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FORM 10-Q
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T
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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94-3008969
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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July 3, 2011
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January 2, 2011
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Assets
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Current assets:
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Cash and cash equivalents
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$
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245,790
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$
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605,420
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Restricted cash and cash equivalents, current portion
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104,722
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117,462
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Short-term investments
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—
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38,720
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Accounts receivable, net
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395,991
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381,200
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Costs and estimated earnings in excess of billings
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144,370
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89,190
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Inventories
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412,614
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313,398
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Advances to suppliers, current portion
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36,075
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31,657
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Project assets - plants and land, current portion
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89,857
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23,868
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Prepaid expenses and other current assets (1)
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207,252
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192,934
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Total current assets
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1,636,671
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1,793,849
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Restricted cash and cash equivalents, net of current portion
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120,885
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138,837
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Property, plant and equipment, net
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592,659
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578,620
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Project assets - plants and land, net of current portion
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25,773
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22,238
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Goodwill
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346,509
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345,270
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Other intangible assets, net
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52,902
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66,788
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Advances to suppliers, net of current portion
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268,466
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255,435
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Other long-term assets (1)
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285,067
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178,294
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Total assets
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$
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3,328,932
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$
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3,379,331
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Liabilities and Stockholders' Equity
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Current liabilities:
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Accounts payable (1)
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$
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413,554
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$
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382,884
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Accrued liabilities
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194,121
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137,704
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Billings in excess of costs and estimated earnings
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47,210
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48,715
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Short-term debt
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108,623
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198,010
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Convertible debt, current portion
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189,200
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—
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Customer advances, current portion (1)
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20,194
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21,044
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Total current liabilities
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972,902
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788,357
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Long-term debt
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105,000
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50,000
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Convertible debt, net of current portion
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416,367
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591,923
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Customer advances, net of current portion (1)
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154,049
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160,485
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Other long-term liabilities
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188,512
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131,132
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Total liabilities
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1,836,830
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1,721,897
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Commitments and contingencies (Note 8)
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Stockholders' equity:
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Preferred stock, 10,042,490 shares authorized, $0.001 par value; none issued and outstanding
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—
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—
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Common stock, 217,500,000 shares of class A common stock authorized, $0.001 par value; 59,101,667 and 56,664,413 shares of class A common stock issued; 57,959,170 and 56,073,083 shares of class A common stock outstanding, as of July 3, 2011 and January 2, 2011, respectively; 150,000,000 shares of class B common stock authorized, $0.001 par value; 42,033,287 shares of class B common stock issued and outstanding as of both July 3, 2011 and January 2, 2011
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100
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98
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Additional paid-in capital
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1,635,157
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1,606,697
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Retained earnings (accumulated deficit)
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(86,321
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63,672
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Accumulated other comprehensive income (loss)
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(30,765
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3,640
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Treasury stock, at cost; 1,142,497 and 591,330 shares of class A common stock as of July 3, 2011 and January 2, 2011, respectively
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(26,069
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(16,673
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Total stockholders' equity
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1,492,102
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1,657,434
