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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 16, 2001
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SANMINA CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 77-0228183
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
2700 NORTH FIRST STREET
SAN JOSE, CALIFORNIA 95134
(408) 964-3500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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JURE SOLA
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
SANMINA CORPORATION
2700 NORTH FIRST STREET
SAN JOSE, CALIFORNIA 95134
(408) 964-3500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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COPIES TO:
CHRISTOPHER D. MITCHELL, ESQ.
MICHAEL A. OCCHIOLINI, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable 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. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF EACH CLASS OF MAXIMUM OFFERING MAXIMUM OFFERING AMOUNT OF REGISTRATION
SECURITIES TO BE REGISTERED PRICE(1)(2) PRICE PER UNIT FEE
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Common Stock, $0.01 par value................ -- -- --
Preferred Stock, $0.01 par value............. -- -- --
Depositary Shares............................ -- -- --
Debt Securities.............................. -- -- --
Total(3)................................... $2,000,000,000 100%(3) $500,000
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(1) Or (i) if any Debt Securities are issued at an original issue discount, such
greater principal amount as shall result in an aggregate initial offering
price equal to the amount to be registered or (ii) if any Debt Securities
are issued with a principal amount denominated in a foreign currency or
composite currency, such principal amount as shall result in an aggregate
initial offering price equivalent thereto in United States dollars at the
time of initial offering.
(2) These figures are estimates made solely for the purpose of calculating the
registration fee pursuant to Rule 457(o). Exclusive of accrued interest, if
any, on the Debt Securities.
(3) The proposed maximum offering price per unit will be determined by us in
connection with the issuance of the Securities.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER
TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED MAY 16, 2001
PROSPECTUS
$2,000,000,000
SANMINA CORPORATION
BY THIS PROSPECTUS, WE MAY OFFER --
Common Stock
Preferred Stock
Depositary Shares
Debt Securities
SEE "RISK FACTORS" ON PAGE 4 FOR INFORMATION YOU SHOULD
CONSIDER BEFORE BUYING THE SECURITIES.
Our common stock is listed on the Nasdaq National Market under the symbol
"SANM." On May 15, 2001, the last reported sale price of our common stock on the
Nasdaq National Market was $30.91 per share.
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We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest.
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This prospectus may not be used to offer and sell securities unless
accompanied by a prospectus supplement.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus is dated , 2001
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SUMMARY
This prospectus is part of a Registration Statement on Form S-3 that we
filed with the Securities and Exchange Commission utilizing a "shelf"
registration process. Under this shelf process, we may, over the next two years,
sell any combination of securities described in this prospectus in one or more
offerings, up to a total dollar amount of $2,000,000,000. This prospectus
provides you with a general description of the securities we may offer. Each
time we sell securities, we will provide a prospectus supplement that will
contain specific information about the terms of that offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and any prospectus supplement
together with additional information described below under the heading "Where
You Can Find More Information."
SANMINA CORPORATION
Sanmina is a leading independent provider of customized integrated
electronic manufacturing services, known as EMS, including turnkey electronic
assembly and manufacturing management services, to original equipment
manufacturers, or OEMs, in the electronics industry. Our electronics
manufacturing services consist primarily of the design and manufacture of
complex printed circuit board assemblies using surface mount and
pin-through-hole interconnection technologies, the manufacture of custom
designed backplane assemblies, fabrication of complex multi-layered printed
circuit boards, metal stamping and plating, electronic enclosure systems,
subsystem assembly, testing, and assembly of completed systems and direct order
fulfillment. In addition to assembly, turnkey manufacturing management also
involves procurement and materials management, as well as consultation on
printed circuit board design and manufacturing. We also manufacture custom cable
and wire harness assemblies for electronic industry OEMs. In addition, we have
developed enclosure systems capabilities which manufacture and assemble metal
enclosures that house large electronic systems and subsystems. As a result of
these services, Sanmina can offer an end to end total EMS solution for its
customers.
We were originally incorporated in California in October 1980. In May 1989,
we were reincorporated into Delaware. Our principal offices are located at 2700
North First Street, San Jose, California 95134. Our telephone number at this
location is (408) 964-3500. Our world wide web site is located at
www.sanmina.com. Information contained on our web site does not constitute part
of this prospectus.
THE SECURITIES WE MAY OFFER
We may offer up to $2,000,000,000 of common stock, preferred stock
depositary shares and debt securities. The prospectus supplement will describe
the specific amounts, prices and terms of these securities.
We may sell the securities to or through underwriters, dealers or agents or
directly to purchasers. Our agents and we reserve the sole right to accept and
to reject in whole or in part any proposed purchase of securities. The
prospectus supplement, which we will provide to you each time we offer
securities, will set forth the names of any underwriters, dealers or agents
involved in the sale of the securities and any applicable fee, commission or
discount arrangements with them.
DEBT SECURITIES
We may offer unsecured general obligations in the form of either senior or
subordinated debt. The senior debt securities and the subordinated debt
securities are together referred to in this prospectus as the "debt securities".
The senior debt securities will have the same rank as all of our other
unsecured, unsubordinated debt. The subordinated debt securities will be
entitled to payment only after payment on our senior debt. Senior debt generally
includes all indebtedness for money borrowed by us, except indebtedness that is
stated to be not senior to, or to have the same rank as, or is expressly junior
to the subordinated debt securities.
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The senior and subordinated debt securities will be issued under separate
indentures between Sanmina and Wells Fargo Bank Minnesota, National Association,
as trustee. We have summarized the general features of the debt securities from
the indentures. We encourage you to read the indentures which are exhibits to
our Registration Statement (No. 333- ) and our recent annual report on Form
10-K and our recent quarterly report on Form 10-Q and our recent report on Form
8-K. Instructions on how you can get copies of these documents are provided
below under the heading "Where You Can Find More Information."
GENERAL INDENTURE PROVISIONS THAT APPLY TO SENIOR AND SUBORDINATED DEBT
- Neither indenture limits the amount of debt that we may issue or provides
holders any protection should there be a highly leveraged transaction
involving our company.
- The indentures allow us to merge or to consolidate with another U.S.
entity or convey, transfer or lease our properties and assets
substantially as an entirety to another U.S. entity, as long as certain
conditions are met. If these events occur, the other company will be
required to assume our responsibilities on the debt securities, and we
will be released from all liabilities and obligations (except in the case
of a lease).
- The indentures provide that holders of a majority of the total principal
amount of the debt outstanding in any series may request in writing that
we enter into a supplemental indenture with the trustee to change certain
of our obligations or your rights concerning the debt. But to change the
payment of principal, interest, or adversely effect the right to convert
or certain other matters, every holder in that series must consent.
- We may discharge the indentures and defease restrictive covenants by
depositing sufficient funds with the trustee to pay the obligations when
due, as long as certain conditions are met. The trustee would pay all
amounts due to you on the debt from the deposited funds.
EVENTS OF DEFAULT
Each of the following is an event of default under the indentures:
- Principal not paid when due,
- Sinking fund payment not made when due,
- Failure to pay interest for 30 days,
- Covenants not performed for 90 days after notice,
- Bankruptcy, insolvency or reorganization of Sanmina, and
- Any other event of default in the indenture.
REMEDY
Upon an event of default, other than a bankruptcy, insolvency or
reorganization, the trustee or holders of 25% of the principal amount
outstanding in a series may declare the outstanding principal immediately
payable. However, the holders of a majority in principal amount may, under
certain circumstances, rescind this action.
GENERAL INDENTURE PROVISIONS THAT APPLY ONLY TO SENIOR DEBT SECURITIES
The indenture relating to the senior debt securities contains covenants
restricting our ability to incur liens and enter into sale and leaseback
transactions.
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GENERAL INDENTURE PROVISIONS THAT APPLY ONLY TO SUBORDINATED DEBT SECURITIES
The subordinated debt securities will be subordinated to all senior debt.
COMMON STOCK
We may offer our common stock, par value $0.01 per share. Common stock
holders are entitled to receive dividends declared by the board of directors out
of funds legally available for the payment of dividends, subject to rights, if
any, of preferred stock holders. Currently, we do not pay a dividend. Each
holder of common stock is entitled to one vote per share. The holders of common
stock have no preemptive rights or cumulative voting rights.
PREFERRED STOCK AND DEPOSITARY SHARES
We may issue preferred stock in one or more series and will determine the
dividend, voting, and conversion rights and other provisions at the time of
sale. We may also issue fractional shares of preferred stock that will be
represented by depositary shares and depositary receipts.
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RISK FACTORS
Before you invest in any of our securities, you should be aware of various
risks, including those described below. You should carefully consider these risk
factors, together with all of the other information included or incorporated by
reference in this prospectus and in the prospectus supplement, before you decide
whether to purchase any of our securities. The risks set out below are not the
only risks we face.
If any of the following risks occur, our business, financial condition and
results of operations could be materially adversely affected. In such case, the
trading price of our securities could decline, and you may lose all or part of
your investment.
Keep these risk factors in mind when you read "forward-looking" statements
elsewhere in this prospectus, in the documents incorporated herein by reference
and in the prospectus supplement. These are statements that relate to our
expectations for future events and time periods. Generally, the words
"anticipate," "expect," "intend" and similar expressions identify
forward-looking statements. Forward-looking statements involve risks and
uncertainties, and future events and circumstances could differ significantly
from those anticipated in the forward-looking statements.
WE ARE HEAVILY DEPENDENT ON THE ELECTRONICS INDUSTRY, AND CHANGES IN THE
INDUSTRY COULD HARM OUR BUSINESS AND OPERATING RESULTS.
Our business is heavily dependent on the health of the electronics
industry. Our customers are manufacturers in the communications, industrial and
medical instrumentation and high-speed computer systems sectors of the
electronics industry. These industry sectors, and the electronics industry as a
whole, are subject to rapid technological change and product obsolescence. Our
customers can discontinue or modify products containing components manufactured
by us. Any discontinuance or modification of orders or commitments could harm
our operating results.
The electronics industry is also subject to economic cycles and has in the
past experienced, and is likely in the future to experience, recessionary
periods. In particular, many sectors of the electronics industry are currently
experiencing a downturn in economic conditions. This downturn is leading to
reduced demand for the services provided by EMS companies. These changes in
demand and in economic conditions have resulted and may continue to result in
customer rescheduling of orders and shipments, which could affect our results of
operations. In addition, a protracted, general recession in the electronics
industry could have a material adverse effect on our business, financial
condition and results of operations.
