also consider a proposal or nomination
by a person who was a stockholder of record on the record date for the meeting,
who is entitled to vote at the meeting and who has given to our Secretary timely
written notice, in proper form, of his or her intention to bring that business
before the meeting. The bylaws do not give the board of directors the power to
approve or disapprove stockholder nominations of candidates or proposals
regarding other business to be conducted at a special or annual meeting of the
stockholders. However, our bylaws may have the effect of precluding the conduct
of that item of business at a meeting if the proper procedures are not followed.
These provisions may also discourage or deter a potential acquirer from
conducting a solicitation of proxies to elect the acquirer's own slate of
directors or otherwise attempting to obtain control of our company.
Under Delaware law, a special meeting of stockholders may be called by the
board of directors or by any other person authorized to do so in the certificate
of incorporation or the bylaws. The following persons are authorized to call a
special meeting of stockholders:
- a majority of our board of directors;
- the chairman of the board; or
- the chief executive officer.
The limitation on the right of our stockholders to call a special meeting
will make it more difficult for a stockholder to force stockholder consideration
of a proposal over the opposition of the board of directors by calling a special
meeting of stockholders. The restriction on the ability of stockholders to call
a special meeting also will make it more difficult to replace the board until
the next annual meeting.
Although Delaware law provides that stockholders may execute an action by
written consent in lieu of a stockholder meeting, it also allows us to eliminate
stockholder actions by written consent. Elimination of written consents of
stockholders may lengthen the amount of time required to take
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stockholder actions since actions by written consent are not subject to the
minimum notice requirement of a stockholder's meeting. However, we believe that
the elimination of stockholders' written consents may deter hostile takeover
attempts. Without the availability of stockholder's actions by written consent,
a holder controlling a majority of our capital stock would not be able to amend
our bylaws or remove directors without holding a stockholders meeting. The
holder would have to obtain the consent of a majority of the board of directors,
the chairman of the board or the chief executive officer to call a stockholders'
meeting and satisfy the notice periods determined by the board of directors. Our
certificate of incorporation provides for the elimination of actions by written
consent of stockholders.
SHAREHOLDER RIGHTS PLAN
In June 1998, our board of directors adopted the shareholder rights plan
(the "rights plan"). Pursuant to the rights plan, we declared a dividend of one
preferred share purchase right (a "right") for each outstanding share of common
stock and each share of common stock issued thereafter. Initially, each right
entitles the holder thereof to purchase from TriQuint one share of common stock
at an exercise price of $400.00, subject to adjustment for stock split, stock
dividends and similar events. The rights are not exercisable until the
occurrence of certain triggering events. The rights will become exercisable only
if a person or group acquires 15% or more of our common stock or announces a
tender offer or exchange offer that would result in their ownership of 15% or
more of our common stock.
Ten days after an acquisition or offer by a person or group for 15% or more
of TriQuint's common stock, each right becomes exercisable at the right's then
current exercise price, for shares of our common stock (or, in certain
circumstances as determined by our board of directors, a combination of cash,
property, common stock or other securities) having a value of twice the right's
exercise price. Alternatively, if TriQuint is involved in a merger or other
business combination transaction with another person ten or more days after such
acquisition or offer, each right becomes exercisable, at the right's then
current exercise price, for shares of common stock of such other person having a
value of twice the right's exercise price. The rights are redeemable up to ten
days following the announcement of such acquisition or offer, subject to
extension by our board of directors, at a price of $0.01 per right. The rights
plan expires in June 2008 unless we redeem the rights earlier.
Pursuant to the rights plan, we designated 25,000 shares of preferred stock
series A participating preferred, and reserved those shares for issuance under
the rights plan. The series A participating preferred purchasable upon exercise
of the rights will be nonredeemable and junior to any other series of preferred
stock we may issue (unless otherwise provided in the terms of such stock). Each
share of series A participating preferred will have a preferential cumulative
quarterly dividend in an amount equal to 1,000 times the dividend declared on
each share of common stock and, in the event of liquidation, the holders of
series A participating preferred will receive a preferred liquidation payment
equal to $125,000 per share, plus accrued and unpaid dividends (the "series A
liquidation preference"). Following payment of the series A liquidation
preference, and after the holders of shares of common stock shall have received
an amount per share equal to the quotient obtained by dividing the series A
liquidation preference by 1,000, the holders of series A participating preferred
and holders of common stock shall share ratably and proportionately the
remaining assets to be distributed in liquidation. Each share of series A
participating preferred stock will have 1,000 votes, voting together with the
shares of common stock as a single class. In the event of any merger,
consolidation or other transaction in which shares of common stock are exchanged
for or changed into other securities, cash and/or other property, each share of
series A participating preferred will be entitled to receive 1,000 times the
amount and type of consideration received per share of common stock.
The rights plan is intended to protect TriQuint's stockholders in the event
of an unsolicited offer to acquire, or the acquisition of, 15% or more of the
common stock of TriQuint. The rights are not intended to prevent a takeover of
TriQuint and will not interfere with any tender offer or business
40
<PAGE>
combination approved by the board of directors. The rights encourage persons
seeking control of TriQuint to initiate such an acquisition or offer to acquire
through arm's-length negotiations with the board of directors.
INDEMNIFICATION ARRANGEMENTS
Our certificate of incorporation limits the liability of our directors and
executive officers to the maximum extent permitted by Delaware law. Delaware law
provides that directors of a corporation will not be personally liable for
monetary damages for breach of their fiduciary duties as directors, except
liability for:
- any breach of their duty of loyalty to our company or our stockholders;
- acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General Corporation
Law; or
- any transaction from which the director derived an improper personal
benefit.
The limits on a director or officer's liability in our certificate of
incorporation do not apply to liabilities arising under the federal securities
laws and do not affect the availability of equitable remedies such as injunctive
relief or rescission.
Our certificate of incorporation together with our bylaws provide that we
must indemnify our directors and executive officers and may indemnify our other
officers and employees and other agents to the fullest extent permitted by law.
We believe that indemnification under our bylaws covers at least negligence
and gross negligence on the part of indemnified parties. Our bylaws also permit
us to secure insurance on behalf of any officer, director, employee or other
agent for any liability arising out of his or her actions in that capacity,
regardless of whether our bylaws would otherwise permit indemnification. We
believe that the indemnification provisions of our certificate of incorporation
and bylaws are necessary to attract and retain qualified persons as directors
and officers. We also maintain directors' and officers' liability insurance.
We have entered into agreements to indemnify our directors, executive
officers and other employees as determined by the board of directors. These
agreements provide for indemnification for related expenses including attorneys'
fees, judgments, fines and settlement amounts incurred by any such person in any
action or proceeding. We believe that these provisions and agreements are
necessary to attract and retain qualified persons as our directors and executive
officers.
At present we are not aware of any pending litigation or proceeding
involving any director, officer, employee or agent of our company where
indemnification will be required or permitted. Nor are we aware of any
threatened litigation or proceeding that might result in a claim for
indemnification.
TRANSFER AGENT AND REGISTRAR
ChaseMellon Shareholder Services LLC serves as the transfer agent and
registrar for our common stock. ChaseMellon's address is 85 Challenger Road,
Ridgefield Park, New Jersey 07660 and its telephone number is 1-800-522-6645.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
This section summarizes some of the U.S. federal income tax considerations
relating to the purchase, ownership and disposition of the notes and of common
stock into which the notes may be converted. This summary does not provide a
complete analysis of all potential tax considerations. The information provided
below is based on authorities now in effect. These authorities may change, or
the Internal Revenue Service (the "IRS") might interpret the existing
authorities differently. In either case, the tax consequences of purchasing,
owning or disposing of notes or common stock could differ from those described
below. The summary generally applies only to U.S. Holders that purchase notes in
the initial offering at their issue price and hold the notes or common stock as
"capital assets" (generally, for investment). For this purpose, U.S. holders
include citizens or residents of the United States and corporations organized
under the laws of the United States or any state. Trusts are U.S. holders if
they are subject to the primary supervision of a U.S. court and the control of
one of more U.S. persons. Special rules apply to nonresident alien individuals
and foreign corporations or trusts ("Non-U.S. holders"). This summary describes
some, but not all, of these special rules. For U.S. federal income tax purposes,
income earned through a foreign or domestic partnership or similar entity is
attributed to its owners. The summary generally does not address tax
considerations that may be relevant to particular investors because of their
specific circumstances, or because they are subject to special rules. Finally,
the summary does not describe the effect of the federal estate and gift tax laws
on U.S. holders or the effects of any applicable foreign, state, or local laws.
INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT THEIR OWN TAX
ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR
PARTICULAR SITUATIONS AND THE CONSEQUENCES OF FEDERAL ESTATE OR GIFT TAX LAWS,
FOREIGN, STATE, OR LOCAL LAWS, AND TAX TREATIES.
U.S. HOLDERS
TAXATION OF INTEREST. U.S. holders are required to recognize ordinary
interest income when interest on the notes is paid or accrued, in accordance
with the holders' regular method of tax accounting. In general, if a holder of a
debt instrument may receive payments of other than fixed periodic interest that
exceed the issue price of the instrument, the holder may be required to
recognize additional interest as "original issue discount" over the term of the
instrument. The notes were not issued with original issue discount. In certain
circumstances, we may be obligated to pay noteholders amounts in excess of
stated interest or principal. For example, we are required to pay liquidated
damages to noteholders in certain circumstances described in "Description of
Notes--Registration Rights of the Holders of the Notes." In addition, if the
price of our common stock exceeds 150% of the conversion price of the notes
during a prescribed period, and certain other conditions are met regarding the
registration of the notes and common stock, we may call the notes for redemption
at a price that will include an additional amount in excess of their principal
amount. The original issue discount regulations allow contingent payments such
as these to be disregarded in computing a holder's interest income if the
contingency is either "incidental" or "remote." If we are required to pay
liquidated damages, we believe that these payments would be insignificant
relative to the total expected amount of remaining payments on the notes.
Therefore, we will treat the possible payment of liquidated damages as an
incidental contingency. If we exercise our provisional redemption right, it is
likely that holders of the notes would convert them into common stock.
Therefore, we believe that the possibility that we will pay the prescribed
redemption premium is remote. Our determination that these contingencies are
incidental or remote is binding on holders unless they disclose their contrary
position. If we pay liquidated damages, noteholders would be required to
recognize additional interest income. If we pay a redemption premium in
connection with our exercise of our provisional redemption right, the premium
would most likely be treated as capital gain under the rules described under
"U.S. Holders--Sale, Exchange or Redemption of the Notes."
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<PAGE>
SALE, EXCHANGE OR REDEMPTION OF THE NOTES. A U.S. holder will generally
recognize capital gain or loss if the holder disposes of a note in a sale,
redemption or exchange other than a conversion of the note into common stock.
The holder's gain (or loss) will equal the amount by which the proceeds received
by the holder exceed (or are less than) the holder's adjusted tax basis in the
note. The proceeds received by the holder will include the amount of any cash
and the fair market value of any other property received for the note. The
holder's tax basis in the note will generally equal the amount the holder paid
for the note. The portion of any proceeds that is attributable to accrued
interest will not be taken into account in computing the holder's capital gain
or loss. Instead, that portion will be recognized as ordinary interest income to
the extent that the holder has not previously included the accrued interest in
income. The gain or loss recognized by a holder on a disposition of the note
will be long-term capital gain or loss if the holder held the note for more than
one year. In the case of individuals, long-term capital gains are generally
taxed at a maximum rate of 20%, while the deductibility of capital losses is
subject to limitation.
CONVERSION OF THE NOTES. A U.S. holder generally will not recognize any
income, gain or loss on converting a note into common stock. If the holder
receives cash in lieu of a fractional share of stock, however, the holder will
be treated as if it received the fractional share and then had the fractional
share redeemed for the cash. The holder would recognize gain (or loss) in the
amount by which the cash exceeds (or is less than) the holder's basis
attributable to the fractional share. The holder's basis in the common stock
received on conversion will equal the holder's adjusted basis in the note. The
holder's holding period for the stock will include the period during which the
holder held the note.
DIVIDENDS. If, after converting a note into common stock, a U.S. holder
receives a distribution from us in respect of the stock, the distribution will
be treated as a dividend, taxable to the U.S. holder as ordinary income, to the
extent it is paid from our current or accumulated earnings and profits. If the
distribution exceeds our current and accumulated profits, the excess will be
treated first as a tax-free return of the holder's investment, up to the
holder's basis in our common stock. Any remaining excess will be treated as
capital gain. If the U.S. holder is a U.S. corporation, it would generally be
able to claim a deduction equal to a portion of any dividends received.
The terms of the notes allow for changes in the conversion price of the
notes in certain circumstances. A change in conversion price that allows
noteholders to receive more shares of common stock on conversion may increase
the noteholders' proportionate interests in our earnings and profits or assets.
In that case, the noteholders would be treated as though they received a
dividend paid in stock. Such a constructive stock dividend could be taxable to
the noteholders, although they would not actually receive any cash or other
property. A taxable constructive stock dividend would result, for example, if
the conversion price were adjusted to compensate noteholders for distributions
of cash or property to our stockholders. Not all changes in conversion price
that allow noteholders to receive more stock on conversion, however, increase
the noteholders' proportionate interests in TriQuint. Such a change could simply
prevent the dilution of the noteholders' interests upon a stock split or other
change in capital structure. These changes, if made by a bona fide, reasonable
adjustment formula, are not treated as constructive stock dividends. Conversely,
if an event occurs that dilutes the noteholders' interests and the conversion
price is not adjusted, the resulting increase in the proportionate interests of
our stockholders could be treated as a taxable stock dividend to them. Any
taxable constructive stock dividends resulting from a change to, or failure to
change, the conversion price would be treated like distributions paid in cash or
other property. They would result in ordinary income to the recipient, to the
extent of TriQuint's current or accumulated earnings and profits, with any
excess treated as a tax-free return of capital or as capital gain.
SALE OF COMMON STOCK. A U.S. holder will generally recognize capital gain
or loss on a sale or exchange of common stock. The holder's gain (or loss) will
equal the amount by which the proceeds received by the holder exceed (or are
less than) the holder's adjusted tax basis in the stock. The
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<PAGE>
proceeds received by the holder will include the amount of any cash and the fair
market value of any other property received for the stock. The gain or loss
recognized by a holder on a sale or exchange of stock will be long-term capital
gain or loss if the holder held the stock for more than one year. In the case of
individuals, long-term capital gains are generally taxed at a maximum rate of 20
percent, while the deductibility of capital losses is subject to limitation.
SPECIAL TAX RULES APPLICABLE TO NON-U.S. HOLDERS
TAXATION OF INTEREST. Payments of interest to nonresident persons or
entities are generally subject to U.S. federal income tax at a rate of 30%,
collected by means of withholding by the payor. Payments of interest on the
notes to most Non-U.S. holders, however, will qualify as "portfolio interest,"
and thus will be exempt from the withholding tax, if the holders certify their
nonresident status as described below. The portfolio interest exception will not
apply to payments of interest to a Non-U.S. holder that
- owns, directly or indirectly, our voting stock with 10% or more of the
total voting power, or
- is a "controlled foreign corporation" that is related to TriQuint.
In general, a controlled foreign corporation is a foreign corporation more than
50% of the stock of which (by vote or value) is owned, directly or indirectly,
by one or more U.S. persons that each owns, directly or indirectly, voting stock
with at least 10% of the total voting power.
The portfolio interest exception and several of the special rules for
Non-U.S. holders described below apply only if the holder certifies its
nonresident status. A Non-U.S. holder can meet this certification requirement by
providing a Form W-8BEN to us or our paying agent. If the Non-U.S. holder holds
a note through a financial institution, or other agent acting on the owner's
behalf, the certification requirement will be met if the Non-U.S. holder
provides a Form W-8BEN to the agent and the agent provides to us or our paying
agent a Form W-8IMY along with a copy of the Non-U.S. holder's Form W-8BEN. The
certification requirement can also be met using appropriate substitute forms for
the standard IRS forms. For payments made to a foreign partnership after
December 31, 2000, the certification requirements generally apply to the
partners rather than the partnership.
SALE, EXCHANGE OR REDEMPTION OF NOTES. Non-U.S. holders generally will not
be subject to U.S. federal income tax on any gain realized on the sale,
exchange, or other disposition of notes. This general rule, however, is subject
to several exceptions. For example, the gain would be subject to U.S. federal
income tax if
- the gain is effectively connected with the conduct by the Non-U.S. holder
of a U.S. trade or business,
- the Non-U.S. holder was a citizen or resident of the United States and
thus is subject to special rules that apply to expatriates, or
- the rules of the Foreign Investment in Real Property Tax Act ("FIRPTA")
(described below) treat the gain as effectively connected with a U.S.
trade or business.
The FIRPTA rules may apply to a sale, exchange or other disposition of notes if
we are, or were within five years before the transaction, a "U.S. real property
holding corporation" ("USRPHC"). In general, we would be a USRPHC if interests
in U.S. real estate comprised most of our assets. We do not believe that we are
a USRPHC or that we will become one in the future. Even if we were a USRPHC, the
FIRPTA rules would apply to a disposition of notes by a Non-U.S. holder only if
the holder owned, directly or indirectly, more than 5% of our common stock
within five years before the holder's disposition of the notes. For this
purpose, the Non-U.S. holder would be treated as owning the stock of TriQuint
that the holder could acquire on conversion of the holder's notes. If all of
these conditions were met, and the FIRPTA rules applied to the sale, exchange,
or other disposition of notes by a Non-
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<PAGE>
U.S. holder, then any gain recognized by the holder would be treated as
effectively connected with a U.S. trade or business, and would thus be subject
to U.S. federal income tax and withholding.
CONVERSION OF THE NOTES. A Non-U.S. holder generally will not recognize any
income, gain or loss on converting a note into common stock. Any gain recognized
as a result of the holder's receipt of cash in lieu of a fractional share of
stock would also generally not be subject to U.S. federal income tax. See
"Special Tax Rules Applicable to Non-U.S. Holders--Sale of Common Stock," below.
DIVIDENDS. Dividends paid to a Non-U.S. holder on common stock received on
conversion of a note will generally be subject to U.S. withholding tax at a 30%
rate. The withholding tax might not apply, however, or might apply at a reduced
rate, under the terms of a tax treaty between the United States and the Non-U.S.
holder's country of residence. A Non-U.S. holder must demonstrate its
entitlement to treaty benefits by certifying its nonresident status. Some of the
common means of meeting this requirement are described above under "Special Tax
Rules Applicable to Non-U.S. Holders--Taxation of Interest."
SALE OF COMMON STOCK. Non-U.S. holders will generally not be subject to
U.S. federal income tax on any gains realized on the sale, exchange, or other
disposition of common stock. This general rule, however, is subject to
exceptions, some of which are described above under "Special Tax
Rules Applicable to Non-U.S. Holders--Sale, Exchange or Redemption of Notes."
INCOME OR GAINS EFFECTIVELY CONNECTED WITH A U.S. TRADE OR BUSINESS. The
preceding discussion of the tax consequences of the purchase, ownership or
disposition of notes or common stock by a Non-U.S. holder assumes that the
holder is not engaged in a U.S. trade or business. If any interest on the notes,
dividends on common stock, or gain from the sale, exchange or other disposition
of the notes or stock is effectively connected with a U.S. trade or business
conducted by the Non-U.S. holder, then the income or gain will be subject to
U.S. federal income tax at the regular graduated rates. If the Non-U.S. holder
is eligible for the benefits of a tax treaty between the United States and the
holder's country of residence, any "effectively connected" income or gain will
be subject to U.S. federal income tax only if it is also attributable to a
permanent establishment maintained by the holder in the United States. Payments
of dividends that are effectively connected with a U.S. trade or business, and
therefore included in the gross income of a Non-U.S. holder, will not be subject
to the 30% withholding tax. To claim exemption from withholding, the holder must
certify its qualification, which can be done by filing a Form W-8ECI. If the
Non-U.S. holder is a corporation, that portion of its earnings and profits that
are effectively connected with its U.S. trade or business would generally be
subject to a "branch profits tax." The branch profits tax rate is generally 30%,
although an applicable tax treaty might provide for a lower rate.
U.S. FEDERAL ESTATE TAX. The estates of nonresident alien individuals are
subject to U.S. federal estate tax on property with a U.S. situs. The notes will
not be U.S. situs property as long as interest on the notes paid immediately
before the death of the holder would have qualified as portfolio interest,
exempt from withholding tax as described above under "Special Tax Rules
Applicable to Non-U.S. Holders--Taxation of Interest," and would not have been
effectively connected with a U.S. trade or business. Because TriQuint is a U.S.
corporation, our common stock will be U.S. situs property, and therefore will be
included in the taxable estate of a nonresident alien decedent. The U.S. federal
estate tax liability of the estate of a nonresident alien may be affected by a
tax treaty between the United States and the decedent's country of residence.
BACKUP WITHHOLDING AND INFORMATION REPORTING
The Code and the Treasury regulations require those who make specified
payments to report the payments to the IRS. Among the specified payments are
interest, dividends and proceeds paid by brokers to their customers. The
required information returns enable the IRS to determine whether the
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<PAGE>
recipient properly included the payments in income. This reporting regime is
reinforced by "backup withholding" rules. These rules require the payors to
withhold tax at a 31% rate from payments subject to information reporting if the
recipient fails to cooperate with the reporting regime by failing to provide his
taxpayer identification number to the payor, furnishing an incorrect
identification number, or repeatedly failing to report interest or dividends on
his returns. The information reporting and backup withholding rules do not apply
to payments to corporations, whether domestic or foreign.
Payments of interest or dividends to individual U.S. holders of notes or
common stock will generally be subject to information reporting, and will be
subject to backup withholding unless the holder provides us or our paying agent
with a correct taxpayer identification number.
The information reporting and backup withholding rules do not apply to
payments that are subject to the 30% withholding tax on dividends or interest
paid to nonresidents, or to payments that are exempt from that tax by
application of a tax treaty or special exception. Therefore, payments of
dividends on common stock, or interest on notes, will generally not be subject
to information reporting or backup withholding. To avoid backup withholding on
dividends paid after December 31, 2000, a Non-U.S. holder will have to certify
its nonresident status. Some of the common means of doing so are described above
under "Special Rules Applicable to Non-U.S. Holders--Taxation of Interest."
Payments made to U.S. holders by a broker upon a sale of notes or common
stock will generally be subject to information reporting and backup withholding.
If, however, the sale is made January 1, 2001, through a foreign office of a
U.S. broker, the sale will be subject to information reporting but not backup
withholding. If the sale is made through a foreign office of a foreign broker,
the sale will generally not be subject to either information reporting or backup
withholding. If the foreign broker is controlled by U.S. persons or engaged in a
U.S. trade or business, information reporting, but not backup withholding, may
apply.
Payments made to Non-U.S. holders by a broker upon a sale of notes or common
stock will not be subject to information reporting or backup withholding as long
as the Non-U.S. holder certifies his nonresident status.
Any amounts withheld from a payment to a holder of notes or common stock
under the backup withholding rules can be credited against any U.S. federal
income tax liability of the holder.
THE PRECEDING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
IS FOR GENERAL INFORMATION ONLY. IT IS NOT TAX ADVICE. EACH PROSPECTIVE INVESTOR
SHOULD CONSULT SUCH INVESTOR'S OWN TAX ADVISOR REGARDING THE PARTICULAR U.S.
FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF PURCHASING, HOLDING, AND
DISPOSING OF NOTES OR COMMON STOCK OF TRIQUINT, INCLUDING THE CONSEQUENCES OF
ANY PROPOSED CHANGE IN APPLICABLE LAWS.
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SELLING SECURITYHOLDERS
We originally issued the notes in private placements in February 2000 and
March 2000. The notes were resold by the initial purchasers to qualified
institutional buyers under Rule 144A under the Securities Act and to a limited
number of institutional accredited investors as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act in transactions exempt from registration
under the Securities Act. Selling securityholders may offer and sell the notes
and the underlying common stock pursuant to this prospectus.
The following table contains information as of April 3, 2000, with respect
to the selling securityholders and the principal amount of notes and the
underlying common stock beneficially owned by each selling security holder that
may be offered using this prospectus.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT AT
MATURITY OF NUMBER OF
NOTES SHARES OF
BENEFICIALLY PERCENTAGE OF COMMON STOCK PERCENTAGE OF
OWNED THAT NOTES THAT MAY BE COMMON STOCK
NAME MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
- ---- ------------ ------------- ------------ --------------
<S> <C> <C> <C> <C>
State of Oregon Equity.................... $8,700,000 2.5% 64,159 *
c/o Froley, Revy Investment Co., Inc.
10900 Wilshire Boulevard
Suite 900
Los Angeles, CA 90024
PRIM Board................................ 5,025,000 1.5 37,057 *
c/o Froley, Revy Investment Co., Inc.
10900 Wilshire Boulevard
Suite 900
Los Angeles, CA 90024
Bear Stearns & Co., Inc.(3)............... 3,550,000 1.0 25,811 *
245 Park Avenue
New York, NY 10167
White River Securities LLC................ 3,550,000 1.0 25,811 *
c/o Bear Stearns & Co., Inc.
Global Fund Management
245 Park Avenue
New York, NY 10167
State of Connecticut Combined
Investment Funds........................ 3,395,000 * 25,036 *
c/o Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
Arkansas PERS............................. 3,315,000 * 24,446 *
c/o Froley, Revy Investment Co., Inc.
10900 Wilshire Boulevard
Suite 900
Los Angeles, CA 90024
Vanguard Convertible Securities Fund,
Inc..................................... 3,005,000 * 22,160 *
c/o Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT AT
MATURITY OF NUMBER OF
NOTES SHARES OF
BENEFICIALLY PERCENTAGE OF COMMON STOCK PERCENTAGE OF
OWNED THAT NOTES THAT MAY BE COMMON STOCK
NAME MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
- ---- ------------ ------------- ------------ --------------
<S> <C> <C> <C> <C>
Delaware PERS............................. 2,675,000 * 19,727 *
c/o Froley, Revy Investment Co., Inc.
10900 Wilshire Boulevard
Suite 900
Los Angeles, CA 90024
Chrysler Corporation Master
Retirement Trust........................ 2,655,000 * 19,579 *
c/o Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
BNP Arbitrage SNC......................... 2,500,000 * 18,436 *
555 Croton Road, 4th Floor
King of Prussia, PA 19406
Grace Brothers, Ltd....................... 2,500,000 * 18,436 *
1560 Sherman Avenue
Suite 900
Evanston, IL 60201
OCM Convertible Trust..................... 1,590,000 * 11,725 *
c/o Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
ICI American Holdings Trust............... 1,425,000 * 10,508 *
c/o Froley, Revy Investment Co., Inc.
10900 Wilshire Boulevard
Suite 900
Los Angeles, CA 90024
Starvest Combined Portfolio............... 1,325,000 * 9,771 *
c/o Froley, Revy Investment Co., Inc.
10900 Wilshire Boulevard
Suite 900
Los Angeles, CA 90024
AIG/National Union Fire Insurance......... 1,200,000 * 8,849 *
c/o Froley, Revy Investment Co., Inc.
10900 Wilshire Boulevard
Suite 900
Los Angeles, CA 90024
Zeneca Holdings Trust..................... 1,100,000 * 8,112 *
c/o Froley, Revy Investment Co., Inc.
10900 Wilshire Boulevard
Suite 900
Los Angeles, CA 90024
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT AT
MATURITY OF NUMBER OF
NOTES SHARES OF
BENEFICIALLY PERCENTAGE OF COMMON STOCK PERCENTAGE OF
OWNED THAT NOTES THAT MAY BE COMMON STOCK
NAME MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
- ---- ------------ ------------- ------------ --------------
<S> <C> <C> <C> <C>
Delta Airlines Master Trust............... 1,065,000 * 7,853 *
c/o Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
Bank Austria Cayman Island Ltd............ 1,000,000 * 7,375 *
c/o Ramius Capital Group
757 Third Avenue
New York, New York 10017
State Employees' Retirement
Fund of the State of Delaware........... 700,000 * 5,162 *
c/o Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
Partner Reinsurance Company Ltd........... 590,000 * 4,351 *
c/o Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
Castle Convertible Fund, Inc.............. 500,000 * 3,687 *
One World Trade Center
Suite 9333
New York, NY 10048
Nalco Chemical Company.................... 475,000 * 3,502 *
c/o Froley, Revy Investment Co., Inc.
10900 Wilshire Boulevard
Suite 900
Los Angeles, CA 90024
Motion Picture Industry Health
Plan--Active Member Fund................ 335,000 * 2,470 *
c/o Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
Motion Picture Industry Health
Plan--Retiree Member Fund............... 165,000 * 1,216 *
c/o Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT AT
MATURITY OF NUMBER OF
NOTES SHARES OF
BENEFICIALLY PERCENTAGE OF COMMON STOCK PERCENTAGE OF
OWNED THAT NOTES THAT MAY BE COMMON STOCK
NAME MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2)
- ---- ------------ ------------- ------------ --------------
<S> <C> <C> <C> <C>
Jackson Investment Fund Ltd............... 115,000 * 848 *
c/o Leeds Management Services
(Cayman) Ltd.
One Capital Place
P.O. Box 847
Grand Cayman, Cayman Islands
British West Indies
Island Holdings........................... 65,000 * 479 *
c/o Froley, Revy Investment Co., Inc.
10900 Wilshire Boulevard
Suite 900
Los Angeles, CA 90024
Any other holder of notes or future
transferee, pledgee, donee or successor
of any holder(4)(5).....................
</TABLE>
- ------------------------
* Less than 1%.
(1) Assumes conversion of all of the holder's notes at a conversion price of
$135.60 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
38,387,139 shares of common stock outstanding as of April 3, 2000. 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) Bear Stearns has acted as a underwriter for an issuance of our
securities within the past three years.
(4) Information about other selling security holders will be set forth in
prospectus supplements, if required.
(5) 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."
50
<PAGE>
PLAN OF DISTRIBUTION
We will not receive any of the proceeds of the sale of the notes and the
underlying common stock offered by this prospectus. The notes and the underlying
common stock may be sold from time to time to purchasers:
- directly by the selling securityholders;
- through underwriters, broker-dealers or agents who may receive
compensation in the form of discounts, concessions or commissions from the
selling securityholders or the purchasers of the notes and the underlying
common stock.
The selling securityholders and any such broker-dealers or agents who
participate in the distribution of the notes and the underlying common stock may
be deemed to be "underwriters." As a result, any profits on the sale of the
notes and underlying common stock by selling securityholders and any discounts,
commissions or concessions received by any such broker-dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities Act.
If the selling securityholders were to deemed underwriters, the selling
securityholders may be subject to certain statutory liabilities of, including,
but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act.
If the notes and underlying common stock are sold through underwriters or
broker-dealers, the selling securityholders will be responsible for underwriting
discounts or commissions or agent's commissions.
The notes and underlying common stock may be sold in one or more
transactions at:
- fixed prices;
- prevailing market prices at the time of sale;
- varying prices determined at the time of sale; or
- negotiated prices.
These sales may be effected in transactions:
- on any national securities exchange or quotation service on which the
notes and underlying common stock may be listed or quoted at the time of
the sale, including the Nasdaq National Market 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
51
<PAGE>
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
"TQNT". We do not intend to apply for listing of the notes on any securities
exchange or for quotation through Nasdaq. Accordingly, no assurance can be given
as to the development of liquidity or any trading market for the notes. See
"Risk Factors--A public market may not develop for the notes."
There can be no assurance that any selling securityholder will sell any or
all of the notes or underlying common stock pursuant to this prospectus. In
addition, any notes or underlying common stock covered by this prospectus that
qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be
sold under Rule 144 or Rule 144A rather than pursuant to this prospectus.