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Total liabilities and stockholders' equity
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$
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3,328,932
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$
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3,379,331
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(1)
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The Company has related party balances in connection with transactions made with its joint ventures which are recorded within the "Prepaid expenses and other current assets," "Other long-term assets," "Accounts payable," "Customer advance, current portion" and "Customer advances, net of current portion" financial statement line items in the Condensed Consolidated Balance Sheets (see Note 8 and Note 9).
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Three Months Ended
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Six Months Ended
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July 3, 2011
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July 4, 2010
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July 3, 2011
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July 4, 2010
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Revenue:
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Utility and power plants
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$
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302,439
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$
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119,999
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$
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548,348
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$
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264,093
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Residential and commercial
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289,816
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264,239
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495,325
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467,419
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Total revenue
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592,255
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384,238
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1,043,673
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731,512
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Cost of revenue:
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Utility and power plants
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309,032
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97,224
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512,043
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208,652
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Residential and commercial
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263,929
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199,163
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423,814
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363,266
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Total cost of revenue
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572,961
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296,387
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935,857
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571,918
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Gross margin
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19,294
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87,851
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107,816
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159,594
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Operating expenses:
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Research and development
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15,255
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11,206
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28,901
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21,613
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Sales, general and administrative
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90,856
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78,376
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167,035
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142,656
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Restructuring charges
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13,308
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—
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13,308
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—
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Total operating expenses
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119,419
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89,582
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209,244
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164,269
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Operating loss
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(100,125
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(1,731
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(101,428
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(4,675
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Other income (expense), net:
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Interest income
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488
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279
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1,231
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552
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Interest expense
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(16,059
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(19,310
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(31,318
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(30,250
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Gain on change in equity interest in unconsolidated investee
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322
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28,348
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322
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28,348
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Gain (loss) on mark-to-market derivatives
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(97
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34,070
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(141
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31,852
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Other, net
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(9,527
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(10,806
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(18,734
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(16,397
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Other income (expense), net
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(24,873
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32,581
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(48,640
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14,105
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Income (loss) before income taxes and equity in earnings of unconsolidated investees
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(124,998
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)
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30,850
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(150,068
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)
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9,430
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Provision for income taxes
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(22,702
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)
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(46,992
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(6,886
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(16,117
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)
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Equity in earnings (loss) of unconsolidated investees
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(172
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)
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2,030
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6,961
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5,148
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Loss from continuing operations
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(147,872
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)
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(14,112
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)
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(149,993
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)
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(1,539
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)
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Income from discontinued operations, net of taxes