WE TYPICALLY DO NOT OBTAIN LONG-TERM VOLUME PURCHASE COMMITMENTS FROM CUSTOMERS,
AND CANCELLATIONS AND RESCHEDULING OF PURCHASE ORDERS COULD HARM OUR OPERATING
RESULTS AND CAUSE OUR STOCK PRICE TO DECLINE.
We typically do not obtain long-term volume purchase contracts from our
customers. Customer orders may be canceled and volume levels may be changed or
delayed. For example, we have recently experienced certain cancellation and
rescheduling of shipment dates of customer orders. As a result, our results of
operations for the second quarter of 2001 were adversely affected. Results of
operations in future fiscal periods may continue to be affected by customer
cancellations and reschedulings as well as by changes in shipment volumes. We
cannot assure you that we will be able to replace canceled, delayed or reduced
contracts or purchase orders with new business. As a result, future
cancellations or rescheduling of orders or commitments could cause our operating
results to be below expectations, which would likely cause our stock price to
decline.
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OUR RESULTS OF OPERATIONS CAN BE AFFECTED BY A VARIETY OF FACTORS, WHICH COULD
CAUSE OUR OPERATING RESULTS TO FAIL TO MEET EXPECTATIONS AND OUR STOCK PRICE TO
DECLINE.
Our results of operations have varied and may continue to fluctuate
significantly from period to period, including on a quarterly basis. Our
operating results are affected by a number of factors. These factors include:
- timing of orders from major customers;
- mix of products ordered by and shipped to major customers, including the
mix between backplane assemblies and printed circuit board assemblies;
- the volume of orders as related to our capacity;
- pricing and other competitive pressures;
- component shortages, which could cause us to be unable to meet customer
delivery schedules;
- economic conditions in the electronics industry in general, and in the
communications sector in particular;
- our ability to effectively manage inventory and fixed assets; and
- our ability to time expenditures in anticipation of future sales.
Our results can also be significantly influenced by development and
introduction of new products by our customers. From time to time, we experience
changes in the volume of sales to each of our principal customers, and operating
results may be affected on a period-to-period basis by these changes. Our
customers generally require short delivery cycles, and a substantial portion of
our backlog is typically scheduled for delivery within six months. Quarterly
sales and operating results therefore depend in large part on the volume and
timing of bookings received during the quarter, which are difficult to forecast.
Our backlog also affects our ability to plan production and inventory levels,
which could lead to fluctuations in operating results. In addition, a
significant portion of our operating expenses are relatively fixed in nature and
planned expenditures are based in part on anticipated orders. Any inability to
adjust spending quickly enough to compensate for any revenue shortfall may
magnify the adverse impact of such revenue shortfall on our results of
operations. Results of operations in any period should not be considered
indicative of the results to be expected for any future period. In addition,
fluctuations in operating results may also result in fluctuations in the price
of our common stock.
WE ARE DEPENDENT ON A SMALL NUMBER OF CUSTOMERS FOR A LARGE PORTION OF OUR
REVENUES, AND DECLINES IN SALES TO MAJOR CUSTOMERS COULD HARM OUR OPERATING
RESULTS.
A small number of customers are responsible for a significant portion of
our net sales. During fiscal year 2000, fiscal year 1999 and fiscal year 1998,
sales to our ten largest customers accounted for 54.8%, 48.1% and 40.2%,
respectively, of our net sales. For fiscal 2000, only sales to one customer,
Nortel Networks, represented more than 10.0% of our net sales. For fiscal 1999
and 1998, no single customer individually exceeded 10.0% of net sales. This
customer information gives effect to the restatement of our results of
operations to reflect our recent acquisition of AB Segerstrom and Svensson
("Segerstrom"). Although we cannot assure you that our principal customers will
continue to purchase products and services from us at current levels, if at all,
we expect to continue to depend upon our principal customers for a significant
portion of our net sales. Our customer concentration could increase or decrease,
depending on future customer requirements, which will be dependent in large part
on market conditions in the electronics industry segments in which our customers
participate. The loss of one or more major customers or declines in sales to
major customers could significantly harm our business and operating results and
lead to declines in the price of our common stock.
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WE ARE SUBJECT TO RISKS ASSOCIATED WITH OUR STRATEGY OF ACQUISITIONS, AND THESE
RISKS COULD HARM OUR OPERATING RESULTS AND CAUSE OUR STOCK PRICE TO DECLINE.
We have, for the past several fiscal years, pursued a strategy of growth
through acquisitions. These acquisitions have involved acquisitions of entire
companies.
In addition, we have in other instances acquired selected assets,
principally equipment, inventory and customer contracts and, in certain cases,
facilities or facility leases. Acquisitions of companies and businesses and
expansion of operations involve certain risks, including the following:
- the potential inability to successfully integrate acquired operations and
businesses or to realize anticipated synergies, economies of scale or
other value;
- diversion of management's attention;
- difficulties in scaling up production at new sites and coordinating
management of operations at new sites;
- difficulties associated with managing and integrating operations in
distant geographic locales, such as Europe and Asia;
- the possible need to restructure, modify or terminate customer
relationships of the acquired company; and
- loss of key employees of acquired operations.
Accordingly, we may experience problems in integrating the recently
acquired operations or operations associated with any future acquisition. We
therefore cannot assure you that any recent or future acquisition will result in
a positive contribution to our results of operations. Furthermore, we cannot
assure you that we will realize value from any acquisition which equals or
exceeds the consideration paid. In particular, the successful combination of us
and any businesses we acquire in the future will require substantial effort from
each company, including the integration and coordination of sales and marketing
efforts. The diversion of the attention of management and any difficulties
encountered in the transition process, including, the interruption of, or a loss
of momentum in, the activities of any future acquisition, problems associated
with integration of management information and reporting systems, and delays in
implementation of consolidation plans, could harm our ability to realize the
anticipated benefits of any future acquisition. Any failure by us to realize the
anticipated benefits of our acquisitions could harm our business and operating
results, and could cause the price of our common stock to decline. In addition,
future acquisitions may result in dilutive issuances of equity securities, the
incurrence of additional debt, large one-time write-offs and the creation of
goodwill or other intangible assets that could result in amortization expense.
These factors could harm our business and operating results and cause the price
of our common stock to decline.
In addition, we have pursued and expect to continue to pursue opportunities
to acquire assembly operations being divested by electronics industry OEMs. We
expect that competition for these opportunities among electronics manufacturing
services firms will be intense as these transactions typically enable the
acquiror to enter into long-term supply arrangements with the divesting OEM.
Accordingly, our future results of operations could be harmed if we are not
successful in attracting a significant portion of the OEM divestiture
transactions we pursue. In addition, due to the large scale and long-term nature
of supply arrangements typically entered into in OEM divestiture transactions
and because cost reductions are generally a major reason why the OEM is
divesting operations, pricing of manufacturing services may be less favorable to
the manufacturer than in standard contractual relationships. For example, we
experienced declines in gross margins during fiscal 2000 due to our increase in
sales to Nortel Networks under our supply agreement relating to the operations
it acquired. As we enter into new OEM divestiture transactions, we may
experience further erosion in gross margins.
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WE MAY EXPERIENCE COMPONENT SHORTAGES, WHICH WOULD CAUSE US TO DELAY SHIPMENTS
TO CUSTOMERS, RESULTING IN POTENTIAL DECLINES IN REVENUES AND OPERATING RESULTS.
Recently, a number of components purchased by us and incorporated into
assemblies and subassemblies we produce have been the subject of shortages.
These components include application-specific integrated circuits, capacitors
and connectors. Unanticipated component shortages caused us to be unable to make
certain scheduled shipments to customers during fiscal 2000 and may do so in the
future. The inability to make scheduled shipments in the future could cause us
to experience a shortfall in revenues. We could also experience negative
customer goodwill due to the delay in shipment. Component shortages may also
increase our cost of goods due to premium charges we must pay to purchase
components in short supply and due to changes in the mix of assemblies shipped
to customers. For example, shortages in certain components negatively affected
our operating results and contributed to an increase in inventory levels during
fiscal 2000. Accordingly, component shortages could harm our operating results
for a particular fiscal period due to the resulting revenue shortfall or cost
increases and could also damage customer relationships over a longer-term
period.
WE ARE SUBJECT TO COMPETITION AND TECHNOLOGICAL CHANGE, AND OUR BUSINESS MAY BE
HARMED BY COMPETITIVE PRESSURES AND FAILURE TO ADAPT TO TECHNOLOGICAL CHANGES.
The electronic interconnect industry is highly fragmented and characterized
by intense competition. We compete in the technologically advanced segment of
the interconnect market, which is also highly competitive but is much less
fragmented than the industry as a whole. Our competitors consist primarily of
larger manufacturers of interconnect products, and some of these competitors
have greater manufacturing and financial resources than us, as well as greater
surface mount assembly capacity. As a participant in the interconnect industry,
we must continually develop improved manufacturing processes to accommodate our
customers' needs for increasingly complex products. During periods of recession
in the electronics industry, our competitive advantages in the areas of quick
turnaround manufacturing and responsive customer service may be of reduced
importance to electronics OEMs, who may become more price sensitive. In
addition, captive interconnect manufacturers seek orders in the open market to
fill excess capacity, thereby increasing price competition. We may also be at a
competitive disadvantage with respect to price when compared to manufacturers
with lower cost structures, particularly those with offshore facilities where
labor and other costs are lower.
ENVIRONMENTAL MATTERS ARE A KEY CONSIDERATION IN OUR BUSINESS, AND FAILURE TO
COMPLY WITH THE REQUIREMENTS OF ENVIRONMENTAL LAWS COULD HARM OUR BUSINESS.
