UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
(Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934)
Date of Report (Date of earliest event reported) February 14, 2006
SOLECTRON CORPORATION
(Exact name of registrant as specified in charter)
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Delaware
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1-11098
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94 - 2447045
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(State or other jurisdiction
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(Commission
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(IRS Employer
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of incorporation)
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File Number)
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Identification No.)
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| 847 Gibraltar Drive, Milpitas, California |
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95035 |
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| (Address of principal executive offices) |
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(Zip Code)
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Registrant’s telephone number, including area code: (408) 957-8500
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)).
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)).
SECTION 1 — Registrant’s Business and Operations
TABLE OF CONTENTS
ITEM 1.01 Entry into a Material Definitive Agreement
On February 14, 2006, Solectron Global Finance Ltd (“Financeco”), an exempted company with
limited liability under the laws of the Cayman Islands and an indirect, wholly-owned subsidiary
of Solectron Corporation (“Solectron”), sold $150,000,000 in principal amount of Financeco’s
8.00% Senior Subordinated Notes due 2016 (the “Notes”). The Notes were sold pursuant to a
Purchase Agreement, dated as of February 14, 2006 (the “Purchase Agreement”), among Financeco
and Solectron, and Banc of America Securities LLC, Morgan Stanley & Co. Incorporated and
Citigroup Global Markets Inc., as representatives of the initial purchasers identified therein
(collectively, the “Initial Purchasers”). The Notes were issued pursuant to an Indenture, dated
as of February 21, 2006, which includes the form of the Notes, among Financeco, as issuer,
Solectron, as guarantor, and U.S. Bank National Association, as trustee (the “Indenture”).
The Purchase Agreement provides that the Notes will be offered and sold to the Initial
Purchasers and reoffered by the Initial Purchasers without being registered under the Securities
Act of 1933, as amended (the “Securities Act”), in reliance on applicable exemptions from the
registration requirements of the Securities Act.
The Initial Purchasers and their direct and indirect transferees will be entitled to the
benefits of a Registration Rights Agreement, dated as of February 21, 2006 (the “Registration
Rights Agreement”), among Financeco, Solectron and the Initial Purchasers. Pursuant to the
Registration Rights Agreement, Financeco and Solectron have agreed to register the Notes under
the Securities Act within a specified time or pay additional amounts to the holders of the
Notes.
The Notes will bear interest at 8.00% per year and will mature on March 15, 2016. Interest on
the Notes will be payable on March 15 and September 15 of each year, beginning on September 15,
2006. The Notes will be unsecured, senior subordinated obligations of Financeco and will be
subordinated in right of payment to all of Financeco’s existing and future senior debt. The
Notes will be fully and unconditionally guaranteed on a senior subordinated, unsecured basis by
Solectron (the “Guarantee”).
At any time prior to March 15, 2009, Financeco or Solectron may, on any one or more occasions,
redeem up to 35% of the aggregate principal amount of the Notes at a redemption price of 108% of
the principal amount, plus accrued and unpaid interest to, but not including, the redemption
date, with cash in an amount not in excess of the Net Cash Proceeds of one or more Qualified
Equity Offerings, both as defined in the Indenture, provided that at least 65% of the aggregate
principal amount of the Notes remains outstanding immediately after the occurrence of such
redemption (excluding Notes held by Financeco, Solectron and its subsidiaries), and provided
that the redemption occurs within 90 days of the date of the closing of such Qualified Equity
Offering. On or after March 15, 2011, Financeco or Solectron may redeem all or a part of the
Notes, at redemption prices from 100% to 104% of the principal amount, plus accrued and unpaid
interest on the Notes redeemed, to, but not including, the redemption date. In addition, at any
time prior to March 15, 2011, Financeco or Solectron may, at their option, redeem the Notes, in
whole or in part, from time to time, at a redemption price equal to the greater of (1) 100% of
the principal amount of the Notes redeemed, plus accrued and unpaid interest, and (2) the
Make-Whole Premium, plus accrued and unpaid interest to, but not including, the date of
redemption. The Notes are not entitled to a sinking fund.