The selling securityholders and any other person participating in such
distribution will be subject to the Exchange Act. The Exchange Act rules
include, without limitation, Regulation M, which may limit the timing of
purchases and sales of any of the notes and the underlying common stock by the
selling securityholders and any other such person. In addition, Regulation M of
the Exchange Act may restrict the ability of any person engaged in the
distribution of the notes and the underlying common stock to engage in
market-making activities with respect to the particular notes and the underlying
common stock being distributed for a period of up to five business days prior to
the commencement of such distribution. This may affect the marketability of the
notes and the underlying common stock and the ability of any person or entity to
engage in market-making activities with respect to the notes and the underlying
common stock.
Pursuant to the registration rights agreement filed as an exhibit to this
registration statement, we and the selling securityholders will be indemnified
by the other against certain liabilities, including certain liabilities under
the Securities Act or will be entitled to contribution in connection with these
liabilities.
We have agreed to pay substantially all of the expenses incidental to the
registration, offering and sale of the notes and underlying common stock to the
public other than commissions, fees and discounts of underwriters, brokers,
dealers and agents.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
TriQuint by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo
Alto, California.
EXPERTS
The consolidated financial statements of TriQuint Semiconductor, Inc. as of
December 31, 1999 and 1998, and for each of the years in the three-year period
ended December 31, 1999, have been incorporated by reference herein in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
52
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by TriQuint in connection with
the sale of common stock being registered. All amounts are estimates except the
SEC registration fee and the Nasdaq National Market filing fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 80,948
Nasdaq National Market listing fee.......................... 17,500
Printing and engraving costs................................ 275,000
Legal fees and expenses..................................... 350,000
Accounting fees and expenses................................ 175,000
Transfer Agent and Registrar fees........................... 10,000
Miscellaneous expenses...................................... 41,552
--------
Total..................................................... 950,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's board of directors to grant indemnification 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,
as amended (the "Securities Act"). Article VI, Section 1, of the Registrant's
bylaws provides for mandatory indemnification of its directors and officers and
permissible indemnification of employees and other agents to the maximum extent
permitted by the Delaware General Corporation Law. The Registrant's certificate
of incorporation provides that, pursuant to Delaware law, its directors shall
not be liable for monetary damages for breach of the directors' fiduciary duty
as directors to the Registrant and its stockholders. This provision in the
certificate of incorporation does not eliminate the directors' fiduciary duty,
and in appropriate circumstances equitable remedies such as injunctive or other
forms of non-monetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Registrant for acts or omission not in
good faith or involving international misconduct, for knowing violations of law,
for actions leading to improper personal benefit to the director, and for
payment of dividends or approval of stock repurchases or redemptions that are
unlawful under Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws. The Registrant has entered into
Indemnification Agreements with its officers and directors, a form of which was
attached as Exhibit 10.1 to the Registrant's registration statement on Form 8-B
filed with the Commission on February 18, 1997 and incorporated herein by
reference. The Indemnification Agreements provide the Registrant's officers and
directors with further indemnification to the maximum extent permitted by the
Delaware General Corporation Law.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
<TABLE>
<C> <S>
3.1 Certificate of Incorporation, as amended.(1)
3.2 Bylaws.(1)
4.1 Form of Note.
4.2 Indenture.
4.3 Registration Rights Agreement.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati
12.1 Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of KPMG LLP, independent auditors.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
24.1 Power of Attorney (see page II-4 of this Form S-3).
25.1 Form T-1 Statement of Eligibility of Trustee for Indenture
under the Trust Indenture Act of 1939.
</TABLE>
- ------------------------
(1) Incorporated by reference to Registrant's Registration Statement on Form 8-B
(File No. 000-22660) as declared effective by the Securities and Exchange
Commission on February 18, 1997 and to Registrant's Form 10-K for the year
ended December 31, 1999 as filed with the Securities and Exchange Commission
on February 15, 2000.
(B) FINANCIAL STATEMENT SCHEDULES
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act,
(b) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement,
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that clauses (a) and (b) do not apply if the information
required to be included in a post-effective amendment by such clauses is
contained in periodic reports filed with or furnished to the
II-2
<PAGE>
Securities and Exchange Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated
by reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities, other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding, is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this registration statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on our behalf by the
undersigned, thereunto duly authorized, in the City of Hillsboro, State of
Oregon, on the 2nd day of May 2000.
<TABLE>
<S> <C> <C>
TRIQUINT SEMICONDUCTOR, INC.
By: /s/ STEVEN J. SHARP
-----------------------------------------
Steven J. Sharp
PRESIDENT, CHIEF EXECUTIVE OFFICER &
CHAIRMAN
</TABLE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Steven J. Sharp and Edson H. Whitehurst, Jr. and
each of them, his attorneys-in-fact, each with the power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this Registration
Statement, and to sign any registration statement for the same offering covered
by this Registration Statement that is to be effective upon filing pursuant to
Rule 462(b) promulgated under the Securities Act of 1933, as amended, and all
post-effective amendments thereto, and to file the same, with all exhibits
thereto and all documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents or any of them, or his or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ STEVEN J. SHARP President, Chief Executive Officer and
------------------------------------ Chairman (Principal Executive May 2, 2000
(Steven J. Sharp) Officer)
Vice President, Finance and
/s/ EDSON H. WHITEHURST, JR. Administration, Chief Financial
------------------------------------ Officer and Secretary (Principal May 2, 2000
(Edson H. Whitehurst, Jr.) Financial and Accounting Officer)
------------------------------------ Director
(Paul A. Gary)
/s/ CHARLES SCOTT GIBSON
------------------------------------ Director May 2, 2000
(Charles Scott Gibson)
/s/ NICHOLAS KAUSER
------------------------------------ Director May 2, 2000
(Nicholas Kauser)
/s/ WALDEN C. RHINES
------------------------------------ Director May 2, 2000
(Walden C. Rhines)
/s/ EDWARD F. TUCK
------------------------------------ Director May 2, 2000
(Edward F. Tuck)
</TABLE>
II-4
<PAGE>
EXHIBIT 4.1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE.
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY
NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT); (2)
AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE
SECURITY EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A)
TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO
CLAUSE 2(C) OR 2(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL
ISSUANCE OF THE SECURITY EVIDENCED HEREBY.
<PAGE>
TRIQUINT SEMICONDUCTOR, INC.
4% CONVERTIBLE SUBORDINATED NOTE DUE 2007
No. $
CUSIP NO. 89674KAA1
TRIQUINT SEMICONDUCTOR, INC., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "COMPANY," which term
includes any successor entity under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of ($ ) at the office or
agency of the Company referred to below, on March 1, 2007 in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest on
said principal sum semiannually on March 1 and September 1 of each year,
commencing September 1, 2000 (each an "INTEREST PAYMENT DATE"), at said office
or agency, in like coin or currency, at the rate of 4% per annum, until the
principal hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the February 15 or
August 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of, premium, if any (including the Make-Whole
Payment, if any), and interest (including Liquidated Damages, if any) on this
Security shall be made at the office or agency of the Company maintained for
such purpose, which initially shall be the Corporate Trust Office of the Trustee
or such other office or agency of the Company as may be designated by it in the
Borough of Manhattan, The City of New York, in such lawful money of the United
States of America as at the time of payment is legal tender for payment of
public and private debts, PROVIDED that the Company may make such payment either
by (i) mailing a check in the amount of such payment, payable to or upon the
written order of the Person entitled thereto pursuant to Section 3.07 of the
Indenture (as defined herein) or (ii) transfer to an account maintained by the
payee located inside the United States.
<PAGE>
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
DATED: February , 2000 TRIQUINT SEMICONDUCTOR, INC.
By:
-----------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
DATED: February , 2000 STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A.
as Trustee
By:
-----------------------------------
Authorized Signatory
<PAGE>
REVERSE OF SECURITY
TRIQUINT SEMICONDUCTOR, INC.
4% CONVERTIBLE SUBORDINATED NOTE DUE 2007
This Security is one of a duly authorized issue of securities of the
Company designated as its 4% Convertible Subordinated Notes due 2007 (herein
called the "SECURITIES"), limited in aggregate principal amount to $300,000,000
(up to $345,000,000 if the option set forth in Section 2(b) of the Purchase
Agreement dated February 17, 2000 among the Company and the Initial Purchasers
named therein is exercised in full), which may be issued under an Indenture,
dated as of February 24, 2000 (the "INDENTURE"), between the Company and State
Street Bank and Trust Company of California, N.A., as Trustee for the Holders of
Securities issued under said Indenture (herein called the "TRUSTEE", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Indebtedness and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
The Holder of this Security (including any Person that has a
beneficial interest in this Security) and the Common Stock of the Company
issuable upon conversion hereof is entitled to the benefits of a Registration
Rights Agreement, dated as of February 24, 2000 executed by the Company (the
"Registration Rights Agreement"). Pursuant to the Registration Rights
Agreement, the Company has agreed for the benefit of the Holders from time to
time of the Registrable Securities to pay additional interest on this Security
("Liquidated Damages") in accordance with the terms of the Registration Rights
Agreement. Whenever in this Security there is a reference, in any context, to
the payment of the principal of, premium, if any, or interest on, or in respect
of, any Security, such mention shall be deemed to include mention of the
payment of Liquidated Damages payable as described in this paragraph to the
extent that, in such context, Liquidated Damages are, were or would be payable
in respect of such Security and express mention of the payment of Liquidated
Damages (if applicable) in any provisions of this Security shall not be
construed as excluding Liquidated Damages in those provisions of this Security
where such express mention is not made.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at its option, at any time on or before
maturity of the Securities, or in case this Security or a portion hereof is
called for redemption, then in respect of this Security or such portion hereof
until and including, but (unless the Company defaults in making the payment due
upon redemption or repurchase) not after, the close of business on the Business
Day immediately preceding the Redemption Date or Repurchase Date, as the case
may be, to convert this Security (or any portion of the principal amount hereof
which is U.S. $1,000 or an integral multiple thereof), at the principal amount
hereof, or of such portion, into fully paid and nonassessable shares of Common
Stock of the Company at a Conversion Price of $135.60 per share of Common Stock,
which is equal to a Conversion Rate of 7.3746 shares of Common Stock per $1,000
principal amount of the Securities (or at the current adjusted Conversion Price
and Conversion Rate if an adjustment has been made as provided in Article 12 of
the Indenture) by surrender of this Security, duly endorsed or assigned to the
Company or in blank, to the Company at its office or agency maintained for such
<PAGE>
purpose, accompanied by the conversion notice hereon executed by the Holder
hereof evidencing such Holder's election to convert this Security, or if less
than the entire principal amount hereof is to be converted, the portion hereof
to be converted, and, in case such surrender shall be made during the period
from the close of business on any Regular Record Date to the opening of
business on the corresponding Interest Payment Date (unless this Security or
the portion hereof being converted has been called for redemption on a
Redemption Date within such period between and including such Regular Record
Date and such Interest Payment Date), also accompanied by payment in funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Security then being
converted. Subject to the aforesaid requirement for payment of interest and, in
the case of a conversion after the close of business on any Regular Record Date
and on or before the corresponding Interest Payment Date, to the right of the
Holder of this Security (or any Predecessor Security) of record at such Regular
Record Date to receive an installment of interest (even if the Security has
been called for redemption on a Redemption Date within such period), no payment
or adjustment is to be made on conversion for interest accrued hereon or for
dividends on the Common Stock issued on conversion. No fractions of shares or
scrip representing fractions of shares will be issued on conversion, but
instead of any fractional interest the Company shall pay a cash adjustment as
provided in Article 12 of the Indenture. The Conversion Rate and Conversion
Price are subject to adjustment as provided in Article 12 of the Indenture. In
addition, the Indenture provides that in case of certain reclassifications,
consolidations, mergers, sales or transfers of assets or other transactions
pursuant to which the Common Stock is converted into the right to receive other
securities, cash or other property, the conversion privilege shall be modified
so that this Security, if then outstanding, will be convertible thereafter,
during the period this Security shall be convertible as specified above, only
into the kind and amount of securities, cash and other property receivable upon
the transaction by a holder of the number of shares of Common Stock into which
this Security might have been converted immediately prior to such transaction.
The Securities may be redeemed at the election of the Company, as a
whole or from time to time in part, at any time prior to March 5, 2003 (a
"PROVISIONAL REDEMPTION"), at a Redemption Price equal to $1,000 per $1,000
principal amount of the Securities plus accrued and unpaid interest, if any, to
but excluding the date of redemption (the "PROVISIONAL REDEMPTION DATE") if (i)
the Closing Price of the Common Stock has exceeded 150% of the Conversion Price
(as defined in Article 12 of the Indenture and as such may be adjusted from
time to time) then in effect for at least 20 Trading Days in any period of 30
consecutive Trading Days ending on the Trading Day prior to the date of mailing
of the provisional notice of redemption pursuant to Section 10.04 (the "NOTICE
DATE"), and (ii) a registration statement covering resales of the Securities
and Common Stock issuable upon the conversion thereof is effective and
available for use and is expected to remain effective for the 30 days following
the Provisional Redemption Date unless registration is no longer required.
Upon any such Provisional Redemption, the Company shall make an
additional payment in cash (the "MAKE-WHOLE PAYMENT") to holders of the
Securities called for redemption, including those Securities converted into
Common Stock between the Notice Date and the Provisional Redemption Date, in an
amount equal to $166.67 per $1,000 principal amount of the Securities, less the
amount of any interest actually paid on the Securities before the date of
redemption.
The Securities (other than those Securities that have been converted in
accordance with the terms of the Indenture) are subject to redemption at the
option of the Company upon not less than 30
<PAGE>
days' or more than 60 days' notice by mail (unless a shorter notice is deemed
satisfactory by the Trustee), as a whole or from time to time in part, at any
time on or after March 5, 2003. The redemption prices (expressed as percentages
of the principal amount) shall be as set forth below for Securities redeemed
during the following periods described below:
<TABLE>
<CAPTION>
PERIOD REDEMPTION PRICE
- ----------------------------------------------- -------------------
<S> <C>
March 5, 2003 through February 29, 2004 102.286%
March 1, 2004 through February 28, 2005 101.714%
March 1, 2005 through February 28, 2006 101.143%
March 1, 2006 through February 28, 2007 100.571%
</TABLE>
and 100% of the principal amount on March 1, 2007, together, in the case of any
such redemption, with accrued interest to (but not including) the Redemption
Date (subject to the right of holders of record on the Regular Record Date to
receive interest on the related Interest Payment Date). Any redemption of
Securities must be in integral multiples of $1,000.
If fewer than all of the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed in principal amounts at maturity of
$1,000 or integral multiples thereof by lot, pro rata or by another method the
Trustee considers fair and appropriate. If a portion of a Holder's Securities is
selected for partial redemption and that holder converts a portion of those
Securities prior to the redemption, the converted portion shall be deemed,
solely for purposes of determining the aggregate principal amount of the
Securities to be redeemed by the Company, to be of the portion selected for
redemption.
In certain circumstances involving a Change in Control, each Holder
shall have the right to require the Company to repurchase all or part of its
Securities at a repurchase price equal to 100% of the principal amount thereof,
together with accrued and unpaid interest through the Repurchase Date (subject
to the right of holders of record on the Regular Record Date to receive interest
on the related Interest Payment Date). At the option of the Company, the
Repurchase Price may be paid in cash or, subject to the conditions provided in
the Indenture, by delivery of shares of Common Stock.
The Securities do not have the benefit of any sinking fund.
In the event of redemption, conversion or repurchase of this Security
in part only, a new Security or Securities for the unredeemed, unconverted or
unrepurchased portion hereof shall be issued in the name of the Holder hereof
upon the cancellation hereof.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
<PAGE>
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable in the manner and with the
effect provided in Article 4 of the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any
(including the Make-Whole Payment, if any), and interest (including Liquidated
Damages, if any) on this Security at the times, place and rate, and in the coin
or currency, herein prescribed or to convert this Security as provided in the
Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
Corporate Trust Office duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
No service charge shall be made to a Holder for any such registration
of transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Interest (including Liquidated Damages, if any) on this Security shall
be computed on the basis of a 360-day year of twelve 30-day months. In the event
that any date on which interest is payable on the Securities is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay).
<PAGE>
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES.
<PAGE>
CONVERSION NOTICE
To: TRIQUINT SEMICONDUCTOR, INC.
The undersigned Holder of this Security hereby irrevocably exercises
the option to convert this Security, or the portion hereof (which is $1,000 or
an integral multiple thereof) below designated, at any time following the date
of original issuance thereof, into shares of Common Stock in accordance with the
terms of the Indenture referred to in this Security, and directs that the shares
issuable and deliverable upon conversion, together with any check in payment for
a fractional share and any Security representing any unconverted principal
amount hereof, be issued and delivered to the registered owner hereof unless a
different name has been provided below. If shares or any portion of this
Security not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith a certificate in proper form certifying that
the applicable restrictions on transfer have been complied with. Any amount
required to be paid by the undersigned on account of interest accompanies this
Security.
Dated: By:
----------------------------
Signature*
If shares or Securities are to be registered Principal amount to be converted
in the name of a Person other than the (if less than all):$______,000
Holder, please print such Person's name
and address:
- --------------------------------------------
Name
- --------------------------------------------
Social Security or Taxpayer
Identification Number
- --------------------------------------------
Street Address
- --------------------------------------------
City, State and Zip Code
* Signature(s) must be guaranteed by an eligible guarantor institution (banks,
stock brokers, savings and loan associations and credit unions with membership
in an approved signature guarantee medallion program) pursuant to Securities and
Exchange Commission Rule 17Ad-15 if shares of Common Stock are to be delivered,
or unconverted Securities are to be issued, other than to and in the name of the
registered owner.
<PAGE>
ELECTION OF HOLDER TO REQUIRE REPURCHASE
(1) Pursuant to Article 11.01 of the Indenture, the undersigned
hereby elects to have this Security repurchased by the Company.
(2) The undersigned hereby directs the Trustee or the Company to
pay it or ___________________ an amount in cash or, at the Company's election,
Common Stock valued as set forth in the Indenture, equal to 100% of the
principal amount to be repurchased (as set forth below), plus interest
(including Liquidated Damages, if any) accrued to the Repurchase Date, as
provided in the Indenture.
Dated:
- --------------------------------------------
- --------------------------------------------
Signature(s)
Signature(s) must be guaranteed by an Eligible
Guarantor Institution with membership in an
approved signature guarantee program pursuant
to Rule 17Ad-15 under the Securities Exchange
Act of 1934.
- --------------------------------------------
Signature Guaranteed
Principal amount to be repurchased (at least
U.S. $1,000 or an integral multiple of $1,000
in excess thereof): ______________________
Remaining principal amount following such
repurchase (not less than U.S. $1,000):
- ----------------------------
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
<PAGE>
EXHIBIT 4.2
================================================================================
TRIQUINT SEMICONDUCTOR, INC.
And
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
as Trustee
INDENTURE
--------------------------
Dated as of February 24, 2000
--------------------------
4% Convertible Subordinated Notes due 2007
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
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<S> <C>
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.....................................................1
SECTION 1.01. Definitions............................................................................1
SECTION 1.02. Other Definitions......................................................................8
SECTION 1.03. Compliance Certificates and Opinions...................................................9
SECTION 1.04. Form of Documents Delivered to Trustee.................................................9
SECTION 1.05. Acts of Holders.......................................................................10
SECTION 1.06. Notices, Etc..........................................................................12
SECTION 1.07. Notice to Holders; Waiver.............................................................12
SECTION 1.08. Effect of Headings and Table of Contents..............................................13
SECTION 1.09. Successors and Assigns................................................................13
SECTION 1.10. Separability Clause...................................................................13
SECTION 1.11. Benefits of Indenture.................................................................13
SECTION 1.12. Governing Law.........................................................................13
SECTION 1.13. Legal Holidays........................................................................13
SECTION 1.14. Personal Immunity from Liability for Incorporators,
Stockholders, Etc.....................................................................13
SECTION 1.15. Conflict with Trust Indenture Act.....................................................14
ARTICLE 2 SECURITIES FORMS...........................................................................................14
SECTION 2.01. Forms of Securities...................................................................14
SECTION 2.02. Form of Trustee's Certificate of Authentication.......................................14
SECTION 2.03. Securities Issuable in Global Form....................................................14
ARTICLE 3 The Securities.............................................................................................15
SECTION 3.01. Title and Term........................................................................15
SECTION 3.02. Denominations.........................................................................16
SECTION 3.03. Execution, Authentication, Delivery and Dating........................................16
SECTION 3.04. Registration, Registration of Transfer and Exchange...................................16
SECTION 3.05. Mutilated, Destroyed, Lost and Stolen Securities......................................21
SECTION 3.06. Payment of Interest; Interest Rights Preserved........................................22
SECTION 3.07. Persons Deemed Owners.................................................................24
SECTION 3.08. Cancellation..........................................................................24
SECTION 3.09. Computation of Interest...............................................................24
SECTION 3.10. CUSIP Numbers.........................................................................24
ARTICLE 4 REMEDIES...................................................................................................25
SECTION 4.01. Events of Default.....................................................................25
SECTION 4.02. Acceleration of Maturity; Rescission and Annulment....................................27
SECTION 4.03. Collection of Indebtedness and Suits for Enforcement by
Trustee...............................................................................27
SECTION 4.04. Trustee May File Proofs of Claim......................................................28
SECTION 4.05. Trustee May Enforce Claims Without Possession of
Securities............................................................................29
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<S> <C>
SECTION 4.06. Application of Money Collected........................................................29
SECTION 4.07. Limitation on Suits...................................................................30
SECTION 4.08. Unconditional Right of Holders to Receive Principal,
Premium, If Any, and Interest.........................................................30
SECTION 4.09. Restoration of Rights and Remedies....................................................30
SECTION 4.10. Rights and Remedies Cumulative........................................................31
SECTION 4.11. Delay or Omission Not Waiver..........................................................31
SECTION 4.12. Control by Holders of Securities......................................................31
SECTION 4.13. Waiver of Past Defaults...............................................................31
SECTION 4.14. Waiver of Usury, Stay or Extension Laws...............................................32
SECTION 4.15. Undertaking for Costs.................................................................32
ARTICLE 5 THE TRUSTEE................................................................................................32
SECTION 5.01. General...............................................................................32
SECTION 5.02. Certain Rights of Trustee.............................................................33
SECTION 5.03. Individual Rights of Trustee..........................................................34
SECTION 5.04. Trustee's Disclaimer..................................................................35
SECTION 5.05. Notice of Default.....................................................................35
SECTION 5.06. Conflicting Interests of Trustee......................................................35
SECTION 5.07. Compensation and Indemnity............................................................35
SECTION 5.08. Replacement of Trustee................................................................36
SECTION 5.09. Successor Trustee by Merger, Etc......................................................37
SECTION 5.10. Eligibility...........................................................................37
SECTION 5.11. Money Held in Trust...................................................................37
SECTION 5.12. Preferential Collection of Claims.....................................................37
SECTION 5.13. Trustee's Application for Instructions from the Company;
Liquidated Damages....................................................................37
ARTICLE 6 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..........................................................38
SECTION 6.01. Disclosure of Names and Addresses of Holders..........................................38
SECTION 6.02. Reports by Trustee....................................................................38
SECTION 6.03. Reports by Company....................................................................38
SECTION 6.04. Company to Furnish Trustee Names and Addresses of Holders.............................39
ARTICLE 7 CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE...........................................................39
SECTION 7.01. Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions...............................39
SECTION 7.02. Rights and Duties of Successor Corporation............................................40
SECTION 7.03. Officers' Certificate and Opinion of Counsel..........................................40
-ii-
<PAGE>
<CAPTION>
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(CONTINUED)
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<S> <C>
ARTICLE 8 SUPPLEMENTAL INDENTURES....................................................................................41
SECTION 8.01. Supplemental Indentures Without Consent of Holders....................................41
SECTION 8.02. Supplemental Indentures with Consent of Holders.......................................41
SECTION 8.03. Execution of Supplemental Indenture...................................................42
SECTION 8.04. Effect of Supplemental Indentures.....................................................42
SECTION 8.05. Conformity with Trust Indenture Act...................................................43
SECTION 8.06. Reference in Securities to Supplemental Indentures....................................43
ARTICLE 9 COVENANTS..................................................................................................43
SECTION 9.01. Payment of Principal, Premium, If Any, and Interest...................................43
SECTION 9.02. Maintenance of Office or Agency.......................................................43
SECTION 9.03. Money for Securities Payments to Be Held in Trust.....................................44
SECTION 9.04. Existence.............................................................................45
SECTION 9.05. Payment of Taxes and Other Claims.....................................................45
SECTION 9.06. Statement as to Compliance............................................................45
SECTION 9.07. Waiver of Certain Covenants...........................................................45
SECTION 9.08. Rule 144A Information Requirement.....................................................46
ARTICLE 10 REDEMPTION OF SECURITIES..................................................................................46
SECTION 10.01. Provisional and Optional Redemption by the Company....................................46
SECTION 10.02. Election to Redeem; Notice to Trustee.................................................47
SECTION 10.03. Selection by Trustee of Securities to Be Redeemed.....................................47
SECTION 10.04. Notice of Redemption..................................................................48
SECTION 10.05. Deposit of Redemption Price...........................................................49
SECTION 10.06. Securities Payable on Redemption Date.................................................49
SECTION 10.07. Securities Redeemed in Part...........................................................50
SECTION 10.08. Conversion Arrangement on Call for Redemption.........................................50
ARTICLE 11 REPURCHASE AT OPTION OF HOLDERS UPON CHANGE IN CONTROL....................................................51
SECTION 11.01. Right to Require Repurchase...........................................................51
SECTION 11.02. Conditions to the Company's Election to Pay the
Repurchase Price in Common Stock......................................................51
SECTION 11.03. Notices; Method of Exercising Repurchase Right, Etc...................................52
SECTION 11.04. Certain Definitions...................................................................55
SECTION 11.05. Change in Control.....................................................................55
ARTICLE 12 CONVERSION................................................................................................57
SECTION 12.01. Conversion Privilege, Conversion Rate and Conversion Price............................57
SECTION 12.02. Exercise of Conversion Privilege......................................................57
-iii-
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(CONTINUED)
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<S> <C>
SECTION 12.03. Fractions of Shares...................................................................59
SECTION 12.04. Adjustment of Conversion Rate.........................................................59
SECTION 12.05. Notice of Adjustments of Conversion Rate..............................................64
SECTION 12.06. Notice of Certain Corporate Action....................................................65
SECTION 12.07. Company's Obligation Regarding Common Stock...........................................66
SECTION 12.08. Taxes on Conversions..................................................................66
SECTION 12.09. Covenant as to Common Stock...........................................................66
SECTION 12.10. Cancellation of Converted Securities..................................................66
SECTION 12.11. Provisions in Case of Reclassification, Consolidation,
Merger or Sale of Assets..............................................................67
SECTION 12.12. Company's Obligation..................................................................67
ARTICLE 13 SUBORDINATION.............................................................................................67
SECTION 13.01. Securities Subordinate to Senior Indebtedness.........................................67
SECTION 13.02. Payment over of Proceeds upon Dissolution, Etc........................................68
SECTION 13.03. No Payment When Senior Indebtedness in Default........................................69
SECTION 13.04. Payment Permitted If No Default.......................................................70
SECTION 13.05. Subrogation to Rights of Holders of Senior Indebtedness...............................70
SECTION 13.06. Provisions Solely to Define Relative Rights...........................................70
SECTION 13.07. Trustee to Effectuate Subordination...................................................71
SECTION 13.08. No Waiver of Subordination Provisions.................................................71
SECTION 13.09. Notice to Trustee.....................................................................72
SECTION 13.10. Reliance on Judicial Order or Certificate of Liquidating
Agent.................................................................................72
SECTION 13.11. Trustee Not Fiduciary for Holders of Senior Indebtedness..............................73
SECTION 13.12. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights......................................................73
SECTION 13.13. Article Applicable to Paying Agents...................................................73
SECTION 13.14. Certain Conversions Deemed Payment....................................................73
</TABLE>
SIGNATURES
EXHIBIT A - FORM OF SECURITY
-iv-
<PAGE>
INDENTURE, dated as of February 24, 2000, between TRIQUINT
SEMICONDUCTOR, INC., a Delaware corporation (the "COMPANY"), having its
principal office at 2300 N.E. Brookwood Parkway, Hillsboro, Oregon 97124 and
State Street Bank and Trust Company of California, N.A., a national banking
association organized under the laws of the United States of America, as Trustee
hereunder (the "TRUSTEE").
RECITALS OF THE COMPANY
The Company has duly authorized the issue of its 4% Convertible
Subordinated Notes due 2007 (the "SECURITIES"), and to provide for such
issuance, the Company has duly authorized the execution and delivery of this
Indenture.
Upon qualification of this Indenture under the Trust Indenture Act of
1939 (the "TIA"), it will be subject to the provisions of such Act that are
deemed to be incorporated into this Indenture and shall, to the extent
applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all the holders of the Securities, as
follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. DEFINITIONS. For all purposes of this Indenture, except
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular,
and references to he or him or she or her are intended to be gender neutral;
(2) all other terms used herein which are defined in the TIA,
either directly or by reference therein, have the meanings assigned to them
therein;
(3) the word "including" means "including without limitation,"
and
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
<PAGE>
"ACT," when used with respect to any Holder, has the meaning specified
in Section 1.05.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"AUTHORIZED NEWSPAPER" means a newspaper, printed in the English
language or in an official language of the country of publication, customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"BANKRUPTCY LAW" has the meaning specified in Section 4.01.
"BOARD OF DIRECTORS" means the board of directors of the Company, the
executive committee of that board or any committee of that board duly authorized
to act hereunder.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the City of New York,
the city in which the Corporate Trust office is located or, when used with
respect to any Place of Payment, such Place of Payment, are authorized or
obligated by law, regulation or executive order to close.
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after execution of this instrument such Commission is not existing
and performing substantially the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"COMMON STOCK" means the common stock of the Company, $0.001 par value,
as it exists on the date of this Indenture and any shares of any class or
classes of capital stock of the Company resulting from any reclassification or
reclassifications thereof.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
-2-
<PAGE>
"COMPANY REQUEST" and "COMPANY ORDER" mean, respectively, a written
request or order signed in the name of the Company by the Chairman of the Board
of Directors, the Chief Executive Officer, the Chief Financial Officer, the
President or a Vice President or Assistant Vice President of the Company and
delivered to the Trustee.
"CONVERSION AGENT" means any Person authorized by the Company pursuant
to Section 9.02 to convert Securities in accordance with Article 12.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which, at
any particular time, its corporate trust business as it relates to this
Indenture shall be principally administered and as to which notice to that
effect has been delivered to the Company and the Holders in accordance with the
provisions hereof, which office at the date hereof is located at State Street
Bank and Trust Company of California, N.A., 633 West 5th Street, 12th Floor, Los
Angeles, CA 90071, Attention: Corporate Trust Administration (TriQuint
Semiconductor, Inc. 4% Convertible Subordinated Notes due 2007).
"CORPORATION" means a corporation, association, partnership, company
(including limited liability company), joint-stock company or business trust.
"DEFAULT" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"DOLLAR" or "$" means a dollar or other equivalent unit in such lawful
money of the United States of America as at the time shall be legal tender for
the payment of public and private debts.
"DTC" means The Depository Trust Company.
"GOVERNMENT OBLIGATIONS" means securities that are (i) direct
obligations of the United States of America, for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which is not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such Government Obligation or a specific payment of interest on or
principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"HOLDER" means the Person in whose name a Security is registered in the
Security Register.