We are subject to a variety of local, state and federal environmental laws
and regulations relating to the storage, use, discharge and disposal of
chemicals, solid waste and other hazardous materials used during their
manufacturing processes, as well as air quality regulations and restrictions on
water use. Proper waste disposal is a major consideration for printed circuit
board manufacturers because metals and chemicals are used in the manufacturing
process. Maintenance of environmental controls is also important in the
electronics assembly process. When violations of environmental laws occur, we
can be held liable for damages and the costs of remedial actions and can also be
subject to revocation of permits necessary to conduct our businesses. There can
be no assurance that violations of environmental laws will not occur in the
future as a result of the inability to obtain permits, human error, equipment
failure or other causes. Any permit revocations could require us to cease or
limit production at one or more facilities, which could seriously harm our
business, financial condition and results of operations. Moreover, the failure
to comply with present and future regulations could restrict our ability to
expand facilities or could require us to acquire costly equipment or to incur
other significant expenses to comply with environmental regulations.
Environmental laws could become more stringent over time, imposing greater
compliance costs and increasing risks and penalties associated with violations.
We operate in several environmentally sensitive locations and are subject to
potentially conflicting and changing regulatory agendas of political, business
and environmental groups. Changes or restrictions on discharge limits, emissions
levels, permitting requirements or processes, or material storage or handling
might require a high level of unplanned capital
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investment and/or relocation. Compliance with new or existing regulations could
seriously harm our business, financial condition and results of operations.
WE ARE SUBJECT TO ENVIRONMENTAL CONTINGENCIES AT SITES OPERATED BY ACQUIRED
COMPANIES AND COULD INCUR SUBSTANTIAL COSTS FOR ENVIRONMENTAL REMEDIATION AND
RELATED ACTIVITIES AT THESE SITES.
In November 1997, we acquired Elexsys International Inc. ("Elexsys"), which
became a wholly owned subsidiary of us. Several facilities owned or occupied by
Elexsys at the time of the acquisition, or formerly owned or occupied by Elexsys
or companies acquired by Elexsys, had either soil contamination or contamination
of groundwater underneath or near the facility including the following:
contamination was discovered at Elexsys' Irvine, California facility in 1989 and
Elexsys voluntarily installed a groundwater remediation system at the facility
in 1994. Additional investigation is being undertaken by other parties in the
area at the request of the California Regional Water Quality Control Board. It
is unknown whether any additional remediation activities will be required as a
result of such investigations or whether any third party claims will be brought
against us alleging that they have been damaged in any way by the existence of
the contamination at the Irvine facility. We have been required by the
California Department of Toxic Substances Control to undertake investigation of
soil and/or groundwater at certain facilities formerly owned or occupied by a
predecessor company to Elexsys in Mountain View, California. Depending upon the
results of this soil sampling and groundwater testing, we could be ordered to
undertake soil and/or groundwater cleanup. To date, we have not been ordered to
undertake any soil or groundwater cleanup activities at the Mountain View
facilities, and we do not believe any such activities should be required. Test
results received to date are not sufficient to enable us to determine whether or
not such cleanup activities are likely to be mandated. Contamination has also
been discovered at other current and former Elexsys facilities and has been
reported to the relevant regulatory agencies. No remediation or further
investigation of such contamination has been required by regulatory agencies. To
date, the cost of the various investigations and the cost of operating the
remediation system at the Irvine facility have not been material to our
financial condition. However, in the event we are required to undertake
additional groundwater or soil cleanup, the costs of such cleanup are likely to
be substantial. We are currently unable to estimate the amount of such soil and
groundwater cleanup costs because no soil or groundwater cleanup has been
ordered and we cannot determine from available test results what remediation
activities, if any, are likely to be required. We believe, based on the limited
information currently available, that the cost of any groundwater or soil
clean-up that may be required would not harm our business, financial condition
and results of operations. Nevertheless, the process of remediating contaminated
soil and groundwater is costly, and if we are required to undertake substantial
remediation activities at one or more of the former Elexsys facilities, there
can be no assurance that the costs of such activities would not harm our
business, financial condition and results of operations.
In November 1998, we acquired Altron Incorporated ("Altron"), which became
a wholly owned subsidiary of us. Altron was advised in 1993 by Olin Corporation
("Olin") that contamination resulting from activities of prior owners of
property owned by Olin and located close to the Altron manufacturing plant in
Wilmington, Massachusetts, had migrated under the Altron plant. Olin has assumed
full responsibility for any remediation activities that may be required and has
agreed to indemnify and hold Altron harmless from any and all costs,
liabilities, fines, penalties, charges and expenses arising from and relating to
any action or requirement, whether imposed by statute, ordinance, rule,
regulation, order, decree or by general principles of law to remediate, clean up
or abate contamination emanating from the Olin site. Although we believe that
Olin's assumption of responsibility will result in no remediation cost to Altron
from the contamination, there can be no assurance that Altron will not be
subject to some costs regarding this matter, but we do not anticipate that such
costs, if any, will be material to its financial condition or results of
operations.
We have been named as a potentially responsible party at several
contaminated disposal sites as a result of the past disposal of hazardous waste
by companies acquired by us or their corporate predecessors. While liabilities
for such historic disposal activities have not been material to our financial
condition to date, there can be no guarantee that past disposal activities will
not result in material liability to us in the future.
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HADCO, A WHOLLY OWNED SUBSIDIARY OF US, IS SUBJECT TO ENVIRONMENTAL
CONTINGENCIES AT SITES CURRENTLY OR FORMERLY OPERATED BY IT AND COULD INCUR
SUBSTANTIAL COSTS FOR ENVIRONMENTAL REMEDIATION AND RELATED ACTIVITIES AT THESE
SITES.
Hadco is aware of certain chemicals that exist in the ground at certain of
its facilities. Hadco has notified various governmental agencies and continues
to work with them to monitor and resolve these matters. During March 1995, Hadco
received a Record Of Decision (ROD) from the New York State Department of
Environmental Conservation (NYSDEC), regarding soil and groundwater
contamination at its Owego, New York facility. Based on a Remedial Investigation
and Feasibility Study (RIFS) for apparent on-site contamination at that facility
and a Focused Feasibility Study (FFS), each prepared by environmental
consultants of Hadco, the NYSDEC has approved a remediation program of
groundwater withdrawal and treatment and iterative soil flushing. Hadco has
executed a Modification of the Order on Consent to implement the approved ROD.
Capital equipment for this remediation has already been acquired by Hadco, and
future operation and maintenance costs, which will be incurred and expended over
the estimated life of the program of the next 28 years, are estimated at between
$40,000 and $100,000 per year. In the summer of 1998, NYSDEC took additional
samples from a wetland area near Hadco's Owego facility. Analytical reports of
earlier sediment samples indicated the presence of certain inorganics. The new
samples showed elevated levels of certain metals, but NYSDEC has not made a
determination as to the potential source of such metals, the remedial action to
be taken, or the persons to undertake and/or pay for any remediation. There can
be no assurance that Hadco and/or other third parties will not be required to
conduct additional investigations and remediation at that location, the costs of
which are currently indeterminable.
Hadco has commenced the operation of a groundwater extraction system at its
Derry, New Hampshire facility to address certain groundwater contamination and
migration control issues. It is not possible to make a reliable estimate of the
length of time remedial activity will have to be performed. However, it is
anticipated that the groundwater extraction system will be operated for at least
30 years. There can be no assurance that Hadco will not be required to conduct
additional investigations and remediation relating to the Derry facility. The
total costs of such groundwater extraction system and of conducting any
additional investigations and remediation relating to the Derry facility are not
fully determinable.
From 1974 to 1980, Hadco operated a printed circuit manufacturing facility
in Florida as a lessee. In June 1999, Hadco, Gould Electronics, Inc. ("Gould")
and the Florida Department of Environmental Protection ("FDEP") entered into a
Settlement Agreement which provides that Hadco and Gould will undertake remedial
action based on a Supplemental Contamination Assessment Report and a later
Feasibility Study, which has been prepared by a consultant to Hadco and Gould
and approved by the FDEP. The remedial capital costs are estimated to be $1.4
million. In addition, ongoing monitoring and operation and maintenance costs are
estimated to be $1.4 million, which includes operation of the remediation system
for 8 years and monitoring for 30 years. Actual remedial activities have not yet
commenced.
In March 1993, the EPA notified Hadco Santa Clara of its potential
liability for maintenance and remediation costs in connection with a hazardous
waste disposal facility operated by Casmalia Resources, a California Limited
Partnership, in Santa Barbara County, California.
In June 1997, the United States District Court in Los Angeles, California
approved and entered a Consent Decree among the EPA and 49 entities (including
Hadco Santa Clara) acting through the Casmalia Steering Committee (CSC). The
Consent Decree sets forth the terms and conditions under which the CSC will
carry out work aimed at final closure of the site. Certain closure activities
will be performed by the CSC. Under the Consent Decree, the settling parties
will work with the EPA to pursue the non-settling parties to ensure they
participate in contributing to the closure and long-term operation and
maintenance of the facility.
We have been notified by the City of Santa Clara, California ("City") of a
number of alleged wastewater discharge and other violations of environmental
laws by one of our plants. The City claims that
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the "cost recovery to date now exceeds $400,000." The notice from the City sets
forth that the penalties for the alleged violations could exceed $1.6 million.
We have been cooperating with the City to review the plant's operations to
determine if violations have occurred and to address concerns of the City with
respect to plant operations. The City has notified us that it could file a civil
action to address the violations, but no civil suit has been filed to date.
In March 2001, we acquired approximately 94% of the outstanding shares and
convertible debentures of Segerstrom. It is possible that previous operations
have contaminated soil and/or groundwater at Segerstrom facilities. At the
current time, we believe that the estimated environmental liabilities associated
with the Segerstrom facilities are approximately $4.4 million. We believe, based
on the limited information currently available, that the cost of any groundwater
or soil clean-up that may be required would not harm our business, financial
condition and results of operations. Nevertheless, the process of remediating
contaminated soil and groundwater is costly, and if we are required to undertake
substantial remediation activities at one or more of the former Segerstrom
facilities, there can be no assurance that the costs of such activities would
not harm our business, financial condition and results of operations.
FAILURE TO MANAGE OUR GROWTH MAY SERIOUSLY HARM OUR BUSINESS.
Our business has grown in recent years through both internal expansion and
acquisitions, and continued growth may cause a significant strain on our
infrastructure and internal systems. To manage our growth effectively, we must
continue to improve and expand our management information systems. We will face
additional growth management challenges, particularly as a result of our recent
acquisitions in Europe and Brazil. Future acquisitions, both in the United
States and internationally, could place additional strains on our management
infrastructure. If we are unable to manage growth effectively, our results of
operations could be harmed.