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—
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7,896
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—
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7,896
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Net income (loss)
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$
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(147,872
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)
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$
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(6,216
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)
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$
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(149,993
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)
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$
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6,357
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Net income (loss) per share of class A and class B common stock:
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Net income (loss) per share - basic and diluted:
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Continuing operations
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$
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(1.51
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)
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$
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(0.15
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)
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$
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(1.55
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)
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$
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(0.01
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)
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Discontinued operations
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—
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0.08
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—
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0.08
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Net income (loss) per share
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$
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(1.51
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)
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$
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(0.07
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)
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$
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(1.55
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)
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$
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0.07
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Weighted-average shares:
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Basic and diluted
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97,656
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95,564
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97,054
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95,359
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Six Months Ended
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July 3, 2011
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July 4, 2010
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Cash flows from operating activities:
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Net income (loss)
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$
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(149,993
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)
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$
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6,357
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Less: Income from discontinued operations, net of taxes
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—
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7,896
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Loss from continuing operations
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(149,993
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)
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(1,539
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)
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Adjustments to reconcile loss from continuing operations to net cash used in operating activities of continuing operations
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Stock-based compensation
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25,980
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22,399
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Depreciation
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53,664
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49,273
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Amortization of other intangible assets
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13,932
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16,461
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Loss (gain) on sale of investments
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191
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(1,572
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)
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Loss (gain) on mark-to-market derivatives
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141
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(31,852
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)
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Non-cash interest expense
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14,332
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15,768
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Debt issuance costs
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2,734
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1,790
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Amortization of promissory notes
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3,352
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2,919
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Gain on change in equity interest in unconsolidated investee
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(322
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)
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(28,348
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)
|
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Third-party inventories write-down
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16,399
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—
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Project assets write-down
|
16,053
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—
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Equity in earnings of unconsolidated investees
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(6,961
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)
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(5,148
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)
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Deferred income taxes and other tax liabilities
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(2,084
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)
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|
12,219
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Changes in operating assets and liabilities, net of effect of acquisition:
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Accounts receivable
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3,109
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41,662
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Costs and estimated earnings in excess of billings
|
(47,114
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)
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|
(32,564
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)
|
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Inventories
|
(102,997
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)
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(72,248
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)
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Project assets
|
(83,842
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)
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|
(47,906
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)
|
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Prepaid expenses and other assets
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(9,328
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)
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|
(107,315
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)
|
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Advances to suppliers
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(17,470
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)
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3,757
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Accounts payable and other accrued liabilities