"INDEBTEDNESS" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities, contingent
or otherwise, of such Person for borrowed money (including obligations of such
Person in respect of overdrafts, foreign exchange contracts,
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currency exchange or similar agreements, interest rate protection, hedging or
similar agreements, and any loans or advances from banks, whether or not
evidenced by notes or similar instruments) or evidenced by bonds, debentures,
notes or similar instruments (whether or not the recourse of the holder is to
the whole of the assets of such Person or to only a portion thereof), other
than any account payable or other accrued current liability or current
obligation, in each case not constituting indebtedness, obligations or other
liabilities for borrowed money and incurred in the ordinary course of
business in connection with the obtaining of materials or services; (b) all
reimbursement obligations and other liabilities, contingent or otherwise, of
such Person with respect to letters of credit, bank guarantees, bankers'
acceptances, security purchase facilities or similar credit transactions; (c)
all obligations and liabilities, contingent or otherwise, in respect of
deferred and unpaid balances on any purchase price of any property; (d) all
obligations and liabilities (contingent or otherwise) in respect of leases of
such Person required, in conformity with generally accepted accounting
principles, to be accounted for as capitalized lease obligations on the
balance sheet of such Person and all obligations and other liabilities,
contingent or otherwise, under any lease or related document, including,
without limitation, the balance deferred and unpaid on any purchase price of
any property and a purchase agreement in connection with the lease of real
property that provides that such Person is contractually obligated to
purchase or cause a third party to purchase the leased property and thereby
guarantee a residual value of the leased property to the lessor and the
obligations of such Person under such lease or related document to purchase
or to cause a third party to purchase such leased property; (e) all
obligations of such Person, contingent or otherwise, with respect to an
interest rate or other swap, cap or collar agreement or other similar
instrument or agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement; (f) all direct or indirect guarantees or
similar agreements by such Person in respect of, and obligations or
liabilities, contingent or otherwise, of such Person to purchase or otherwise
acquire or otherwise assure a creditor against loss in respect of
indebtedness, obligations or liabilities of another Person of the kind
described in clauses (a) through (e); (g) recourse or repurchase obligations
arising in connection with sales of assets in transactions that are in the
nature of asset-based financings, whether or not such transactions are
treated as sales under generally accepted accounting principles or
bankruptcy, tax or other applicable laws, where such recourse or repurchase
obligations arise out of the failure of such assets to provide the economic
benefit to which the purchaser is entitled under the agreements relating to
such transactions; (h) any indebtedness or other obligations described in
clauses (a) through (g) secured by any mortgage, pledge, lien or other
encumbrance existing on property that is owned or held by such Person,
regardless of whether the indebtedness or other obligation secured thereby
shall have been assumed by such Person; and (i) any and all deferrals,
renewals, extensions, refinancing, replacements, restatements and refundings
of, or amendments, modifications or supplements to, or any indebtedness, or
obligation issued in exchange for, any indebtedness, obligation or liability
of the kind described in clauses (a) through (h).
"INDENTURE" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"INITIAL PURCHASERS" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated, SG Cowen Securities Corporation, Banc of America Securities LLC
and Bear, Stearns & Co. Inc.
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"INTEREST PAYMENT DATE" means, with respect to any Security, the Stated
Maturity of an installment of interest on such Security.
"LIQUIDATED DAMAGES" means additional interest that may accrue on the
Securities and be payable to Holders pursuant to and in accordance in each case
with the terms of the Registration Rights Agreement.
"MATURITY" means the date on which the principal of the Securities
becomes due and payable as therein or herein provided, whether at the Stated
Maturity, conversion or by declaration of acceleration, notice of redemption,
notice of option to elect repayment or otherwise.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board of Directors, the President or a Vice President and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company,
and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company or who may be an employee of or other counsel for the
Company and who shall be reasonably satisfactory to the Trustee.
"OUTSTANDING," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the
Trustee or delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose
payment or redemption or repayment at the option of the Holder, money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Securities; provided that, if such Securities are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities that have been paid pursuant to
Section 3.05 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a BONA FIDE purchaser
in whose hands such Securities are valid obligations of the Company; and
(iv) Securities converted into Common Stock pursuant
to or in accordance with this Indenture;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of
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making the calculations required by TIA Section 313, Securities owned by the
Company or any other obligor upon the Securities under a supplemental
indenture entered into in accordance herewith or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in making such calculation or in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Securities
that a Responsible Officer of the Trustee knows to be so owned shall be so
disregarded. Securities so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the Securities
or a supplemental indenture entered into in accordance herewith or any
Affiliate of the Company or of such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest (including Liquidated Damages, if
any) on any Securities on behalf of the Company.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PLACE OF PAYMENT" means the place or places where the principal of
(and premium, if any), interest (including Liquidated Damages, if any) on and
the Redemption Prices and the Repurchase Price with respect to the Securities
are payable as specified by Section 9.02.
"PREDECESSOR SECURITY" means, with respect to any Security, every
previous Security evidencing all or a portion of the same debt as that evidenced
by such Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.05 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"REDEMPTION DATE," when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"REDEMPTION PRICE," means the Optional Redemption Price, in the event
of an Optional Redemption, or the Provisional Redemption Price, in the event of
a Provisional Redemption, as the case may be.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of February 24, 2000, between the Company and the Initial
Purchasers.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date on the Securities means the date specified for that purpose as contemplated
by Section 3.06, whether or not a Business Day.
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"RESPONSIBLE OFFICER," when used with respect to the Trustee, means any
officer in the Corporate Trust Office of the Trustee and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"RULE 144A" shall mean Rule 144A as promulgated under the Securities
Act.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"SECURITY" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture.
"SENIOR INDEBTEDNESS" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and all other amounts
owed in respect of all Indebtedness of the Company, whether outstanding on the
date of this Indenture or thereafter created, incurred, assumed, guaranteed or
in effect guaranteed by the Company (including all deferrals, renewals,
extensions, refinancings, replacements, restatements or refundings of, or
amendments, modifications or supplements to, the foregoing); except for (i) any
such Indebtedness that is by its terms subordinated to or ranking equal with the
Securities, and (ii) any Indebtedness between or among the Company and any of
its Subsidiaries or its Affiliates, including all other debt securities and
guarantees in respect of those debt securities issued to any trust, or trustees
of any trust, partnership or other entity affiliated with the Company that is,
directly or indirectly, a financing vehicle used by the Company in connection
with the issuance by that financing vehicle of preferred securities or other
securities that rank equal with, or junior to, the Securities.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that is a "significant
subsidiary" (as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act) of the Company.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the
Securities means a date fixed by the Trustee pursuant to Section 3.06.
"STATED MATURITY" means the date specified in the Securities as the
fixed date on which the principal of, or interest on, such Securities is due and
payable.
"SUBSIDIARY" means a corporation a majority of the outstanding voting
securities of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries of the Company, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "VOTING SECURITIES"
means shares, interests, participations or other equivalents of corporate stock,
partnership or limited liability company interests or any other participation,
right or other interest in the nature of an equity interest that ordinarily have
voting power for the election of directors, managers or trustees whether at all
times or only so long as no senior class of equity interest has such voting
power by reason of any contingency.
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"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939,
and the rules and regulations promulgated thereunder, as in force on the date
this Indenture is qualified thereunder; PROVIDED, HOWEVER, that in the event the
Trust Indenture Act of 1939 or such rules and regulations are amended after such
date, "TRUST INDENTURE ACT" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 and such rules and regulations as so amended.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder.
"UNITED STATES" means the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
DEFINED
TERM IN SECTION
<S> <C>
"Act".......................................................................... 1.05
----
"Announced Split".............................................................. 12.04
-----
"Average Sale Price"........................................................... 12.04
-----
"Bankruptcy Law"............................................................... 4.01
----
"Change in Control"............................................................ 11.05
-----
"Change in Control Purchase Notice"............................................ 11.03
-----
"Closing Price"................................................................ 12.03
-----
"Commencement Date"............................................................ 12.04
-----
"Company Notice"............................................................... 11.03
-----
"Conversion Price"............................................................. 12.01
-----
"Conversion Rate".............................................................. 12.01
-----
"Current Event"................................................................ 12.04
-----
"Custodian".................................................................... 4.01
----
"Defaulted Interest"........................................................... 3.06
----
"Event of Default"............................................................. ARTICLE 4
---------
"Ex-Dividend Time"............................................................. 12.04
-----
"Expiration Time".............................................................. 12.04
-----
"Indemnitees".................................................................. 5.07
----
"Make-Whole Payment"........................................................... 10.01
-----
"Material Adverse Effect"...................................................... 9.04
----
"Notice Date".................................................................. 10.01
-----
"Notice of Default"............................................................ 4.01
----
"Optional Redemption".......................................................... 10.01
-----
"Optional Redemption Price".................................................... 10.01
-----
"Other Event".................................................................. 12.04
-----
"Provisional Redemption"....................................................... 10.01
-----
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"Provisional Redemption Date".................................................. 10.01
-----
"Provisional Redemption Price"................................................. 10.01
-----
"Purchased Shares"............................................................. 12.04
-----
"Redeemable Capital Stock"..................................................... 11.05
-----
"Reference Date"............................................................... 12.04
-----
"Repurchase Date".............................................................. 11.01
-----
"Repurchase Price"............................................................. 11.01
-----
"Restricted Securities"........................................................ 3.04
----
"Security Register"............................................................ 3.04
----
"Security Registrar"........................................................... 3.04
----
"Senior Indebtedness Default Notice"........................................... 13.03
-----
"Time of Determination"........................................................ 12.04
-----
"Trading Day".................................................................. 12.03
-----
</TABLE>
SECTION 1.03. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate
or opinion has read such condition or covenant and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant has
been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.04. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion as to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.
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Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which such certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.05. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of the Outstanding Securities, may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such Holders in
person or by agents duly appointed in writing. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"ACT" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent, or of the
holding by any Person of a Security, shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company and any agent
of the Trustee or the Company, if made in the manner provided in this Section
1.05.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness to such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of the Securities shall be proved by the
Security Register.
(d) (i) If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, in or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to effect such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so; provided that the Company
shall not be entitled to set a
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record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in clause 1.05(d)(iii) below. Notwithstanding TIA
Section 316(c), such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier than the
date 30 days prior to the first solicitation of Holders generally in
connection therewith and not later than the date such solicitation is
completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be
effected before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for
the purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent
by the Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
eleven months after the record date.
(ii) Subject to clause 1.05(d)(iii) below, in the
absence of any such record date fixed by the Company, regardless as to whether
any solicitation of the Holders is occurring on behalf of the Company or any
Holder, the Trustee may, at its option, fix in advance a record date for the
determination of such Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Trustee
shall have no obligation to do so. Any such record date shall be a date not more
than 30 days prior to the first solicitation of Holders generally in connection
therewith and no later than the date of such solicitation.
(iii) The Trustee may set any day as a record date
for the purpose of determining the Holders of Outstanding Securities entitled
to join in the giving or making of (A) any notice of default, (B) any
declaration of acceleration referred to in Section 4.02, (C) any request to
institute proceedings referred to in Section 4.07(b), or (D) any direction
referred to in Section 4.12 and may also set an expiration date by which the
relevant Act must be taken. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities on such record date, and no
other Holders, shall be entitled to join in such notice, declaration, request
or direction, whether or not such Holders remain Holders after such record
date; provided that no such Act shall be effective hereunder unless taken on
or prior to any applicable expiration date by Holders of the requisite
principal amount of Outstanding Securities on such record date. Nothing in
this paragraph shall be construed to prevent the Trustee from setting a new
record date for any action (whereupon the record date previously set shall
automatically and without any action by any Person be canceled and of no
effect), nor shall anything in this paragraph be construed to render
ineffective any Act taken by Holders of the requisite principal amount of
Outstanding Securities on the date such Act is taken. Promptly after any
record date is set pursuant to this paragraph, the Trustee, at the Company's
expense, shall cause notice of such record date, the proposed Act by Holders
and the applicable expiration date to be given to the Company in writing and
to each Holder of Outstanding Securities in the manner set forth in Section
1.07.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder
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of every Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee, any Security Registrar, any Paying Agent,
any Conversion Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
SECTION 1.06. NOTICES, ETC. to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other notice or communication provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee, delivered in person, mailed by first class mail,
postage prepaid, or sent by facsimile (and receipt confirmed by a Responsible
Officer over the telephone) or overnight courier, at its Corporate Trust Office,
Attention: Corporate Trust Administration (TriQuint Semiconductor, Inc. 4%
Convertible Subordinated Notes due 2007); PROVIDED that notices or other
communications to the Trustee shall only be deemed given when actually received
by the Trustee,
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and delivered in person, mailed by first class mail,
postage prepaid, or sent by facsimile or overnight courier, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this Indenture; provided that the Company may, by notice furnished
in writing to the Trustee, designate additional or different addresses for
subsequent notices or communications by the Company.
SECTION 1.07. NOTICE TO HOLDERS; WAIVER. Where this Indenture provides
for notice of any event to Holders by the Company or the Trustee, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each such Holder affected by
such event, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders given as provided herein. Any notice mailed to a Holder
in the manner herein prescribed shall be conclusively deemed to have been
received by such Holder, whether or not such Holder actually receives such
notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders as shall be made with the
approval of the Trustee shall constitute a sufficient notification to such
Holders for every purpose hereunder.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
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Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 1.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.09. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.10. SEPARABILITY CLAUSE. In case any provision in this
Indenture or in any Security shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.11. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto, any Security Registrar, any Paying Agent, any Conversion Agent
and their successors hereunder and the Holders any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 1.12. GOVERNING LAW. This Indenture and the Securities shall be
governed by and construed in accordance with the law of the State of New York
without regard to conflicts of laws principles.
SECTION 1.13. LEGAL HOLIDAYS. In any case where any Interest Payment
Date, Redemption Date, Repurchase Date, Stated Maturity or Maturity of any
Security or the last date on which a Holder has the right to convert his
Securities shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or any Security), payment
of Redemption Price, Repurchase Price, interest (including Liquidated Damages,
if any) or principal (and premium, if any), or conversion of the Securities,
need not be made at such Place of Payment on such date, but may be made on the
next succeeding Business Day at such Place of Payment with the same force and
effect as if made on the Interest Payment Date, Redemption Date, Repurchase Date
or at the Stated Maturity or Maturity or on such last day for conversion;
provided that no interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date, Repurchase Date,
Stated Maturity or Maturity or on such last day for conversion, as the case may
be.
SECTION 1.14. PERSONAL IMMUNITY FROM LIABILITY FOR INCORPORATORS,
STOCKHOLDERS, ETC. No recourse shall be had for the payment of the principal of
or premium, if any, or interest (including Liquidated Damages), if any, on any
Security, or for any claim based thereon, or otherwise in respect of any
Security, or based on or in respect of this Indenture or any indenture
supplemental hereto, against any incorporator, or against any past, present or
future stockholder, director or officer, as such, of the Company or of any
successor corporation, whether by virtue of
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any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being expressly waived
and released as a condition of, and as consideration for, the execution of
this Indenture and the issue of Securities.
SECTION 1.15. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with a provision of the TIA that is
required under such Act to be a part of and govern this Indenture, the latter
provision shall control. If any provision of this Indenture modifies or excludes
any provision of the TIA that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be. To the extent that any provision of a Security
conflicts with a provision in this Indenture, the provision of this Indenture
shall control.
ARTICLE 2
SECURITIES FORMS
SECTION 2.01. FORMS OF SECURITIES. The Securities shall be in
substantially the form of Exhibit A hereto, and shall have notations, legends or
endorsements required by law, stock exchange rule or usage or as otherwise
indicated in Exhibit A hereto.
SECTION 2.02. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in substantially
the following form:
This is one of the Securities described in the within-mentioned
Indenture.
DATED: STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A.
as Trustee
By:
------------------------------------
Authorized Signatory
SECTION 2.03. SECURITIES ISSUABLE IN GLOBAL FORM. Except as otherwise
provided in this Section 2.03 or in Section 3.04, the Securities shall be
issuable only in global form and deposited with the Trustee, at its Corporate
Trust Office, as custodian for DTC or the nominees thereof, and any such
Security shall represent such of the Outstanding Securities as shall be set
forth in the books and records of the Trustee and may provide that it shall
represent the aggregate amount of Outstanding Securities from time to time as
adjusted in the books and records of the Trustee, and that the aggregate amount
of Outstanding Securities represented thereby may from time to time be increased
or decreased to reflect exchanges. Any adjustment of the aggregate amount of
Outstanding Securities represented by a Security in global form shall be made by
the Trustee in such manner and upon instructions given by such Person or Persons
as shall be specified therein or in the Company Order to be delivered to the
Trustee pursuant to Section 3.03. Subject to the provisions of Section 3.03, the
Trustee shall deliver and redeliver any Security in global form in the manner
and
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upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 3.03 has been,
or simultaneously is, delivered, any instructions by the Company with respect to
endorsement or delivery or redelivery of a Security in global form shall be in
writing but need not comply with Section 1.03 and need not be accompanied by an
Opinion of Counsel.
The provisions of the last sentence of Section 3.03 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 1.03 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 3.03.
Notwithstanding the provisions of Section 3.07, payment of principal of
and any premium and interest (including Liquidated Damages, if any) on any
Security in global form shall be made to the Person or Persons specified in such
Security.
All Securities issued in global form shall bear the following legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE.
ARTICLE 3
The Securities
SECTION 3.01. TITLE AND TERM. The Securities shall be and are hereby
authorized to be designated as "4% Convertible Subordinated Notes due 2007",
limited in aggregate principal amount to $300,000,000 (up to $345,000,000 if the
option set forth in Section 2(b) of the Purchase Agreement dated February 17,
2000 among the Company and the Initial Purchasers, is exercised in full). The
Securities shall mature and the principal thereof shall be due and payable,
together with
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all accrued and unpaid interest thereon, on March 1, 2007. The Securities
shall be convertible into shares of Common Stock.
SECTION 3.02. DENOMINATIONS. The Securities shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 3.03. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The
Securities shall be executed on behalf of the Company by the Chief Executive
Officer, Chief Financial Officer, the President or a Vice President of the
Company. The signature of any of these individuals on the Securities may be a
manual or facsimile signature of such authorized officer and may be imprinted or
otherwise reproduced on the Securities.
Securities bearing the manual or facsimile signatures of an individual
who was at any time the proper officer of the Company shall bind the Company,
notwithstanding that such individual shall have ceased to hold such office prior
to the authentication and delivery of such Securities or did not hold such
office at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities, executed by the Company, to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for in Section
2.02, duly executed by the Trustee by manual signature of an authorized
signatory, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been authenticated and
delivered hereunder but never issued and sold by the Company, and the Company
shall deliver such Security to the Trustee for cancellation as provided in
Section 3.08 together with a written statement (which need not comply with
Section 1.03 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes of
this Indenture, such Security shall be deemed not to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
SECTION 3.04. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for the
Securities (the "SECURITY REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of the Securities and of transfers of the Securities. The Security Register
shall be in written form or any other form capable of being converted into
written form within a reasonable time. The Trustee, at its Corporate Trust
Office, is hereby appointed "SECURITY REGISTRAR" for the purpose of registering
the Securities and transfers of the Securities on such Security Register as
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herein provided. In the event that the Trustee shall cease to be Security
Registrar, it shall have the right to examine the Security Register at all
reasonable times.
Subject to the provisions of this Section 3.04 and except as otherwise
provided in any Security, including any legend thereon, upon surrender for
registration of transfer of any Security at any office or agency of the Company
in a Place of Payment, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities, of any authorized denominations and of
a like aggregate principal amount, bearing a number not contemporaneously
outstanding, and containing identical terms and provisions.
Subject to the provisions of this Section 3.04, at the option of the
Holder, the Securities may be exchanged for other Securities, of any authorized
denomination or denominations and of a like aggregate principal amount,
containing identical terms and provisions, upon surrender of the Securities to
be exchanged at any such office or agency. Whenever any such Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities that the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, any global Security shall be
exchangeable only as provided in this paragraph. The depositary for the global
Securities shall be DTC, and the global Securities may be transferred, in whole
but not in part, only to a nominee of DTC, or by a nominee of DTC to DTC, or to
a successor to DTC for such global Security selected or approved by the Company
or to a nominee of such successor to DTC. If at any time DTC notifies the
Company that it is unwilling or unable to continue as depositary for the
applicable global Security or Securities or if at any time DTC ceases to be a
clearing agency registered under the Securities Exchange Act of 1934 if so
required by applicable law or regulation, the Company shall appoint a successor
depositary with respect to such global Security or Securities. If (x) a
successor depositary for such global Security or Securities is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such unwillingness, inability or ineligibility, or (y) an Event of
Default has occurred and is continuing and the beneficial owners representing a
majority in principal amount of the applicable Securities represented by such
global Security or Securities advise DTC to cease acting as depositary for such
global Security or Securities, or (z) the Company, in its sole discretion,
executes and delivers to the Trustee and the Security Registrar an Officers'
Certificate stating that definitive Securities may be issued in exchange for
interests in a global Security or Securities, then the Company shall execute,
and the Trustee shall authenticate and deliver, definitive Securities of like
rank, tenor and terms in definitive form, registered in such names as DTC shall
direct and bearing such legends as the Company shall specify, in an aggregate
principal amount equal to the principal amount of such global Security or
Securities. If a Security is issued in exchange for any portion of a global
Security after the close of business at the office or agency where such exchange
occurs on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date or (ii) any Special
Record Date and before the opening of business at such office or agency on the
related proposed date for payment of Defaulted Interest, interest or Defaulted
Interest, as the case may be, shall not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such Security,
but will be payable on such Interest Payment Date or proposed date for payment,
as the case may be, only to the Person to
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whom interest in respect of such portion of such global Security is payable
in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange or redemption shall (if so required by the Company or the Security
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 8.06, 10.07, 11.03(e), or 12.02 not involving
any transfer.
The Company or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security is
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
10.03 and ending at the close of business on the day of the mailing of the
relevant notice of redemption, or (ii) to register the transfer of or exchange
any Security so selected for redemption in whole or in part, except, in the case
of any Security to be redeemed in part, the portion thereof not to be redeemed,
or (iii) to issue, register the transfer of or exchange any Security that has
been surrendered for repayment at the option of the Holder, except the portion,
if any, of such Security not to be so repaid.
(a) Every Security that bears or is required under this
Section 3.04(a) to bear the legend set forth in this Section 3.04(a) (together
with any Common Stock issued upon conversion or exchange of the Securities
(including any exchange constituting payment of the Repurchase Price for
Securities pursuant to Article 11) and required to bear the legend set forth in
Section 3.04(b), collectively, the "RESTRICTED SECURITIES") shall be subject to
the restrictions on transfer set forth in this Section 3.04(a) (including one of
the legends set forth below), unless such restrictions on transfer shall be
waived by written consent of the Company, and the holder of each such Restricted
Security, by such holder's acceptance thereof, agrees to be bound by all such
restrictions on transfer. As used in Sections 3.04(a) and 3.04(b), the term
"transfer" encompasses any sale, pledge, transfer or other disposition
whatsoever of any Restricted Security.
Until two years after the original issuance date of any Security, any
certificate evidencing such Security (and all securities issued in exchange
therefor or upon payment of the Repurchase Price therefor pursuant to Article
11, or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof which shall bear the legend set forth in SECTION 3.04(b), if
applicable) shall bear a legend in substantially the following form (unless such
Securities have been transferred pursuant to a registration statement that has
been declared effective under the Securities
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Act (and which continues to be effective at the time of such transfer),
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act, or unless otherwise agreed by the Company in writing, with
notice thereof to the Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT); (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THE SECURITY EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE
SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH
SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND
WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED
HEREBY PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM
THE ORIGINAL ISSUANCE OF THE SECURITY EVIDENCED HEREBY.
Any Security (or Security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their terms may, upon surrender of such Security for exchange to the Security
Registrar in accordance with the provisions of this Section 3.04, be exchanged
for a new Security or Securities, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 3.04(a).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 3.04(a)), the global Security may not be
transferred as a whole or in part except by the depositary to a nominee of the
depositary or by a nominee of the depositary to the depositary or another
nominee of the depositary or by the depositary or any such nominee to a
successor depositary or a nominee of such successor depositary.
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At such time as all interests in the global Security have been
redeemed, converted, canceled, repurchased or transferred, the global Security
shall be, upon receipt thereof, canceled by the Trustee in accordance with
standing procedures and instructions existing between the depositary and the
Custodian.
(b) Until two years after the original issuance date of any
Security, any stock certificate representing Common Stock issued upon conversion
or exchange of such Security (including any exchange constituting payment of the
Repurchase Price for any Securities pursuant to Article 11) of such Security
shall bear a legend in substantially the following form (unless such Common
Stock has been sold pursuant to the exemption from registration provided by Rule
144 under the Securities Act or pursuant to a registration statement that has
been declared effective under the Securities Act, and which continues to be
effective at the time of such transfer, or such Common Stock has been issued
upon conversion or exchange of Securities that have been transferred pursuant to
a registration statement that has been declared effective under the Securities
Act, or unless otherwise agreed by the Company with written notice thereof to
the Trustee (in the form of an Officers' Certificate) and any transfer agent for
the Common Stock):
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE EXPIRATION OF TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE UPON THE CONVERSION OR EXCHANGE OF
WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED, (1) IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO THE COMPANY
OR ANY SUBSIDIARY THEREOF, (B) TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) IN
ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), OR (D) IN ACCORDANCE WITH A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO ANY SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE), IT WILL FURNISH
TO CHASEMELLON SHAREHOLDER SERVICES L.L.C., AS TRANSFER AGENT, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL DELIVER TO EACH PERSON TO
WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(C) OR 1(D) ABOVE OR THE
EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE SECURITY
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UPON THE CONVERSION OR EXCHANGE OF WHICH THE COMMON STOCK EVIDENCED HEREBY
WAS ISSUED.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms may, upon surrender of the
certificates representing such shares of Common Stock for exchange in accordance
with the procedures of the transfer agent for the Common Stock, be exchanged for
a new certificate or certificates for a like aggregate number of shares of
Common Stock, which shall not bear the restrictive legend required by this
SECTION 3.04(b).
(c) Any Security or Common Stock issued upon the conversion or
exchange of a Security that, prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), is purchased or owned by the Company or any Affiliate
thereof may not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction that results in
such Securities or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144).
(d) Notwithstanding any provision of Section 3.04 to the
contrary, in the event Rule 144(k) as promulgated under the Securities Act (or
any successor rule) is amended to change the two-year period under Rule 144(k)
(or the corresponding period under any successor rule), from and after receipt
by the Trustee of the Officers' Certificate and Opinion of Counsel provided for
in this Section 3.04(d), (i) each reference in Section 3.04(a) to "two years"
and in the restrictive legend set forth in such paragraph to "TWO YEARS" shall
be deemed for all purposes hereof to be references to such changed period, (ii)
each reference in Section 3.04(b) to "two years" and in the restrictive legend
set forth in such paragraph to "TWO YEARS" shall be deemed for all purposes
hereof to be references to such changed period and (iii) all corresponding
references in the Securities and the restrictive legends thereon shall be deemed
for all purposes hereof to be references to such changed period, provided that
such changes shall not become effective if they are otherwise prohibited by, or
would otherwise cause a violation of, the then-applicable federal securities
laws. As soon as practicable after the Company has knowledge of the
effectiveness of any such amendment to change the two-year period under Rule
144(k) (or the corresponding period under any successor rule), unless such
changes would otherwise be prohibited by, or would otherwise cause a violation
of, the then-applicable securities law, the Company shall provide to the Trustee
an Officers' Certificate and Opinion of Counsel informing the Trustee of the
effectiveness of such amendment and the effectiveness of the foregoing changes
to Sections 3.04(a) and 3.04(b) and the Notes. The provisions of this Section
3.04(d) shall not be effective until such time as the Opinion of Counsel and
Officers' Certificate have been received by the Trustee hereunder. This Section
3.04(d) shall apply to successive amendments to Rule 144(k) (or any successor
rule) changing the holding period thereunder.
SECTION 3.05. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If any
mutilated Security is surrendered to the Trustee or the Company, together with
such security or indemnity as may be required by the Company or the Trustee to
save each of them or any agent of either of them
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harmless, the Company shall, at the relevant Holder's expense, execute and
the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same principal amount, containing identical terms and
provisions and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company, at the relevant Holder's expense, shall execute, and
upon the Company's request the Trustee shall authenticate and deliver, in lieu
of any such destroyed, lost or stolen Security, a new Security of the same
principal amount, containing identical terms and provisions and bearing a number
not contemporaneously outstanding, appertaining to such destroyed, lost or
stolen Security.
Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a
new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security, shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.06. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Interest
on any Security that is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 9.02; PROVIDED,
HOWEVER, that each installment of interest on any Security may at the Company's
option be paid by (i) mailing a check for such interest, payable to or upon the
written order of the Person entitled thereto pursuant to Section 3.07, to the
address of such Person as it appears on the Security Register or (ii)
transferring to an account maintained by the payee located inside the United
States if the Trustee shall have received written bank wire instructions prior
to the Regular Record Date for such payment; PROVIDED, HOWEVER, that payments to
DTC shall be made by wire transfer of immediately available funds to the account
of DTC or its nominee. The term "REGULAR RECORD DATE" with
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respect to any Interest Payment Date shall mean the February 15 or August 15
preceding March 1 or September 1, respectively.
Any interest (including Liquidated Damages, if any) on any Security
that is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "DEFAULTED INTEREST") shall forthwith cease
to be payable to the registered Holder thereof on the relevant Regular Record
Date by virtue of having been such Holder, and such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in clause 3.06(a)
or 3.06(b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment (which shall not be less than 30 days after such notice
is received by the Trustee) and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Company shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days prior to
the date of the proposed payment. The Company shall promptly notify the Trustee
of such Special Record Date and, in the name and at the expense of the Company,
the Trustee shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Securities at his address as it appears in the
Security Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the Company,
cause a similar notice to be published at least once in an Authorized Newspaper
in each Place of Payment, but such publications shall not be a condition
precedent to the establishment of such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special Record Date
and shall no longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on
the Securities in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
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SECTION 3.07. PERSONS DEEMED OWNERS. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any), and (subject to Sections 3.04 and 3.06)
interest on, such Security and for all other purposes whatsoever, whether or not
such Security is overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depositary, as a Holder, with respect to
such global Security or impair, as between such depositary and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
SECTION 3.08. CANCELLATION. All Securities surrendered for payment,
redemption, repayment at the option of the Holder or registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities surrendered directly to the
Trustee for any such purpose shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder that the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder that the Company has not issued and sold, and all
Securities so delivered shall be promptly canceled by the Trustee. If the
Company shall so acquire any of the Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are surrendered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. Canceled Securities held by the Trustee shall be
destroyed by the Trustee and the Trustee shall deliver a certificate of such
destruction to the Company, unless by a Company Order the Company directs their
return to it.