Our existing international operations and plans to expand international
operations involve additional risks, and failure to effectively expand
internationally could harm our operating results. We opened our first overseas
facility, located in Dublin, Ireland, in June 1997. During June 2000 and July
2000, we acquired operations in Ireland, Sweden, Finland, Malaysia and China. In
October 2000, we acquired a 49.9% ownership interest in INBOARD, a wholly owned
subsidiary of Siemens AG, located in Germany. By virtue of the Segerstrom
acquisition, we acquired operations in Sweden, Finland, Brazil, Hungary, and
Scotland. A number of risks are inherent in international operations and
transactions. International sales and operations may be limited or disrupted by
the imposition of government controls, export license requirements, political
and economic instability, trade restrictions, changes in tariffs, labor unrest
and difficulties in staffing, coordinating communications among and managing
international operations. Additionally, our business and operating results may
be harmed by fluctuations in international currency exchange rates as well as
increases in duty rates, difficulties in obtaining export licenses,
misappropriation of intellectual property, constraints on our ability to
maintain or increase prices, and competition. We cannot assure you that we will
realize the anticipated strategic benefits of our international expansion or
that international operations will contribute positively to our business and
operating results. In addition, to respond to competitive pressures and customer
requirements, we plan to further expand internationally in lower cost locations,
particularly additional locations in Asia and Latin America. As a result of this
proposed expansion, we could encounter difficulties in scaling up production at
overseas facilities or in coordinating our United States and international
operations. In addition, we may not realize anticipated revenue growth at new
international operations. We may elect to establish start-up operations rather
than acquiring existing businesses, which would require us to recruit management
and other personnel and build a customer base at a completely new operation.
Accordingly, unanticipated problems we encounter in establishing new
international operations could harm our business and operating results and cause
our stock price to decline.
OUR BUSINESS MAY BE HARMED BY THE CALIFORNIA ELECTRICAL POWER CRISIS.
A significant portion of our customer base and operations are located in
the State of California, which is in the midst of an energy crisis that could
disrupt our operations and increase our expenses. In the event
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of an acute power shortage, that is, when power reserves for the State of
California fall below 1.5%, California has on some occasions implemented, and
may in the future continue to implement, rolling blackouts throughout
California. If blackouts interrupt our power supply, we could be temporarily
unable to continue operations at certain of our California facilities. In
addition, concerns exist that the California energy crisis could lead to
worsening of economic conditions in California which could affect our customers
in California. Power shortages in California have also caused the wholesale
price of electricity to increase, which will likely cause our operating expenses
for our California facilities to increase. Accordingly, the California energy
situation could adversely affect our business and results of operations.
WE ARE SUBJECT TO RISKS RELATED TO INTELLECTUAL PROPERTY RIGHTS HELD BY THIRD
PARTIES.
We are subject to risks related to intellectual property rights held by
third parties. In certain cases, we may find it necessary or desirable to
license or otherwise acquire rights to intellectual property rights held by
others. In July 2000, we settled one such dispute through a licensing
arrangement with the Lemelson Foundation. Other such disputes, which could
involve us in litigation or in administrative proceedings before the United
States Patent and Trademark Office or patent authorities in foreign countries,
could arise in the future. These proceedings could be costly to conduct and
could also result in the diversion of management time and attention. In
addition, adverse determinations in any proceedings of this nature could require
us to pay monetary damages and could also result in the loss of intellectual
property rights. In the event we were able to settle disputes through licensing
or similar arrangements, the costs of these licenses could be substantial.
Accordingly, future disputes regarding intellectual property rights could harm
our business, financial condition and results of operations.
THE TRADING PRICE OF OUR SECURITIES, INCLUDING COMMON STOCK AND CONVERTIBLE
SUBORDINATED DEBENTURES, MAY BE VOLATILE, AND THE VALUE OF YOUR INVESTMENT COULD
DECLINE.
The trading price of our common stock has been and could in the future be
subject to significant fluctuations in response to variations in quarterly
operating results, developments in the electronics industry, changes in general
economic conditions and economic conditions in the electronics industry and the
communications sector in particular, changes in securities analysts'
recommendations regarding our securities and other factors. In addition, the
stock market in recent years has experienced significant price and volume
fluctuations which have affected the market prices of technology companies and
which have been unrelated to or disproportionately impacted by the operating
performance of these companies. These broad market fluctuations may cause the
market price of our common stock to decline, which could diminish the value of
your investment.
In addition, we have outstanding several classes of convertible
subordinated notes. Although these notes are not traded on a national securities
exchange or market, inter-institutional trading markets do exist for these
securities. The market price of these securities is likely to be affected by the
same factors that will affect the market price for our common stock.
WE DEPEND ON CERTAIN KEY PERSONNEL, AND THE LOSS OF KEY PERSONNEL MAY HARM OUR
BUSINESS.
Our future success depends in large part on the continued service of our
key technical and management personnel and on our ability to continue to attract
and retain qualified employees, particularly those highly skilled design,
process and test engineers involved in the manufacture of existing products and
the development of new products and processes. The competition for such
personnel is intense, and the loss of key employees, none of whom is subject to
an employment agreement for a specified term or a post-employment
non-competition agreement, could harm our business.
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USE OF PROCEEDS
Unless otherwise indicated in the prospectus supplement, the net proceeds
from the sale of securities offered by this prospectus will be used for general
corporate purposes, including capital expenditures and to meet working capital
needs. We expect from time to time to evaluate the acquisition of businesses,
products and technologies for which a portion of the net proceeds may be used.
Pending such uses, we will invest the net proceeds in interest-bearing
securities.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods indicated is
as follows:
6 MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, --------------------
---------------------------------- APRIL 1, MARCH 31,
1996 1997 1998 1999 2000 2000 2001
---- ---- ---- ---- ---- -------- ---------
Ratio of earnings to fixed charges............ 16.9x 3.8x 3.0x 3.6x 5.6x 5.5x 9.6x
In calculating the ratio of earnings to fixed charges, "earnings" consist
of net income (loss) before provisions for income taxes plus fixed charges.
Fixed charges consist of interest expense, charges and amortization of debt,
expenses and discount of premium related to indebtedness, whether expensed or
capitalized, and that portion of rental expense we believe to be representative
of interest.
DESCRIPTION OF THE DEBT SECURITIES
The debt securities will either be our senior debt securities or our
subordinated debt securities. The debt securities will be issued under one or
more separate indentures between us and Wells Fargo Bank Minnesota, National
Association, as trustee. Senior debt securities will be issued under a senior
indenture and subordinated debt securities will be issued under a subordinated
indenture. Together, the senior indenture and subordinated indenture are called
indentures. The prospectus, together with its prospectus supplement, will
describe all the material terms of a particular series of debt securities.
The following is a summary of the most important provisions and definitions
of the indentures. For additional information, you should look at the applicable
indenture that is filed as an exhibit to the registration statement which
includes the prospectus. In this description of the debt securities, the words
"Sanmina", "we", "us" or "our" refer only to Sanmina Corporation and not to any
of our subsidiaries.
GENERAL
Debt securities may be issued in separate series without limitation as to
aggregate principal amount. We may specify a maximum aggregate principal amount
for the debt securities of any series.
We are not limited as to the amount of debt securities we may issue under
the indentures.
The prospectus supplement will set forth:
- whether the debt securities are senior or subordinated,
- the offering price,
- the title,
- any limit on the aggregate principal amount,
- the person who shall be entitled to receive interest, if other than the
record holder on the record date,
- the date the principal will be payable,
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- the interest rate, if any, the date interest will accrue, the interest
payment dates and the regular record dates,
- the place where payments may be made,
- any mandatory or optional redemption provisions and any applicable
redemption or purchase prices associated with these provisions,
- if issued other than in denominations of U.S. $1,000 or any multiple of
U.S. $1,000, the denominations in which the debt securities shall be
issuable,
- if applicable, the method for determining how the principal, premium, if
any, or interest will be calculated by reference to an index or formula,
- if other than U.S. currency, the currency or currency units in which
principal, premium, if any, or interest will be payable and whether we or
a holder may elect payment to be made in a different currency,
- the portion of the principal amount that will be payable upon
acceleration of maturity, if other than the entire principal amount,
- if the principal amount payable at stated maturity will not be
determinable as of any date prior to stated maturity, the amount which
will be deemed to be the principal amount,
- if applicable, whether the debt securities shall be subject to the
defeasance provisions described below under "Satisfaction and
Discharge -- Defeasance" or such other defeasance provisions specified in
the applicable prospectus supplement for the debt securities,
- any conversion or exchange provisions,
- whether the debt securities will be issuable in the form of a global
security,
- any subordination provisions applicable to the subordinated debt
securities if different from those described below under "Subordinated
Debt Securities,"
- any paying agents, authenticating agents, security registrars or other
agents for the debt securities,
- any deletions of, or changes or additions to, the events of default or
covenants, and
- any other specific terms of such debt securities.
Unless otherwise specified in the prospectus supplement, the debt
securities will be registered debt securities.
Debt securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at time of
issuance is below market rates.
EXCHANGE AND TRANSFER
Debt securities may be transferred or exchanged at the office of the
security registrar or at the office of any transfer agent designated by us.
We will not impose a service charge for any transfer or exchange, but we
may require holders to pay any tax or other governmental charges associated with
any transfer or exchange.
In the event of any potential redemption of debt securities of any series,
we will not be required to:
- issue, register the transfer of, or exchange, any debt security of that
series during a period beginning at the opening of business 15 days
before the day of mailing of a notice of redemption and ending at the
close of business on the day of the mailing, or
- register the transfer of or exchange any debt security of that series
selected for redemption, in whole or in part, except the unredeemed
portion being redeemed in part.
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We have initially appointed the trustee as the security registrar. Any
transfer agent, in addition to the security registrar, initially designated by
us will be named in the prospectus supplement. We may designate additional
transfer agents or change transfer agents or change the office of the transfer
agent. However, we will be required to maintain a transfer agent in each place
of payment for the debt securities of each series.