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(16
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)
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|
120,782
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Billings in excess of costs and estimated earnings
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(2,480
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)
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(5,288
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)
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Customer advances
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(7,812
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)
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|
951
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Net cash used in operating activities of continuing operations
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(280,532
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)
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(45,799
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)
|
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Net cash provided by operating activities of discontinued operations
|
—
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|
|
649
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|
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Net cash used in operating activities
|
(280,532
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)
|
|
(45,150
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)
|
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Cash flows from investing activities:
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|
|
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Decrease (increase) in restricted cash and cash equivalents
|
30,693
|
|
|
(8,253
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)
|
||
Purchase of property, plant and equipment
|
(68,164
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)
|
|
(100,292
|
)
|
||
Proceeds from sale of equipment to third-party
|
499
|
|
|
2,875
|
|
||
Proceeds from sales or maturities of available-for-sale securities
|
43,759
|
|
|
1,572
|
|
||
Cash paid for acquisition, net of cash acquired
|
—
|
|
|
(272,699
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)
|
||
Cash paid for investments in joint ventures and other non-public companies
|
(50,000
|
)
|
|
(1,618
|
)
|
||
Net cash used in investing activities of continuing operations
|
(43,213
|
)
|
|
(378,415
|
)
|
||
Net cash used in investing activities of discontinued operations
|
—
|
|
|
(17,708
|
)
|
||
Net cash used in investing activities
|
(43,213
|
)
|
|
(396,123
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of bank loans, net of issuance costs
|
189,221
|
|
|
—
|
|
||
Proceeds from issuance of project loans, net of issuance costs
|
—
|
|
|
5,134
|
|
||
Proceeds from issuance of convertible debt, net of issuance costs
|
—
|
|
|
244,241
|
|
||
Repayment of bank loans
|
(226,136
|
)
|
|
(30,000
|
)
|
||
Cash paid for bond hedge
|
—
|
|
|
(75,200
|
)
|
||
Proceeds from warrant transactions
|
—
|
|
|
61,450
|
|
||
Proceeds from exercise of stock options
|
3,926
|
|
|
346
|
|
||
Purchases of stock for tax withholding obligations on vested restricted stock
|
(9,396
|
)
|
|
(1,977
|
)
|
||
Net cash provided by (used in) financing activities of continuing operations
|
(42,385
|
)
|
|
203,994
|
|
||
Net cash provided by financing activities of discontinued operations
|
—
|
|
|
17,059
|
|
||
Net cash provided by (used in) financing activities
|
(42,385
|
)
|
|
221,053
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
6,500
|
|
|
(12,691
|
)
|
||
Net decrease in cash and cash equivalents
|
(359,630
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)
|
|
(232,911
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)
|
||
Cash and cash equivalents at beginning of period
|
605,420
|
|
|
615,879
|
|
||
Cash and cash equivalents at end of period
|
245,790
|
|
|
382,968
|
|
||
Less: Cash and cash equivalents of discontinued operations
|
—
|
|
|
—
|
|
||
Cash and cash equivalents of continuing operations, end of period
|
$
|
245,790
|
|
|
$
|
382,968
|
|
|
|
|
|
||||
Non-cash transactions:
|
|
|
|
||||
Property, plant and equipment acquisitions funded by liabilities
|
$
|
6,494
|
|
|
$
|
113,008
|
|
Non-cash interest expense capitalized and added to the cost of qualified assets
|
1,294
|
|
|
1,095
|
|
(In thousands)
|
|
July 4, 2010
|
||
Utility and power plants revenue
|
|
$
|
7,905
|
|
Gross margin
|
|
7,905
|
|
|
Income from discontinued operations before sale of business unit
|
|
11,510
|
|
|
Gain on sale of business unit
|
|
—
|
|
|
Income before income taxes
|
|
11,510
|
|
|
Income from discontinued operations, net of taxes
|
|
7,896
|
|
(In thousands)
|
|
UPP
|
|
R&C
|
|
Total
|
||||||
As of January 2, 2011
|
|
226,350
|
|
|
118,920
|
|
|
345,270
|
|
|||
Translation adjustment
|
|
—
|
|
|
1,239
|
|
|
1,239
|
|
|||
As of July 3, 2011
|
|
$
|
226,350
|
|
|
$
|
120,159
|
|
|
$
|
346,509
|
|
(In thousands)
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||
As of July 3, 2011
|
|
|
|
|
|
|
||||||
Project assets
|
|
$
|
79,160
|
|
|
$
|
(33,643
|
)
|
|
$
|
45,517
|
|
Patents, trade names and purchased technology
|
|
50,320
|
|
|
(50,001
|
)
|
|
319
|
|
|||
Purchased in-process research and development
|
|
1,000
|
|
|
(111
|
)
|
|
889
|
|
|||
Customer relationships and other
|
|
28,717
|
|
|
(22,540
|
)
|
|
6,177
|
|
|||
|
|
$
|
159,197
|
|
|
$
|
(106,295
|
)
|
|
$
|
52,902
|
|
|
|
|
|
|
|
|
|
|
|
|||
As of January 2, 2011
|
|
|
|
|
|
|
|
|
|
|||
Project assets
|
|
$
|
79,160
|
|
|
$
|
(22,627
|
)
|
|
$
|
56,533
|
|
Patents, trade names and purchased technology
|
|
55,144
|
|
|
(54,563
|
)
|
|
581
|
|
|||
Purchased in-process research and development
|
|
1,000
|
|
|
(28
|
)
|
|
972
|
|
|||
Customer relationships and other
|
|
40,525
|
|
|
(31,823
|
)
|
|
8,702
|
|
|||
|
|
$
|
175,829
|
|
|
$
|
(109,041
|
)
|
|
$
|
66,788
|
|
(In thousands)
|
|
Amount
|
||
Year
|
|
|
||
2011 (remaining six months)
|
|
$
|
13,273
|
|
2012
|
|
22,721
|
|
|
2013
|
|
16,331
|
|
|
2014
|
|
252
|
|
|
2015
|
|
186
|
|
|
Thereafter
|
|
139
|
|
|
|
|
$
|
52,902
|
|
|
|
As of
|
||||||
(In thousands)
|
|
July 3, 2011
|
|
January 2, 2011
|
||||
Accounts receivable, net:
|
|
|
|
|
||||
Accounts receivable, gross
|
|
$
|
410,705
|
|
|
$
|
389,554
|
|
Less: allowance for doubtful accounts
|
|
(12,403
|
)
|
|
(5,967
|
)
|
||
Less: allowance for sales returns
|
|
(2,311
|
)
|
|
(2,387
|
)
|
||
|
|
$
|
395,991
|
|
|
$
|
381,200
|
|
Inventories:
|
|
|
|
|
||||
Raw materials
|
|
$
|
78,612
|
|
|
$
|
70,683
|
|
Work-in-process
|
|
59,731
|
|
|
35,658
|
|
||
Finished goods
|
|
274,271
|
|
|
207,057
|
|
||
|
|
$
|
412,614
|
|
|
$
|
313,398
|
|
(1)
|
Includes tolling agreements with suppliers in which the Company provides polysilicon required for silicon ingot manufacturing and procures the manufactured silicon ingots from the suppliers (see Notes 8 and 9).
|
(2)
|
Certain manufacturing equipment associated with solar cell manufacturing lines located at one of the Company’s facilities in the Philippines is collateralized in favor of a third-party lender. The Company provided security for advance payments received from a third party in fiscal 2008 totaling
$40.0 million
in the form of collateralized manufacturing equipment with a net book value of
$24.5 million
and
$28.3 million
as of
July 3, 2011
and
January 2, 2011
, respectively.
|
(3)
|
Total
depreciation expense was
$28.0 million
and
$53.7 million
for the
three
and
six
months ended
July 3, 2011
, respectively, and
$24.6 million
and
$49.3 million
for the
three
and
six
months ended
July 4, 2010
, respectively.
|
|
|
As of
|
||||||
(In thousands)
|
|
July 3, 2011
|
|
January 2, 2011
|
||||
Property, plant and equipment, net by geography (4):
|
|
|
|
|
||||
Philippines
|
|
$
|
484,065
|
|
|
$
|
502,131
|
|
United States
|
|
103,342
|
|
|
73,860
|
|
||
Europe
|
|
5,026
|
|
|
2,400
|
|
||
Australia
|
|
226
|
|
|
229
|
|
||
|
|
$
|
592,659
|
|
|
$
|
578,620
|
|
(4)
|
Property, plant and equipment, net are based on the physical location of the assets.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Interest expense:
|
|
|
|
|
|
|
|
|
||||||||
Interest cost incurred
|
|
$
|
(17,652
|
)
|
|
$
|
(20,246
|
)
|
|
$
|
(34,103
|
)
|
|
$
|
(32,117
|
)
|
Cash interest cost capitalized - property, plant and equipment
|
|
555
|
|
|
376
|
|
|
885
|
|
|
772
|
|
||||
Non-cash interest cost capitalized - property, plant and equipment
|
|
472
|
|
|
560
|
|
|
721
|
|
|
1,095
|
|
||||
Cash interest cost capitalized - project assets - plant and land
|
|
242
|
|
|
—
|
|
|
606
|
|
|
—
|
|
||||
Non-cash interest cost capitalized - project assets - plant and land
|
|
324
|
|
|
—
|
|
|
573
|
|
|
—
|
|
||||
Interest expense
|
|
$
|
(16,059
|
)
|
|
$
|
(19,310
|
)
|
|
$
|
(31,318
|
)
|
|
$
|
(30,250
|
)
|
|
|
As of
|
||||||
(In thousands)
|
|
July 3, 2011
|
|
January 2, 2011
|
||||
Other long-term assets:
|
|
|
|
|
||||
Investments in joint ventures
|
|
$
|
173,724
|
|
|
$
|
116,444
|
|
Bond hedge derivative
|
|
65,964
|
|
|
34,491
|
|
||
Investments in non-public companies
|
|
6,418
|
|
|
6,418
|
|
||
VAT receivables, net of current portion
|
|
6,750
|
|
|
7,002
|
|
||
Long-term debt issuance costs
|
|
10,938
|
|
|
12,241
|
|
||
Other
|
|
21,273
|
|
|
1,698
|
|
||
|
|