SECTION 3.09. COMPUTATION OF INTEREST. Interest (including Liquidated
Damages, if any) on the Securities shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
SECTION 3.10. CUSIP NUMBERS. The Company in issuing the Securities
shall use "CUSIP" numbers, and the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders; PROVIDED HOWEVER, that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any
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notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers. The
Company shall promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE 4
REMEDIES
SECTION 4.01. EVENTS OF DEFAULT. "EVENT OF DEFAULT," wherever used
herein with respect to the Securities, means any one of the following events
(whatever the reason for such Event of Default and whether or not it shall be
occasioned by the provisions of Article 13 or be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) default in the payment of any interest upon any Security,
when such interest becomes due and payable, and continuance of such default for
a period of 30 days (whether or not such payment is prohibited by the provisions
of Article 13); or
(b) default in the payment of (i) the principal of (or
premium, if any, on) any Security when it becomes due and payable at its
Maturity, or (ii) the Redemption Price (including the Make-Whole Payment, if
any) with respect to any Security when it becomes due and payable (whether or
not such payment is prohibited by the provisions of Article 13); or
(c) failure by the Company to give the Company Notice in
accordance with Section 11.03(a) to all Holders of Outstanding Securities and to
the Trustee or default in the payment of the Repurchase Price in respect of any
Security on the Repurchase Date thereof (whether or not such payment is
prohibited by the provisions of Article 13); or
(d) failure by the Company to deliver shares of Common Stock
(together with cash in lieu of fractional shares) when such Common Stock (or
cash in lieu of fractional shares) is required to be delivered following
conversion of a Security and continuation of such default for a period of 10
days; or
(e) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture with respect to any Security (other
than a covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with) and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "NOTICE OF
DEFAULT" hereunder; or
(f) a default under any bonds, debentures, notes or other
evidences of indebtedness for money borrowed of the Company or under any
mortgages, indentures or
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instruments under which there may be issued or by which there may be secured
or evidenced any indebtedness for money borrowed by the Company, whether such
indebtedness now exists or shall hereafter be created, which indebtedness,
individually or in the aggregate, has a principal amount outstanding in
excess of $35,000,000, which default shall have resulted in such indebtedness
becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable, without such indebtedness having
been discharged, or such acceleration having been rescinded or annulled,
within a period of 60 days after there shall have been given, by registered
or certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the Securities
then Outstanding, a written notice specifying such default and requiring the
Company to cause such indebtedness to be discharged or cause such
acceleration to be rescinded or annulled and stating that such notice is a
"NOTICE OF DEFAULT" hereunder (unless such default has been cured or waived);
or
(g) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(iv) makes a general assignment for the benefit of
its creditors; or
(h) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any
Significant Subsidiary in an involuntary case,
(ii) appoints a Custodian of the Company or any
Significant Subsidiary or for all or substantially all of the property of any of
them, or
(iii) orders the winding up or liquidation of the
Company or any Significant Subsidiary,
and the order or decree remains unstayed and in effect for 60 days.
As used in this Section 4.01 only, the term "BANKRUPTCY LAW" means
title 11, U.S. Code or any similar Federal or State law for the relief of
debtors and the term "CUSTODIAN" means any receiver, trustee, assignee,
liquidator or other similar official under any Bankruptcy Law.
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SECTION 4.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default with respect to Securities at the time Outstanding occurs and
is continuing, then and in every such case the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities may declare the
principal of all the Securities, and accrued interest thereon to the date of
such declaration, to be due and payable immediately, by a notice in writing to
the Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal shall become immediately due and payable. If an Event
of Default specified in Section 4.01(g) or Section 4.01(h) occurs, the principal
of, and accrued interest on, all the Securities shall automatically, and without
any declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
the Securities has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter provided in this
Article, the Holders of a majority in principal amount of the Outstanding
Securities, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all overdue installments of interest on all
Outstanding Securities,
(ii) the principal of (and premium, if any, on) any
Outstanding Securities that have become due otherwise than by reason of such
declaration of acceleration and interest thereon at the rate or rates borne by
or provided for in such Securities,
(iii) to the extent that payment of such interest is
lawful, interest upon overdue installments of interest at the rate or rates
borne by or provided for in such Securities, and
(iv) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and
(b) all Events of Default with respect to the Securities,
other than the nonpayment of the principal of (or premium, if any) or interest
on Securities which have become due solely by reason of such declaration of
acceleration, have been cured or waived as provided in Section 4.13.
No such rescission shall affect any subsequent Event of Default or
impair any right in respect thereof.
SECTION 4.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Company covenants that if:
(a) default is made in the payment of any installment of
interest on any Security when such interest becomes due and payable and such
default continues for a period of 30 days, or
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(b) default is made in the payment of the principal of (or
premium, if any, on) any Security at its Maturity,
then the Company shall, upon demand of the Trustee, pay to the Trustee,
for the benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal (and premium, if any) and interest,
with interest upon any overdue principal (and premium, if any) and, to the
extent that payment of such interest shall be legally enforceable, upon any
overdue installments of interest, if any, at the rate or rates borne by or
provided for in such Securities, and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities under a
supplemental indenture entered into in accordance herewith and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other such obligor upon such Securities,
wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 4.04. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities under a supplemental
indenture entered into in accordance herewith or the property of the Company or
of such other obligor or the Company's, or any such other obligor's, creditors,
the Trustee (irrespective of whether the principal of the Securities shall then
be due and payable as therein expressed or by acceleration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal, premium, if any, or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Securities, of principal (and
premium, if any) and interest, owing and unpaid in respect of the Securities and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial proceeding is
hereby directed by each Holder to make such payments to the Trustee, and in the
event that the Trustee shall request or consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee and
any predecessor Trustee, their agents and counsel, and any other amounts due the
Trustee or any predecessor Trustee under Section 5.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a
Security, any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder of a Security in any
such proceeding; PROVIDED HOWEVER, that the Trustee may, on behalf of the
Holders, vote for the election of a trustee in bankruptcy or similar official
and be a member of a creditors' or other similar committee.
SECTION 4.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES. All rights of action and claims under this Indenture or any of the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 4.06. APPLICATION OF MONEY COLLECTED. Any money collected by
the Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Securities, or both, as the case may be, and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 5.07;
SECOND: To the holders of Senior Indebtedness to the extent required by
the provisions of Article 13.
THIRD: To the payment of the amounts then due and unpaid upon the
Securities for principal (and premium, if any) and interest (including
Liquidated Damages, if any) payable, in respect of which or for the benefit of
which such money has been collected, ratably, without preference or priority of
any kind, according to the aggregate amounts due and payable on such Securities
for principal (and premium, if any) and, interest (including Liquidated Damages,
if any), respectively; and
FOURTH: To the payment of the remainder, if any, to the Company.
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SECTION 4.07. LIMITATION ON SUITS. No Holder of any Security shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities;
(b) the Holders of not less than 25% in principal amount of
the Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee
security or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of security or indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holders, or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all such Holders.
SECTION 4.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST. Notwithstanding any other provision in this
Indenture, the Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment of the principal of, and premium, if any,
including the Redemption Prices and Make-Whole Payment upon redemption pursuant
to Article 10, the Repurchase Price pursuant to Article 11 and (subject to
Sections 3.04 and 3.06) interest (including Liquidated Damages, if any) on such
Security on the respective due dates expressed in such Security (or, in the case
of redemption or repurchase, on the Redemption Date or Repurchase Date, as the
case may be) and to convert such Security in accordance with the provisions of
this Indenture and to institute suit for the enforcement of any such payment and
right to convert, and such rights shall not be impaired without the consent of
such Holder.
SECTION 4.09. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder of a Security has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, the Company, the Trustee and the
Holders of Securities shall, subject to any determination in such proceeding, be
restored severally
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and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 4.10. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 3.05, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Securities is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 4.11. DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities, as the case may be.
SECTION 4.12. CONTROL BY HOLDERS OF SECURITIES. The Holders of not less
than a majority in principal amount of the Outstanding Securities shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Securities, PROVIDED that:
(a) such direction shall not be in conflict with any rule of
law or with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction, and
(c) the Trustee need not take any action that might involve it
in personal liability or be unduly prejudicial to the Holders of Securities not
joining therein.
SECTION 4.13. WAIVER OF PAST DEFAULTS. The Holders of not less than a
majority in principal amount of the Outstanding Securities may on behalf of the
Holders of all the Securities waive any past Default or Event of Default
hereunder with respect to such Securities and its consequences, except a Default
or Event of Default:
(a) in the payment of the principal of (or premium, if any) or
interest on any Security,
(b) in respect of the conversion by the Company of any
Security into Common Stock,
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(c) in the payment of the Redemption Prices or Make-Whole
Payment pursuant to Article 10,
(d) in the payment of the Repurchase Price pursuant to Article
11, or
(e) in respect of a covenant or provision hereof that under
Article 8 cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such Default or Event of Default shall cease to
exist, and any Event of Default arising from any Default shall be deemed to have
been cured, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 4.14. WAIVER OF USURY, STAY OR EXTENSION LAWS. The Company
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but shall suffer and permit the execution
of every such power as though no such law had been enacted.
SECTION 4.15. UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Security by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit
having due regard to the merits and good faith of the claims or defenses made
by such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by the Company, to
any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities, or
to any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repurchase, on or after the Redemption Date or the Repurchase
Date, respectively), or the right to convert any Security in accordance with
ARTICLE 12.
ARTICLE 5
THE TRUSTEE
SECTION 5.01. GENERAL. The Trustee, prior to the occurrence of an Event
of Default and after the curing of all Events of Default that may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred (that has not
been cured or waived) the Trustee shall exercise such of the rights and
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powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, its own willful misconduct, its own recklessness or its own bad faith.
SECTION 5.02. CERTAIN RIGHTS OF TRUSTEE. Subject to TIA Sections 15(a)
through (d):
(a) the Trustee may rely, and shall be protected in acting or
refraining from acting, upon any resolution, certificate, statement, instrument,
facsimile transmission, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, made or presented
by, the proper person and may accept and rely upon the same as conclusive
evidence of the truth and accuracy of the statements and opinions contained
therein. The Trustee need not investigate any fact or matter stated in any such
document;
(b) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, which shall conform
to Section 1.03. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such certificate or opinion;
(c) the Trustee may consult with counsel, and the written
advice of such counsel shall be full and complete authorization and protection
with respect to any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon, and may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care;
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in complying with such request or
direction;
(e) the Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within its
rights or powers or for any action it takes or omits to take in accordance with
the written direction of the holders of a majority in principal amount of the
Outstanding Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture;
(f) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
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(g) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company personally or by agent or
attorney;
(h) the Trustee shall not be required to take notice or be
deemed to have notice of any Default or Event of Default hereunder unless a
Responsible Officer of the Trustee be specifically notified of such Default or
Event of Default in writing by the Company or any Holder, and in the absence of
such notice the Trustee may conclusively assume that there is no Default or
Event of Default; provided that if the Trustee is acting as Paying Agent, the
Trustee shall be required to take and be deemed to have notice of its failure to
receive payments of interest or principal hereunder;
(i) except for information provided by the Trustee concerning
the Trustee, the Trustee shall have no responsibility with respect to any
information in any offering memorandum or other disclosure material distributed
with respect to the Securities, and the Trustee shall have no responsibility for
compliance with securities laws in connection with the issuance and sale, resale
or exchange of the Securities;
(j) in the event the Trustee shall receive inconsistent or
conflicting requests and indemnity from two or more groups of Holders, each
representing at least 25% (but less than 50%) of the aggregate principal amount
of the Securities then Outstanding, the Trustee shall act in accordance with
instructions received by the Holders of the greater percentage thereof;
(k) except as otherwise expressly provided by the provisions
of this Indenture, the Trustee shall not be obligated and may not be required to
give or furnish any notice, demand, report, request, reply, statement, advice or
opinion to any Holder or to the Company or any other Person, and the Trustee
shall not incur any liability for its failure or refusal to give or furnish the
same unless obligated or required to do so by the express provisions hereof; and
(l) the Trustee shall not be required to give any bond or
surety with respect to the performance of its duties or the exercise of its
powers under this Indenture.
SECTION 5.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee, any Paying
Agent, Security Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Securities and may
otherwise deal with the Company, its Subsidiaries or its Affiliates with the
same rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent. Any registrar, co-registrar, paying agent,
conversion agent or authenticating agent may do the same with like rights.
However, upon qualification of this Indenture under the TIA the Trustee shall be
subject to TIA Sections 310(b) and 311.
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SECTION 5.04. TRUSTEE'S DISCLAIMER. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the
Securities, (ii) shall not be accountable for the Company's use or application
of the proceeds from the Securities and (iii) shall not be responsible for any
statement in the Securities other than its certificate of authentication.
SECTION 5.05. NOTICE OF DEFAULT. If any Event of Default occurs and is
continuing and if the Trustee has actual knowledge of such Event of Default, the
Trustee shall mail to each holder in the manner and to the extent provided in
TIA Section 313(c) notice of the Event of Default within 90 days after it
occurs, unless such Event of Default has been cured or waived; PROVIDED,
HOWEVER, that, except in the case of a Default in the payment of the principal
of (or premium, if any) or interest on any Security, the Trustee shall be
protected in withholding such notice if and so long as Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interests of the Holders of the Securities; and provided further that in the
case of any Default or breach referred to in Section 4.01(e) with respect to the
Securities, no such notice to Holders shall be given until at least 60 days
after the occurrence thereof.
SECTION 5.06. CONFLICTING INTERESTS OF TRUSTEE. If the Trustee has or
shall acquire a conflicting interest within the meaning of the TIA, the Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of the TIA and this Indenture.
SECTION 5.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing for its services.
The compensation of the Trustee shall not be limited by any law on compensation
of a trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses, disbursements and advances
incurred or made by the Trustee in accordance with this Indenture. Such expenses
shall include the reasonable compensation, expenses, disbursements and advances
of the Trustee's agents and counsel.
The Company shall indemnify and hold harmless the Trustee and its
officers, directors, agents and employees (collectively the "INDEMNITEES")
against any and all losses, liabilities, obligations, damages, penalties, fines,
judgments, actions, suits, proceedings, reasonable costs and expenses (including
reasonable fees and disbursements of counsel) of any kind whatsoever that may be
incurred by or imposed on the Indemnitees or any of them arising out of or in
connection with the acceptance or administration of the Trustee's duties under
this Indenture; PROVIDED, HOWEVER, that the Company need not reimburse any
expense or indemnify against any loss, obligation, damage, penalty, fine,
judgment, action, suit, proceeding, reasonable cost or expense (including
reasonable fees and disbursements of counsel) of any kind whatsoever that may be
incurred by Indemnitees or any of them which results from the negligence or
willful misconduct of the Indemnitees or any of them. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder, unless the Company is materially prejudiced thereby. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
Unless otherwise set forth herein, the Indemnitees, or any of them, may have
separate counsel and the Company shall pay the
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reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld. The provisions of this Section 5.07 shall survive the termination of
this Indenture and the resignation or removal of the Trustee for any reason.
To secure the Company's payment obligations in this Section 5.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of, premium, if any, and interest on
particular Securities.
If the Trustee incurs expenses or renders services after the occurrence
of an Event of Default specified in Section 4.01(g) or Section 4.01(h), such
expenses, and the compensation due to the Trustee for such services, are
intended to constitute expenses of administration under Title 11 of the United
States Bankruptcy Code or any applicable federal or state law for the relief of
debtors.
SECTION 5.08. REPLACEMENT OF TRUSTEE. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
5.08.
The Trustee may resign at any time by so notifying the Company in
writing at least thirty days prior to the date of the proposed resignation. At
any time, the Holders of a majority in principal amount of the Outstanding
Securities may, by written notice to the Trustee and the Company, remove the
Trustee and, with the prior consent of the Company, appoint a successor Trustee.
The Company may remove the Trustee if: (i) the Trustee is no longer eligible
under Section 5.10; (ii) the Trustee is adjudged a bankrupt or an insolvent;
(iii) a receiver or other public officer takes charge of the Trustee or its
property; or (iv) the Trustee becomes incapable of acting.
If the Trustee is removed without the concurrent appointment by the
Holders of a successor Trustee, if the Trustee resigns, or if a vacancy exists
in the office of Trustee for any other reason, the Company shall promptly
appoint a successor Trustee. If no successor Trustee has delivered its written
acceptance required by the next succeeding paragraph of this Section 5.08 within
thirty days after the retiring Trustee delivers notice of its resignation or is
removed, or after the occurrence of a vacancy in the office of Trustee for any
other reason, the retiring Trustee, the Company or the Holders of a majority in
principal amount of the Outstanding Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after the
delivery of such written acceptance, subject to payment of all amounts due and
owing to the Trustee under Section 5.07 and its lien provided in Section 5.07,
(i) the retiring Trustee shall transfer all property held by it as Trustee to
the successor Trustee, (ii) the resignation or removal of the retiring Trustee
shall become effective and (iii) the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Holder.
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If the Trustee is no longer eligible under Section 5.10, any Holder who
satisfies the requirements of TIA Section 310(b) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
The Company shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all holders. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section
5.08, the Company's obligations under Section 5.07 shall continue for the
benefit of the retiring Trustee.
SECTION 5.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business (including the administration of this
Indenture) to, another corporation or national banking association, the
resulting, surviving or transferee corporation or national banking association,
without any further act, shall be the successor Trustee with the same effect as
if the successor Trustee had been named as the Trustee herein.
SECTION 5.10. ELIGIBILITY. This Indenture shall always have a Trustee
who satisfies the requirements of TIA Section 310(a)(1). The Trustee (or the
bank holding company to which the Trustee is a member) shall have a combined
capital and surplus of at least $25 million as set forth in its most recent
published annual report of condition.
SECTION 5.11. MONEY HELD IN TRUST. Subject to the provisions of Section
9.03 and Sections 13.02, 13.03, 13.09 all monies received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received. The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree with the Company. Money
held in trust by the Trustee need not be segregated from other funds except to
the extent required by law.
SECTION 5.12. PREFERENTIAL COLLECTION OF CLAIMS. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Securities under a supplemental indenture entered into in accordance
herewith), the Trustee shall be subject to the provisions of the Trust Indenture
Act regarding the collection of the claims against the Company (or any such
other obligor).
SECTION 5.13. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY;
LIQUIDATED DAMAGES. Any application by the Trustee for written instructions from
the Company (other than with regard to any action proposed to be taken or
omitted to be taken by the Trustee that affects the rights of the Holders or
holders of Senior Indebtedness under this Indenture, including, without
limitation, under Article 13 hereof) may, at the option of the Trustee, set
forth in writing any action proposed to be taken or omitted by the Trustee under
this Indenture and the date on and/or after which such action shall be taken or
such omission shall be effective. The Trustee shall not be liable for any action
taken by, or omission of, the Trustee in accordance with a proposal included in
such application on or after the date specified in such application (which date
shall not be less than ten
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Business Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
(a) If Liquidated Damages are payable to Holders pursuant to
the terms of the Registration Rights Agreement, the Company shall deliver to the
Trustee a certificate to that effect stating (i) the amount of Liquidated
Damages that is payable and (ii) the date on which such amount of Liquidated
Damages is payable. Unless and until a Responsible Officer of the Trustee
receives at the Corporate Trust Office such a certificate, the Trustee may
assume without inquiry that no such Liquidated Damages are payable. Upon receipt
of a Company Request together with a sum sufficient to pay such Liquidated
Damages so becoming due, the Trustee shall pay such Liquidated Damages to the
Holders in the same manner as interest on the Securities. If the Company has
paid Liquidated Damages directly to the Persons entitled to them, the Company
shall deliver to the Trustee a certificate setting forth the particulars of such
payment.
ARTICLE 6
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 6.01. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS. Every
Holder of Securities, by receiving and holding the same, agrees with the Company
and the Trustee that neither the Company or the Trustee, nor any Paying Agent or
any Security Registrar shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Holders of Securities in
accordance with TIA Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under TIA Section
312(b).
SECTION 6.02. REPORTS BY TRUSTEE. Within 60 days after May 15 of each
year, commencing with the first May 15 after the qualification of this
Indenture, the Trustee shall transmit by mail to all Holders of Securities as
provided in TIA Section 313(c), if required by TIA Section 313(a), a brief
report dated as of such May 15. A copy of each such report shall at the time of
such transmission to Holders be filed by the Trustee with the Company.
SECTION 6.03. REPORTS BY COMPANY. The Company shall:
(a) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) that the Company may be required to file with the
Commission pursuant to Sections 13(a) or 13(b) or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to any of such Sections, then it
shall file with the Trustee, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents
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and reports that may be required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in such
rules and regulations;
(b) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(c) file with the Trustee and the Commission, if applicable,
and transmit by mail to the Holders, within thirty days after the filing
thereof with the Trustee, in the manner and to the extent provided in TIA
Section 313(c), such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (1) and (2) of this
Section as may be required by rules and regulations prescribed from time to
time by the Commission and other information as may be required pursuant to the
TIA at the time and in the manner provided pursuant to such Act.
SECTION 6.04. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
HOLDERS.
(a) The Company shall furnish or cause to be furnished to the
Trustee:
(i) semi-annually, not later than 10 days after the
Regular Record Date for the payment of interest on the Securities, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders as of such Regular Record Date; and
(ii) at such other times as the Trustee may request
in writing, within 30 days after the receipt by the Company of any such request,
a list of similar form and content as of a date not more than 15 days prior to
the time such list is furnished,
PROVIDED, HOWEVER, that, so long as the Trustee is the Security
Registrar, no such list shall be required to be furnished.
(b) The Company shall provide the Trustee with at least thirty
days' prior notice of any change in location of its principal executive offices
or other principal place of business.
ARTICLE 7
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 7.01. CONSOLIDATIONS AND MERGERS OF COMPANY AND SALES, LEASES
AND CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS. The Company may
consolidate with or merge into or transfer or lease its assets substantially as
an entirety to any Person, and any Person is entitled to consolidate with or
merge into, or transfer or lease its assets substantially as an entirety to the
Company, PROVIDED HOWEVER, that in any such case, (1) either the Company shall
be the continuing corporation, or the Person (if other than the Company) formed
by such consolidation or
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into which the Company is merged, or the Person (if other than a Subsidiary of
the Company) that receives the Company's assets substantially as an entirety,
is a corporation, partnership, limited liability company or trust organized and
existing under the laws of any United States jurisdiction and expressly assumes
the due and punctual payment of the principal of and premium, if any (including
the Make-Whole Payment, if any), and any interest (including Liquidated
Damages, if any) payable pursuant to this Indenture on all of the Securities,
according to their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of this Indenture to be performed by the
Company and shall have provided for conversion rights, if applicable, in
accordance with the provisions of Article 12 hereof, by supplemental indenture,
complying with Article 8 hereof, satisfactory to the Trustee, executed and
delivered to the Trustee by such entity and (2) immediately after giving effect
to such consolidation, merger, transfer or lease, no Default or Event of
Default, shall have happened and be continuing. For purposes of the foregoing,
the transfer (by lease, assignment, sale or otherwise) of the properties and
assets of one or more Subsidiaries (other than to the Company or another
Subsidiary), which, if such assets were owned by the Company, would constitute
all or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.
SECTION 7.02. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of
any such consolidation, merger, sale, lease, conveyance or other disposition and
upon any such assumption by the successor Person, such successor Person shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part, and the predecessor
corporation, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor Person
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company, any or all of the Securities issuable hereunder that
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person, instead of the Company,
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities that
previously shall have been signed and delivered by the officers of the Company
to the Trustee for authentication, and any Securities that such successor Person
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Securities so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease, conveyance or
other disposition, such changes in phraseology and form (but not in substance)
may be made in the Securities thereafter to be issued as may be appropriate.
SECTION 7.03. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL. Any
consolidation, merger, sale, lease, transfer, conveyance or other disposition
permitted under Section 7.01 is also subject to the condition that the Trustee
receive an Officers' Certificate and an Opinion of Counsel to the effect that
any such consolidation, merger, sale, lease, transfer or conveyance or other
disposition, complies with the provisions of this Article and constitutes the
legal, valid and binding obligation of the successor Person, subject to
customary enforceability exceptions.
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ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders of Securities, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of the Company
contained herein and the Securities issued hereunder;
(b) to add to the covenants of the Company for the equal and
ratable benefit of the Holders or to surrender any right, power or option herein
conferred upon the Company;
(c) to add any Events of Default for the benefit of the
Holders; PROVIDED, HOWEVER, that in respect of any such additional Events of
Default such supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon such
default or may limit the remedies available to the Trustee upon such default or
may limit the right of the Holders of a majority in aggregate principal amount
of those Securities to which such additional Events of Default apply to waive
such default;
(d) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee and to add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee;
(e) to cure any ambiguity or to correct or supplement any
provision herein that may be defective or inconsistent with any other provision
herein; provided such provisions shall not adversely affect the interests of the
Holders of Securities in any material respect;
(f) to make any change that does not adversely affect the
rights of any holder of Securities or to surrender any right, power or option
conferred on the Company hereunder;
(g) to make any change to comply with any requirement of the
Commission in connection with the qualification of the Indenture under TIA; or
(h) to provide for the issuance of uncertificated Securities
in addition to or in place of certificated Securities; PROVIDED, HOWEVER that
the uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Internal Revenue Code of 1986.
SECTION 8.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities affected
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by such supplemental indenture, by Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by or pursuant to a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders; PROVIDED, HOWEVER, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(a) reduce the principal amount, Repurchase Price or
Redemption Price with respect to any Security, or extend the Stated Maturity of
any Security or alter the manner of payment or rate of interest on any Security
or make any Security or Redemption Price or Repurchase Price in respect of such
Security payable in money or securities other than that stated in the Security;
(b) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver with respect to Securities (or for the waiver of compliance with certain
provisions of this Indenture or certain Defaults or Events of Default hereunder
and their consequences);
(c) make any change that adversely affects the right to
convert any Security;
(d) modify the provisions of the Indenture relating to the
ranking of the Securities in a manner adverse to the Holders of the Securities;
or
(e) impair the right to institute suit for the enforcement of
any payment with respect to, or conversion of, the Securities.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 8.03. EXECUTION OF SUPPLEMENTAL INDENTURE. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Article 5)
shall be fully protected in relying upon, an Opinion of Counsel stating that (i)
the execution of such supplemental indenture is authorized or permitted by this
Indenture, (ii) all conditions precedent to its execution and delivery have been
complied with and (iii) such supplemental indenture constitutes the valid and
binding obligation of the Company. The Trustee may, but shall not be obligated
to, enter into any such supplemental indenture that affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 8.04. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
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SECTION 8.05. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 8.06. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall, if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
ARTICLE 9
COVENANTS
SECTION 9.01. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST. The
Company covenants and agrees for the benefit of the Holders of Securities that
it shall duly and punctually pay the principal of (and premium, if any),
interest (including Liquidated Damages, if any) on, and the Repurchase Price,
the Redemption Price and the Make-Whole Payment with respect to the Securities
in accordance with the terms of the Securities and this Indenture. At the option
of the Company, all payments of principal with respect to any Security may be
paid by check to the registered Holder of the Security or other Person entitled
thereto against surrender of such Security. The conversion of any Securities
pursuant to Article 12 hereof and payment of the Repurchase Price by delivery of
shares of Common Stock in accordance with Article 11, together with the making
of any cash payments required to be made in accordance with the terms of the
Securities and this Indenture, shall satisfy the Company's obligations under
this Section 9.01 with respect to such Securities.
SECTION 9.02. MAINTENANCE OF OFFICE OR AGENCY. The Company shall
maintain a Place of Payment for the Securities in the Borough of Manhattan, The
City of New York, which shall be an office or agency where the Securities may be
presented or surrendered for payment or conversion, exchange or redemption,
where the Securities may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The office or agency of the Trustee
in the Borough of Manhattan, The City of New York, shall initially be such
office or agency of the Company, unless and until the Company shall designate
and maintain some other office or agency for one or more of such purposes. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of each such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
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The Company may from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all of such purposes, and may from time to
time rescind such designations; PROVIDED, HOWEVER, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in accordance with the requirements set forth above for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 9.03. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST. If the
Company shall at any time act as its own Paying Agent with respect to any
Securities, it shall, on or before each due date of the principal of (and
premium, if any), or interest on, the Securities, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
shall promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it shall, before each due date of the principal of (and premium, if
any), or interest on, the Securities, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest, so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest and (unless such Paying Agent is the
Trustee) the Company shall promptly notify the Trustee of its action or failure
so to act.
The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument pursuant to which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent shall:
(a) hold all sums held by it for the payment of principal of
(and premium, if any,) or interest on the Securities, in trust for the benefit
of the Persons entitled thereto, until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities under a supplemental indenture entered
into in accordance herewith) in the making of any such payment of principal (and
premium, if any) or interest; and
(c) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
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Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall be paid to the Company upon Company Request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company
for payment of such principal of (and premium, if any) or interest on any
Security, without interest thereon, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in an Authorized
Newspaper, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining, shall be
repaid to the Company.
SECTION 9.04. EXISTENCE. Subject to Article 7, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect the corporate existence of the Company and its Subsidiaries, and their
respective rights (charter and statutory) and franchises, except to the extent
that the Board of Directors shall determine that the failure to do so would not
have a material adverse effect on the business, assets, financial condition or
results of operation of the Company (a "MATERIAL ADVERSE EFFECT"); PROVIDED,
HOWEVER, that the Company shall not be required to preserve any right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 9.05. PAYMENT OF TAXES AND OTHER CLAIMS. The Company shall pay
or discharge, or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary and have a Material Adverse Effect; PROVIDED, HOWEVER,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 9.06. STATEMENT AS TO COMPLIANCE. The Company shall deliver to
the Trustee, within 120 days after the end of each fiscal year of the Company, a
certificate from the Company's Chief Executive Officer, Chief Financial Officer
or principal accounting officer as to his or her knowledge of the Company's
compliance with all terms, conditions and provisions under this Indenture and,
in the event of any noncompliance, specifying such noncompliance and the nature
and status thereof. For purposes of this Section 9.06, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
SECTION 9.07. WAIVER OF CERTAIN COVENANTS. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 9.04 to 9.05,
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inclusive, if, before the time for such compliance, the Holders of at least a
majority in principal amount of the Outstanding Securities, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
SECTION 9.08. RULE 144A INFORMATION REQUIREMENT. Within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any Holder or
beneficial owner of Securities that continue to be Restricted Securities, in
connection with any sale thereof and any prospective purchaser of Securities
from such holder or beneficial owner, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any such holder or
beneficial owner of the Securities and the Company shall take such further
action as any holder or beneficial owner of such Securities may reasonably
request, all to the extent required from time to time to enable such holder or
beneficial owner to sell its Securities without registration under the
Securities Act within the limitation of the exemption provided by Rule 144A, as
such rule may be amended from time to time.
ARTICLE 10
REDEMPTION OF SECURITIES
SECTION 10.01. PROVISIONAL AND OPTIONAL REDEMPTION BY THE COMPANY. (a)
The Securities may be redeemed at the election of the Company, as a whole or in
parts from time to time, at any time prior to March 5, 2003 (a "PROVISIONAL
REDEMPTION"), upon notice as set forth in Section 10.04, at a redemption price
equal to $1,000 per $1,000 principal amount of the Securities redeemed plus
accrued and unpaid interest (including Liquidated Damages), if any (such amount,
together with the Make-Whole Payment described below, the "PROVISIONAL
REDEMPTION PRICE"), to but excluding the date of redemption (the "PROVISIONAL
REDEMPTION DATE") if (i) the Closing Price of the Common Stock has exceeded 150%
of the Conversion Price (as defined in Article 12 and as such may be adjusted
from time to time) then in effect for at least 20 Trading Days within a period
of 30 consecutive Trading Days ending on the Trading Day prior to the date of
mailing of the provisional notice of redemption pursuant to Section 10.04 (the
"NOTICE DATE"), and (ii) a registration statement covering resales of the
Securities and the Common Stock issuable upon conversion thereof is effective
and available for use and is expected to remain effective for the 30 days
following the Provisional Redemption Date unless registration is no longer
required.