GLOBAL SECURITIES
The debt securities of any series may be represented, in whole or in part,
by one or more global securities. Each global security will:
- be registered in the name of a depositary that we will identify in a
prospectus supplement,
- be deposited with the depositary or nominee or custodian, and
- bear any required legends.
No global security may be exchanged in whole or in part for debt securities
registered in the name of any person other than the depositary or any nominee
unless:
- the depositary has notified us that it is unwilling or unable to continue
as depositary or has ceased to be qualified to act as depositary,
- an event of default is continuing, or
- any other circumstances described in a prospectus supplement.
As long as the depositary, or its nominee, is the registered owner of a
global security, the depositary or nominee will be considered the sole owner and
holder of the debt securities represented by the global security for all
purposes under the indentures. Except in the above limited circumstances, owners
of beneficial interests in a global security will not be:
- entitled to have the debt securities registered in their names,
- entitled to physical delivery of certificated debt securities, and
- considered to be holders of those debt securities under the indenture.
Payments on a global security will be made to the depositary or its nominee
as the holder of the global security. Some jurisdictions have laws that require
that certain purchasers of securities take physical delivery of such securities
in definitive form. These laws may impair the ability to transfer beneficial
interests in a global security.
Institutions that have accounts with the depositary or its nominee are
referred to as "participants." Ownership of beneficial interests in a global
security will be limited to participants and to persons that may hold beneficial
interests through participants. The depositary will credit, on its book-entry
registration and transfer system, the respective principal amounts of debt
securities represented by the global security to the accounts of its
participants.
Ownership of beneficial interests in a global security will be shown on and
effected through records maintained by the depositary, with respect to
participants' interests, or any participant, with respect to interests of
persons held by participants on their behalf.
Payments, transfers and exchanges relating to beneficial interests in a
global security will be subject to policies and procedures of the depositary.
The depositary policies and procedures may change from time to time. Neither we
nor the trustee will have any responsibility or liability for the depositary's
or any participant's records with respect to beneficial interests in a global
security.
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PAYMENT AND PAYING AGENTS
The provisions of this paragraph will apply to the debt securities unless
otherwise indicated in the prospectus supplement. Payment of interest on a debt
security on any interest payment date will be made to the person in whose name
the debt security is registered at the close of business on the regular record
date. Payment on debt securities of a particular series will be payable at the
office of a paying agent or paying agents designated by us. However, at our
option, we may pay interest by mailing a check to the record holder. The
corporate trust office will be designated as our sole paying agent.
We may also name any other paying agents in the prospectus supplement. We
may designate additional paying agents, change paying agents or change the
office of any paying agent. However, we will be required to maintain a paying
agent in each place of payment for the debt securities of a particular series.
All moneys paid by us to a paying agent for payment on any debt security
which remain unclaimed for a period ending the earlier of:
- 10 business days prior to the date the money would be turned over to the
state, or
- at the end of two years after such payment was due
will be repaid to us. Thereafter, the holder may look only to us for such
payment.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with or merge into any other person, in a
transaction in which we are not the surviving corporation, or convey, transfer
or lease its properties and assets substantially as an entirety to, any person,
unless:
- the successor entity, if any, is a U.S. corporation, limited liability
company, partnership, trust or other entity,
- the successor entity assumes our obligations on the debt securities and
under the indentures,
- immediately after giving effect to the transaction, no default or event
of default shall have occurred and be continuing, and
- certain other conditions are met.
EVENTS OF DEFAULT
The following will be events of default for any series of debt securities
under the indentures:
(1) we fail to pay principal of or any premium on any debt security of
that series when due,
(2) we fail to pay any interest on any debt security of that series
for 30 days when due,
(3) we fail to deposit any sinking fund payment when due,
(4) we fail to perform any other covenant in the indenture that
continues for 90 days after we are given the notice required in the
indenture,
(5) certain events including bankruptcy, insolvency or reorganization
of Sanmina, and
(6) we fail to comply with any other event of default specified in the
prospectus supplement for that series of debt securities.
An event of default of one series of debt securities is not necessarily an
event of default for any other series of debt securities.
If an event of default, other than an event of default described in clause
(5) above, shall occur and be continuing, either the trustee or the holders of
at least 25% in aggregate principal amount of the
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outstanding securities of that series may declare the principal amount of the
debt securities of that series to be due and payable immediately.
If an event of default described in clause (5) above shall occur, the
principal amount of all the debt securities of that series will automatically
become immediately due and payable. Any payment by us on the subordinated debt
securities following any such acceleration will be subject to the subordination
provisions described below under "Subordinated Debt Securities."
After acceleration the holders of a majority in aggregate principal amount
of the outstanding securities of that series may, under certain circumstances,
rescind and annul such acceleration if all events of default, other than the
non-payment of accelerated principal, or other specified amounts, have been
cured or waived.
Other than the duty to act with the required care during an event of
default, the trustee will not be obligated to exercise any of its rights or
powers at the request of the holders unless the holders shall have offered to
the trustee reasonable indemnity. Generally, the holders of a majority in
aggregate principal amount of the outstanding debt securities of any series will
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.
A holder will not have any right to institute any proceeding under the
indentures, or for the appointment of a receiver or a trustee, or for any other
remedy under the indentures, unless:
(1) the holder has previously given to the trustee written notice of a
continuing event of default with respect to the debt securities of that
series,
(2) the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of that series have made a written request and
have offered reasonable indemnity to the trustee to institute the
proceeding, and
(3) the trustee has failed to institute the proceeding and has not
received direction inconsistent with the original request from the holders
of a majority in aggregate principal amount of the outstanding debt
securities of that series within 60 days after the original request.
Holders may, however, sue to enforce the payment of principal, premium or
interest on any debt security on or after the due date or to enforce the right,
if any, to convert any debt security without following the procedures listed in
(1) through (3) above.
We will furnish the trustee an annual statement by our officers as to
whether or not we are in default in the performance of the indenture and, if so,
specifying all known defaults.
MODIFICATION AND WAIVER
Sanmina and the trustee may make modifications and amendments to the
indentures with the consent of the holders of a majority in aggregate principal
amount of the outstanding securities of each series affected by the modification
or amendment.
However, neither we nor the trustee may make any modification or amendment
without the consent of the holder of each outstanding security of that series
affected by the modification or amendment if such modification or amendment
would:
- change the stated maturity of any debt security,
- reduce the principal, premium, if any, or interest on any debt security,
- reduce the principal of an original issue discount security or any other
debt security payable on acceleration of maturity,
- change the place of payment or the currency in which any debt security is
payable,
- impair the right to enforce any payment after the stated maturity or
redemption date,
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- if subordinated debt securities, modify the subordination provisions in a
materially adverse manner to the holders,
- adversely affect the right to convert any debt security, or
- change the provisions in the indenture that relate to modifying or
amending the indenture.
SATISFACTION AND DISCHARGE; DEFEASANCE
We may be discharged from our obligations on the debt securities of any
series that have matured or will mature or be redeemed within one year if we
deposit enough money with the trustee to pay all the principal, interest and any
premium due to the stated maturity date or redemption date of the debt
securities.
Each indenture contains a provision that permits us to elect either or both
of the following:
- to be discharged from all of our obligations, subject to limited
exceptions, with respect to any series of debt securities then
outstanding, and
- to be released from our obligations under the following covenants and
from the consequences of an event of default resulting from a breach of
these covenants:
(1) the limitations on sale and leaseback transactions under the
senior indenture,
(2) the limitations on secured debt under the senior indenture,
(3) the subordination provisions under the subordinated indenture, and
(4) covenants as to payment of taxes and maintenance of properties.
To make either of the above elections, we must deposit in trust with the
trustee enough money to pay in full the principal, interest and premium on the
debt securities. This amount may be made in cash and/or U.S. government
obligations. As a condition to either of the above elections, we must deliver to
the trustee an opinion of counsel that the holders of the debt securities will
not recognize income, gain or loss for Federal income tax purposes as a result
of the action.
If any of the above events occurs, the holders of the debt securities of
the series will not be entitled to the benefits of the indenture, except for the
rights of holders to receive payments on debt securities or the registration of
transfer and exchange of debt securities and replacement of lost, stolen or
mutilated debt securities.
NOTICES
Notices to holders will be given by mail to the addresses of the holders in
the security register.
GOVERNING LAW
The indentures and the debt securities will be governed by, and construed
under, the law of the State of New York, without regard to principles of
conflicts of laws.
REGARDING THE TRUSTEE
The indentures limit the right of the trustee, should it become a creditor
of Sanmina, to obtain payment of claims or secure its claims.
The trustee is permitted to engage in certain other transactions. However,
if the trustee, acquires any conflicting interest, and there is a default under
the debt securities of any series for which they are trustee, the trustee must
eliminate the conflict or resign.
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SENIOR DEBT SECURITIES
The senior debt securities will be unsecured and will rank equally with all
of our other unsecured and non-subordinated senior debt.
Covenants in the Senior Indenture
Limitations on Liens. Neither we nor any restricted subsidiary will issue,
incur, create, assume or guarantee any secured debt without securing the senior
debt securities equally and ratably with or prior to that secured debt unless
the sum of the following amounts would not exceed the greater of $300 million or
10% of our consolidated net tangible assets:
- the total amount of all secured debt not subject to the exceptions set
forth in the definition of secured debt that the senior debt securities
are not secured equally and ratably with, and
- the attributable debt in respect of sale and leaseback transactions
entered into after the date of the issuance of the debt securities, other
than any sale and leaseback transaction on principal property as to which
we or one of our restricted subsidiaries would be entitled to incur
secured debt on the principal property equal to the attributable debt on
such sale and leaseback transaction under the exceptions set forth in the
definition of secured debt.
Limitations on Sale and Lease-back Transactions. Subject to the last
paragraph of this section, neither we nor any restricted subsidiary will enter
into any lease longer than three years covering any of our principal property or
any restricted subsidiary that is sold to any other person in connection with
that lease unless either:
(1) we or any restricted subsidiary would be entitled to incur secured
debt on the principal property involved in such transaction at least equal
in amount to the attributable debt with respect to the lease, without
equally and ratably securing the senior debt securities, pursuant to
"Limitation on Liens" described above, or
(2) an amount equal to the greater of the following amounts is applied
180 days to the retirement of our or any restricted subsidiary's long-term
debt or the purchase or development of comparable property:
(a) the net proceeds from the sale, or
(b) the attributable debt with respect to the sale and leaseback
transaction.