$
|
285,067
|
|
|
$
|
178,294
|
|
|
|
As of
|
||||||
(In thousands)
|
|
July 3, 2011
|
|
January 2, 2011
|
||||
Accrued liabilities:
|
|
|
|
|
||||
VAT payables
|
|
$
|
13,756
|
|
|
$
|
11,699
|
|
Foreign currency derivatives
|
|
49,197
|
|
|
10,264
|
|
||
Short-term warranty reserves
|
|
12,910
|
|
|
14,639
|
|
||
Interest payable
|
|
6,839
|
|
|
6,982
|
|
||
Deferred revenue
|
|
27,380
|
|
|
21,972
|
|
||
Employee compensation and employee benefits
|
|
26,034
|
|
|
33,227
|
|
||
Restructuring liability
|
|
11,039
|
|
|
—
|
|
||
Other
|
|
46,966
|
|
|
38,921
|
|
||
|
|
$
|
194,121
|
|
|
$
|
137,704
|
|
|
|
|
|
|
|
|
||
Other long-term liabilities:
|
|
|
|
|
|
|
||
Embedded conversion option derivatives
|
|
$
|
66,453
|
|
|
$
|
34,839
|
|
Long-term warranty reserves
|
|
66,351
|
|
|
48,923
|
|
||
Unrecognized tax benefits
|
|
26,958
|
|
|
24,894
|
|
||
Other
|
|
28,750
|
|
|
22,476
|
|
||
|
|
$
|
188,512
|
|
|
$
|
131,132
|
|
|
|
July 3, 2011
|
|
January 2, 2011
|
||||||||||||||||||||||||||||
(In thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
|
$
|
358,277
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
358,277
|
|
|
$
|
488,626
|
|
|
$
|
—
|
|
|
$
|
172
|
|
|
$
|
488,798
|
|
Debt securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,548
|
|
|
—
|
|
|
38,548
|
|
||||||||
|
|
$
|
358,277
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
358,277
|
|
|
$
|
488,626
|
|
|
$
|
38,548
|
|
|
$
|
172
|
|
|
$
|
527,346
|
|
|
|
July 3, 2011
|
|
January 2, 2011
|
||||||||||||||||||||
(In thousands)
|
|
Available-For-Sale
|
|
Cash and Cash Equivalents (2)
|
|
Total
|
|
Available-For-Sale
|
|
Cash and Cash Equivalents (2)
|
|
Total
|
||||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
245,790
|
|
|
$
|
245,790
|
|
|
$
|
—
|
|
|
$
|
605,420
|
|
|
$
|
605,420
|
|
Short-term restricted cash and cash equivalents (1)
|
|
—
|
|
|
104,722
|
|
|
104,722
|
|
|
—
|
|
|
117,462
|
|
|
117,462
|
|
||||||
Short-term investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,548
|
|
|
172
|
|
|
38,720
|
|
||||||
Long-term restricted cash and cash equivalents (1)
|
|
—
|
|
|
120,885
|
|
|
120,885
|
|
|
—
|
|
|
138,837
|
|
|
138,837
|
|
||||||
|
|
$
|
—
|
|
|
$
|
471,397
|
|
|
$
|
471,397
|
|
|
$
|
38,548
|
|
|
$
|
861,891
|
|
|
$
|
900,439
|
|
(1)
|
Details regarding the Company's cash in restricted accounts are contained in the Company's annual consolidated financial statements and notes thereto for the year ended
January 2, 2011
included in the fiscal 2010 Form 10-K.
|
(2)
|
Includes money market funds.
|
(In thousands)
|
|
Severance Benefits
(1)
|
|
Lease and Related Termination Costs
|
|
Other Costs (2)
|
|
Total
|
||||||||
Accrued liability as of January 2, 2011
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges
|
|
10,911
|
|
|
713
|
|
|
320
|
|
|
11,944
|
|
||||
Payments
|
|
(905
|
)
|
|
—
|
|
|
—
|
|
|
(905
|
)
|
||||
Accrued liability as of July 3, 2011
|
|
$
|
10,006
|
|
|
$
|
713
|
|
|
$
|
320
|
|
|
$
|
11,039
|
|
(1)
|
Restructuring reserve charges above exclude
$1.4 million
of accrued compensation associated with the accelerated vesting of promissory notes, in accordance with the terms of each agreement, previously issued as consideration for an acquisition completed in the first quarter of fiscal 2010. The
$1.4 million
is separately recorded in "Accrued liabilities" on the Company's Condensed Consolidated Balance Sheet as of
July 3, 2011
, and in "Restructuring charges" on its Condensed Consolidated Statement of Operations for the three and six months ended
July 3, 2011
.
|
(2)
|
Other costs primarily represent associated legal services.
|
(In thousands)
|
|
Amount
|
||
Year
|
|
|
||
2011 (remaining six months)
|
|
$
|
7,435
|
|
2012
|
|
12,483
|
|
|
2013
|
|
12,255
|
|
|
2014
|
|
10,921
|
|
|
2015
|
|
9,490
|
|
|
Thereafter
|
|
46,380
|
|
|
|
|
$
|
98,964
|
|
(In thousands)
|
|
Amount
|
||
Year
|
|
|
||
2011 (remaining six months)
|
|
$
|
792,736
|
|
2012
|
|
655,195
|
|
|
2013
|
|
653,957
|
|
|
2014
|
|
846,983
|
|
|
2015
|
|
881,985
|
|
|
Thereafter
|
|
1,655,721
|
|
|
|
|
$
|
5,486,577
|
|
(In thousands)
|
|
Amount
|
||
Year
|
|
|
||
2011 (remaining six months)
|
|
$
|
111,186
|
|
2012
|
|
105,281
|
|
|
2013
|
|
7,934
|
|
|
|
|
$
|
224,401
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Balance at the beginning of the period
|
|
$
|
70,119
|
|
|
$
|
49,424
|
|
|
$
|
63,562
|
|
|
$
|
46,475
|
|
Accruals for warranties issued during the period
|
|
10,629
|
|
|
4,646
|
|
|
18,368
|
|
|
9,705
|
|
||||
Settlements made during the period
|
|
(1,487
|
)
|
|
(2,079
|
)
|
|
(2,669
|
)
|
|
(4,189
|
)
|
||||
Balance at the end of the period
|
|
$
|
79,261
|
|
|
$
|
51,991
|
|
|
$
|
79,261
|
|
|
$
|
51,991
|
|
(In thousands)
|
|
Amount
|
||
Year
|
|
|
||
2011 (remaining six months)
|
|
$
|
1,900
|
|
2012
|
|
75,870
|
|
|
2013
|
|
101,400
|
|
|
2014
|
|
96,770
|
|
|
|
|
$
|
275,940
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||||||||||
(In thousands)
|
|
Face Value
|
|
2011
(remaining
six months)
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
Beyond
2015
|
||||||||||||||
Convertible debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
4.50% debentures
|
|
$
|
250,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
250,000
|
|
|
$
|
—
|
|
4.75% debentures
|
|
230,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230,000
|
|
|
—
|
|
|
—
|
|
|||||||
1.25% debentures
|
|
198,608
|
|
|
—
|
|
|
198,608
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
0.75% debentures
|
|
79
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|||||||
IFC mortgage loan
|
|
75,000
|
|
|
—
|
|
|
—
|
|
|
12,500
|
|
|
15,000
|
|
|
15,000
|
|
|
32,500
|
|
|||||||
CEDA loan
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|||||||
Société Générale revolving credit facility
|
|
108,623
|
|
|
108,623
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
$
|
892,310
|
|
|
$
|
108,623
|
|
|
$
|
198,608
|
|
|
$
|
12,500
|
|
|
$
|
245,000
|
|
|
$
|
265,079
|
|
|
$
|
62,500
|
|
|
|
July 3, 2011
|
|
January 2, 2011
|
||||||||||||||||||||
(In thousands)
|
|
Carrying Value
|
|
Face Value
|
|
Fair Value (1)
|
|
Carrying Value
|
|
Face Value
|
|
Fair Value (1)
|
||||||||||||
4.50% debentures
|
|
$
|
186,288
|
|
|
$
|
250,000
|
|
|
$
|
276,750
|
|
|
$
|
179,821
|
|
|
$
|
250,000
|
|
|
$
|
230,172
|
|
4.75% debentures
|
|
230,000
|
|
|
230,000
|
|
|
245,525
|
|
|
230,000
|
|
|
230,000
|
|
|
215,050
|
|
||||||
1.25% debentures (2)
|
|
189,200
|
|
|
198,608
|
|
|
196,870
|
|
|
182,023
|
|
|
198,608
|
|
|
188,429
|
|
||||||
0.75% debentures
|
|
79
|
|
|
79
|
|
|
79
|
|
|
79
|
|
|
79
|
|
|
75
|
|
||||||
|
|
$
|
605,567
|
|
|
$
|
678,687
|
|
|
$
|
719,224
|
|
|
$
|
591,923
|
|
|
$
|
678,687
|
|
|
$
|
633,726
|
|
(1)
|
The fair value of the convertible debt was determined based on quoted market prices as reported by an independent pricing source.
|
(2)
|
The carrying value of the 1.25% senior convertible debentures ("1.25% debentures") was reclassified from long-term liabilities to short-term liabilities within "Convertible debt, current portion" in the Condensed Consolidated Balance Sheet as of
July 3, 2011
as the holders may require the Company to repurchase all of their 1.25% debentures on February 15, 2012.
|
|
As of (1)
|
||||||
|
July 3, 2011
|
|
January 2, 2011
|
||||
Stock price
|
$
|
19.71
|
|
|
$
|
12.83
|
|
Exercise price
|
$
|
22.53
|
|
|
$
|
22.53
|
|
Interest rate
|
1.26
|
%
|
|
1.63
|
%
|
||
Stock volatility
|
45.10
|
%
|
|
49.80
|
%
|
||
Maturity date
|
February 18, 2015
|
|
|
February 18, 2015
|
|
(1)
|
The valuation model utilizes these inputs to value the right but not the obligation to purchase one share at
$22.53
. The Company utilized a Black-Scholes valuation model to value the embedded cash conversion option. The underlying input assumptions were determined as follows:
|
(i)
|
Stock price. The closing price of the Company's class A common stock on the last trading day of the quarter.
|
(ii)
|
Exercise price. The exercise price of the embedded conversion option.
|
(iii)
|
Interest rate. The Treasury Strip rate associated with the life of the embedded conversion option.
|
(iv)
|
Stock volatility. The volatility of the Company's class A common stock over the life of the embedded conversion option.
|
|
As of (1)
|
||||||
|
July 3, 2011
|
|
January 2, 2011
|
||||
Stock price
|
$
|
19.71
|
|
|
$
|
12.83
|
|
Exercise price
|
$
|
22.53
|
|
|
$
|
22.53
|
|
Interest rate
|
1.26
|
%
|
|
1.63
|
%
|
||
Stock volatility
|
45.10
|
%
|
|
49.80
|
%
|
||
Credit risk adjustment
|
1.11
|
%
|
|
1.25
|
%
|
||
Maturity date
|
February 18, 2015
|
|
|
February 18, 2015
|
|
(1)
|
The valuation model utilizes these inputs to value the right but not the obligation to purchase one share at
$22.53
for the 4.50% Bond Hedge. The Company utilized a Black-Scholes valuation model to value the 4.50% Bond Hedge. The underlying input assumptions were determined as follows:
|
(i)
|
Stock price. The closing price of the Company's class A common stock on the last trading day of the quarter.
|
(ii)
|
Exercise price. The exercise price of the 4.50% Bond Hedge.
|
(iii)
|
Interest rate. The Treasury Strip rate associated with the life of the 4.50% Bond Hedge.
|
(iv)
|
Stock volatility. The volatility of the Company's class A common stock over the life of the 4.50% Bond Hedge.
|
(v)
|
Credit risk adjustment. Represents the weighted average of the credit default swap rate of the counterparties.