Upon any such Provisional Redemption, the Company shall make an
additional payment in cash (the "MAKE-WHOLE PAYMENT") with respect to the
Securities called for redemption to holders on the Notice Date in an amount
equal to $166.67 per $1,000 principal amount of the Securities, less the amount
of any interest actually paid on such Securities prior to the date of
redemption. The Company shall make the Make-Whole Payment on all Securities
called for Provisional Redemption,
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including those Securities converted into Common Stock between the Notice Date
and the Provisional Redemption Date.
(a) The Securities may be redeemed at the election of the
Company, as a whole or from time to time in part, at any time on or after March
5, 2003, and prior to maturity (an "OPTIONAL REDEMPTION"), upon notice as set
forth in Section 10.04, at the following optional redemption prices (expressed
as percentages of the principal amount), together in each case with accrued and
unpaid interest (including Liquidated Damages), if any, up to but not including
the date fixed for redemption (the "OPTIONAL REDEMPTION PRICE"), if redeemed
during the periods described below:
<TABLE>
<CAPTION>
PERIOD REDEMPTION PRICE
---------------------------------------------- ------------------
<S> <C>
March 5, 2003 through February 29, 2004 102.286%
March 1, 2004 through February 28, 2005 101.714%
March 1, 2005 through February 28, 2006 101.143%
March 1, 2006 through February 28, 2007 100.571%.
</TABLE>
and 100% of the principal amount on March 1, 2007.
SECTION 10.02. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of
the Company to redeem any Securities shall be evidenced by a Board Resolution.
In case of any redemption at the election of the Company of all or any part of
the Securities pursuant to Section 10.01 (Provisional Redemption or Optional
Redemption), the Company shall, at least 30 days prior to the giving of the
notice to the Holders of redemption in Section 10.04 (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of the Redemption Date
and of the principal amount of Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
SECTION 10.03. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If
less than all the Securities are to be redeemed, the particular Securities to be
redeemed shall be selected not more than 60 days and not less than 30 days prior
to the Redemption Date by the Trustee, from the Outstanding Securities not
previously called for redemption, by lot, pro rata or any other method that
complies with the requirements of any exchange on which the Securities are
listed or quoted and that as the Trustee shall deem fair and appropriate.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed,
solely for purposes of determining the aggregate principal amount of the
Securities to be redeemed, to be the portion selected for redemption (PROVIDED,
HOWEVER, that the
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Holder of such Security so converted and deemed redeemed shall not be entitled
to any interest payment as a result of such deemed redemption except for such
interest payment as such Holder would have otherwise been entitled to receive
upon conversion of such Security). Securities that have been converted during a
selection of Securities to be redeemed may be treated by the Trustee as
Outstanding for the purpose of such selection.
Securities in denominations of $1,000 may only be redeemed in whole.
The Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Securities that have denominations larger
than $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 10.04. NOTICE OF REDEMPTION. Notice of redemption shall be
given in the manner provided in Section 1.07 not less than 30 days nor more than
60 days prior to the Redemption Date in the case of an Optional Redemption or
Provisional Redemption; provided, in each case, that failure to give such notice
in the manner herein provided to the Holder of any Security designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption of
any other such Security or portion thereof.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Securities to be redeemed;
(d) if any Security is to be redeemed in part only, the
portion of the principal amount of each Security to be redeemed, and the notice
that relates to such Security shall state that on and after the Redemption Date,
upon surrender of such Security, the holder shall receive, without a charge, a
new Security or Securities of authorized denominations for the principal amount
thereof remaining unredeemed;
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(e) that on the Redemption Date, the Redemption Price shall
become due and payable upon each such Security, or the portion thereof, to be
redeemed and, if applicable, that interest thereon shall cease to accrue on and
after said date;
(f) the Place or Places of Payment where such Securities are
to be surrendered for payment of the Redemption Price;
(g) that Securities called for redemption must be presented
and surrendered to the Paying Agent to collect the redemption price;
(h) the then current Conversion Price and Make-Whole Payment,
if any;
(i) that the Securities called for redemption may be converted
at any time before the close of business on the last Business Day prior to the
Redemption Date;
(j) the CUSIP number of such Security, if any; and
(k) that a Holder of Securities who desires to convert
Securities must satisfy the requirements for conversion contained in such
Securities.
Notice of redemption of Securities to be redeemed shall be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 10.05. DEPOSIT OF REDEMPTION PRICE. Not later than 11:00 a.m.
New York City time on the Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 9.03) an amount of
money sufficient to pay, on the Redemption Date, the Redemption Price of all the
Securities or portions thereof that are to be redeemed on that date, other than
Securities or portions thereof called for redemption on that date that have been
delivered by the Company to the Trustee for cancellation or have been converted.
The Trustee or the Paying Agent, as the case may be, shall return to the Company
no later than 30 days after such request any money not required for that
purpose.
SECTION 10.06. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price) such Securities shall cease to
bear interest. Upon surrender of any such Security for redemption in accordance
with said notice, such Security shall be paid by the Company at the Redemption
Price; PROVIDED, HOWEVER, that if the Redemption Date is an Interest Payment
Date, the semi-annual payment of interest becoming due on such date shall be
payable to the Holders of such Securities registered as such on the relevant
Regular Record Date according to their terms and the provisions of Section 3.06,
and with respect to a Provisional Redemption, the holder of any Securities
converted into Common Stock pursuant to the terms hereof after the Notice Date
and prior to the Provisional Redemption Date shall have the right to the
Make-Whole Payment regardless of the conversion of such Securities.
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If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the Redemption Price, shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security and such
Security shall remain convertible into Common Stock until the Redemption Price,
and any such accrued interest, shall have been paid or duly provided for.
SECTION 10.07. SECURITIES REDEEMED IN PART. Any Security that is to be
redeemed only in part (pursuant to the provisions of this Article) shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing) and the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.
SECTION 10.08. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In
connection with any redemption of Securities, the Company may arrange for the
purchase and conversion of any Securities by an agreement with one or more
investment bankers or other purchasers to purchase such Securities by paying to
the Trustee in trust for the Holders, on or before the Redemption Date, an
amount not less than the applicable Redemption Price of such Securities.
Notwithstanding anything to the contrary contained in this Article 10, the
obligation of the Company to pay the Redemption Price of such Securities shall
be deemed to be satisfied and discharged to the extent such amount is so paid by
such purchasers. If such an agreement is entered into, a copy of which shall be
filed with the Trustee prior to the Redemption Date, any Securities not duly
surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary
contained in Article 12) surrendered by such purchasers for conversion, all as
of immediately prior to the close of business on the Redemption Date (and the
right to convert any such Securities shall be deemed to have been extended
through such time), subject to payment of the above amount as aforesaid
(including the Make-Whole Payment, if any, with respect to all Securities called
for Provisional Redemption). At the direction of the Company, the Trustee shall
hold and dispose of any such amount paid to it in the same manner as it would
monies deposited with it by the Company for the redemption of Securities.
Without the Trustee's prior written consent, no arrangement between the Company
and such purchasers for the purchase and conversion of any Securities shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any Securities between the Company and such
purchasers to which the Trustee has not consented in writing, including the
costs and expenses incurred by the Trustee in the defense of any claim or
liability arising out of or in connection with the exercise or performance of
any of its powers, duties, responsibilities or obligations under this Indenture.
Nothing in the preceding sentence shall be deemed to limit the rights and
protections afforded to the Trustee in Article 5 hereof, including, but not
limited to, the right to indemnification pursuant to Section 5.07
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ARTICLE 11
REPURCHASE AT OPTION OF HOLDERS UPON CHANGE IN CONTROL
SECTION 11.01. RIGHT TO REQUIRE REPURCHASE. In the event that a Change
in Control shall occur, each Holder shall have the right, at the Holder's
option, to require the Company to repurchase (subject to the provisions of
Section 13.03) all of such Holder's Securities, or any portion of the principal
amount thereof that is an integral multiple of $1,000 (provided that no single
Security may be repurchased in part unless the portion of the principal amount
of such Security to be outstanding after such repurchase is equal to $1,000 or
an integral multiple of $1,000), on the date (the "REPURCHASE DATE") that is 45
Business Days after the date of the occurrence of a Change in Control at a
purchase price equal to 100% of the principal amount plus interest (including
Liquidated Damages, if any) accrued and unpaid to the Repurchase Date (the
"REPURCHASE PRICE"). At the option of the Company, the Repurchase Price may be
paid in cash or, subject to the fulfillment by the Company of the conditions set
forth in Section 11.02, by delivery of that number of shares of Common Stock
equal to the quotient of (i) the Repurchase Price divided by (ii) 95% of the
average of the Closing Prices of the Common Stock for the five consecutive
Trading Days ending on and including the third Trading Day immediately preceding
the date of the occurrence of the Change in Control.
SECTION 11.02. CONDITIONS TO THE COMPANY'S ELECTION TO PAY THE
REPURCHASE PRICE IN COMMON STOCK. The Company may elect to pay the Repurchase
Price by delivery of shares of Common Stock pursuant to Section 11.01 if and
only if the following conditions have been satisfied:
(a) The shares of Common Stock delivered in payment of the
Repurchase Price are listed for trading on a U.S. national securities exchange
or approved for trading in the Nasdaq National Market;
(b) The shares of Common Stock delivered in payment of the
Repurchase Price (i) shall not require registration under any federal securities
law before such shares may be freely transferable without being subject to any
transfer restrictions under the Securities Act upon repurchase pursuant to this
Article 11 or, if such registration is required, such registration shall be
completed and shall become effective prior to the Repurchase Date, and (ii)
shall not require registration with or approval of any governmental authority
under any state law or any other federal law before such shares may be validly
issued or delivered upon repurchase pursuant to this Article 11, or if such
registration is required or such approval must be obtained, such registration
shall be completed or such approval shall be obtained prior to the Repurchase
Date; and
(c) All shares of Common Stock delivered in payment of the
Repurchase Price are issued out of the Company's authorized but unissued Common
Stock and shall, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights.
If all of the conditions set forth in this Section 11.02 are not
satisfied in accordance with the terms hereof, the Repurchase Price shall be
paid by the Company only in cash.
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SECTION 11.03. NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC.
(a) Unless the Company shall have theretofore called for
redemption all of the Outstanding Securities, on or before the date that is 30
Business Days after the occurrence of a Change in Control, the Company shall
give notice to all Holders of Outstanding Securities and to the Trustee (the
"COMPANY NOTICE") of the occurrence of the Change in Control and of the
repurchase right set forth herein arising as a result thereof.
Each Company Notice shall state:
(i) the date of such Change in Control and, briefly,
the events causing such Change in Control;
(ii) the date by which the Change in Control Purchase
Notice (as defined below) must be delivered;
(iii) the Repurchase Date;
(iv) the Repurchase Price, and whether the Repurchase
Price shall be paid by the Company in cash or by delivery of shares of Common
Stock;
(v) the name and address of the Paying Agent and the
Conversion Agent;
(vi) that Securities with respect to which a Change
in Control Purchase Notice is given by the Holder may be converted only if the
Change in Control Purchase Notice has been withdrawn in accordance with the
terms set forth herein;
(vii) a description of the procedure that a Holder
must follow to exercise a repurchase right;
(viii) the procedures for withdrawing a Change in
Control Purchase Notice;
(ix) the place or places where such Securities are to
be surrendered for payment of the Repurchase Price or for conversion;
(x) briefly, the conversion rights of Holders of
Securities;
(xi) the Conversion Rate and any adjustments thereto;
and
(xii) that Holders who want to convert Securities
must satisfy the requirements set forth in the Securities.
The Company shall cause a copy of the Company Notice to be published in
The Wall Street Journal or another daily newspaper of national circulation.
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If any Senior Indebtedness is outstanding at the time of the occurrence
of a Change in Control, and such Senior Indebtedness prohibits by its terms the
Company's repurchase of its Securities upon the occurrence of a Change in
Control, the Company shall prior to giving the Company Notice either: (i) repay
in full all obligations and terminate all commitments under or in respect of all
such Senior Indebtedness; or (ii) offer to repay in full all obligations and
terminate all commitments under or in respect of all such Senior Indebtedness
and repay such Senior Indebtedness owed to each holder thereof who has accepted
such offer; or (iii) obtain the requisite consents under all such Senior
Indebtedness to permit the Company to repurchase the Securities in accordance
herewith.
(b) To exercise a repurchase right, a Holder must deliver to
the Trustee or a Paying Agent at an office or agency maintained by the Company
for such purpose in the Borough of Manhattan, The City of New York, prior to the
close of business on the Business Day prior to the Repurchase Date (i) written
notice of the Holder's exercise of such right (the "CHANGE IN CONTROL PURCHASE
NOTICE"), which notice shall set forth (A) the name of the Holder, (B) the
certificate numbers of the Securities with respect to which the repurchase right
is being exercised, (C) the principal amount of the Securities to be repurchased
(and, if any Security is to be repurchased in part, the portion of the principal
amount thereof to be repurchased, which shall be in integral multiples of
$1,000) and (D) a statement that an election to exercise the repurchase right is
being made thereby pursuant to the applicable provisions of the Securities and
(ii) surrender the Securities subject to the Change in Control Purchase Notice.
(c) Unless the Company has elected to pay the Repurchaser
Price by delivery of shares of Common Stock on or prior to the Repurchase Date,
the Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 9.03) an amount of money sufficient to pay the Repurchase
Price of the Securities that are to be repaid on the Repurchase Date. On the
Repurchase Date, the Trustee, a Paying Agent (or, if the Company is acting as
its own Paying Agent, the Company) shall repurchase all such Securities validly
tendered prior to such date.
In the event that a Holder has previously delivered a Change in Control
Purchase Notice, but failed to surrender the Security with respect to which such
Change in Control Purchase Notice relates, then so long as either (i) the
Company has elected to pay the Repurchase Price by delivery of Shares of Commons
Stock or (ii) the Trustee or the Paying Agent holds (or, if the Company is
acting as its own Paying Agent, the Company segregates and holds in trust as
provided in Section 9.03) money sufficient to pay the Repurchase Price in
respect of such Security, then such Security shall cease to be Outstanding for
the purposes of this Indenture and all rights of the Holder thereof other than
the right to receive the Repurchase Price shall terminate on the Repurchase
Date.
(d) If any Security (or portion thereof) surrendered for
repurchase shall not have been repurchased on the Business Day following the
Repurchase Date, the Repurchase Price in respect of such Security shall, until
paid, bear interest from the Business Day following the Repurchase Date at the
rate borne by the Security and such Security shall remain convertible into
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Common Stock until the Repurchase Price and any such accrued interest shall have
been paid or duly provided for.
(e) Any Security that is to be repurchased only in part shall
be surrendered to the Trustee or any such Paying Agent and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal amount equal to and in exchange for the portion of the principal of
the Security so surrendered that was not repurchased.
(f) Any Holder that has delivered a Change in Control Purchase
Notice shall have the right to withdraw such notice by delivery of a written
notice of withdrawal to the Trustee or any such Paying Agent prior to the close
of business on the Business Day immediately preceding the Repurchase Date. The
notice of withdrawal shall state the principal amount and the certificate
numbers of the Securities as to which the withdrawal notice relates and the
principal amount, if any, that remains subject to the change in Control Purchase
Notice. A Security in respect of which a Holder has exercised its right to
require repurchase upon a Change in Control may thereafter be converted into
Common Stock only if, and at such time as, such Holder withdraws its Change in
Control Purchase Notice in accordance with the preceding sentence.
(g) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior to the
close of business on the Repurchase Date and the person or persons in whose name
or names any certificate or certificates for shares of Common Stock shall be
issuable upon such repurchase shall be deemed to have become on the Repurchase
Date the holder or holders of record of the shares represented thereby;
PROVIDED, HOWEVER, that any surrender for repurchase on a date when the stock
transfer books of the Company shall be closed shall constitute the person or
persons in whose name or names the certificate or certificates for such shares
are to be issued as the record holder or holders thereof for all purposes at the
opening of business on the next succeeding day on which such stock transfer
books are open.
(h) No fractional shares of Common Stock or scrip representing
fractional shares shall be issued upon repurchase of Securities. If more than
one Security shall be repurchased from the same Holder and the Repurchase Price
shall be payable in shares of Common Stock, the number of full shares that shall
be issued upon repurchase shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof to the extent
permitted hereby) so repurchased from such Holder. If any fractional share of
stock otherwise would be issuable upon repurchase of any Security or Securities,
the Company shall make an adjustment therefor by paying to the Holder thereof an
amount of cash calculated at the price per share at which the Common Stock is
valued for purposes of Section 11.01.
(i) The issue of stock certificates on repurchase of
Securities shall be made without charge to the Holder being repurchased for any
tax in respect of the issue thereof. The Company shall not, however, be required
to pay any tax that may be payable in respect of any transfer involved in the
issue and delivery of stock in any name other than that of the Holder of any
Security repurchased, and the Company shall not be required to issue or deliver
any such stock
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certificate unless and until the person or persons requesting the issue
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
(j) Notwithstanding anything to the contrary in this Section
11.03, the Company shall not be required to give the Company Notice following
the occurrence of a Change in Control if:
(i) it shall notify the Trustee in writing no later
than 20 days after the Change in Control that another Person shall make
the offer and repurchase as hereafter set forth and of the identity of
the appropriate officers of such Person to liaise with the Trustee with
respect thereto; and
(ii) in the manner, at the time and otherwise in
compliance with the requirements set forth herein regarding the
Company's obligation to offer to repurchase the Outstanding Securities
following the occurrence of a Change in Control, (A) another Person
makes an offer to repurchase the Outstanding Securities, (B) such
Person repurchases all Outstanding Securities validly tendered and not
withdrawn, and (C) such Person makes all payments with respect thereto.
Notwithstanding the foregoing, the Company shall remain at all times
the sole obligor with respect to all of its obligations hereunder (unless the
Trustee shall have entered into a supplemental indenture complying with Article
8 hereof providing for another Person to succeed to the Company hereunder and
assume the covenants of the Company hereunder), and any failure of the
performance of any such offer or repurchase obligation in the absence of such a
supplemental indenture shall be a failure by the Company as if the Company were
itself giving the Company Notice and repurchasing Outstanding Securities in
accordance herewith.
SECTION 11.04. CERTAIN DEFINITIONS. For purposes of this Article 11:
(a) the terms "BENEFICIAL OWNER" and "BENEFICIAL OWNERSHIP"
shall be determined in accordance with Rules 13d-3 and 13d-5 promulgated by the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time; and
(b) the term "PERSON" shall include any syndicate or group
that would be deemed to be a "Person" under Section 13(d)(3) or Section 14(d)(2)
of the Exchange Act.
SECTION 11.05. CHANGE IN CONTROL. A "CHANGE IN CONTROL" shall be deemed
to have occurred at such time after the original issuance of the Securities as:
(a) any Person acquires the beneficial ownership, directly or
indirectly, through a purchase, merger or other acquisition transaction, of more
than 50% of the total voting power of the
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total outstanding voting stock of the Company other than an acquisition by
the Company, any of its Subsidiaries or any of its employee benefit plans;
(b) the Company shall consolidate with, or merge with or into,
another Person or convey, transfer, lease or otherwise dispose of all or
substantially all of its assets to any Person, or any Person consolidates with
or merges with or into the Company, in any such event pursuant to a transaction
in which the Company's outstanding voting stock is converted into or exchanged
for cash, securities or other property, other than any such transactions where:
(i) the Company's voting stock is not converted or
exchanged at all (except to the extent necessary to reflect a change in the
Company's jurisdiction of incorporation) or is converted into or exchanged for
voting stock (other than Redeemable Capital Stock) of the surviving or
transferee corporation; and
(ii) immediately after such transaction, no Person
other than one or more Persons who were the beneficial owner, directly or
indirectly, of more than 50% of the total voting power of all of the Company's
voting stock immediately before such transaction, is the beneficial owner,
directly or indirectly, of more than 50% of the total outstanding voting stock
of the surviving or transferee corporation;
(c) during any consecutive two-year period, individuals who at
the beginning of such period constituted the Board of Directors (together with
any new directors whose election to such Board of Directors, or whose nomination
for election by the Company's stockholders, was approved by a vote of a majority
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office;
(d) a special resolution is passed by the Company's
stockholders approving a plan of liquidation or dissolution of the Company
(other than in a transaction that complies with the provisions described in
Article 7), and no additional approvals of the Company's stockholders are
required under applicable law to cause such a liquidation or dissolution.
"REDEEMABLE CAPITAL STOCK" means any class or series of capital stock
that, either by its terms, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise, is, or upon the
happening of an event or passage of time would be, required to be redeemed prior
to the Stated Maturity of the Securities or is redeemable at the option of the
holder thereof at any time prior to such Stated Maturity, or is convertible into
or exchangeable for debt securities at any time prior to such Stated Maturity;
PROVIDED, HOWEVER, that Redeemable Capital Stock shall not include any Common
Stock the holder of which has the right to put to the Company upon termination
of such holder's employment.
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ARTICLE 12
CONVERSION
SECTION 12.01. CONVERSION PRIVILEGE, CONVERSION RATE AND CONVERSION
PRICE. Subject to and upon compliance with the provisions of this Article 12, at
the option of the Holder thereof, any Security or any portion of the principal
amount thereof that is $1,000 or an integral multiple of $1,000 may be converted
at any time after original issuance thereof through the close of business on
March 1, 2007 into that number of fully paid and non-assessable shares of Common
Stock obtained by multiplying the Conversion Rate then in effect by each $1,000
principal amount of Securities surrendered for conversion. In case a Security or
portion thereof has previously been called for redemption at the election of the
Company, such conversion right in respect of the Security or portion so called
shall expire at the close of business, New York City time, on the last Business
Day prior to the Redemption Date, unless the Company defaults in making the
payment due upon redemption. A Security in respect of which a Holder has
delivered a Change in Control Purchase Notice (as defined in Article 11 hereof)
exercising the option of such Holder to require the Company to purchase such
Security may be converted only if such notice and the Security is withdrawn by a
written notice of withdrawal delivered by the Holder to the Trustee or any
Paying Agent prior to the close of business on the Repurchase Date, in
accordance with the terms of this Indenture.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "CONVERSION PRICE") shall be initially $271.20 per
share of Common Stock, which is equal to a conversion rate of 3.6873 shares per
$1,000 principal amount of the Securities (the "CONVERSION RATE"). The
Conversion Rate shall be adjusted in certain instances as provided in Section
12.04 and, in every instance in which an adjustment is made to the Conversion
Rate, a corresponding adjustment shall be made to the Conversion Price. After
giving effect to the Announced Split (as such term is defined in Section
12.04(a)), the initial Conversion Price would be $135.60 per share of Common
Stock, which is equal to a conversion rate of 7.3746 shares per $1,000 principal
amount of the Securities.
SECTION 12.02. EXERCISE OF CONVERSION PRIVILEGE. In order to exercise
the conversion privilege with respect to any Security in definitive form, the
Holder of any Security to be converted shall surrender such Security, duly
endorsed or assigned to the Company or in blank, at any office or agency
maintained by the Company pursuant to Section 9.02, accompanied by (a) written
notice to the Company in substantially the form of conversion notice attached to
the form of Security attached as Exhibit A hereto at such office or agency that
the Holder elects to convert such Security or, if less than the entire principal
amount thereof is to be converted, the portion thereof to be converted, (b) the
funds, if any, required by this Section 12.02, and (c) if shares or any portion
of such Security not to be converted are to be issued in the name of a Person
other than the Holder thereof, the name of the Person in which to issue such
shares and the transfer taxes, if any, required to be paid by the Holder
pursuant to Section 12.08.
In order to exercise the conversion privilege with respect to any
interest in a global Security, the beneficial owner must complete, or cause to
be completed, the appropriate instruction form for conversion pursuant to the
depositary's book-entry conversion program, deliver, or cause to be
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delivered, by book-entry delivery an interest in such global Security,
furnish appropriate endorsements and transfer documents if required by the
Company or the Trustee or other agent, and pay the funds if any required by
this Section 12.02 and any transfer taxes if required pursuant to Section
12.08.
As promptly as practicable after satisfaction of all of the
requirements for conversion set forth above, but in any event no later than the
seventh business day following such date, the Company shall issue and shall
deliver to such Holder a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Security or portion
thereof in accordance with the provisions of this Article and bearing the legend
set forth in Section 3.04(b) and a check or cash in respect of any fractional
interest in respect of a share of Common Stock arising upon such conversion, as
provided in Section 12.03. In case any Security of a denomination greater than
$1,000 shall be surrendered for partial conversion, and subject to Article 2,
the Company shall execute and the Trustee shall authenticate and deliver to the
holder of the Security so surrendered, without charge, a new Security or
Securities in authorized denominations in an aggregate principal amount equal to
the unconverted portion of the surrendered Security.
Each conversion shall be deemed to have been effected as to any such
Security (or portion thereof) on the date on which all of the requirements set
forth above in this Section 12.02 have been satisfied as to such Security (or
portion thereof), and the Person in whose name any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become on said date the holder of record of the shares
represented thereby; PROVIDED HOWEVER that any such surrender on any date when
the stock transfer books of the Company shall be closed shall constitute the
Person in whose name the certificates are to be issued as the record holder
thereof for all purposes on the next succeeding day on which such stock transfer
books are open, but such conversion shall be at the Conversion Rate in effect on
the date upon which such Security shall be surrendered.
Any Security or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date to the opening of business on the Interest Payment Date, except notes to be
redeemed on a date within that period, shall be accompanied by payment, in
immediately available funds or other funds acceptable to the Company, of an
amount equal to the interest otherwise payable on such interest payment date on
the principal amount being converted; PROVIDED HOWEVER that no such payment need
be made to the extent any overdue interest shall exist at the time of conversion
with respect to any such Security or portion thereof. Except as provided above
in this Section 12.02, no payment or other adjustment shall be made for interest
accrued on any Security converted or for dividends on any shares issued upon the
conversion of such Security as provided in this Article.
Upon the conversion of an interest in a global Security, the Trustee
(or other conversion agent appointed by the Company), shall make a notation on
such global Security as to the reduction in the principal amount represented
thereby. The Company shall notify the Trustee in writing of any conversions of
Securities effected through any conversion agent other than the Trustee.
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SECTION 12.03. FRACTIONS OF SHARES. No fractional shares of Common
Stock shall be issued upon conversion of Securities. If more than one Security
shall be surrendered for conversion at one time by the same Holder, the number
of full shares that shall be issuable upon conversion thereof shall be computed
on the basis of the aggregate principal amount of the Securities (or specified
portions thereof) so surrendered. Instead of any fractional share of Common
Stock that would otherwise be issuable upon conversion of any Security (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fraction in an amount equal to the same fraction of the Closing Price
per share of the Common Stock at the close of business on the Trading Day
immediately preceding such day.
"TRADING DAY" shall mean each day on which the primary securities
exchange or quotation system that is used to determine the Closing Price is open
for trading or quotation.
"CLOSING PRICE" of a single share of Common Stock on any Trading Day
shall mean the closing sale price per share for the Common Stock (or if no
closing sale price is reported, the average of the bid and ask prices) on such
Trading Day on the principal United States national securities exchange on which
the Common Stock is traded or, if the Common Stock is not listed on a United
States national stock exchange, as reported by the National Association of
Securities Dealers Automated Quotation System.
SECTION 12.04. ADJUSTMENT OF CONVERSION RATE.
(a) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in Common Stock (including the
Announced Split), the Conversion Rate in effect at the opening of business on
the earlier of the day next following such dividend or other distribution or the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution (except in the case of the Announced Split, which
shall be that Conversion Rate in effect at the opening of business on February
23, 2000) shall be adjusted so that a Holder upon conversion will be entitled to
receive that number of shares of Common Stock it would have been entitled to
after such dividend or other distribution if it had converted its Security
immediately prior to such dividend or other distribution. The term "Announced
Split" shall refer to the two-for-one stock split in the form of a stock
dividend announced on December 2, 1999 to be paid on February 22, 2000 to
stockholders of record on February 1, 2000.
(b) In case the Company shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall otherwise
issue to all holders of its Common Stock, rights, warrants or options entitling
the holders thereof, for a period not exceeding 45 days from the record date of
such issuance, to subscribe for or purchase shares of Common Stock at a price
per share less than the current market price per share (determined as provided
in Section 12.04(g)) of the Common Stock on the date fixed for the determination
of stockholders entitled to receive such rights, warrants or options, the
Conversion Rate in effect at the opening of business on the day following the
date fixed for such determination shall be increased by multiplying such
Conversion Rate by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock so offered for
subscription or purchase and the denominator
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shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate price of the total number of shares so
offered would purchase at the current market price per share (determined as
provided in Section 12.04(g)), such increase to become effective immediately
after the opening of business on the day following the date fixed for such
determination. If at the end of the period during which such rights, warrants
or options are exercisable, not all rights, warrants or options shall have
been exercised, the adjusted Conversion Rate shall be immediately readjusted
to what it would have been upon application of the foregoing adjustment
substituting the number of additional shares of Common Stock actually issued
for the total number of shares of Common Stock offered.
(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Rate
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness,
shares of any class of capital stock, securities, cash or assets (excluding any
rights, warrants or options referred to in Section 12.04(b), any dividend or
distribution paid exclusively in cash and any dividend or distribution referred
to in Section 12.04(a)), the Conversion Rate shall be adjusted by multiplying
the Conversion Rate in effect immediately prior to the earlier of such
distribution or the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided in Section 12.04(g)) and the denominator
shall be such current market price less the fair market value (as determined in
good faith by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution), on the date of such effectiveness, of the
portion of the evidences of indebtedness, shares of capital stock, securities,
cash and assets so distributed applicable to one share of Common Stock, such
adjustment to become effective immediately prior to the opening of business on
the day next following the later of (i) the date fixed for the payment of such
distribution and (ii) the date 20 days after the notice relating to such
distribution is given pursuant to Section 12.06 (such later date of (i) and (ii)
being referred to as the "REFERENCE DATE"). The provisions of this Section
12.04(d) shall not be applicable to an event covered by Section 12.04(j). For
purposes of this Section 12.04(d) and Sections 12.04(a) and 12.04(b), any
dividend or distribution for which an adjustment is being made pursuant to this
Section 12.04(d) that also includes shares of Common Stock or rights, warrants
or options to subscribe for or purchase shares of Common Stock shall be deemed
instead to be (A) a dividend or distribution of the evidences of indebtedness,
cash, property, shares of capital stock or securities other than such shares of
Common Stock or such rights, warrants or options (making any Conversion Rate
adjustment required by this Section 12.04(d)) immediately followed by (B) a
dividend or
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distribution of such shares of Common Stock or such rights (making any
further Conversion Rate adjustment required by Sections 12.04(a) or
12.04(b)), except (1) the record date of such dividend or distribution as
defined in this Section 12.04(d) shall be substituted as "the date fixed for
the determination of stockholders entitled to receive such dividend or other
distributions", "the date fixed for the determination of stockholders
entitled to receive such rights, warrants or options" and "the date fixed for
such determination" within the meaning of Sections 12.04(a) and 12.04(b) and
(2) any shares of Common Stock included in such dividend or distribution
shall not be deemed "outstanding at the close of business on the date fixed
for such determination" within the meaning of this 12.04(a).