However, either we or our restricted subsidiaries would be able to enter
into a sale and leaseback transaction without being required to apply to net
proceeds from this sale and leaseback transaction required by (2) above if the
sum of the following amounts would not exceed $300 million or 10% of our
consolidated net tangible assets:
- the total amount of the sale and leaseback transactions, and
- the total amount of secured debt.
Definitions
"attributable debt" with regard to a sale and leaseback transaction means
the lesser of:
(1) the fair market value of such property as determined in good faith
by our board of directors, or
(2) discounted present value of all net rentals under the lease.
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"consolidated net tangible assets" means the total amount of assets, less
reserves and other deductible items, after deducting:
(1) all current liabilities, excluding:
- any current liabilities which by their terms are extendible or
renewable to a time from the 12 months after which the amount is being
computed,
- all current maturities of debt having more than a 12 month maturity,
- all current maturities of capital lease obligations,
(2) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, other than capitalized
unamortized product development costs, and
(3) adjustments on account of minority interests of other persons
holding stock of our subsidiaries.
"mortgage" means a mortgage, security interest, pledge, lien, charge or
other encumbrance.
"principal property" means the land, improvements, buildings and fixtures
owned by us or a subsidiary located in the United States that constitutes our
principal corporate office, any manufacturing plant or any manufacturing
facility and has a book value in excess of 1% of our consolidated net tangible
assets as of the determination date. Principal property does not include any
property that our board of directors has determined not to be of material
importance to the business conducted by us and our subsidiaries, taken as a
whole.
"restricted subsidiary" means any subsidiary that owns any principal
property. "Restricted subsidiary" does not include:
- any subsidiary primarily engaged in financing receivables or is otherwise
engaged primarily in the finance business, including, without limitation,
financing the operations or purchase of products of Sanmina or any of its
subsidiaries, or
- any of our less than 80%-owned subsidiaries if the common stock of the
subsidiary is traded on any national securities exchange or quoted on the
Nasdaq National Market or in the over-the-counter market.
"secured debt" means any of our debt or any debt of a restricted subsidiary
for borrowed money secured by a mortgage on any principal property or any stock
or indebtedness of a restricted subsidiary. Secured debt does not include:
- mortgages on property existing at the time of acquisition of the property
by us or any subsidiary, whether or not assumed,
- mortgages on property, shares of stock or indebtedness or other assets of
a corporation existing at the time it becomes a restricted subsidiary,
- mortgages on property, shares of stock or indebtedness or other assets
existing at the time of acquisition by us or a restricted subsidiary of
ours (including leases), or mortgages to secure payment of all or any
part of the purchase price, or to secure any debt within 12 months after
the acquisition thereof, or in the case of property, the completion of
construction, improvement or commencement of substantial commercial
operation of the property,
- mortgages to secure indebtedness owing to us or to a restricted
subsidiary,
- mortgages existing at the date of the senior indenture,
- mortgages on property existing at the time the person is merged or
consolidated with us or a restricted subsidiary,
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- mortgages on property at the time of a sale or lease of the properties of
a person as an entirety or substantially as an entirety to us or a
restricted subsidiary,
- mortgages incurred to finance the acquisition or construction of property
secured by mortgages in favor of the United States or a political
subdivision of the Unites States,
- mortgages for taxes, assessments or other governmental charges not yet
due or payable without penalty that are being contested by us or a
restricted subsidiary, and for which we have adequately reserved,
- mortgages incurred in connection with an asset acquisition or a project
financed with a non-recourse obligation,
- mortgages for materialmen's, mechanics' workmen's, repairmen's landlord's
mortgages for rent or other similar mortgages arising in the ordinary
course of business in respect of obligations which are not overdue or
which are being contested by us or any restricted subsidiary in good
faith and by appropriate proceedings,
- mortgages consisting of zoning restrictions, licenses, easements and
restrictions on the use of real property and minor irregularities that do
not materially impair the use of the real property, or
- mortgages constituting any extension, renewal or replacement of any
mortgage listed above to the extent the mortgage is not increased.
SUBORDINATED DEBT SECURITIES
The indebtedness evidenced by the subordinated debt securities is
subordinated to the extent provided in the subordinated indenture to the prior
payment in full of all senior debt, including any senior debt securities.
Upon any distribution of our assets upon any dissolution, winding up,
liquidation or reorganization, payments on the subordinated debt securities will
be subordinated in right of payment to the prior payment in full in cash or
other payment satisfactory to holders of senior debt of all senior debt.
In the event of any acceleration of the subordinated debt securities
because of an event of default, holders of any senior debt would be entitled to
payment in full in cash or other payment satisfactory to holders of senior debt
of all senior debt before the holders of subordinated debt securities are
entitled to receive any payment or distribution.
We are required to promptly notify holders of senior debt under the
subordinated indenture if payment of the subordinated debt securities is
accelerated because of an event of default.
We may also not make payment on the subordinated debt securities if:
- a default in the payment of senior debt occurs and is continuing beyond
any grace period (a "payment default"), or
- any other default occurs and is continuing with respect to designated
senior debt that permits holders of designated senior debt to accelerate
its maturity, and the trustee receives a payment blockage notice from us
or some other person permitted to give the notice under the subordinated
indenture (a "non-payment default").
We may and shall resume payments on the subordinated debt securities:
- in case of a payment default, when the default is cured or waived or
ceases to exist, and
- in case of a nonpayment default, the earlier of when the default is cured
or waived or 179 days after the receipt of the payment blockage notice if
the maturity of the designated senior debt has not been accelerated.
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No new payment blockage period may start unless 365 days have elapsed from
the effectiveness of the prior payment blockage notice.
No nonpayment default that existed or was continuing on the date of
delivery of any payment blockage notice to the trustee shall be the basis for a
subsequent payment blockage notice.
As a result of these subordination provisions, in the event of our
bankruptcy, dissolution or reorganization, holders of senior debt may receive
more, ratably, and holders of the subordinated debt securities may receive less,
ratably, than our other creditors. The subordination provisions will not prevent
the occurrence of any event of default under the subordinated indenture.
If the trustee or any holder receives any payment that should not have been
made to them in contravention of subordination provisions before all senior debt
is paid in full in cash or other payment satisfactory to holders of senior debt,
then such payment will be held in trust for the holders of senior debt.
Senior debt securities will constitute senior debt under the subordinated
indenture.
Definitions
"designated senior debt" means our obligations under any of our senior debt
that expressly provides that it is "designated senior debt."
"indebtedness" means:
(1) all of our indebtedness, obligations and other liabilities for:
- borrowed money, including our obligations in respect of overdrafts,
foreign exchange contracts, currency exchange agreements, interest
rate protection 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 lender is to the whole of the assets or to
only a portion of the assets, other than any account payable or other
accrued current liability or obligation incurred in the ordinary
course of business in connection with the obtaining of materials or
services,
(2) all of our reimbursement obligations and other liabilities with
respect to letters of credit, bank guarantees or bankers' acceptances,
(3) all of our obligations and liabilities in respect of leases
required, in conformity with generally accepted accounting principles, to
be accounted for as capitalized lease obligations on our balance sheet,
(4) all of our obligations and other liabilities under our synthetic
lease and any other any lease or related document (including a purchase
agreement) in connection with the lease of real property which provides
that we are contractually obligated to purchase or cause a third party to
purchase the leased property and thereby guarantee a minimum residual value
of the leased property to the lessor and our obligations under such lease
or related document to purchase or to cause a third party to purchase such
leased property,
(5) all of our obligations 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,
(6) all of our direct or indirect guaranties or similar agreements in
respect of, and obligations or liabilities 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 (1) through (5),
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(7) any of our indebtedness or other obligations described in clauses
(1) through (5) secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by us regardless of whether the
indebtedness or other obligation secured thereby shall have been assumed by
us and
(8) any and all deferrals, renewals, extensions, refunds, amendments,
modifications or supplements of the kind described in clauses (1) through
(7).
"senior debt" means the principal of, premium, if any, interest, including
all interest accruing subsequent to the commencement of any bankruptcy or
similar proceeding, rent and all fees, costs, expenses and other amounts on our
indebtedness, including all deferrals or renewals. Senior debt shall not
include:
- any indebtedness that expressly provides it shall not be senior in right
of payment to the subordinated debt securities or expressly provides that
such indebtedness is on the same basis or "junior" to the subordinated
debt securities,
- indebtedness to any of our subsidiaries, a majority of the voting stock
of which is owned, directly or indirectly, by us,
- the 4 1/4% Convertible Subordinated Notes due 2004, or
- the Zero Coupon Convertible Subordinated Debentures due 2020.
"subsidiary" means:
- any corporation of which more than 66 2/3% is owned by us or by one or
more or our other subsidiaries, and
- any partnership of which more than 66 2/3% of the equity capital or
profit interest is owned by us or by one or more of our other
subsidiaries.
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DESCRIPTION OF COMMON STOCK
Our certificate of incorporation authorizes us to issue up to 1,000,000,000
shares of common stock, $0.01 par value. As of April 30, 2001, there were
approximately 319,689,599 shares of common stock issued and outstanding.
The holders of shares of our common stock are entitled to one vote per
share on all matters to be voted on by stockholders. Holders of common stock are
entitled to receive dividends declared by the Board of Directors, out of funds
legally available for the payment of dividends, subject to the rights of holders
of preferred stock. Currently, we are not paying a dividend. Each holder of
common stock is entitled to one vote per share. Upon any liquidation,
dissolution or winding up of our business, the holders of common stock are
entitled to share equally in all assets available for distribution after payment
of all liabilities and provision for liquidation preference of shares of
preferred stock then outstanding. The holders of common stock have no preemptive
rights and no rights to convert their common stock into any other securities.
There are also no redemption or sinking fund provisions applicable to our common
stock. All outstanding shares of common stock are fully paid and nonassessable.
The transfer agent and registrar for the common stock is Wells Fargo
Financial.