Following a Change of Control, as defined in the Indenture, holders of the Notes may require
Financeco to repurchase all or a portion of the Notes at a price equal to 101% of the principal
amount of the Notes, plus any accrued and unpaid interest to the date of repurchase.
The Indenture includes covenants that limit the ability of Financeco, Solectron and Solectron’s
Restricted subsidiaries, as defined in the Indenture to include Solectron’s significant
subsidiaries, to, among other things, incur additional indebtedness, pay dividends, make
distributions in respect of Financeco’s, Solectron’s or Solectron’s Restricted Subsidiaries’
capital stock, make other restricted payments, give subsidiary guarantees of other debt, enter
into transactions with affiliates or related persons, sell assets, enter into sale and leaseback
transactions, create liens,
or consolidate, merge or sell all or substantially all of Financeco’s, Solectron’s or
Solectron’s Restricted Subsidiaries’ assets, but many of these covenants would be suspended
during the time that the Notes are rated Baa3 or above by Moody’s Investor Services or BBB- or
above by Standard & Poor’s, and, subject to certain exceptions, no default or event of default
has occurred and is continuing.
The Indenture provides for customary events of default, including payment defaults, breaches of
covenants, defaults under or acceleration of other indebtedness, failure to pay final judgments,
and events of bankruptcy, insolvency and reorganization. In the case of an event of default
arising from certain events of bankruptcy or insolvency with respect to Financeco, Solectron or
any Restricted Subsidiary or group of Restricted Subsidiaries that would individually or
collectively constitute a Significant Subsidiary, all outstanding Notes will become due and
payable immediately without further action or notice. Subject to certain exceptions, if any
other event of default occurs and is continuing, the trustee or the holders of at least 25% in
aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and
payable immediately, together with accrued and unpaid interest.
Financeco intends to use the net proceeds from the offering, together with cash on hand, to
repay at maturity Solectron’s outstanding 7.375% Senior Notes due March 1, 2006.
The above descriptions of the Indenture, the Notes, the Guarantee, the Purchase Agreement and
the Registration Rights Agreement are summaries only and are qualified in their entirety by
reference to the respective exhibits to this Current Report on Form 8-K.
ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant
See disclosure under Item 1.01 of this report, which is incorporated by reference in this Item
2.03.
ITEM 8.01 Other Events
On February 13, 2006, Solectron issued a press release
announcing the proposed offering of the Notes. A copy of
the press release is attached as Exhibit 99.1 to this
Current Report and is incorporated by reference herein.
On February 14, 2006, Solectron issued a press release
announcing that it has priced the offering of the Notes. A
copy of the press release is attached as Exhibit 99.2 to
this Current Report and is incorporated by reference
herein.
ITEM 9.01 Financial Statements and Exhibits
(c) Exhibits.
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Description |
1.1
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Purchase Agreement, dated
February 14, 2006, among Solectron Global Finance LTD,
Solectron Corporation and the Initial Purchasers named therein |
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4.1
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Indenture dated February 21, 2006, among Solectron Global Finance LTD, as Issuer,
Solectron Corporation, as Guarantor and U.S. Bank National Association, as Trustee |
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4.2
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Form of 8.00% Senior Subordinated Note due 2016 (included in Exhibit 4.1) |
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4.3
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Registration Rights Agreement dated February 21, 2006, among Solectron Global Finance
LTD, Solectron Corporation and the Initial Purchasers named therein |
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99.1
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Press release dated February 13, 2006 announcing Solectron Global Finance LTD’s
proposed offering of approximately $150 million aggregate principal amount of Senior
Subordinated Notes due 2016. |
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99.2
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Press release dated February 14, 2006 announcing the pricing of Solectron Global Finance
LTD’s offering of $150 million aggregate principal amount of Senior Subordinated Notes due
2016. |