(e) In case the Company shall, by dividend or otherwise, make
a distribution to all holders of its Common Stock exclusively in cash in an
aggregate amount that, together with (i) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such distribution and in respect
of which no Conversion Rate adjustment pursuant to this Section 12.04(e) has
been made and (ii) the aggregate of any cash plus the fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), as of the expiration of the
tender or exchange offer referred to below, of consideration payable in respect
of any tender or exchange offer by the Company or a Subsidiary for all or any
portion of the Common Stock concluded within the 12 months preceding the date of
payment of such distribution and in respect of which no Conversion Rate
adjustment pursuant to this Section 12.04(e) has been made, exceeds 10% of the
product of the current market price per share (determined as provided in Section
12.04(g)) of the Common Stock as of the Trading Day immediately preceding the
record date fixed for stockholders entitled to receive such distribution times
the number of shares of Common Stock outstanding on such record date, the
Conversion Rate shall be increased so that the same shall equal the price
determined by multiplying the Conversion Rate in effect immediately prior to the
close of business on the date fixed for the determination of the stockholders of
record entitled to such distribution by a fraction of which the denominator
shall be the current market price per share (determined as provided in Section
12.04(g)) on such date less an amount equal to the quotient of (x) the excess of
such combined amount over such 10% and (y) the number of shares of Common Stock
outstanding on the record date and (iii) the numerator shall be equal to the
current market price on such date, such adjustment to become effective
immediately prior to the opening of business on the day following the record
date fixed for the payment of such distribution.
(f) In case a successful tender or exchange offer, other
than an odd lot offer, made by the Company or any Subsidiary for all or any
portion of the Common Stock shall involve an aggregate consideration having a
fair market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution)
as of the trading day next succeeding the last date (the "EXPIRATION TIME")
tenders or exchanges may be made pursuant to such tender or exchange offer
(as it may be amended) that, together with (i) the aggregate of the cash plus
the fair market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution),
as of the expiration of the other tender or exchange offer referred to below,
of consideration payable in respect of any other tender or exchange offer by
the Company or a Subsidiary for all or any portion
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of the Common Stock concluded within the preceding 12 months and in respect
of which no Conversion Rate adjustment pursuant to this Section 12.04(f) has
been made and (ii) the aggregate amount of any distributions to all holders
of the Common Stock made exclusively in cash within the preceding 12 months
and in respect of which no Conversion Rate adjustment pursuant to Section
12.04(e) has been made, exceeds 10% of the product of the current market
price per share (determined as provided in Section 12.04(g)) of the Common
Stock outstanding (including any tendered shares) on the Expiration Time, the
Conversion Rate shall be adjusted by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction of which the
denominator shall be (i) the product of the current market price per share
(determined as provided in Section 12.04(g)) of the Common Stock on the
Trading Day next succeeding the Expiration Time times the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) at the
Expiration Time minus (ii) the fair market value (determined as aforesaid) of
the aggregate consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "PURCHASED SHARES") and the numerator shall be the product
of (i) such current market price per share (determined in accordance with
Section 12.04(g)) on the Trading Day next succeeding the Expiration Time
times (ii) such number of outstanding shares at the Expiration Time less the
number of Purchased Shares, such increase to become effective immediately
prior to the opening of business on the day following the Expiration Time.
(g) For the purpose of any computation under Sections
12.04(b), (d) and (e), the current market price per share of Common Stock on
any date in question shall be deemed to be the average of the daily Closing
Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to the date in question; PROVIDED, HOWEVER, that (i) if the
"ex" date (as hereinafter defined) for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
Conversion Rate pursuant to Section 12.04(a), (b), (c), (d), (e) or (f)
("OTHER EVENT") occurs on or after the 20th Trading Day prior to the date in
question and prior to the "ex" date for the issuance or distribution
requiring such computation (the "CURRENT EVENT"), the Closing Price for each
Trading Day prior to the "ex" date for such Other Event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by which the
Conversion Rate is so required to be adjusted as a result of such Other
Event, (ii) if the "ex" date for any Other Event occurs after the "ex" date
for the Current Event and on or prior to the date in question, the Closing
Price for each Trading Day on and after the "ex" date for such Other Event
shall be adjusted by multiplying such Closing Price by the fraction by which
the Conversion Rate is so required to be adjusted as a result of such Other
Event, (iii) if the "ex" date for any Other Event occurs on the "ex" date for
the Current Event, one of those events shall be deemed for purposes of
clauses (i) and (ii) of this proviso to have an "ex" date occurring prior to
the "ex" date for the Other Event, and (iv) if the "ex" date for the Current
Event is on or prior to the date in question, after taking into account any
adjustment required pursuant to clause (ii) of this proviso, the Closing
Price for each Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market value on the date
in question (as determined in good faith by the Board of Directors in a
manner consistent with any determination of such value for purposes of
Section 12.04(d) or (e), whose determination shall be conclusive and
described in a Board Resolution) of the portion of the
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rights, warrants, options, evidences of indebtedness, shares of capital
stock, securities, cash or property being distributed applicable to one share
of Common Stock. For the purpose of any computation under Section 12.04(f),
the current market price per share of Common Stock on any date in question
shall be deemed to be the average of the daily Closing Prices for the five
consecutive Trading Days selected by the Company commencing on or after the
latest (the "COMMENCEMENT DATE") of (i) the date 20 Trading Days before the
date in question, (ii) the date of commencement of the tender or exchange
offer requiring such computation and (iii) the date of the last amendment, if
any, of such tender or exchange offer involving a change in the maximum
number of shares for which tenders are sought or a change in the
consideration offered, and ending not later than the Trading Day next
succeeding the Expiration Time of such tender or exchange offer (or, if such
Expiration Time occurs before the close of trading on a Trading Day, not
later than the Trading Day during which the Expiration Time occurs);
PROVIDED, HOWEVER, that if the "ex" date for any Other Event (other than the
tender or exchange offer requiring such computation) occurs on or after the
Commencement Date and on or prior to the Trading Day next succeeding the
Expiration Time for the tender or exchange offer requiring such computation,
the Closing Price for each Trading Day prior to the "ex" date for such Other
Event shall be adjusted by multiplying such Closing Price by the reciprocal
of the same fraction by which the Conversion Rate is so required to be
adjusted as a result of such other event. For purposes of this paragraph, the
term "ex" date, (i) when used with respect to any issuance or distribution,
means the first date on which the Common Stock trades regular way on the
relevant exchange or in the relevant market from which the Closing Price was
obtained without the right to receive such issuance or distribution, (ii)
when used with respect to any subdivision or combination of shares of Common
Stock, means the first date on which the Common Stock trades regular way on
such exchange or in such market after the time at which such subdivision or
combination becomes effective, and (iii) when used with respect to any tender
or exchange offer means the first date on which the Common Stock trades
regular way on such exchange or in such market after the Expiration Time of
such tender or exchange offer.
(h) The Company may make such increases in the Conversion
Rate, in addition to those required by paragraphs (a), (b), (c), (d), (e), (f)
and (g) of this Section 12.04, as it considers to be advisable.
(i) No adjustment in the Conversion Rate shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Conversion Rate; PROVIDED, HOWEVER, that any adjustments, which by reason of
this Section 12.04(i) are not required to be made, shall be carried forward and
taken into account in any subsequent adjustment.
(j) No adjustment in the Conversion Rate is necessary if
Holders may participate in the transactions otherwise giving rise to an
adjustment on a basis and with notice that the Company's Board of Directors
determines to be fair and appropriate, or in other cases specified in this
Indenture.
(k) In the event that the Company distributes assets, debt
securities, rights, warrants or options (other than those referred to in Section
12.04(b)) pro rata to holders of Common Stock, and the fair market value of the
portion of assets, debt securities, rights, warrants or options
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applicable to one share of Common Stock distributed to holders of Common
Stock exceeds the Average Sale Price (as defined below) per share of Common
Stock, or such Average Sale Price exceeds such fair market value by less than
$1.00, then so long as any such assets, debt securities, rights, options or
warrants have not expired or been redeemed by the Company, the Company shall
make proper provision so that the Holder of any Security upon conversion,
rather than being entitled to an adjustment in the Conversion Rate, will be
entitled to receive upon such conversion, in addition to the shares of Common
Stock otherwise issuable upon conversion, the kind and amount of assets, debt
securities, rights, warrants and options such Holder would have received had
such Holder converted its Security immediately prior to the date of
determination of the holders entitled to such distribution.
"AVERAGE SALE PRICE" means the average of the Closing Prices of the
Common Stock for the shorter of (i) 30 consecutive Trading Days ending on the
last full Trading Day prior to the Time of Determination (as defined below)
with respect to the rights, options, warrants or distribution in respect of
which the Average Sale Price is being calculated, or (ii) the period (x)
commencing on the date next succeeding the first public announcement of (a)
the issuance of rights, options or warrants or (b) the distribution, in each
case, in respect of which the Average Sale Price is being calculated and (y)
proceeding through the last full Trading Day prior to the Time of
Determination with respect to the rights, options, warrants or distribution
in respect of which the Average Sale Price is being calculated, or (iii) the
period, if any, (x) commencing on the date next succeeding the Ex-Dividend
Time (as defined below) with respect to the next preceding (a) issuance of
rights, warrants or options or (b) distribution, in each case, for which an
adjustment is required by the provisions of Section 12.04(b) or Section
12.04(k) and (y) proceeding through the last full Trading Day prior to the
Time of Determination with respect to the rights, options, warrants, or
distribution in respect of which the Average Sale Price is being calculated.
If the Ex-Dividend Time (or in the case of a subdivision, combination or
reclassification, the effective date with respect thereto) with respect to a
dividend, subdivision, combination or reclassification to which Section
12.04(a), (b) or (c)applies occurs during the period applicable for
calculating "Average Sale Price" pursuant to the definition in the preceding
sentence, "Average Sale Price" shall be calculated for such period in a
manner determined in good faith by the Board of Directors to reflect the
impact of such dividend, subdivision, combination or reclassification on the
Closing Price of the Common Stock during such period.
"TIME OF DETERMINATION" means the time and date of the earlier of (i)
the determination of stockholders entitled to receive rights, warrants or
options or a distribution, in each case, to which this Section 12.04 applies and
(ii) the time ("EX-DIVIDEND TIME") immediately prior to the commencement of
"ex-dividend" trading for such rights, options, warrants or distribution on the
New York Stock Exchange or such other national or regional exchange or market on
which the shares of Common Stock are listed or quoted.
SECTION 12.05. NOTICE OF ADJUSTMENTS OF CONVERSION RATE. Whenever the
Conversion Rate and Conversion Price are adjusted as herein provided, the
Company shall compute the adjusted Conversion Rate and Conversion Price in
accordance with Section 12.04 and shall prepare a certificate signed by the
Chief Financial Officer of the Company setting forth the adjusted
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Conversion Rate and Conversion Price and showing in reasonable detail the
facts upon which such adjustment is based, and such certificate shall
forthwith be filed (with a copy to the Trustee) at each office or agency
maintained for the purpose of conversion of Securities pursuant to Section
9.02; and the Company shall forthwith cause a notice setting forth the
adjusted Conversion Rate and Conversion Price to be mailed, first class
postage prepaid, to each Holder of Securities at its address appearing on the
Security Register. Unless and until the Trustee shall receive such notice,
the Trustee may assume without inquiry that the Conversion Rate and
Conversion Price have not been, and are not required to be, adjusted and that
the last Conversion Rate and Conversion Price of which it has written notice
remain in effect.
SECTION 12.06. NOTICE OF CERTAIN CORPORATE ACTION. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require a Conversion Rate
adjustment pursuant to Section 12.04(e); or
(b) the Company shall authorize the granting to all holders of
its Common Stock of rights, warrants or options to subscribe for or purchase any
shares of capital stock of any class or of any other rights (excluding rights
distributed pursuant to any stockholder rights plan); or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding shares of Common
Stock), or of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding, up of the Company; or
(e) the Company or any Subsidiary of the Company shall
commence a tender or exchange offer for all or a portion of the Company's
outstanding shares of Common Stock (or shall amend any such tender or exchange
offer);
then the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of Securities pursuant to Section 9.02,
and shall cause to be mailed to all Holders at their last addresses as they
shall appear in the Security Register, at least 20 days (or 10 days in any case
specified in clause 12.06(a) or 12.06(b) above) prior to the applicable record,
effective or expiration date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution or granting of rights, warrants or options, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights, warrants or options are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up,
or (z) the date on which such tender offer commenced, the date on which
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such tender offer is scheduled to expire unless extended, the consideration
offered and the other material terms thereof (or the material terms of any
amendment thereto).
SECTION 12.07. COMPANY'S OBLIGATION REGARDING COMMON STOCK. The Company
shall at all times reserve and keep available, free from preemptive rights, out
of its authorized but unissued Common Stock, solely for the purpose of effecting
the conversion of Securities, the whole number of shares of Common Stock then
issuable upon the conversion in full of all Outstanding Securities.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Securities, the Company shall take all corporate
action that may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Securities hereunder require registration with
or approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company shall in good
faith and as expeditiously as practicable endeavor to secure such registration
or approval, as the case may be.
The Company further covenants that so long as the Common Stock shall be
listed or quoted on the New York Stock Exchange, the Nasdaq Stock Market
(National Market), or any other national securities exchange the Company shall,
if permitted by the rules of such exchange, list and keep listed so long as the
Common Stock shall be so listed on such market or exchange, all Common Stock
issuable upon conversion of the Securities.
SECTION 12.08. TAXES ON CONVERSIONS. The Company shall pay any and all
taxes that may be payable in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant hereto. The Company shall not,
however, be required to pay any tax that may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a name
other than that of the Holder of the Security or Securities to be converted, and
no such issue or delivery shall be made unless and until the Person requesting
such issue has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company that such tax has been paid.
SECTION 12.09. COVENANT AS TO COMMON STOCK. The Company covenants that
all shares of Common Stock that may be issued upon conversion of Securities
shall upon issue be newly issued (and not treasury shares) and shall be duly
authorized, validly issued, fully paid and nonassessable and, except as provided
in Section 12.08, the Company shall pay all taxes, liens and charges with
respect to the issue thereof.
SECTION 12.10. CANCELLATION OF CONVERTED SECURITIES. All Securities
delivered for conversion shall be delivered to the Trustee to be cancelled by or
at the direction of the Trustee, which shall dispose of the same as provided in
Section 3.08.
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SECTION 12.11. PROVISIONS IN CASE OF RECLASSIFICATION, CONSOLIDATION,
MERGER OR SALE OF ASSETS. In the event that the Company shall be a party to any
transaction (including any (i) recapitalization or reclassification of the
Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (ii) any consolidation of the Company with, or
merger of the Company into, any other person, any merger of another person into
the Company (other than a merger that does not result in a reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company), (iii) any sale, lease, transfer conveyance or other disposition of
all or substantially all of the assets of the Company or (iv) any compulsory
share exchange) pursuant to which the Common Stock is converted into the right
to receive other securities, cash or other property, then lawful provision shall
be made as part of the terms of such transaction whereby the Holder of each
Security then Outstanding shall have the right thereafter to convert such
Security only into (subject to funds being legally available for such purpose
under applicable law at the time of such conversion) the kind and amount of
securities, cash and other property receivable upon such transaction by a holder
of the number of shares of Common Stock into which such Security might have been
converted immediately prior to such transaction. The Company or the Person
formed by such consolidation or resulting from such merger or that acquired such
assets or that acquired the Company's shares of Common Stock, as the case may
be, shall execute and deliver to the Trustee a supplemental indenture
establishing such rights. Such supplemental indenture shall provide for
adjustments that, for events subsequent to the effective date of such
supplemental indenture, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article. The above provisions of this
Section 12.11 shall similarly apply to successive transactions of the foregoing
type.
SECTION 12.12. COMPANY'S OBLIGATION. All calculations, adjustments,
conversions and other determinations under this Article 12 shall be the sole
responsibility and obligation of the Company. The Trustee (a) shall have no
obligation to review, challenge or contest any such calculation, adjustment,
conversion or other determination and (b) shall not be liable for any default or
error by the Company under this Article 12.
ARTICLE 13
SUBORDINATION
SECTION 13.01. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS. The
Company covenants and agrees, and each Holder of Securities, by such Holder's
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article 13, the indebtedness
represented by the Securities and the payment of the principal of (and premium,
if any), and interest (including Liquidated Damages, if any) on and all other
amounts payable under the Securities are hereby expressly made subordinate and
subject in right of payment to the prior payment in full in cash or other
payment satisfactory to Holders of Senior Indebtedness of all existing and
future Senior Indebtedness.
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SECTION 13.02. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. In the
event of any payment by, or distribution of the assets of, the Company in
connection with (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or its assets, (b) any
liquidation, dissolution or other winding-up of the Company, whether voluntary
or involuntary and whether or not involving insolvency or bankruptcy, or (c) any
assignment for the benefit of creditors or any other marshaling of assets and
liabilities of the Company, then and in any such event the holders of Senior
Indebtedness shall be entitled to receive payment in full of all amounts due in
respect of all Senior Indebtedness, or provision shall be made for such payment
in cash or cash equivalents or otherwise in a manner satisfactory to the holders
of Senior Indebtedness, before the Holders of the Securities are entitled to
receive any payment on account of principal of (or premium, if any), or interest
(including Liquidated Damages, if any) on or any other amount payable under the
Securities, ratably according to the aggregate amounts remaining unpaid on
account of such Senior Indebtedness held by them, for application to the payment
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, that may be payable or deliverable in respect of the
Securities in any such case, proceeding, dissolution, liquidation or other
winding-up or event, after giving effect to any concurrent payment or
distribution, or provision therefore, to the holders of such Senior
Indebtedness.
In the event that, notwithstanding the foregoing provisions of this
Section 13.02, the Trustee or the Holder of Securities shall have received any
payment or distribution of assets of the Company prohibited by the foregoing
paragraph of any kind or character, whether in cash, property or securities,
before all Senior Indebtedness is paid in full or payment thereof provided for,
and if, at or prior to the time of such payment or distribution, written notice
that such payment or distribution is prohibited by the foregoing paragraph shall
have been actually given to a Responsible Officer of the Trustee or, as the case
may be, such Holder, then and in such event such payment or distribution shall
be paid over or delivered forthwith to holders of such Senior Indebtedness
remaining unpaid or their representatives to the extent necessary to pay all
Senior Indebtedness in full, after giving effect to any concurrent payment or
distribution, or provision therefor, to the holders of such Senior Indebtedness.
For purposes of this Article 13 only, the words "CASH, PROPERTY OR
SECURITIES" shall not be deemed to include shares of capital stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment that in
either case are subordinated in right of payment to all Senior Indebtedness that
may at the time be outstanding to substantially the same extent as, or to a
greater extent than, the Securities are so subordinated as provided in this
Article 13. The consolidation of the Company with, or the merger of the Company
into, another Person or the liquidation or dissolution of the Company following
the conveyance, transfer or other disposition of its properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in Article 7 shall not be deemed a dissolution, winding-up, liquidation,
reorganization, assignment for the benefit of creditors or marshaling of assets
and liabilities of the Company for the purposes of this Section 13.02 if the
Person formed by such consolidation or into which the Company is merged or that
acquires by sales, lease, conveyance, transfer or other disposition such
properties and assets substantially as an entirety, as
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the case may be, shall, as a part of such consolidation, merger, sales,
lease, conveyance, transfer or other disposition, comply with the conditions
set forth in Article 7.
SECTION 13.03. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT. (a) In
the event and during the continuation of any default in the payment of principal
of (or premium, if any) or interest on any Senior Indebtedness beyond any
applicable grace period with respect thereto (unless and until such payment
default shall have been cured or waived in writing by the holders of such Senior
Indebtedness), or (b) any default (other than a payment default) with respect to
Senior Indebtedness occurs and is continuing that permits the acceleration of
the maturity thereof and judicial proceedings shall be pending with respect to
any such default or the Company receives written notice of such default (a
"SENIOR INDEBTEDNESS DEFAULT NOTICE"), then no payment shall be made by the
Company on account of principal of (or premium, if any) or interest (including
Liquidated Damages, if any) on the Securities or on account of all other amounts
payable under the Securities. Notwithstanding the foregoing, payments with
respect to the Securities may resume, and the Company may acquire Securities for
cash or property, when (x) the default with respect to the Senior Indebtedness
is cured or waived or ceases to exist or (y) in the case of a default described
in clause (b) of this Section 13.03, 179 or more days pass after the Senior
Indebtedness Default Notice is received by the Company. If the Company receives
a Senior Indebtedness Default Notice, then a similar notice received within one
year thereafter relating to the default that was the basis of such Senior
Indebtedness Default Notice, on the same issue of Senior Indebtedness, shall not
be effective to prevent the payment or acquisition of the Securities as
described in the first sentence of this Section 13.03(a). In addition, no
payment may be made on the Securities if any Securities are declared due and
payable prior to their Stated Maturity by reason of the occurrence of an Event
of Default resulting from the acceleration of the maturity of any Senior
Indebtedness until the earlier of (i) 120 days after the date of such
acceleration of the maturity of the Securities or (ii) the payment in full of
all Senior Indebtedness in cash or other consideration satisfactory to the
holders of such Senior Indebtedness, but only if such payment is then otherwise
permitted under the terms of this Indenture.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of Securities prohibited by the
foregoing provisions of this Section 13.03 before all Senior Indebtedness is
paid in full, or effective provisions made for its payment, and if, at or prior
to the time of such payment, written notice that such payment is prohibited by
the foregoing paragraph shall have been actually given to a Responsible Officer
of the Trustee or, as the case may be, such Holder, then and in such event (but
subject to the provisions of Section 13.09) such payment shall be paid over and
delivered forthwith to the holders of such Senior Indebtedness remaining unpaid
or their representatives to the extent necessary to pay all Senior Indebtedness
in full, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness.
The provisions of this Section 13.03 shall not apply to any payment
with respect to which Section 13.02 would be applicable.
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SECTION 13.04. PAYMENT PERMITTED IF NO DEFAULT. Nothing contained in
this Article 13 or elsewhere herein or in any of the Securities shall prevent
(a) the Company, at any time except during the pendency of any case, proceeding,
dissolution, liquidation or other winding-up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of the Company referred
to in Section 13.02, except under the conditions described in Section 13.03,
from making payments at any time of principal of (and premium, if any), or
interest on, or any other amount payable under the Securities, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of (and premium, if any), or interest
on, or any other amount payable under the Securities, or the retention of such
payment by the Holders, if, by the close of business on the date that was two
Business Days prior to such application by the Trustee, the Trustee had not
received written notice that such payment would be prohibited by the provisions
of this Article 13.
SECTION 13.05. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
Upon payment in full of all Senior Indebtedness, the Holders of the Securities
shall be subrogated (equally and ratably with the holders of all Indebtedness of
the Company that by its express terms is subordinated to Indebtedness of the
Company to substantially the same extent as the Securities are subordinated to
Senior Indebtedness) to the rights of the holders of such Senior Indebtedness to
receive payments and distributions of cash, property and securities applicable
to the Senior Indebtedness to the extent that payments and distributions
otherwise payable to Holders of Securities have been applied to the payment of
Senior Indebtedness as provided by this Article 13. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled, except for the provisions of this
Article 13, and no payments over pursuant to the provisions of this Article 13
to the holders of Senior Indebtedness by Holders of the Securities or the
Trustee, shall, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
SECTION 13.06. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The
provisions of this Article 13 are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article 13 or elsewhere herein or in the Securities is intended to or
shall:
(a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the obligation
of the Company, which is absolute and unconditional (and which, subject to the
rights under this Article 13 of the holders of Senior Indebtedness, is intended
to rank equally with all other general obligations of the Company), to pay to
the Holders of the Securities the principal of (and premium, if any), and
interest (including Liquidated Damages, if any) on, and any other amount payable
under the Securities, as and when the same shall become due and payable in
accordance with their terms;
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(b) affect the relative rights against the Company of the
Holders of the Securities and other creditors of the Company, other than
Holders' rights in relation to the holders of Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Securities from
exercising all remedies available upon a Default or Event of Default under this
Indenture, subject to the rights, if any, under this Article 13 of the holders
of Senior Indebtedness to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder.
SECTION 13.07. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of
Securities by its acceptance thereof authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article 13 and appoints the Trustee its
attorney-in-fact for any and all such purposes, including the immediate filing
of a claim for the unpaid balance of such Holder's Securities in any insolvency
or bankruptcy proceeding, or any receivership, liquidation, reorganization or
similar case or proceeding, in the form required in such proceeding, and the
taking of such actions as may be required to cause such claim to be approved. If
the Trustee does not file a proper claim in the form required in such proceeding
on or prior to thirty days before the expiration of the time to file such claim
or claims, then the holders of Senior Indebtedness or their representatives are
hereby authorized to file such claim for and on behalf of the Holders.
SECTION 13.08. NO WAIVER OF SUBORDINATION PROVISIONS. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article 13
or the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following:
(a) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Indebtedness, or otherwise amend
or supplement in any manner Senior Indebtedness or any instrument evidencing the
same or any agreement under which Senior Indebtedness is outstanding;
(b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Indebtedness;
(c) release any Person liable in any manner for the collection
of Senior Indebtedness; and
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(d) exercise or refrain from exercising any rights against the
Company and any other Person.
SECTION 13.09. NOTICE TO TRUSTEE. The Company shall give prompt written
notice to the Trustee if, to the Company's knowledge, any payment to or by the
Trustee in respect of the Securities is prohibited by this Article 13.
Notwithstanding the provisions of this Article 13 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge that any payment to
or by the Trustee in respect of the Securities is prohibited by this Article 13,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof from the Company or a holder of Senior Indebtedness or
from any trustee therefor or other representative thereof; and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 1.05, shall be entitled in all respects to assume that no facts exist
that would prohibit any payment in respect of the Securities; PROVIDED, HOWEVER,
that if a Responsible Officer of the Trustee shall not have received at the
Corporate Trust Office of the Trustee the notice provided for in this Section
13.09 by the close of business on the date that is two Business Days prior to
the date upon which by the terms hereof any money may become payable for any
purpose (including the payment of the principal of (and premium, if any) or
interest (including Liquidated Damages, if any) on any Security), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the purpose
for which such money was received and shall not be affected by any notice to the
contrary which may be received by it after the close of business on the date
that is two Business Days prior to such date.
Subject to the provisions of Article 5, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
itself to be a holder of Senior Indebtedness (or a representative thereof) to
establish that such notice has been given by a holder of Senior Indebtedness (or
a representative thereof). In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 13, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 13, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 13.10. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT. Upon any payment or distribution of assets of the Company referred to in
this Article 13, the Trustee, subject to the provisions of Article 5, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the
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amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 13.
SECTION 13.11. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Company or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
13 or otherwise.
SECTION 13.12. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
PRESERVATION OF TRUSTEE'S RIGHTS. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article 13 with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article 13 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 5.07.
SECTION 13.13. ARTICLE APPLICABLE TO PAYING AGENTS. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "TRUSTEE" as used in this Article 13
shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article 13 in
addition to or in place of the Trustee; PROVIDED, HOWEVER, that Section 13.13
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as Paying Agent.
SECTION 13.14. CERTAIN CONVERSIONS DEEMED PAYMENT. For the purposes of
this Article 13 only, (1) the issuance and delivery of junior securities upon
conversion of Securities in accordance with Article 12 or in respect to the
Repurchase Price in accordance with Article 11 shall not be deemed to constitute
a payment or distribution on account of the principal of or premium or interest
(including Liquidated Damages, if any) on, or other amount payable with respect
to, Securities or on account of the redemption, purchase or other acquisition of
Securities, and (2) the payment, issuance or delivery of cash, property or
securities (other than junior securities) upon conversion of a Security shall be
deemed to constitute payment on account of the principal of, premium or interest
on, or other amount payable with respect to, such Security. For the purposes of
this Section 13.14, the term "JUNIOR SECURITIES" means (a) shares of any stock
of any class of the Company and (b) securities of the Company that are
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness that may be outstanding at the time of issuance or delivery of such
securities to substantially the same extent as, or to a greater extent than, the
Securities are so subordinated as provided in this Article 13. Nothing contained
in this Article 13 or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the right,
which is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article 12.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
TRIQUINT SEMICONDUCTOR, INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A.
as Trustee
By:
-----------------------------
Name:
Title:
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EXHIBIT A
TRIQUINT SEMICONDUCTOR, INC.
4% CONVERTIBLE SUBORDINATED NOTE DUE 2007
No. R-1 $ 300,000,000
CUSIP 89674KAA1
TRIQUINT SEMICONDUCTOR, INC., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "COMPANY," which term
includes any successor entity under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of THREE HUNDRED MILLION DOLLARS ($300,000,000) at the office or
agency of the Company referred to below, on March 1, 2007 in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest on
said principal sum semiannually on March 1 and September 1 of each year,
commencing September 1, 2000 (each an "INTEREST PAYMENT DATE"), at said office
or agency, in like coin or currency, at the rate of 4% per annum, until the
principal hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the February 15 or
August 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of, premium, if any (including the Make-Whole
Payment, if any), and interest (including Liquidated Damages, if any) on this
Security shall be made at the office or agency of the Company maintained for
such purpose, which initially shall be the Corporate Trust Office of the Trustee
or such other office or agency of the Company as may be designated by it in the
Borough of Manhattan, The City of New York, in such lawful money of the United
States of America as at the time of payment is legal tender for payment of
public and private debts, PROVIDED that the Company may make such payment either
by (i) mailing a check in the amount of such
<PAGE>
payment, payable to or upon the written order of the Person entitled thereto
pursuant to Section 3.07 of the Indenture (as defined herein) or (ii) transfer
to an account maintained by the payee located inside the United States.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
DATED: TRIQUINT SEMICONDUCTOR, INC.
By:
--------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
DATED: STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A.
as Trustee
By:
--------------------------------
Authorized Signatory
-2-
<PAGE>
[FORM OF REVERSE OF SECURITY]
TRIQUINT SEMICONDUCTOR, INC.
4% CONVERTIBLE SUBORDINATED NOTE DUE 2007
This Security is one of a duly authorized issue of securities of the
Company designated as its 4% Convertible Subordinated Notes due 2007 (herein
called the "SECURITIES"), limited in aggregate principal amount to $300,000,000
(up to $345,000,000 if the option set forth in Section 2(b) of the Purchase
Agreement dated February 17, 2000 among the Company and the Initial Purchasers
named therein is exercised in full), which may be issued under an Indenture,
dated as of February 24, 2000 (the "INDENTURE"), between the Company and State
Street Bank and Trust Company of California, N.A., as Trustee for the Holders of
Securities issued under said Indenture (herein called the "TRUSTEE", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Indebtedness and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
[The Holder of this Security [if this security is a global security,
then insert -- (including any Person that has a beneficial interest in this
Security)] and the Common Stock of the Company issuable upon conversion hereof
is entitled to the benefits of a Registration Rights Agreement, dated as of
February 24, 2000 executed by the Company (the "Registration Rights Agreement").
Pursuant to the Registration Rights Agreement, the Company has agreed for the
benefit of the Holders from time to time of the Registrable Securities to pay
additional interest on this Security ("Liquidated Damages") in accordance with
the terms of the Registration Rights Agreement. Whenever in this Security there
is a reference, in any context, to the payment of the principal of, premium, if
any, or interest on, or in respect of, any Security, such mention shall be
deemed to include mention of the payment of Liquidated Damages payable as
described in this paragraph to the extent that, in such context, Liquidated
Damages are, were or would be payable in respect of such Security and express
mention of the payment of Liquidated Damages (if applicable) in any provisions
of this Security shall not be construed as excluding Liquidated Damages in those
provisions of this Security where such express mention is not made.]