ANTI-TAKEOVER EFFECTS OF DELAWARE LAW
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law, which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the time that such stockholder
became an interested stockholder, unless:
(1) prior to such time, the board of directors of the corporation
approved either the business combination or the transaction that resulted
in the stockholder's becoming an interest stockholder,
(2) upon consummation of the transaction that resulted in the
stockholder's becoming an interest stockholder, the interested 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 those shares owned:
- by persons who are directors and also officers, and
- 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
(3) at or subsequent to such time, the business combination is
approved by the by the board of directors and authorized at an annual or
special meeting of the stockholders, and not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting stock that
is not owned by the interested stockholder.
Section 203 defines "business combination" to include:
(1) any merger or consolidation involving the corporation and the
interested stockholder,
(2) any sale, transfer, pledge or other disposition of 10% or more of
the assets of the corporation involving the interested stockholder,
(3) subject to certain exceptions, any transaction that results in the
issuance or transfer by the corporation of any stock of the corporation to
the interested stockholder,
(4) any transaction involving the corporation that has the effect of
increasing the proportionate share of the stock of any class or series of
the corporation beneficially owned by the interested stockholder, or
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(5) the receipt by the interested stockholder of the benefit of any
loans, advances, guarantees, pledges or other financial benefits provided
by or through the corporation.
In general, Section 203 defines an "interested stockholder" as any entity
or person who or which beneficially owns (or within three years did own) 15% or
more of the outstanding voting stock of the corporation and any entity or person
affiliated with or controlling or controlled by such entity or person.
The existence of this provision would be expected to have an anti-takeover
effect with respect to transactions not approved in advance by our board of
directors, including discouraging attempts that might result in a premium over
the market price for the shares of common stock held by stockholders.
DESCRIPTION OF PREFERRED STOCK
Our certificate of incorporation authorizes us to issue up to 5,000,000
shares of preferred stock in one or more series. As of March 31, 2001, we did
not have any outstanding shares of preferred stock or options to purchase
preferred stock. Our board of directors, however, has the authority without
shareholder consent, subject to certain limitations imposed by law or our
bylaws, to issue one or more series of preferred stock at any time. The rights,
preferences and restrictions of the preferred stock of each series will be fixed
by the certificate of designations relating to each series. A prospectus
supplement relating to each such series will specify the terms of the preferred
stock as determined by our board of directors, including the following:
- the number of shares in any series,
- the designation for any series by number, letter or title that shall
distinguish the series from any other series of preferred stock,
- the dividend rate and whether dividends on that series of preferred stock
will be cumulative, noncumulative or partially cumulative,
- the voting rights of that series of preferred stock, if any,
- the conversion provisions applicable to that series of preferred stock,
- the redemption or sinking fund provisions applicable to that series of
preferred stock, if any,
- the liquidation preference per share of that series of preferred stock,
if any, and
- the terms of any other preferences or rights, if any, applicable to that
series of preferred stock.
We will describe the specific terms of a particular series of preferred
stock in the prospectus supplement relating to that series. The description of
preferred stock above and the description of the terms of a particular series of
preferred stock in the related prospectus supplement will not be complete. You
should refer to the certificate of designation for complete information. The
prospectus supplement will also contain a description of certain U.S. federal
income tax consequences relating to the preferred stock.
Although it has no present intention to do so, our board of directors,
without stockholder approval, may issue preferred stock with voting and
conversion rights which could adversely affect the voting power of the holders
of common stock. If we issue preferred stock, it may have the effect of
delaying, deferring or preventing a change of control.
Certain provisions of our Restated Certificate of Incorporation and Bylaws
may have the effect of preventing, discouraging or delaying any change in
control of us. The authorization of undesignated preferred stock makes it
possible for our Board of Directors to issue preferred stock with voting or
other rights or preferences that could impede the success of any attempt to
change control us. There are also a substantial number of authorized but
unissued shares of our common stock that could be issued for such purpose.
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DESCRIPTION OF THE DEPOSITARY SHARES
At our option, we may elect to offer fractional shares of preferred stock,
rather than full shares of preferred stock. If we do, we will issue to the
public receipts for depositary shares and each of these depositary shares will
represent a fraction of a share of a particular series of preferred stock, as
specified in the applicable prospectus supplement. Each owner of a depositary
share will be entitled, in proportion to the applicable fractional interest in
shares of preferred stock underlying that depositary share, to all rights and
preferences of the preferred stock underlying that depositary share. These
rights include dividend, voting, redemption and liquidation rights.
The shares of preferred stock underlying the depositary shares will be
deposited with a bank or trust company selected by us to act as depositary,
under a deposit agreement between us, the depositary and the holders of the
depositary receipts. The depositary will be the transfer agent, registrar and
dividend disbursing agent for the depositary shares.
The depositary shares will be evidenced by depositary receipts issued
pursuant to the depositary agreement. Holders of depositary receipts agree to be
bound by the deposit agreement, which requires holders to take certain actions
such as filing proof of residence and paying certain charges.
The summary of terms of the depositary shares contained in this prospectus
is not complete. You should refer to the forms of the deposit agreement, our
certificate of incorporation and the certificate of amendment for the applicable
series of preferred stock that are, or will be, filed with the Securities and
Exchange Commission.
DIVIDENDS
The depositary will distribute all cash dividends or other cash
distributions received in respect of the series of preferred stock underlying
the depositary shares to the record holders of depositary receipts in proportion
to the number of depositary shares owned by those holders on the relevant record
date, which will be the same date as the record date for the preferred stock.
In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary receipts
that are entitled to receive the distribution, unless the depositary determines
that it is not feasible to make the distribution. If this occurs, the
depositary, with our approval, may adopt another method for the distribution,
including selling the property and distributing the net proceeds to the holders.
LIQUIDATION PREFERENCE
In the event of the voluntary or involuntary liquidation, dissolution or
winding up of Sanmina, holders of depositary shares will be entitled to receive
the fraction of the liquidation preference accorded each share of the applicable
series of preferred stock, as set forth in the applicable prospectus supplement.
REDEMPTION
If a series of preferred stock underlying the depositary shares is subject
to redemption, the depositary shares will be redeemed from the proceeds received
by the depositary resulting from the redemption, in whole or in part, of the
preferred stock held by the depositary. Whenever we redeem any preferred stock
held by the depositary, the depositary will redeem, as of the same redemption
date, the number of depositary shares representing the preferred stock so
redeemed. The depositary will mail the notice of redemption to the record
holders of the depositary receipts promptly upon receiving the notice from us
and fewer than 35 or more than 60 days, unless otherwise provided in the
applicable prospectus supplement, prior to the date fixed for redemption of the
preferred stock.
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VOTING
Upon receipt of notice of any meeting at which the holders of preferred
stock are entitled to vote, the depositary will mail the information contained
in the notice of meeting to the record holders of the depositary receipts
underlying the preferred stock. Each record holder of those depositary receipts
on the record date will be entitled to instruct the depositary as to the
exercise of the voting rights pertaining to the amount of preferred stock
underlying that holder's depositary shares. The record date for the depositary
will be the same date as the record date for the preferred stock. The depositary
will try, as far as practicable, to vote the preferred stock underlying the
depositary shares in accordance with such instructions, and we will agree to
take all action which may be deemed necessary by the depositary in order to
enable the depositary to do so. The depositary will not vote the preferred stock
to the extent that it does not receive specific instructions from the holders of
depositary receipts.
WITHDRAWAL OF PREFERRED STOCK
Owners of depositary shares are entitled, upon surrender of depositary
receipts at the principal office of the depositary and payment of any unpaid
amount due to the depositary, to receive the number of whole shares of preferred
stock underlying the depositary shares. Partial shares of preferred stock will
not be issued. Holders of preferred stock will not be entitled to deposit the
shares under the deposit agreement or to receive depositary receipts evidencing
depositary shares for the preferred stock.
AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may be amended at any time and from time to
time by agreement between us and the depositary. However, any amendment which
materially and adversely alters the rights of the holders of depositary shares,
other than fee changes, will not be effective unless the amendment has been
approved by at least a majority of the depositary shares then outstanding. The
deposit agreement may be terminated by the depositary or us only if:
- all outstanding depositary shares have been redeemed, or
- there has been a final distribution of the preferred stock in connection
with our dissolution and such distribution has been made to all the
holders of depositary shares.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangement. We will also pay
charges of the depositary in connection with the initial deposit of the
preferred stock the initial issuance of the depositary shares, any redemption of
the preferred stock, and all withdrawals of preferred stock by owners of
depositary shares. Holders of depositary receipts will pay transfer, income and
other taxes and governmental charges and other specified charges as provided in
the deposit agreement for their accounts. The depositary may refuse to transfer
depositary shares, withhold dividends and distributions and sell the depositary
shares evidenced by the depositary receipt if the charges have not been paid.
MISCELLANEOUS
The depositary will forward to the holders of depositary receipts all
reports and communications we deliver to the depositary that we are required to
furnish to the holders of the preferred stock. In addition, the depositary will
make available for inspection by holders of depositary receipts at the principal
office of the depositary, and at such other places as it may from time to time
deem advisable, any reports and communications we deliver to the depositary as
the holder of preferred stock.
Neither the depositary nor Sanmina will be liable if either of the
depositary or Sanmina is prevented or delayed by law or any circumstance beyond
our control in performing our respective obligations under the deposit
agreement. Our obligations and the depositary's obligations will be limited to
the performance
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in good faith of our respective duties under the deposit agreement. Neither the
depositary nor Sanmina will be obligated to prosecute or defend any legal
proceeding in respect of any depositary shares or preferred stock unless
satisfactory indemnity is furnished. Sanmina and the depositary may rely on
written advice of counsel or accountants, on information provided by holders of
depositary receipts or other persons believed in good faith to be competent to
give such information, and on documents believed to be genuine and to have been
signed or presented by the proper party or parties.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering a notice to us of its
election to do so. We may remove the depositary at any time. Any such
resignation or removal will take effect upon the appointment of a successor
depositary and its acceptance of such appointment. The successor depositary must
be appointed within 60 days after delivery of the notice for resignation or
removal and must be a bank and trust company having its principal office in the
United States of America and having a combined capital and surplus of at least
$150,000,000.