|
|
|
As of
|
||||||
(In thousands)
|
|
July 3, 2011
|
|
January 2, 2011
|
||||
Accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
||
Cumulative translation adjustment
|
|
$
|
(3,905
|
)
|
|
$
|
(2,761
|
)
|
Net unrealized gain (loss) on derivatives
|
|
(30,348
|
)
|
|
10,647
|
|
||
Deferred taxes
|
|
3,488
|
|
|
(4,246
|
)
|
||
|
|
$
|
(30,765
|
)
|
|
$
|
3,640
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Net income (loss)
|
|
$
|
(147,872
|
)
|
|
$
|
(6,216
|
)
|
|
$
|
(149,993
|
)
|
|
$
|
6,357
|
|
Components of comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Translation adjustment
|
|
(954
|
)
|
|
1,563
|
|
|
(1,144
|
)
|
|
1,734
|
|
||||
Net unrealized gain (loss) on derivatives (Note 12)
|
|
54
|
|
|
36,216
|
|
|
(40,995
|
)
|
|
62,279
|
|
||||
Unrealized loss on investments
|
|
(355
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income taxes
|
|
(8
|
)
|
|
(4,248
|
)
|
|
7,734
|
|
|
(7,276
|
)
|
||||
Net change in accumulated other comprehensive income (loss)
|
|
(1,263
|
)
|
|
33,531
|
|
|
(34,405
|
)
|
|
56,737
|
|
||||
Total comprehensive income (loss)
|
|
$
|
(149,135
|
)
|
|
$
|
27,315
|
|
|
$
|
(184,398
|
)
|
|
$
|
63,094
|
|
(In thousands)
|
|
Balance Sheet Classification
|
|
July 3, 2011
|
|
January 2, 2011
|
||||
Assets
|
|
Prepaid expenses and other current assets
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||
Foreign currency option contracts
|
|
|
|
$
|
5,621
|
|
|
$
|
16,432
|
|
Foreign currency forward exchange contracts
|
|
|
|
104
|
|
|
16,314
|
|
||
|
|
|
|
$
|
5,725
|
|
|
$
|
32,746
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
Foreign currency forward exchange contracts
|
|
|
|
$
|
8,128
|
|
|
$
|
3,208
|
|
|
|
|
|
|
|
|
||||
Liabilities
|
|
Accrued liabilities
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||
Foreign currency option contracts
|
|
|
|
$
|
10,263
|
|
|
$
|
2,909
|
|
Foreign currency forward exchange contracts
|
|
|
|
11,076
|
|
|
3,295
|
|
||
|
|
|
|
$
|
21,339
|
|
|
$
|
6,204
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
Foreign currency forward exchange contracts
|
|
|
|
$
|
27,858
|
|
|
$
|
4,060
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) recognized in OCI (effective portion)
|
|
$
|
(12,210
|
)
|
|
$
|
45,886
|
|
|
$
|
(60,203
|
)
|
|
$
|
63,581
|
|
Less: Loss (gain) reclassified from OCI to revenue (effective portion)
|
|
12,264
|
|
|
(9,670
|
)
|
|
15,319
|
|
|
(13,780
|
)
|
||||
Less: Loss reclassified from OCI to other, net (1)
|
|
—
|
|
|
—
|
|
|
3,889
|
|
|
—
|
|
||||
Add: Loss reclassified from OCI to cost of revenue (effective portion)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,478
|
|
||||
Net gain (loss) on derivatives (Note 11)
|
|
$
|
54
|
|
|
$
|
36,216
|
|
|
$
|
(40,995
|
)
|
|
$
|
62,279
|
|
(1)
|
During the six months ended
July 3, 2011
, the Company reclassified from OCI to "Other, net" a net gain totaling
$0.8 million
relating to transactions previously designated as effective cash flow hedges as the related forecasted transactions did not occur in the hedge period or within an additional two month time period thereafter. In addition, the Company reclassified from OCI to "Other, net" a net loss totaling
$4.7 million
relating to transactions previously designated as effective cash flow hedges as the Company concluded that the related forecasted transactions are probable not to occur in the hedge period or within an additional two month time period thereafter.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Loss recognized in "Other, net" on derivatives (ineffective portion and amount excluded from effectiveness testing) (1)
|
|
$
|
(9,944
|
)
|
|
$
|
(6,265
|
)
|
|
$
|
(22,636
|
)
|
|
$
|
(8,267
|
)
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recognized in "Other, net"
|
|
$
|
(6,403
|
)
|
|
$
|
22,000
|
|
|
$
|
(44,598
|
)
|
|
$
|
37,390
|
|
(1)
|
The amount of loss recognized related to the ineffective portion of derivatives was insignificant. This amount also includes a net
$3.9 million
loss reclassified from OCI to “Other, net” in the six months ending
July 3, 2011
relating to transactions previously designated as effective cash flow hedges which did not occur or were now probable not to occur in the hedge period or within an additional two month time period thereafter.
|
|
|
As of
|
||||
(In thousands)
|
|
July 3, 2011
|
|
July 4, 2010
|
||
Stock options
|
|
828
|
|
|
350
|
|
Restricted stock units
|
|
2,648
|
|
|
1,900
|
|
Warrants (under the CSO2015)
|
|
*
|
|
|
N/A
|
|
4.75% debentures
|
|
8,712
|
|
|
8,712
|
|
1.25% debentures
|
|
*
|
|
|
*
|
|
0.75% debentures
|
|
*
|
|
|
*
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Cost of UPP revenue
|
|
$
|
2,414
|
|
|
$
|
1,632
|
|
|
$
|
3,299
|
|
|
$
|
2,823
|
|
Cost of R&C revenue
|
|
2,859
|
|
|
2,327
|
|
|
3,895
|
|
|
3,818
|
|
||||
Research and development
|
|
1,735
|
|
|
2,253
|
|
|
3,504
|
|
|
3,936
|
|
||||
Sales, general and administrative
|
|
5,809
|
|
|
5,379
|
|
|
15,282
|
|
|
11,822
|
|
||||
Total stock-based compensation expense
|
|
$
|
12,817
|
|
|
$
|
11,591
|
|
|
$
|
25,980
|
|
|
$
|
22,399
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Employee stock options
|
|
$
|
611
|
|
|
$
|
25
|
|
|
$
|
1,071
|
|
|
$
|
902
|
|
Restricted stock awards and units
|
|
11,054
|
|
|
11,566
|
|
|
25,880
|
|
|
22,381
|
|
||||
Change in stock-based compensation capitalized in inventory
|
|
1,152
|
|
|
—
|
|
|
(971
|
)
|
|
(884
|
)
|
||||
Total stock-based compensation expense
|
|
$
|
12,817
|
|
|
$
|
11,591
|
|
|
$
|
25,980
|
|
|
$
|
22,399
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
(As a percentage of total revenue)
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||
Revenue by geography:
|
|
|
|
|
|
|
|
|
||||
North America
|
|
63
|
%
|
|
34
|
%
|
|
55
|
%
|
|
32
|
%
|
Europe:
|
|
|
|
|
|
|
|
|
||||
Italy
|
|
13
|
|
|
21
|
|
|
15
|
|
|
19
|
|
Germany
|
|
6
|
|
|
20
|
|
|
6
|
|
|
19
|
|
France
|
|
7
|
|
|
8
|
|
|
11
|
|
|
10
|
|
Other
|
|
4
|
|
|
7
|
|
|
5
|
|
|
10
|
|
Rest of world
|
|
7
|
|
|
10
|
|
|
8
|
|
|
10
|
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||
(As a percentage of total revenue)
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
|||
Significant Customers:
|
Business Segment
|
|
|
|
|
|
|
|
|
||
Customer A
|
Utility and power plants
|
|
18
|
%
|
|
*
|
|
11
|
%
|
|
*
|
•
|
superior performance, including the ability to generate up to 50% more power per unit area than conventional solar cells;
|
•
|
superior aesthetics, with our uniformly black surface design that eliminates highly visible reflective grid lines and metal interconnect ribbons;
|
•
|
more KW per pound can be transported using less packaging, resulting in lower distribution costs; and
|
•
|
more efficient use of silicon, a key raw material used in the manufacture of solar cells.