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at its option, at any time on or before
maturity of the Securities, or in case this Security or a portion hereof is
called for redemption, then in respect of this Security or such portion hereof
until and including, but (unless the Company defaults in making the payment due
upon redemption or repurchase) not after, the close of business on the Business
Day immediately preceding the Redemption Date or Repurchase Date, as the case
may be, to convert this Security (or any portion of the principal amount hereof
which is U.S. $1,000 or an integral multiple thereof), at the principal amount
hereof, or of such portion, into fully paid and nonassessable shares of Common
-3-
<PAGE>
Stock of the Company at a Conversion Price of $135.60 per share of Common Stock,
which is equal to a Conversion Rate of 7.3746 shares of Common Stock per $1,000
principal amount of the Securities (or at the current adjusted Conversion Price
and Conversion Rate if an adjustment has been made as provided in Article 12 of
the Indenture) by surrender of this Security, duly endorsed or assigned to the
Company or in blank, to the Company at its office or agency maintained for such
purpose, accompanied by the conversion notice hereon executed by the Holder
hereof evidencing such Holder's election to convert this Security, or if less
than the entire principal amount hereof is to be converted, the portion hereof
to be converted, and, in case such surrender shall be made during the period
from the close of business on any Regular Record Date to the opening of business
on the corresponding Interest Payment Date (unless this Security or the portion
hereof being converted has been called for redemption on a Redemption Date
within such period between and including such Regular Record Date and such
Interest Payment Date), also accompanied by payment in funds acceptable to the
Company of an amount equal to the interest payable on such Interest Payment Date
on the principal amount of this Security then being converted. Subject to the
aforesaid requirement for payment of interest and, in the case of a conversion
after the close of business on any Regular Record Date and on or before the
corresponding Interest Payment Date, to the right of the Holder of this Security
(or any Predecessor Security) of record at such Regular Record Date to receive
an installment of interest (even if the Security has been called for redemption
on a Redemption Date within such period), no payment or adjustment is to be made
on conversion for interest accrued hereon or for dividends on the Common Stock
issued on conversion. No fractions of shares or scrip representing fractions of
shares will be issued on conversion, but instead of any fractional interest the
Company shall pay a cash adjustment as provided in Article 12 of the Indenture.
The Conversion Rate and Conversion Price are subject to adjustment as provided
in Article 12 of the Indenture. In addition, the Indenture provides that in case
of certain reclassifications, consolidations, mergers, sales or transfers of
assets or other transactions pursuant to which the Common Stock is converted
into the right to receive other securities, cash or other property, the
conversion privilege shall be modified so that this Security, if then
outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon the transaction by a holder
of the number of shares of Common Stock into which this Security might have been
converted immediately prior to such transaction.
The Securities may be redeemed at the election of the Company, as a
whole or from time to time in part, at any time prior to March 5, 2003 (a
"PROVISIONAL REDEMPTION"), at a Redemption Price equal to $1,000 per $1,000
principal amount of the Securities plus accrued and unpaid interest, if any, to
but excluding the date of redemption (the "PROVISIONAL REDEMPTION DATE") if (i)
the Closing Price of the Common Stock has exceeded 150% of the Conversion Price
(as defined in Article 12 of the Indenture and as such may be adjusted from time
to time) then in effect for at least 20 Trading Days in any period of 30
consecutive Trading Days ending on the Trading Day prior to the date of mailing
of the provisional notice of redemption pursuant to Section 10.04 (the "NOTICE
DATE"), and (ii) a registration statement covering resales of the Securities and
Common Stock issuable upon the conversion thereof is effective and available for
use and is expected to remain effective for the 30 days following the
Provisional Redemption Date.
-4-
<PAGE>
Upon any such Provisional Redemption, the Company shall make an
additional payment in cash (the "MAKE-WHOLE PAYMENT") to holders of the
Securities called for redemption, including those Securities converted into
Common Stock between the Notice Date and the Provisional Redemption Date, in an
amount equal to $166.67 per $1,000 principal amount of the Securities, less the
amount of any interest actually paid on the Securities before the date of
redemption.
The Securities (other than those Securities that have been converted in
accordance with the terms of the Indenture) are subject to redemption at the
option of the Company upon not less than 30 days' or more than 60 days' notice
by mail (unless a shorter notice is deemed satisfactory by the Trustee), as a
whole or from time to time in part, at any time on or after March 5, 2003. The
redemption prices (expressed as percentages of the principal amount) shall be as
set forth below for Securities redeemed during the following periods described
below:
<TABLE>
<CAPTION>
PERIOD REDEMPTION PRICE
- --------------------------------------- ----------------
<S> <C>
March 5, 2003 through February 29, 2004 102.286%
March 1, 2004 through February 28, 2005 101.714%
March 1, 2005 through February 28, 2006 101.143%
March 1, 2006 through February 28, 2007 100.571%
</TABLE>
and 100% of the principal amount on March 1, 2007, together, in the case of any
such redemption, with accrued interest to (but not including) the Redemption
Date (subject to the right of holders of record on the Regular Record Date to
receive interest on the related Interest Payment Date). Any redemption of
Securities must be in integral multiples of $1,000.
If fewer than all of the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed in principal amounts at maturity of
$1,000 or integral multiples thereof by lot, pro rata or by another method the
Trustee considers fair and appropriate. If a portion of a Holder's Securities is
selected for partial redemption and that holder converts a portion of those
Securities prior to the redemption, the converted portion shall be deemed,
solely for purposes of determining the aggregate principal amount of the
Securities to be redeemed by the Company, to be of the portion selected for
redemption.
In certain circumstances involving a Change in Control, each Holder
shall have the right to require the Company to repurchase all or part of its
Securities at a repurchase price equal to 100% of the principal amount thereof,
together with accrued and unpaid interest through the Repurchase Date (subject
to the right of holders of record on the Regular Record Date to receive interest
on the related Interest Payment Date). At the option of the Company, the
Repurchase Price may be paid in cash or, subject to the conditions provided in
the Indenture, by delivery of shares of Common Stock.
The Securities do not have the benefit of any sinking fund.
-5-
<PAGE>
In the event of redemption, conversion or repurchase of this Security
in part only, a new Security or Securities for the unredeemed, unconverted or
unrepurchased portion hereof shall be issued in the name of the Holder hereof
upon the cancellation hereof.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable in the manner and with the
effect provided in Article 4 of the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any
(including the Make-Whole Payment, if any), and interest (including Liquidated
Damages, if any) on this Security at the times, place and rate, and in the coin
or currency, herein prescribed or to convert this Security as provided in the
Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
Corporate Trust Office duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
-6-
<PAGE>
No service charge shall be made to a Holder for any such registration
of transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Interest (including Liquidated Damages, if any) on this Security shall
be computed on the basis of a 360-day year of twelve 30-day months. In the event
that any date on which interest is payable on the Securities is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay).
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES.
-7-
<PAGE>
FORM OF CONVERSION NOTICE
CONVERSION NOTICE
To: TRIQUINT SEMICONDUCTOR, INC.
The undersigned Holder of this Security hereby irrevocably exercises
the option to convert this Security, or the portion hereof (which is $1,000 or
an integral multiple thereof) below designated, at any time following the date
of original issuance thereof, into shares of Common Stock in accordance with the
terms of the Indenture referred to in this Security, and directs that the shares
issuable and deliverable upon conversion, together with any check in payment for
a fractional share and any Security representing any unconverted principal
amount hereof, be issued and delivered to the registered owner hereof unless a
different name has been provided below. If shares or any portion of this
Security not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith a certificate in proper form certifying that
the applicable restrictions on transfer have been complied with. Any amount
required to be paid by the undersigned on account of interest accompanies this
Security.
Dated: By:
--------------------------------
Signature*
If shares or Securities are to be registered Principal amount to be converted
in the name of a Person other than the (if less than all):$________,000
Holder, please print such Person's name
and address:
- ----------------------------------------
Name
- ----------------------------------------
Social Security or Taxpayer
Identification Number
- ----------------------------------------
Street Address
- ----------------------------------------
City, State and Zip Code
<PAGE>
* Signature(s) must be guaranteed by an eligible guarantor
institution (banks, stock brokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program)
pursuant to Securities and Exchange Commission Rule 17Ad-15 if shares of
Common Stock are to be delivered, or unconverted Securities are to be issued,
other than to and in the name of the registered owner.
-2-
<PAGE>
EXHIBIT 4.3
4% CONVERTIBLE SUBORDINATED NOTES
DUE 2007
REGISTRATION RIGHTS AGREEMENT
Dated as of February 24, 2000
by and among
TRIQUINT SEMICONDUCTOR, INC.,
as the Company,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
SG COWEN SECURITIES CORPORATION,
BANC OF AMERICA SECURITIES LLC
And
BEAR, STEARNS & CO. INC.,
as Initial Purchasers
<PAGE>
TABLE OF CONTENTS
------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 1. Definitions..........................................................................1
SECTION 2. Shelf Registration Statement.........................................................5
SECTION 3. Liquidated Damages...................................................................7
SECTION 4. Registration Procedures..............................................................9
SECTION 5. Registration Expenses...............................................................14
SECTION 6. Indemnification.....................................................................14
SECTION 7. Underwritten Registration...........................................................17
SECTION 8. Miscellaneous.......................................................................18
</TABLE>
<PAGE>
This Registration Rights Agreement is made and entered into as of
February 24, 2000 by and among TRIQUINT SEMICONDUCTOR, INC., a Delaware
corporation (the "COMPANY"), MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
SG COWEN SECURITIES CORPORATION, BANC OF AMERICA SECURITIES LLC and BEAR,
STEARNS & CO. INC. (the "INITIAL PURCHASERS") who have purchased or have the
right to purchase up to $300,000,000 principal amount of 4% Convertible
Subordinated Notes due 2007 (the "NOTES") of the Company with the option to
purchase a further $45,000,000 in principal amount of Notes pursuant to the
Purchase Agreement (as such term is defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
February 17, 2000, among the Company and the Initial Purchasers (the "PURCHASE
AGREEMENT"). In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
provided for in this Agreement to the Initial Purchasers and their respective
direct and indirect transferees (i) for the benefit of the Initial Purchasers,
(ii) for the benefit of the holders from time to time of the Notes (including
the Initial Purchasers), (iii) for the benefit of the holders from time to time
of the Common Stock issuable or issued upon conversion of the Notes, and (iv)
for the benefit of the holders from time to time of the securities constituting
the Transfer Restricted Securities (as defined below). The execution of this
Agreement is a condition to the closing of the transactions contemplated by the
Purchase Agreement, and each Holder (as defined below) by participating in a
Registration Statement agrees to be bound by this Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
ACT: As defined in this Section 1.
AFFILIATE: An affiliate of any specified person shall mean any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For the purposes of this
definition, "CONTROL," when used with respect to any person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise and
the terms "AFFILIATED," "CONTROLLING" and "CONTROLLED" have meanings correlative
to the foregoing.
AGREEMENT: This Registration Rights Agreement, as the same may be
amended, supplemented or modified from time to time in accordance with the terms
hereof.
<PAGE>
BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in New York, New York are authorized
or obligated by law or executive order to close.
CLOSING DATE: February 24, 2000.
COMMON STOCK: Common Stock, $.001 par value per share, of the Company
and any other shares of common stock as may constitute "Common Stock" for
purposes of the Indenture as issuable or issued upon conversion of the Notes.
COMPANY: TriQuint Semiconductor, Inc., a Delaware corporation, and any
successor corporation thereto.
CONTROLLING PERSON: As defined in Section 6(a) hereof.
DAMAGES PAYMENT DATE: Each of the semi-annual interest payment dates
provided in the Notes.
EFFECTIVENESS PERIOD: As defined in Section 2(a) hereof.
EFFECTIVENESS TARGET DATE: The 180th day following the Closing Date.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the SEC thereunder.
FILING DATE: The 90th day after the Closing Date.
HOLDER: Each owner of any Transfer Restricted Securities.
INDEMNIFIED PERSON: As defined in Section 6(a) hereof.
INDENTURE: The Indenture, dated as of the date hereof, between the
Company and the Trustee, pursuant to which the Notes are to be issued, as the
same may be amended, modified or supplemented from time to time in accordance
with the terms thereof.
INITIAL PURCHASERS: As defined in the first paragraph hereof.
LIQUIDATED DAMAGES: As defined in Section 3(a) hereof.
NOTICE AND QUESTIONNAIRE: The Notice and Questionnaire attached hereto
as Exhibit A.
PROCEEDING: An action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
2
<PAGE>
PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed in reliance upon Rule 430A), as
amended or supplemented by any prospectus supplement, with respect to the resale
of any of the Transfer Restricted Securities covered by such Registration
Statement, and all other amendments and supplements to any such prospectus,
including post-effective amendments, and all materials incorporated by reference
or deemed to be incorporated by reference, if any, in such prospectus.
PURCHASE AGREEMENT: As defined in the second paragraph hereof.
RECORD HOLDER: (i) with respect to any Damages Payment Date relating to
any shares of Common Stock as to which any such Liquidated Damages have accrued,
the registered Holder of such shares 15 days prior to the next succeeding
Damages Payment Date; and (ii) with respect to any Damages Payment Date relating
to any Notes as to which any such Liquidated Damages has accrued, the registered
Holder of such Notes 15 days prior to the next succeeding Damages Payment Date.
REGISTRATION DEFAULT: As defined in Section 3(a) hereof.
REGISTRATION STATEMENT: Any registration statement of the Company filed
with the SEC pursuant to the Securities Act that covers the resale of any of the
Transfer Restricted Securities pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such registration statement.
REQUISITE INFORMATION: As defined in Section 2(c) hereof.
RULE 144: Rule 144 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.
RULE 144A: Rule 144A promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.
RULE 158: Rule 158 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.
RULE 415: Rule 415 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.
3
<PAGE>
RULE 424: Rule 424 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.
RULE 430A: Rule 430A promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
SHELF REGISTRATION STATEMENT: As defined in Section 2(a) hereof.
TIA: The Trust Indenture Act of 1939, as amended, and the rules and
regulations promulgated by the SEC thereunder.
TRANSFER RESTRICTED SECURITIES: The Notes, the shares of Common Stock
into which such Notes are converted or convertible (including any shares of
Common Stock issued or issuable thereon upon any stock split, stock combination,
stock dividend or the like), upon original issuance thereof and at all times
subsequent thereto, and associated related rights, if any, until the earliest of
(i) the date on which the resale thereof has been effectively registered under
the Securities Act and disposed of in accordance with the Registration Statement
relating thereto, (ii) the date on which such security has been distributed to
,or is available for distribution to, the public pursuant to Rule 144 or is
saleable pursuant to paragraph (k) of Rule 144 or (iii) the date on which it
ceases to be outstanding.
TRANSFER AGENT: ChaseMellon Shareholder Services L.L.C., the registrar
and transfer agent for the Company's Common Stock, or such registrar and
transfer agent as may subsequently be appointed by the Company.
TRUSTEE: State Street Bank and Trust Company of California, N.A., the
trustee under the Indenture.
References herein to the term "Holders of a majority in interest of
Transfer Restricted Securities" or words to a similar effect shall mean, with
respect to any request, notice, demand, objection or other action by the Holders
hereunder or pursuant hereto (each, an "ACT"), registered Holders of a number of
shares of then outstanding Common Stock constituting Transfer Restricted
Securities and an aggregate amount of then outstanding Notes constituting
Transfer Restricted Securities, such that the sum of such shares of Common Stock
and the shares of Common Stock issuable upon conversion of such Notes
constitutes in excess of 50% of the sum of all of the then outstanding shares of
Common Stock
4
<PAGE>
constituting Transfer Restricted Securities and the number of shares of
Common Stock issuable upon conversion of then outstanding Notes constituting
Transfer Restricted Securities. For purposes of the preceding sentence,
Transfer Restricted Securities owned, directly or indirectly, by the Company
or its Affiliates shall be deemed not to be outstanding.
SECTION 2. SHELF REGISTRATION STATEMENT.
(a) The Company agrees to file with the SEC as soon as reasonably
practicable after the Closing Date, but in no event later than the Filing Date,
a Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Transfer Restricted Securities or
separate Registration Statements for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the Common Stock and Notes
constituting Transfer Restricted Securities, respectively (such Registration
Statement or Statements, collectively, the "SHELF REGISTRATION STATEMENT"). Each
Shelf Registration Statement shall be on Form S-3 under the Securities Act or
another appropriate form selected by the Company permitting registration of such
Transfer Restricted Securities for resale by the Holders in the manner or
manners reasonably designated by Holders of a majority in interest of Transfer
Restricted Securities being sold. The Company shall not permit any securities
other than the Transfer Restricted Securities to be included in any Shelf
Registration Statement. The Company shall use its reasonable efforts to cause
each Shelf Registration Statement to be declared effective pursuant to the
Securities Act as soon as reasonably practicable following the filing thereof
and to use all reasonable efforts to keep such Shelf Registration Statement
continuously effective under the Securities Act, subject to Section 2(d) hereof,
for two years after the date on which all of the Transfer Restricted Securities
are sold to the Initial Purchasers (including those sold pursuant to the option
granted to the Initial Purchasers in the Purchase Agreement) (the "EFFECTIVENESS
PERIOD"), or such shorter period ending when there cease to be any Transfer
Restricted Securities outstanding.
(b) SUPPLEMENTS AND AMENDMENTS. The Company shall use its reasonable
efforts to keep each Shelf Registration Statement continuously effective by
supplementing and amending the Shelf Registration Statement if required by the
rules, regulations or instructions applicable to the registration form used for
such Shelf Registration Statement, if required by the Securities Act or if
reasonably requested by the Holders of a majority in interest of the Transfer
Restricted Securities or by any underwriter of such Transfer Restricted
Securities.
(c) SELLING SECURITYHOLDER INFORMATION. Each Holder wishing to sell
Transfer Restricted Securities pursuant to a Shelf Registration Statement and
related Prospectus agrees to deliver a Notice and Questionnaire that confirms
such Holder's agreement to be bound by the terms of this Agreement and includes
such information regarding it and the distribution of its Transfer Restricted
Securities
5
<PAGE>
as is required by law to be disclosed by the Holder in the applicable
Registration Statement (the "REQUISITE INFORMATION") to the Company prior to the
effectiveness of the Shelf Registration Statement. The Company shall not be
required to include in any Shelf Registration Statement and related Prospectus
the Transfer Restricted Securities of any Holder that does not provide the
Company with a Notice and Questionnaire in accordance with this Section 2(c).
The Company shall file within five Business Days after the receipt of a Notice
and Questionnaire from any Holder, which includes the Requisite Information with
respect to such Holder, a Prospectus supplement pursuant to Rule 424 or
otherwise amend or supplement such Registration Statement to include in the
Prospectus the Requisite Information as to such Holder (and the Transfer
Restricted Securities held by such Holder), and the Company shall provide such
Holder within ten Business Days after receipt of such Notice and Questionnaire
with a copy of such Prospectus as so amended or supplemented containing the
Requisite Information in order to permit such Holder to comply with the
Prospectus delivery requirements of the Securities Act in a timely manner with
respect to any proposed disposition of such Holder's Transfer Restricted
Securities and to file the same with the SEC. Each Holder shall promptly notify
the Company of any material changes to the Requisite Information contained in
the Notice and Questionnaire provided to the Company by such Holder.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require, in the event that such reference to such Holder by
name or otherwise is not required by the Securities Act or any similar Federal
statute then in force, the deletion of the reference to such Holder in such
Registration Statement at the time subsequent to the time that such reference
ceases to be required and the Company otherwise intends to amend our supplement
the Shelf Registration Statement.
(d) MATERIAL EVENTS; SUSPENSION OF SALES. Notwithstanding the
provisions contained in this Section 2, in the event that, in the judgment of
the Company's Board of Directors, it is advisable to suspend use of the
Prospectus due to pending corporate developments, public filings with the SEC
or similar events, the Company shall promptly deliver a written certificate
to each registered Holder, the Trustee, the Transfer Agent and the managing
underwriters, if any, to the effect that the use of the Prospectus is to be
suspended until the Company shall deliver a written notice that the use of
the Prospectus may be resumed. Thereafter, the use of the Prospectus shall be
suspended, and the Company shall not be required to maintain the effectiveness
of, or amend or update the Shelf Registration Statement, or amend or
supplement the Prospectus; PROVIDED, HOWEVER, that the Company shall only be
permitted to suspend the use of the Prospectus for a period not to exceed 90
days in any consecutive 365 days. The Company will use its best efforts to
ensure that the use of the Prospectus may be resumed as soon as, in the
judgment of the Company's Board of Directors,
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disclosure of the material relating to such pending development, filing or
event would not have a material adverse effect on the Company.
(e) ADDITIONAL AGREEMENTS OF HOLDERS. Each Holder agrees not to
dispose of Transfer Restricted Securities pursuant to the Shelf Registration
Statement without complying with the prospectus delivery requirements under
the Act and the provisions of paragraph (d) above regarding use of the
Prospectus. Each Holder further agrees that it will comply fully with
applicable federal and state securities laws in connection with the
distribution of any Transfer Restricted Securities pursuant to the Shelf
Registration Statement. Each Holder further acknowledges having been advised
by the Company that applicable federal securities laws prohibit Holders from
trading in securities of the Company at any time while in possession of
material non-public information about the Company.
SECTION 3. LIQUIDATED DAMAGES.
(a) The Company and the Initial Purchasers agree that the Holders
will suffer damages if the Company fails to fulfill its obligations pursuant
to Section 2 hereof and that it would not be possible to ascertain the extent
of such damages. Accordingly, the Company hereby agrees to pay liquidated
damages ("LIQUIDATED DAMAGES") to each Holder under the circumstances and to
the extent set forth below:
(i) if the Shelf Registration Statement has not been
filed with the SEC on or prior to the Filing Date; or
(ii) if each Shelf Registration Statement is not declared
effective by the SEC on or prior to the applicable Effectiveness
Target Date; or
(iii) any Shelf Registration Statement ceases to be
effective or usable at any time during the Effectiveness Period
(without being succeeded on the same day immediately by a
post-effective amendment or supplement to such Registration
Statement that cures such failure and that is itself, in the case
of post-effective amendment, immediately declared effective) for a
period of time which shall exceed 90 days in the aggregate in any
period of 365 consecutive days; (any of the foregoing, a
"REGISTRATION DEFAULT").
In the event of a Registration Default, the Company will pay Liquidated
Damages to each holder of Transfer Restricted Securities, during the first
90-day period immediately following the occurrence of such Registration Default
in an amount equal to $0.05 per week per $1,000 principal amount of Notes and
for any Common Stock constituting Transfer Restricted Securities, at such rate
adjusted to an equivalent per share basis in accordance with the conversion
price of the Notes after conversion. The rate of accrual of the Liquidated
Damages will
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increase by $0.05 per week per $1,000 principal amount of Notes or Common
Stock constituting Transfer Restricted Securities (adjusted to an equivalent
per share basis in accordance with the conversion price for Common Stock
constituting Transfer Restricted Securities) for each subsequent 90-day
period until the applicable Registration Statement is filed, the applicable
Registration Statement is declared effective and becomes available for
effecting sales of securities, or the Shelf Registration Statement again
becomes effective and becomes available for effecting sales of securities, as
the case may be, up to a maximum amount of Liquidated Damages of $0.25 per
week per $1,000 principal amount of Notes adjusted to an equivalent per share
basis in accordance with the conversion price. Following the cure of a
Registration Default, Liquidated Damages will cease to accrue with respect to
such Registration Default (without in any way limiting the effect of any
subsequent Registration Default). All accrued Liquidated Damages shall be
paid to the holders of (i) Notes constituting Transfer Restricted Securities,
pursuant to the terms of the Indenture with respect to the payment of
interest and (ii) shares of Common Stock, in the manner as interest payments
on the Notes on semiannual payment dates that correspond to interest payment
dates for the Notes. The parties hereto agree and acknowledge that the
payment of Liquidated Damages to holders of Common Stock upon a Registration
Default pursuant to this Agreement shall not be a dividend on such shares of
Common Stock.
(b) The Company shall notify the Transfer Agent or the Trustee, as
the case may be, within five Business Days after each and every date on which
a Registration Default occurs. Liquidated Damages, as calculated by the
Company, shall be paid by the Company to the Record Holders of Common Stock
on each Damages Payment Date by wire transfer of immediately available funds
to the accounts specified by them or by mailing checks to their registered
addresses as they appear in the register of the Company for the Common Stock,
if no such accounts have been specified in the Notice and Questionnaire on or
before the Damages Payment Date; and Liquidated Damages shall be paid by the
Company to the Record Holders of the Notes on each semi-annual interest
payment date together with interest to be paid on the Notes pursuant to the
terms of the Indenture, by wire transfer of immediately available funds to
the accounts specified by them or by mailing checks to their registered
addresses as they appear in the Notes Register (as defined in the Indenture)
if no such accounts have been specified in the Notice and Questionnaire on or
before the Damages Payment Date; PROVIDED, HOWEVER, that any Liquidated
Damages accrued with respect to any Notes or portion thereof called for
redemption on a redemption date, repurchased on a repurchase date, or
converted into shares of Common Stock on a conversion date prior to the
Damages Payment Date shall, in any such event, be paid instead to the Holder
who submitted such Notes or portion thereof for redemption, repurchase or
conversion on the applicable redemption date, repurchase date or conversion
date, as the case may be, on such date.
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SECTION 4. REGISTRATION PROCEDURES. In connection with the Company's
registration obligations hereunder, the Company shall effect such
registrations on the appropriate form selected by the Company to permit the
resale of Transfer Restricted Securities in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company
shall as expeditiously as reasonably possible:
(a) No fewer than five Business Days prior to the initial filing of
a Registration Statement or Prospectus and no fewer than two Business Days
prior to the filing of any amendment or supplement thereto (excluding, unless
requested, any document that would be incorporated or deemed to be
incorporated therein by reference and then only to the Holder who so
requested), furnish to the Holders whose Transfer Restricted Securities are
required to be included in such Registration Statement or Prospectus pursuant
to Section 2(c) hereof and the managing underwriters, if any, copies of all
such documents proposed to be filed (excluding, unless requested, those
incorporated or deemed to be incorporated by reference and then only to the
Holder who so requested) and cause the officers and directors of the Company,
counsel to the Company and independent certified public accountants to the
Company to respond to such inquiries as shall be necessary in connection with
such Registration Statement, in the opinion of counsel to the underwriters,
if any, to conduct a reasonable investigation within the meaning of the
Securities Act. The Company shall not file any such Registration Statement or
related Prospectus or any amendments or supplements thereto (excluding any
document that would be incorporated or deemed incorporated by reference) to
which the Holders of a majority in interest of the Transfer Restricted
Securities or the managing underwriters, if any, shall reasonably object on a
timely basis. The Company shall prepare and file with the SEC such
amendments, including post-effective amendments, to each Registration
Statement as may be necessary to keep such Registration Statement
continuously effective for the applicable time period set forth in Section
2(a) hereof; subject to Section 2(d) hereof, cause the related Prospectus to
be supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Securities Act and the Exchange
Act with respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the intended
method or methods of disposition by the Holder set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented (including,
without limitation, the filing of any Prospectus supplement pursuant to Rule
424 in order to add or change any selling security holder information
(including any such supplements or amendments pursuant to Section 2(c)
hereof, PROVIDED such Holder to which such change applies complies with the
Requisite Information requirements of Section 2(c) hereof)).
(b) Notify the Holders and the managing underwriters, if any,
promptly (and in the case of an event specified by clause (i) of this
paragraph in
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no event fewer than two Business Days prior to such filing), and (if
requested by any such person), confirm such notice in writing, (i) when a
Prospectus or any Prospectus supplement or post-effective amendment is
proposed to be filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request of the SEC or any other Federal or state governmental authority for
amendments or supplements to such Registration Statement or related
Prospectus or for additional information related thereto, (iii) of the
issuance by the SEC, any state securities commission, any other governmental
agency or any court of any stop order, order or injunction suspending or
enjoining the use or the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (iv) if at any time any of
the representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 4(m) hereof
are not true and correct in all material respects, (v) of the receipt by the
Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Transfer
Restricted Securities for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, and (vi) of the existence of
any fact and the happening of any event that makes any statement made in such
Registration Statement or related Prospectus untrue in any material respect,
or that requires the making of any changes in such Registration Statement or
Prospectus so that in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading and that, in the case of the Prospectus, such
Prospectus will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(c) Use all reasonable efforts to avoid the issuance of, or, if
issued, to obtain the withdrawal of any stop order or order enjoining or
suspending the use or effectiveness of a Registration Statement or the
lifting of any suspension of the qualification (or exemption from
qualification) of any of the Transfer Restricted Securities for sale in any
jurisdiction, at the earliest practicable moment.
(d) If requested by the managing underwriters, if any, or the
Holders of a majority in interest of the Transfer Restricted Securities being
sold in connection with such offering, promptly include in a Prospectus
supplement or post-effective amendment such information as the managing
underwriters, if any, and such Holders agree should, in their reasonable
judgment, be included therein, and make all required filings of such
Prospectus supplement or such post-effective amendment as soon as reasonably
practicable after the Company has received notification of the matters to be
included in such Prospectus supplement or post-effective amendment; PROVIDED,
HOWEVER, that the Company shall not be required
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to take any action pursuant to this Section 4(e) that, in the opinion of
counsel for the Company, would violate applicable law;
(e) Furnish to each Holder who so requests and each managing
underwriter, if any, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto, including financial
statements (but excluding schedules, all documents incorporated or deemed to
be incorporated therein by reference and all exhibits, unless requested in
writing by such Holder or any managing underwriter);
(f) Deliver to each Holder and the underwriters, if any, without
charge, as many copies of the Prospectus or Prospectuses (including each form
of Prospectus) and each amendment or supplement thereto to as such persons
may reasonably request; and, unless the Company shall have given notice to
such Holder pursuant to Section 2(d), the Company hereby consents to the use
of such Prospectus and each amendment or supplement thereto by each of the
selling Holders of Transfer Restricted Securities and the underwriters, if
any, in connection with the offering and sale of the Transfer Restricted
Securities covered by such Prospectus and any amendment or supplement
thereto; PROVIDED, HOWEVER, that no Holder shall be entitled to use the
Prospectus unless and until such Holder shall have furnished to the Company
any and all Requisite Information pursuant to Section 2(c) hereof;
(g) Use all reasonable efforts to register or qualify, or cooperate
with the Holders of Transfer Restricted Securities to be sold or tendered
for, the underwriters, if any, and their respective counsel in connection
with the registration or qualification (or exemption from such registration
or qualification) of, such Transfer Restricted Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any Holder or underwriter reasonably requests in writing, keep each
such registration or qualification (or exemption therefrom) effective during
the period such Registration Statement is required to be kept effective and
do any and all other acts or things necessary legally to enable the
disposition in such jurisdictions of the Transfer Restricted Securities
covered by the applicable Registration Statement; PROVIDED, HOWEVER, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified, take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or subject the Company to any tax in any such
jurisdiction where it is not then so subject;
(h) In connection with any sale or transfer of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold, which
certificates shall not bear any restrictive
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<PAGE>
legends, shall bear a CUSIP number different from the CUSIP number for the
Transfer Restricted Securities and shall be in a form eligible for deposit
with The Depository Trust Company and enable such Transfer Restricted
Securities to be in such denominations and registered in such names as the
managing underwriters, if any, or Holders may reasonably request at least two
Business Days prior to any sale of Transfer Restricted Securities;
(i) Use all reasonable efforts to cause the offering of the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities within
the United States, except as may be required as a consequence of the nature
of a Holder's business, in which case the Company will cooperate in all
reasonable respects with the filing of such Registration Statement and the
granting of such approvals as may be reasonably necessary to enable the
seller or sellers thereof or the underwriters, if any, to consummate the
disposition of such Transfer Restricted Securities PROVIDED, HOWEVER, that
the Company shall not be required to register the Transfer Restricted
Securities in any jurisdiction that would require the Company to qualify to
do business in any jurisdiction where it is not then so qualified, subject it
to general service of process in any such jurisdiction where it is not then
so subject or subject the Company to any tax in any such jurisdiction where
it is not then so subject or to;
(j) Upon the occurrence of any event contemplated by Section
4(c)(vi) hereof, as promptly as reasonably practicable (subject to any
suspension of sales pursuant to Section 2(d) hereof), prepare a supplement or
amendment, including, if appropriate, a post-effective amendment, to each
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(k) Prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Securities, to provide a CUSIP number for
the Transfer Restricted Securities to be sold pursuant to the Registration
Statement;
(l) Make available for inspection by a representative of the Holders
of Transfer Restricted Securities being sold, and any attorney, consultant or
accountant retained by such selling Holders or underwriter, at the offices
where normally kept, during reasonable business hours, all financial and
other records, pertinent corporate documents and properties of the Company
and its subsidiaries as they may reasonably request, and cause the officers,
directors, agents and employees of the Company and its subsidiaries to supply
all information in each case reasonably requested by any such representative,
underwriter, attorney,
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<PAGE>
consultant or accountant in connection with such Registration Statement;
PROVIDED, HOWEVER, that such persons shall first agree in writing with the
Company that any information that is reasonably and in good faith designated
by the Company in writing as confidential at the time of delivery or
inspection (as the case may be) of such information shall be kept
confidential by such persons, unless (i) in the reasonable opinion of the
Company or its counsel, disclosure of such information is required by court
or administrative order or is necessary to respond to inquiries of regulatory
authorities, (ii) in the reasonable opinion of the Company or its counsel,
disclosure of such information is required by law (including any disclosure
requirements pursuant to Federal securities laws in connection with the
filing of any Registration Statement or the use of any Prospectus), (iii)
such information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by any such person or (iv)
such information becomes available to any such person from a source other
than the Company and such source is not bound by a confidentiality agreement.