FEDERAL INCOME TAX CONSEQUENCES
Owners of the depositary shares will be treated for Federal income tax
purposes as if they were owners of the preferred stock underlying the depositary
shares. As a result, owners will be entitled to take into account for Federal
income tax purposes and deductions to which they would be entitled if they were
holders of such preferred stock. No gain or loss will be recognized for Federal
income tax purposes upon the withdrawal of preferred stock in exchange for
depositary shares. The tax basis of each share of preferred stock to an
exchanging owner of depositary shares will, upon such exchange, be the same as
the aggregate tax basis of the depositary shares exchanged. The holding period
for preferred stock in the hands of an exchanging owner of depositary shares
will include the period during which such person owned such depositary shares.
PLAN OF DISTRIBUTION
We may sell the securities:
- through one or more underwriters or dealers,
- directly to purchasers,
- through agents, or
- through a combination of any of these methods of sale.
We may distribute the securities:
- from time to time in one or more transactions at a fixed price or prices,
which may be changed from time to time,
- at market prices prevailing at the times of sale,
- at prices related to such prevailing market prices, or
- at negotiated prices.
We will describe the method of distribution of the securities in the
prospectus supplement.
We may determine the price or other terms of the securities offered under
this prospectus by use of an electronic auction. We will describe how any
auction will determine the price or any other terms, how potential investors may
participate in the auction and the nature of the underwriters' obligations in
the related supplement to this prospectus.
Underwriters, dealers or agents may receive compensation in the form of
discounts, concessions or commissions from us or our purchasers (as their agents
in connection with the sale of securities). These
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underwriters, dealers or agents may be considered to be underwriters under the
Securities Act. As a result, discounts, commissions, or profits on resale
received by the underwriters, dealers or agents may be treated as underwriting
discounts and commissions. The prospectus supplement will identify any such
underwriter, dealer or agent, and describe any compensation received by them
from us. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
Underwriters, dealers and agents may be entitled to indemnification by us
against certain civil liabilities, including liabilities under the Securities
Act, or to contribution with respect to payments made by the underwriters,
dealers or agents, under agreements between us and the underwriters, dealers and
agents.
We may grant underwriters who participate in the distribution of securities
an option to purchase additional securities to cover over-allotments, if any, in
connection with the distribution.
All debt securities will be new issues of securities with no established
trading market. Underwriters involved in the public offering and sale of debt
securities may make a market in the debt securities. However, they are not
obligated to make a market and may discontinue market making activity at any
time. No assurance can be given as to the liquidity of the trading market for
any debt securities.
Underwriters or agents and their associates may be customers of, engage in
transactions with or perform services for us in the ordinary course of business.
LEGAL MATTERS
Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto,
California, will pass upon the validity of the issuance of the securities
offered by this prospectus.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements as of September 30, 2000 and October
2, 1999, and for each of the three years in the period ended September 30, 2000,
incorporated by reference in this offering memorandum, have been audited by
Arthur Andersen LLP, independent public accountants, as stated in their report
incorporated by reference herein.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the Securities
and Exchange Commission, in accordance with the Securities Exchange Act of 1934.
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
1-800-SEC-0330 Chicago, Illinois 60661-2511
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" the information into
this prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the Securities and
Exchange Commission. The information incorporated by reference is considered to
be a part of this prospectus, and information that we file later with the
Commission will automatically update and supersede this information.
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We incorporate by reference the documents listed below and any future
filings made by us with the Commission under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act until our offering is complete:
- Annual Report on Form 10-K405 for the fiscal year ended September 30,
2000;
- Quarterly Report on Form 10-Q for the fiscal quarter ended December 31,
2000;
- Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2001;
- Current Report on Form 8-K, filed January 26, 2001;
- Current Report on Form 8-K, filed January 31, 2001;
- Current Report on Form 8-K, filed February 15, 2001; and
- Current Report on Form 8-K, filed May 14, 2001.
We will provide to each person who so requests, including any beneficial
owner to whom a prospectus is delivered, a copy of these filings. You may
request a copy of these filings, at no cost, by writing or telephoning us at the
following address:
Rick R. Ackel
Executive Vice President and Chief Financial Officer
Sanmina Corporation
2700 North First Street
San Jose, California 95134
(408) 964-3500
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The aggregate estimated (other than the registration fee) expenses to be
paid by the Registrant in connection with this offering are as follows:
Securities and Exchange Commission registration fee......... $528,000
Trustee's fees and expenses................................. 15,000
Accounting fees and expenses................................ 40,000
Legal fees and expenses of the registrant................... 100,000
Printing and engraving...................................... 100,000
Blue sky fees and expenses.................................. 15,000
Transfer agent fees and expenses............................ 15,000
Rating agencies' fees....................................... 65,000
Miscellaneous............................................... 37,000
--------
Total..................................................... $900,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS OF SANMINA
Section 145 of the Delaware General Corporation Law ("Delaware Law")
authorizes a court to award or a corporation's Board of Directors to grant
indemnification to directors and officers in terms that are sufficiently broad
to permit indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended. Our bylaws provide for the mandatory indemnification of our
directors and officers to the maximum extent permitted by Delaware law. Our
bylaws also provide (i) that we may modify the scope of indemnification by
individual contracts with our directors and officers, and (ii) that we shall not
be required to indemnify any director or officer unless the indemnification is
required by law, the proceeding in which indemnification is sought was
authorized in advance by our board of directors, the indemnification is provided
by us, in our sole discretion pursuant to powers vested in us under the General
Corporation Law of Delaware or the indemnification is required by individual
contract. In addition our bylaws give us the power to indemnify our employees
and agents to the maximum extent permitted by Delaware law.
We refer you to the form of underwriting agreement to be filed as an
exhibit to this Registration Statement as incorporated by reference as an
exhibit to a current Report on Form 8-K for certain provisions regarding
indemnification of our officers and directors by the underwriters.
ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated by reference
herein:
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
1.1 Form of Underwriting Agreement.*
3.1 Certificate of Incorporation.(1)
3.2 Bylaws.(2)
4.1 Form of Senior Indenture.
4.2 Form of Subordinated Indenture.
4.3 Form of Senior Debt Security (included in Exhibit 4.1).
4.4 Form of Subordinated Debt Security (included in Exhibit
4.2).
4.5 Form of Certificate of Designation.**
4.6 Form of Preferred Stock Certificate.**
4.7 Form of Deposit Agreement.**
II-1
33
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
4.8 Form of Deposit Receipt (included in Exhibit 4.7).**
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Arthur Andersen LLP, independent public
accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
24.1 Power of Attorney of certain directors and officers of
Sanmina Corporation (see page II-5 of this Form S-3).
25.1 Form T-1 Statement of Eligibility of Trustee for Senior
Indenture under the Trust Indenture Act of 1939.
25.2 Form T-1 Statement of Eligibility of Trustee for
Subordinated Indenture under the Trust Indenture Act of
1939.
-------------------------
* To be filed by amendment or by a report on Form 8-K pursuant to Section 601
of Regulation S-K.
** To be filed as an exhibit to a report pursuant to Section 13(a) or 15(d) of
the Securities Act of 1934.
(1) Incorporated by reference to Sanmina's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2001.
(2) Incorporated by reference to Sanmina's registration statement on Form S-1,
No. 33-70700, filed on February 19, 1993.
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 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
II-2
34
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
35
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Jose, State of California, on May 16, 2001.
SANMINA CORPORATION
By: /s/ RICK R. ACKEL
------------------------------------
Rick R. Ackel
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Jure Sola and Rick Ackel and each of them
individually, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities to sign the Registration Statement filed
herewith and any or all amendments to said Registration Statement (including
post-effective amendments and registration statements filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and otherwise), and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission granting unto said
attorneys-in-fact and agents the full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
foregoing, as full to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or his or her substitute, may lawfully do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ JURE SOLA Chief Executive Officer and May 16, 2001
----------------------------------------------------- Chairman of the Board
Jure Sola (Principal Executive Officer)
/s/ RICK R. ACKEL Executive Vice President and May 16, 2001
----------------------------------------------------- Chief Financial Officer
Rick R. Ackel (Principal Financial and
Accounting Officer)
/s/ RANDY W. FURR Director May 16, 2001
-----------------------------------------------------
Randy W. Furr
/s/ JOHN BOLGER Director May 16, 2001
-----------------------------------------------------
John Bolger
/s/ NEIL BONKE Director May 16, 2001
-----------------------------------------------------
Neil Bonke
II-4
36
SIGNATURE TITLE DATE
--------- ----- ----
/s/ MARIO M. ROSATI Director May 16, 2001
-----------------------------------------------------
Mario M. Rosati
/s/ JOSEPH SCHELL Director May 2, 2001
-----------------------------------------------------
Joseph Schell
/s/ BERNARD VONDERSCHMITT Director May 16, 2001
-----------------------------------------------------
Bernard Vonderschmitt
II-5
37
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
1.1 Form of Underwriting Agreement.*
3.1 Certificate of Incorporation.(1)
3.2 Bylaws.(2)
4.1 Form of Senior Indenture.
4.2 Form of Subordinated Indenture.
4.3 Form of Senior Debt Security (included in Exhibit 4.1).
4.4 Form of Subordinated Debt Security (included in Exhibit
4.2).
4.5 Form of Certificate of Designation.**
4.6 Form of Preferred Stock Certificate.**
4.7 Form of Deposit Agreement.**
4.8 Form of Deposit Receipt (included in Exhibit 4.7).**
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Arthur Andersen LLP, independent public
accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
24.1 Power of Attorney of certain directors and officers of
Sanmina Corporation (see page II-5 of this Form S-3).
25.1 Form T-1 Statement of Eligibility of Trustee for Senior
Indenture under the Trust Indenture Act of 1939.
25.2 Form T-1 Statement of Eligibility of Trustee for
Subordinated Indenture under the Trust Indenture Act of
1939.
-------------------------
* To be filed by amendment or by a report on Form 8-K pursuant to Section 601
of Regulation S-K.
** To be filed as an exhibit to a report pursuant to Section 13(a) or 15(d) of
the Securities Act of 1934.
(1) Incorporated by reference to Sanmina's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2001.
(2) Incorporated by reference to Sanmina's registration statement on Form S-1,
No. 33-70700, filed on February 19, 1993.