|
•
|
channel breadth and flexible delivery capability, including turn-key systems;
|
•
|
high performance delivered by enhancing energy delivery and financial return through systems technology design; and
|
•
|
cutting edge systems design to meet customer needs and reduce cost, including non-penetrating, fast roof installation technologies.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Utility and power plants
|
$
|
302,439
|
|
|
$
|
119,999
|
|
|
$
|
548,348
|
|
|
$
|
264,093
|
|
Residential and commercial
|
289,816
|
|
|
264,239
|
|
|
495,325
|
|
|
467,419
|
|
||||
Total revenue
|
$
|
592,255
|
|
|
$
|
384,238
|
|
|
$
|
1,043,673
|
|
|
$
|
731,512
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||
(As a percentage of total revenue)
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
|||
Significant Customer:
|
Business Segment
|
|
|
|
|
|
|
|
|
||
Customer A
|
Utility and power plants
|
|
18
|
%
|
|
*
|
|
11
|
%
|
|
*
|
|
Three Months Ended
|
||||||||||||||||||||||
|
UPP
|
|
R&C
|
|
Consolidated
|
||||||||||||||||||
(Dollars in thousands)
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||||||
Amortization of other intangible assets
|
$
|
65
|
|
|
$
|
774
|
|
|
$
|
2
|
|
|
$
|
2,125
|
|
|
$
|
67
|
|
|
$
|
2,899
|
|
Stock-based compensation
|
2,414
|
|
|
1,632
|
|
|
2,859
|
|
|
2,327
|
|
|
5,273
|
|
|
3,959
|
|
||||||
Non-cash interest expense
|
601
|
|
|
275
|
|
|
155
|
|
|
393
|
|
|
756
|
|
|
668
|
|
||||||
Loss on change in European government incentives
|
29,082
|
|
|
—
|
|
|
19,381
|
|
|
—
|
|
|
48,463
|
|
|
—
|
|
||||||
Materials and other cost of revenue
|
276,870
|
|
|
94,543
|
|
|
241,532
|
|
|
194,318
|
|
|
518,402
|
|
|
288,861
|
|
||||||
Total cost of revenue
|
$
|
309,032
|
|
|
$
|
97,224
|
|
|
$
|
263,929
|
|
|
$
|
199,163
|
|
|
$
|
572,961
|
|
|
$
|
296,387
|
|
Total cost of revenue as a percentage of revenue
|
102
|
%
|
|
81
|
%
|
|
91
|
%
|
|
75
|
%
|
|
97
|
%
|
|
77
|
%
|
||||||
Total gross margin percentage
|
(2
|
)%
|
|
19
|
%
|
|
9
|
%
|
|
25
|
%
|
|
3
|
%
|
|
23
|
%
|
|
Six Months Ended
|
||||||||||||||||||||||
|
UPP
|
|
R&C
|
|
Consolidated
|
||||||||||||||||||
(Dollars in thousands)
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||||||
Amortization of other intangible assets
|
$
|
167
|
|
|
$
|
1,463
|
|
|
$
|
195
|
|
|
$
|
4,249
|
|
|
$
|
362
|
|
|
$
|
5,712
|
|
Stock-based compensation
|
3,299
|
|
|
2,823
|
|
|
3,895
|
|
|
3,818
|
|
|
7,194
|
|
|
6,641
|
|
||||||
Non-cash interest expense
|
986
|
|
|
676
|
|
|
804
|
|
|
895
|
|
|
1,790
|
|
|
1,571
|
|
||||||
Loss on change in European government incentives
|
29,082
|
|
|
—
|
|
|
19,381
|
|
|
—
|
|
|
48,463
|
|
|
—
|
|
||||||
Materials and other cost of revenue
|
478,509
|
|
|
203,690
|
|
|
399,539
|
|
|
354,304
|
|
|
878,048
|
|
|
557,994
|
|
||||||
Total cost of revenue
|
$
|
512,043
|
|
|
$
|
208,652
|
|
|
$
|
423,814
|
|
|
$
|
363,266
|
|
|
$
|
935,857
|
|
|
$
|
571,918
|
|
Total cost of revenue as a percentage of revenue
|
93
|
%
|
|
79
|
%
|
|
86
|
%
|
|
78
|
%
|
|
90
|
%
|
|
78
|
%
|
||||||
Total gross margin percentage
|
7
|
%
|
|
21
|
%
|
|
14
|
%
|
|
22
|
%
|
|
10
|
%
|
|
22
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(Dollars in thousands)
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Stock-based compensation
|
$
|
1,735
|
|
|
$
|
2,253
|
|
|
$
|
3,504
|
|
|
$
|
3,936
|
|
Other R&D
|
13,520
|
|
|
8,953
|
|
|
25,397
|
|
|
17,677
|
|
||||
Total R&D
|
$
|
15,255
|
|
|
$
|
11,206
|
|
|
$
|
28,901
|
|
|
$
|
21,613
|
|
As a percentage of revenue
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(Dollars in thousands)
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Amortization of other intangible assets
|
$
|
6,801
|
|
|
$
|
8,803
|
|
|
$
|
13,570
|
|
|
$
|
10,749
|
|
Stock-based compensation
|
5,809
|
|
|
5,379
|
|
|
15,282
|
|
|
11,822
|
|
||||
Total investment related costs
|
13,123
|
|
|
—
|
|
|
13,123
|
|
|
—
|
|
||||
Amortization of promissory notes
|
698
|
|
|
2,919
|
|
|
1,988
|
|
|
2,919
|
|
||||
Non-cash interest expense
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Other SG&A
|
64,423
|
|
|
61,275
|
|
|
123,070
|
|
|
117,166
|
|
||||
Total SG&A
|
$
|
90,856
|
|
|
$
|
78,376
|
|
|
$
|
167,035
|
|
|
$
|
142,656
|
|
As a percentage of revenue
|
15
|
%
|
|
20
|
%
|
|
16
|
%
|
|
20
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Restructuring charges
|
$
|
13,308
|
|
|
$
|
—
|
|
|
$
|
13,308
|
|
|
$
|
—
|
|
As a percentage of revenue
|
2