(m) Use all reasonable efforts to cause the Indenture to be
qualified under the TIA not later than the effective date of the first
Registration Statement relating to the Transfer Restricted Securities; and in
connection therewith, cooperate with the Trustee and the Holders of Notes or
Common Stock constituting Transfer Restricted Securities to effect such
changes to the Indenture, if any, as may be required for such Indenture to be
so qualified in accordance with the terms of the TIA; and execute, and use
its best efforts to cause the Trustee to execute, all customary documents as
may be required to effect such changes, and all other forms and documents
(including Form T-1) required to be filed with the SEC to enable the
Indenture to be so qualified under the TIA in a timely manner.
(n) Comply with applicable rules and regulations of the SEC and make
generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act or Rule 158 (or any similar
rule promulgated under the Securities Act), no later than 45 days after the
end of any 12-month period (or 90 days after the end of any 12-month period
if such period is a fiscal year) commencing at the end of any fiscal quarter
in which Transfer Restricted Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter after the effective date of a Registration Statement, which
statement shall cover said period, consistent with the requirements of Rule
158; and
(o) (i) list all shares of Common Stock covered by any Registration
Statements on any securities exchange on which the Common Stock is then
listed or (ii) authorize for quotation on the SmallCap Market or the National
Market of the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") all Common Stock covered by all such Registration
Statements if the Common Stock is then so authorized for quotation.
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SECTION 5. REGISTRATION EXPENSES.
All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by it whether or not any
Registration Statement is filed or becomes effective and whether or not any
securities are offered or sold pursuant to any Registration Statement. The
fees and expenses referred to in the foregoing sentence shall include,
without limitation, (i) all registration and filings fees (including, without
limitation, fees and expenses with respect to filings required to be made
with the National Association of Securities Dealers, Inc. and in compliance
with securities or blue sky laws), (ii) printing expenses (including, without
limitation, of printing Prospectuses if the printing of Prospectuses is
required by the managing underwriters, if any, or by the Holders of a
majority in interest of the Transfer Restricted Securities included), (iii)
messenger, telephone and delivery expenses, (iv) reasonable fees and
disbursements of counsel for the Company (plus any local counsel deemed
appropriate by the Holders of a majority in interest of the Transfer
Restricted Securities) in accordance with the provisions of this Section 5
hereof, (v) fees and disbursements of all independent certified public
accountants referred to in Section 4(m)(iii) (including, without limitation,
the expenses of any special audit and "comfort" letters required by or
incident to such performance), (vi) fees and expenses of all other persons
retained by the Company. In addition, the Company shall pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
an annual audit and the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange or the
Nasdaq SmallCap Market or the Nasdaq National Market. Notwithstanding
anything in this Agreement to the contrary, each Holder shall pay all
underwriting discounts and brokerage commissions with respect to any Transfer
Restricted Securities sold by it.
SECTION 6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each of (i)
the Initial Purchasers, (ii) each Holder, (iii) each person, if any, who
controls (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) any of the foregoing (any of the persons referred to
in this clause (iii) being hereinafter referred to as a "CONTROLLING
PERSON"), and (iv) the respective officers, directors, partners, employees,
representatives and agents of the Initial Purchasers, the Holders (including
predecessor Holders), or any controlling person (any person referred to in
clause (i), (ii), (iii) or (iv) may hereinafter be referred to as an
"INDEMNIFIED PERSON"), from and against any and all losses, claims, damages,
liabilities, expenses and judgments caused by any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
or Prospectus or in any amendment or supplement thereto or in any preliminary
Prospectus, or caused by any omission or alleged omission
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to state therein a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus or supplement
thereto, in the light of the circumstances under which they were made) not
misleading, except insofar as such losses, claims, damages, liabilities,
expenses or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Indemnified Person furnished to the Company by or on behalf of such
Indemnified Person expressly for use therein (which shall include, without
limitation, the Requisite Information in the Notice and Questionnaire
provided to the Company by such Indemnified Person); PROVIDED, HOWEVER, that
the foregoing indemnity with respect to any preliminary Prospectus shall not
inure to the benefit of any Indemnified Person from whom the person asserting
such losses, claims, damages, liabilities, expenses and judgments purchased
securities if such untrue statement or omission or alleged untrue statement
or omission made in such preliminary Prospectus is eliminated or remedied in
the Prospectus and a copy of the Prospectus shall not have been furnished to
such person in a timely manner due to the wrongful action or wrongful
inaction of such Indemnified Person, whether as a result of negligence or
otherwise.
(b) In case any action shall be brought against any Indemnified
Person, based upon any Registration Statement or any such Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Company, such Indemnified Person shall promptly notify the
Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such
Indemnified Person and payment of all fees and expenses. Any Indemnified
Person shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person, unless the employment of
such counsel shall have been specifically authorized in writing by the
Company, the Company shall have failed to assume the defense and employ
counsel or such Indemnified Person or Persons shall have been advised by
counsel that there may be a conflict between the positions of the
indemnifying party or parties and of the indemnified party or parties in
conducting the defense of such action or proceeding or that there may be
legal defenses available to such Indemnified Person or Persons different from
or in addition to those available to the indemnifying party or parties (in
which case the Company shall not have the right to assume the defense of such
action on behalf of such Indemnified Person, it being understood, however,
that the Company shall not, in connection with any one such action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all such Indemnified Persons, which
firm shall be designated in writing by such Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred). The Company
shall not be liable for any settlement of any
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such action effected without its written consent but if settled with the
written consent of the Company, the Company agrees to indemnify and hold
harmless any Indemnified Person from and against any loss or liability by
reason of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such proceeding.
(c) In connection with any Registration Statement pursuant to which
any Holder (or predecessor Holder) sold or offered for resale Transfer
Restricted Securities, such Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, officers, employees,
representatives and agents and any person controlling the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, to the same extent as the foregoing indemnity from the Company to each
Indemnified Person but only with reference to information relating to such
Indemnified Person furnished by or on behalf of such Indemnified Person
expressly for use in such Registration Statement (which shall include,
without limitation, the Requisite Information in the Notice and Questionnaire
provided to the Company by such Indemnified Person). In case any action shall
be brought against the Company, any of its directors, officers, employees,
representatives and agents, or any person controlling the Company based on
such Registration Statement and in respect of which indemnity may be sought
against any Indemnified Person, the Indemnified Person shall have the rights
and duties given to the Company (except that if the Company shall have
assumed the defense thereof, such Indemnified Person shall not be required to
do so, but may employ separate counsel therein and participate in defense
thereof but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person), and the Company, its directors, officers,
employees, representatives and agents, and any person controlling the Company
shall have the rights and duties given to the Indemnified Person by Section
6(b) hereof.
(d) If the indemnification provided for in this Section 6 is
applicable by its terms but unavailable to an indemnified party in respect of
any losses, claims, damages, liabilities, expenses or judgments referred to
therein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities,
expenses and judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and each
Indemnified Person on the other hand pursuant to the Purchase Agreement or
from the offering for resale of the Transfer Restricted Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not
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only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and each such Indemnified Person in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities, expenses or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company and each such
Indemnified Person shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Company or such Indemnified Person and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Holders and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 6(d)
were determined by PRO RATA allocation (even if the Indemnified Person were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in
the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities,
expenses or judgments referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Indemnified Person shall
be required to contribute any amount in excess of the amount by which the
total net profit received by it in connection with the sale of the Transfer
Restricted Securities pursuant to this Agreement exceeds the amount of any
damages which such Indemnified Person has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Indemnified Persons' obligations to contribute
pursuant to this Section 6(d) are several in proportion to the respective
amount of Transfer Restricted Securities included in and sold pursuant to any
such Registration Statement by each Indemnified Person and not joint.
SECTION 7. UNDERWRITTEN REGISTRATION.
If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be investment bankers of recognized national
standing selected by the Holders of a majority in interest of such Transfer
Restricted Securities included in such offering, subject to the consent of
the Company (which will not be unreasonably withheld or delayed).
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No person may participate in any underwritten registration hereunder
unless such person agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up agreements and other documents reasonably
required under the terms of such underwriting arrangements.
SECTION 8. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company or by a Holder
of any of their respective obligations under this Agreement, each Holder or
the Company, in addition to being entitled to exercise all rights granted by
law, including, without limitation, recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agree that, in the event of any action for
specific performance in respect of such breach, they shall waive the defense
that a remedy at law would be adequate. This Section 8(a) shall not apply to
any breach for which Liquidated Damages have been specifically provided
hereunder.
(b) NO INCONSISTENT AGREEMENTS. The Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The Company is not currently a party to any agreement
granting any registration rights with respect to any of its securities to any
person which conflicts with the Company's obligations hereunder. Without
limiting the generality of the foregoing, without the written consent of the
Holders of a majority in interest of the Transfer Restricted Securities, the
Company shall not grant to any person the right to request it to register any
of its securities under the Securities Act unless the rights so granted are
subject in all respect to the prior rights of the Holders set forth herein,
and are not otherwise in conflict or inconsistent with the provisions of this
Agreement.
(c) NO ADVERSE ACTION AFFECTING THE TRANSFER RESTRICTED SECURITIES.
The Company will not take any action with respect to the Transfer Restricted
Securities which would adversely affect the ability of any of the Holders to
include such Transfer Restricted Securities in a registration undertaken
pursuant to this Agreement.
(d) NO PIGGYBACK ON REGISTRATIONS. After the date hereof, the
Company shall not grant to any of its security holders (other than the
Holders in such capacity) the right to include any of its securities in any
Shelf Registration Statement.
18
<PAGE>
(e) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof, may not be given, without the written consent of the Holders of a
majority in interest of the Transfer Restricted Securities; PROVIDED,
HOWEVER, that, for the purposes of this Agreement, Transfer Restricted
Securities that are owned, directly or indirectly, by either the Company or
an Affiliate of the Company are not deemed outstanding. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose
Transfer Restricted Securities are being sold pursuant to an underwritten
offering and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of a majority in interest of the Transfer
Restricted Securities being sold by such Holders pursuant to such an
underwritten offering; PROVIDED, HOWEVER, that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.
(f) NOTICES. All notices and other communications provided for
herein shall be made in writing by hand-delivery, next day air courier,
certified first-class mail, return receipt requested or telecopy:
(i) if to a Holder, to the address of such Holder as it
appears in the Notice and Questionnaire, or, if not so specified,
in the Common Stock or Notes register of the Company, as
applicable;
(ii) if to the Company, to:
TriQuint Semiconductor, Inc.
2300 N.E. Brookwood Parkway
Hillsboro, Oregon 97124
Attn.: Chief Financial Officer
Telecopy No.: (503) 651-9000
with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Attn: Robert P. Latta, Esq.
Telecopy No.: (650) 845-5000
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given, when delivered by
hand, if personally delivered; one Business Day after being timely delivered
to a next-day air courier, five Business Days after being deposited in the
mail, postage prepaid, if mailed;
19
<PAGE>
and when receipt is acknowledged by the recipient's telecopier machine, if
telecopied.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each existing and future
Holder. The Company may not assign its rights or obligations hereunder
without the prior written consent of the Holders of a majority in interest of
the Transfer Restricted Securities, other than by operation of law pursuant
to a merger or consolidation to which the Company is a party.
(h) COUNTERPARTS. This Agreement may be executed in any number of
counterparts by the parties hereto, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same instrument.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
(j) SEVERABILITY. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction.
It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(k) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
All references made in this Agreement to "SECTION" and "PARAGRAPH" refer to
such Section or paragraph of this Agreement, unless expressly stated
otherwise.
(l) ATTORNEYS' FEES. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover its reasonable attorneys' fees in addition to
any other available remedy.
20
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
TRIQUINT SEMICONDUCTOR, INC.
By___________________________
Name:
Title:
The foregoing Registration Rights
Agreement is hereby confirmed and
agreed to as of the date first
written above.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SG COWEN SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:______________________________
Authorized Signatory
Acting on behalf of itself and the Initial Purchasers
21
<PAGE>
Exhibit A
NOTICE
The undersigned beneficial owner (the "Selling Securityholder") of
Transfer Restricted Securities hereby gives notice to the Company of its
intention to sell or otherwise dispose of Transfer Restricted Securities
beneficially owned by it and listed below in Item (3), unless otherwise
specified in Item (3), pursuant to the Shelf Registration Statement. The
undersigned, by signing and returning this Notice and Questionnaire,
understands and agrees that it will be bound by the terms and conditions of
this Notice and Questionnaire and the Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, the undersigned has
agreed to indemnify and hold harmless the Company, the Company's directors
and the Company's officers who sign the Shelf Registration Statement and each
person, if any, who controls the Company within the meaning of either Section
15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), from and against certain losses
arising in connection with statements concerning the undersigned made in the
Shelf Registration Statement or the related prospectus in reliance upon the
information provided in this Notice and Questionnaire.
The undersigned hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:
QUESTIONNAIRE
1. (a) Full Legal Name of Selling Securityholder:
_____________________________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as (a)
above) through which Transfer Restricted Securities listed in Item
(3) below are held:
_____________________________________________________________________
(c) Full Legal Name of DTC Participant (if applicable and if not the
same as (b) above) through which Transfer Restricted Securities
listed in Item (3) below are held:
_____________________________________________________________________
A-1
<PAGE>
2. Address for Notices to Selling Securityholder:
_____________________________________________________________________
Telephone:___________________________________________________________
Fax:_________________________________________________________________
Contact Person:______________________________________________________
3. Beneficial Ownership of Transfer Restricted Securities:
(a) Type and Amount of Transfer Restricted Securities beneficially
owned:
_____________________________________________________________________
(b) CUSIP No(s). of such Transfer Restricted Securities beneficially
owned:
_____________________________________________________________________
(c) Type and Amount of Transfer Restricted Securities to be registered:
_____________________________________________________________________
4. Beneficial Ownership of Other Securities of the Company owned by the
Selling Securityholder:
EXCEPT AS SET FORTH BELOW IN THIS ITEM (4), THE UNDERSIGNED IS NOT THE
BENEFICIAL OR REGISTERED OWNER OF ANY SECURITIES OF THE COMPANY OTHER
THAN THE TRANSFER RESTRICTED SECURITIES LISTED ABOVE IN ITEM (3).
(a)Type and Amount of Other Securities beneficially owned:
_____________________________________________________________________
_____________________________________________________________________
(b)CUSIP No(s). of such Other Securities beneficially owned:
_____________________________________________________________________
5. Relationship with the Company:
EXCEPT AS SET FORTH BELOW, NEITHER THE UNDERSIGNED NOR ANY OF ITS
AFFILIATES, OFFICERS, DIRECTORS OR PRINCIPAL EQUITY HOLDERS (5% OR
MORE) HAS HELD ANY POSITION OR OFFICE OR HAS HAD ANY OTHER MATERIAL
RELATIONSHIP WITH THE COMPANY (OR ITS PREDECESSORS OR AFFILIATES)
DURING THE PAST THREE YEARS.
State any exceptions here:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
A-2
<PAGE>
6. Plan of Distribution:
EXCEPT AS SET FORTH BELOW, THE UNDERSIGNED (INCLUDING ITS DONEES OR
PLEDGEES) INTENDS TO DISTRIBUTE THE TRANSFER RESTRICTED SECURITIES
LISTED ABOVE IN ITEM (3) PURSUANT TO THE SHELF REGISTRATION STATEMENT
ONLY AS FOLLOWS (IF AT ALL): SUCH TRANSFER RESTRICTED SECURITIES MAY BE
SOLD FROM TIME TO TIME DIRECTLY BY THE UNDERSIGNED OR ALTERNATIVELY,
THROUGH UNDERWRITERS, BROKER-DEALERS OR AGENTS. IF THE TRANSFER
RESTRICTED SECURITIES ARE SOLD THROUGH UNDERWRITERS OR BROKER-DEALERS,
THE SELLING SECURITYHOLDER WILL BE RESPONSIBLE FOR UNDERWRITING
DISCOUNTS AND COMMISSIONS AND/OR AGENT'S COMMISSIONS. SUCH TRANSFER
RESTRICTED SECURITIES MAY BE SOLD IN ONE OR MORE TRANSACTIONS AT FIXED
PRICES, AT PREVAILING MARKET PRICES AT THE TIME OF SALE, AT VARYING
PRICES DETERMINED AT THE TIME OF SALE, OR AT NEGOTIATED PRICES. SUCH
SALES MAY BE EFFECTED IN TRANSACTIONS (WHICH MAY INVOLVE CROSSES OR
BLOCK TRANSACTIONS) (i) ON ANY NATIONAL SECURITIES EXCHANGE OR
QUOTATION SERVICE ON WHICH THE TRANSFER RESTRICTED SECURITIES MAY BE
LISTED OR QUOTED AT THE TIME OF SALE, (ii) IN THE OVER-THE-COUNTER
MARKET, (iii) IN TRANSACTIONS OTHERWISE THAN ON SUCH EXCHANGES OR
SERVICES OR IN THE OVER-THE-COUNTER MARKET, OR (iv) THROUGH THE WRITING
OF OPTIONS. IN CONNECTION WITH SALES OF THE TRANSFER RESTRICTED
SECURITIES OR OTHERWISE, THE UNDERSIGNED MAY ENTER INTO HEDGING
TRANSACTIONS WITH BROKER-DEALERS, WHICH MAY IN TURN ENGAGE IN SHORT
SALES OF THE TRANSFER RESTRICTED SECURITIES IN THE COURSE OF HEDGING
THE POSITIONS THEY ASSUME. THE SELLING SECURITYHOLDER MAY ALSO SELL
TRANSFER RESTRICTED SECURITIES SHORT AND DELIVER TRANSFER RESTRICTED
SECURITIES TO CLOSE OUT SUCH SHORT POSITIONS, OR LOAN OR PLEDGE
TRANSFER RESTRICTED SECURITIES TO BROKER-DEALERS THAT IN TURN MAY SELL
SUCH SECURITIES.
State any exceptions here:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Note: In no event will such method(s) of distribution take the form of
an underwritten offering of the Transfer Restricted Securities without
the prior agreement of the Company.
The undersigned acknowledges that it understands its obligation to
comply with the provisions of the Exchange Act and the rules thereunder
relating to stock manipulation, particularly Regulation M thereunder (or any
successor rules or regulations), in connection with any offering of Transfer
Restricted Securities pursuant to the Shelf Registration Statement. The
undersigned agrees that neither it nor any person acting on its behalf will
engage in any transaction in violation of such provisions.
A-3
<PAGE>
The Selling Securityholder hereby acknowledges its obligations under
the Registration Rights Agreement to indemnify and hold harmless certain
persons as set forth therein. Pursuant to the Registration Rights Agreement,
the Company has agreed under certain circumstances to indemnify the Selling
Securityholders against certain liabilities.
In accordance with the undersigned's obligation under the
Registration Rights Agreement to provide such information as may be required
by law for inclusion in the Shelf Registration Statement, the undersigned
agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof at
any time while the Shelf Registration Statement remains effective. All
notices hereunder and pursuant to the Registration Rights Agreement shall be
made in writing, by hand delivery, first-class mail or air courier
guaranteeing overnight delivery at the address set forth below. In the
absence of any such notification, the Company shall be entitled to continue
to rely on the accuracy of the information in this Notice and Questionnaire.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to items (1) through (6) above
and inclusion of such information in the Shelf Registration Statement and the
Prospectus. The undersigned understands that such information will be relied
upon by the Company in connection with the preparation, amendment or
supplementation of the Shelf Registration Statement and the Prospectus.
The terms of this Notice and Questionnaire, and the representations
and warranties contained herein, shall be binding upon, shall inure to the
benefit of and shall be enforceable by the respective successors, heirs,
personal representatives, and assigns of the Company and the Selling
Securityholder with respect to the Transfer Restricted Securities
beneficially owned by the Selling Securityholder and listed in Item (3)
above. This agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York applicable to contracts
made in the State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Date:___________________ __________________________________
Selling Securityholder (PRINT OR
TYPE FULL LEGAL NAME OF BENEFICIAL
OWNER OF TRANSFER RESTRICTED
SECURITIES)
By:_______________________________
Name:
Title:
A-4
<PAGE>
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:
TriQuint Semiconductor, Inc.
2300 N.E. Brookwood Parkway
Hillsboro, Oregon 97124
Attention: Chief Financial Officer
WITH A COPY TO:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Robert P. Latta, Esq.
A-5
<PAGE>
EXHIBIT 5.1
[WILSON SONSINI GOODRICH & ROSATI LETTERHEAD]
May 2, 2000
TriQuint Semiconductor, Inc.
2300 N. E. Brookwood Parkway
Hillsboro, Oregon 97124
RE: TRIQUINT SEMICONDUCTOR, INC.--REGISTRATION STATEMENT ON FORM S-3M
Ladies and Gentlemen:
We are acting as counsel for TriQuint Semiconductor, Inc., a Delaware
corporation (the "Company") in connection with the registration under the
Securities Act of 1933, as amended, of $345,000,000 aggregate principal amount
of 4% Convertible Subordinated Notes due 2007 (the "Notes"), and 2,544,237
shares of Common Stock, $0.001 par value (the "Common Stock"), of the Company,
and an indeterminate number of additional shares of Common Stock as may be
required for issuance upon conversion of the Notes (the "Conversion Shares").
The Notes and the Conversion Shares are to be offered and sold by certain
securityholders of the Company (the "Selling Securityholders"). In this regard
we have participated in the preparation of a Registration Statement on Form S-3
relating to the Notes and the Conversion Shares. (Such Registration Statement,
as it may be amended from time to time, is herein referred to as the
"Registration Statement").
We are of the opinion that the Notes have been duly authorized and are
binding obligations of the Company entitled to the benefits of the Indenture
dated as of February 24, 2000, between the Company and State Street Bank and
Trust Company of California, N.A., as Trustee. We are of the further opinion
that the Conversion Shares have been duly authorized and, when issued by the
Company upon conversion of the Notes in accordance with the Indenture, will be
legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Registration Statement and in the Prospectus included therein.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
<PAGE>
Exhibit 12.1
TRIQUINT SEMICONDUCTOR, INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods
indicated is as follows (dollars in thousands):
<TABLE>
<CAPTION>
- ------------------------------------------------------ --------- --------- --------- --------- --------- ------------------
Three Months Ended
1995 1996 1997 1998(1) 1999 March 31, 2000
- ------------------------------------------------------ --------- --------- --------- --------- --------- ------------------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS:
- ------------------------------------------------------ --------- --------- --------- --------- --------- ------------------
Income before provision for income taxes $3,145 $6,518 $7,750 $(3,861) $29,372 $17,310
- ------------------------------------------------------ --------- --------- --------- --------- --------- ------------------
Add: fixed charges, net of capitalized interest 541 1,027 4,181 7,680 7,656 3,345
- ------------------------------------------------------ --------- --------- --------- --------- --------- ------------------
3,686 7,545 11,131 3,819 37,028 20,705
- ------------------------------------------------------ --------- --------- --------- --------- --------- ------------------
Fixed Charges:
- ------------------------------------------------------ --------- --------- --------- --------- --------- ------------------
Interest expense 529 1,015 1,463 1,454 1,062 1,756
- ------------------------------------------------------ --------- --------- --------- --------- --------- ------------------
Interest portion of rental expense 12 12 2,718 4,948 5,575 1,639
- ------------------------------------------------------ --------- --------- --------- --------- --------- ------------------
541 1,027 4,181 7,680 7,656 3,395
- ------------------------------------------------------ --------- --------- --------- --------- --------- ------------------
Ratio of Earnings to Fixed Charges 6.81x 7.35x 2.85x NM 5.43x 6.08
- ------------------------------------------------------ --------- --------- --------- --------- --------- ------------------
</TABLE>
- -----------------------
(1) In 1998, earnings were insufficient to cover fixed charges by $3.9 million.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
TriQuint Semiconductor, Inc.:
We consent to the use of our report dated February 4, 2000, except for Note 13
which is as of February 11, 2000, with respect to the consolidated balance
sheets of TriQuint Semiconductor, Inc. as of December 31, 1999 and 1998, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1999,
incorporated herein by reference and to the reference to our firm under the
heading "Experts" in the Registration Statement.
/s/ KPMG LLP
KPMG LLP
Portland, Oregon
April 28, 2000
<PAGE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
_________
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) /x/
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
United States 06-1143380
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
633 West 5th Street, 12th Floor, Los Angeles, California 90071
(Address of principal executive offices) (Zip Code)
Lynda A. Vogel, Senior Vice President and Managing Director
633 West 5th Street, 12th Floor, Los Angeles, California 90071
(213) 362-7399
(Name, address and telephone number of agent for service)
TRIQUINT SEMICONDUCTOR, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 95-3654013
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2300 N.E. BROOKWOOD PARKWAY HILLSBORO, OREGON 97124
(Address of principal executive offices) (Zip Code)
4% CONVERTIBLE SUBORDINATED NOTES DUE 2007
(TYPE OF SECURITIES)
<PAGE>
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of the Currency, Western District Office, 50 Fremont
Street, Suite 3900, San Francisco, California, 94105-2292
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its
parent, State Street Bank and Trust Company.
(See notes on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN
EFFECT.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as an
Exhibit with corresponding exhibit number to the Form T-1 of Western
Digital Corporation, filed pursuant to Section 305(b)(2) of the
Trust Indenture Act of 1939, as amended (the "Act"), on May 12, 1998
(Registration No. 333-52463), and is incorporated herein by
reference.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A Certificate of Corporate Existence (with fiduciary powers)
from the Comptroller of the Currency, Administrator of National
Banks is on file with the Securities and Exchange Commission as an
Exhibit with corresponding exhibit number to the Form T-1 of Western
Digital Corporation, filed pursuant to Section 305(b)(2) of the Act,
on May 12, 1998 (Registration No. 333-52463), and is incorporated
herein by reference.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE
TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE
DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
Authorization of the Trustee to exercise fiduciary powers
(included in Exhibits 1 and 2; no separate instrument).
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as an Exhibit with
corresponding exhibit number to the Form T-1 of Western Digital
Corporation, filed pursuant to Section 305(b)(2) of the Act, on May
12, 1998 (Registration No. 333-52463), and is incorporated herein by
reference.
1
<PAGE>
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR
IS IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR
EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a part
hereof.
NOTES
In answering any item of this Statement of Eligibility which
relates to matters peculiarly within the knowledge of the obligor or any
underwriter for the obligor, the trustee has relied upon information
furnished to it by the obligor and the underwriters, and the trustee
disclaims responsibility for the accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended,
if necessary, to reflect any facts which differ from those stated and which
would have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company of California,
National Association, a national banking association, organized and existing
under the laws of the United States of America, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Los Angeles, and State of
California, on the 28TH DAY OF APRIL, 2000.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, NATIONAL ASSOCIATION
By: /S/ STEPHEN RIVERO
-------------------------------
NAME: STEPHEN RIVERO
TITLE: VICE PRESIDENT
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the proposed issuance
by Triquint Semiconductor, Inc. of its 4% Convertible Subordinated Notes Due
2007, we hereby consent that reports of examination by Federal, State,
Territorial or District authorities may be furnished by such authorities to
the Securities and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, NATIONAL ASSOCIATION
By: /S/ STEPHEN RIVERO
-------------------------------
NAME: STEPHEN RIVERO
TITLE: VICE PRESIDENT
DATED: APRIL 28, 2000
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition and Income for A Bank With Domestic Offices
Only and Total Assets of Less Than $100 Million of State Street Bank and
Trust Company of California, a national banking association duly organized
and existing under and by virtue of the laws of the United States of America,
at the close of business MARCH 31, 2000, published in accordance with a call
made by the Federal Deposit Insurance Corporation pursuant to the required
law: 12 U.S.C. Section 324 (State member banks); 12 U.S.C. Section 1817
(State nonmember banks); and 12 U.S.C. Section 161 (National banks).
<TABLE>
<CAPTION>
Thousands
of Dollars
<S> <C> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin...... 6,121
Interest-bearing balances............................... 0
Securities.................................................. 38
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary..................... 0
Loans and lease financing receivables:
Loans and leases, net of unearned income................ 0
Allowance for loan and lease losses..................... 0
Allocated transfer risk reserve......................... 0
Loans and leases, net of unearned income and allowances 0
Assets held in trading accounts............................. 0
Premises and fixed assets................................... 22
Other real estate owned..................................... 0
Investments in unconsolidated subsidiaries.................. 0
Customers' liability to this bank on acceptances outstanding 0
Intangible assets........................................... 0
Other assets................................................ 1,213
-----
Total assets................................................ 7,394
=====
LIABILITIES
Deposits:
In domestic offices..................................... 0
Noninterest-bearing................................. 0
Interest-bearing.................................... 0
In foreign offices and Edge subsidiary.................. 0
Noninterest-bearing................................. 0
Interest-bearing.................................... 0
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary..................... 0
Demand notes issued to the U.S. Treasury and
Trading Liabilities..................................... 0
Other borrowed money........................................ 0
Subordinated notes and debentures........................... 0
Bank's liability on acceptances executed and outstanding.... 0
Other liabilities........................................... 3,530
Total liabilities........................................... 3,530
-----
EQUITY CAPITAL
Perpetual preferred stock and related surplus............... 0
Common stock................................................ 500
Surplus..................................................... 750
Undivided profits and capital reserves/Net unrealized
holding gains (losses).................................. 2,614
Cumulative foreign currency translation adjustments......... 0
Total equity capital........................................ 3,864
-----
Total liabilities and equity capital........................ 7,394
=====
</TABLE>
4
<PAGE>
I, John J. Saniuk, Vice President and Comptroller of the above named bank do
hereby declare that this Report of Condition and Income for this report date
have been prepared in conformance with the instructions issued by the
appropriate Federal regulatory authority and is true to the best of my
knowledge and belief.
/S/ JOHN J. SANIUK
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and
correct.
/S/ ALAN D. GREENE
/S/ BRYAN R. CALDER
/S/ LYNDA A. VOGEL
5