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Interest income
|
$
|
488
|
|
|
$
|
279
|
|
|
$
|
1,231
|
|
|
$
|
552
|
|
Non-cash interest expense
|
$
|
(6,249
|
)
|
|
$
|
(8,710
|
)
|
|
$
|
(12,540
|
)
|
|
$
|
(14,197
|
)
|
Other interest expense
|
(9,810
|
)
|
|
(10,600
|
)
|
|
(18,778
|
)
|
|
(16,053
|
)
|
||||
Total interest expense
|
$
|
(16,059
|
)
|
|
$
|
(19,310
|
)
|
|
$
|
(31,318
|
)
|
|
$
|
(30,250
|
)
|
Gain on change in equity interest in unconsolidated investee
|
$
|
322
|
|
|
$
|
28,348
|
|
|
$
|
322
|
|
|
$
|
28,348
|
|
Gain (loss) on mark-to-market derivatives
|
$
|
(97
|
)
|
|
$
|
34,070
|
|
|
$
|
(141
|
)
|
|
$
|
31,852
|
|
Other, net
|
$
|
(9,527
|
)
|
|
$
|
(10,806
|
)
|
|
$
|
(18,734
|
)
|
|
$
|
(16,397
|
)
|
Other income (expense), net
|
$
|
(24,873
|
)
|
|
$
|
32,581
|
|
|
$
|
(48,640
|
)
|
|
$
|
14,105
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In thousands)
|
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Loss on derivatives and foreign exchange
|
|
$
|
(9,752
|
)
|
|
$
|
(10,556
|
)
|
|
$
|
(19,105
|
)
|
|
$
|
(17,614
|
)
|
Gain (loss) on sale of investments
|
|
(319
|
)
|
|
—
|
|
|
(191
|
)
|
|
1,572
|
|
||||
Other income (expense), net
|
|
544
|
|
|
(250
|
)
|
|
562
|
|
|
(355
|
)
|
||||
Total other, net
|
|
$
|
(9,527
|
)
|
|
$
|
(10,806
|
)
|
|
$
|
(18,734
|
)
|
|
$
|
(16,397
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(Dollars in thousands)
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Provision for income taxes
|
$
|
(22,702
|
)
|
|
$
|
(46,992
|
)
|
|
$
|
(6,886
|
)
|
|
$
|
(16,117
|
)
|
As a percentage of revenue
|
4
|
%
|
|
12
|
%
|
|
1
|
%
|
|
2
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(Dollars in thousands)
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Equity in earnings (loss) of unconsolidated investees
|
$
|
(172
|
)
|
|
$
|
2,030
|
|
|
$
|
6,961
|
|
|
$
|
5,148
|
|
As a percentage of revenue
|
—
|
%
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(Dollars in thousands)
|
July 3, 2011
|
|
July 4, 2010
|
|
July 3, 2011
|
|
July 4, 2010
|
||||||||
Income from discontinued operations, net of taxes
|
$
|
—
|
|
|
$
|
7,896
|
|
|
$
|
—
|
|
|
$
|
7,896
|
|
|
|
Six Months Ended
|
||||||
(In thousands)
|
|
July 3, 2011
|
|
July 4, 2010
|
||||
Net cash used in operating activities of continuing operations
|
|
$
|
(280,532
|
)
|
|
$
|
(45,799
|
)
|
Net cash used in investing activities of continuing operations
|
|
(43,213
|
)
|
|
(378,415
|
)
|
||
Net cash provided by (used in) financing activities of continuing operations
|
|
(42,385
|
)
|
|
203,994
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
(In thousands)
|
|
Total
|
|
2011
(remaining 6 months)
|
|
2012-2013
|
|
2014-2015
|
|
Beyond 2015
|
||||||||||
Convertible debt, including interest (1)
|
|
$
|
757,237
|
|
|
$
|
12,329
|
|
|
$
|
243,270
|
|
|
$
|
501,638
|
|
|
$
|
—
|
|
IFC mortgage loan, including interest (2)
|
|
84,406
|
|
|
1,283
|
|
|
17,203
|
|
|
32,736
|
|
|
33,184
|
|
|||||
CEDA loan, including interest (3)
|
|
80,363
|
|
|
1,275
|
|
|
5,100
|
|
|
5,100
|
|
|
68,888
|
|
|||||
Société Générale revolving credit facility, including interest (4)
|
|
110,401
|
|
|
110,401
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Future financing commitments (5)
|
|
275,940
|
|
|
1,900
|
|
|
177,270
|
|
|
96,770
|
|
|
—
|
|
|||||
Customer advances (6)
|
|
174,243
|
|
|
13,490
|
|
|
31,142
|
|
|
48,447
|
|
|
81,164
|
|
|||||
Operating lease commitments (7)
|
|
98,964
|
|
|
7,435
|
|
|
24,738
|
|
|
20,411
|
|
|
46,380
|
|
|||||
Utility obligations (8)
|
|
750
|
|
|
|
|
|
—
|
|
|
—
|
|
|
750
|
|
|||||
Non-cancellable purchase orders (9)
|
|
200,194
|
|
|
200,194
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase commitments under agreements (10)
|
|
5,286,383
|
|
|
592,542
|
|
|
1,309,152
|
|
|
1,728,968
|
|
|
1,655,721
|
|
|||||
Total
|
|
$
|
7,068,881
|
|
|
$
|
940,849
|
|
|
$
|
1,807,875
|
|
|
$
|
2,434,070
|
|
|
$
|
1,886,087
|
|
(1)
|
Convertible debt, including interest, relates to the aggregate of
$678.7 million
in outstanding principal amount of our senior convertible debentures on
July 3, 2011
. For the purpose of the table above, we assume that all holders of the 4.50% debentures and 4.75% debentures will hold the debentures through the date of maturity in fiscal 2015 and 2014, respectively, and all holders of the 1.25% debentures and 0.75% debentures will require us to repurchase the debentures on February 15, 2012 and August 1, 2015, respectively, and upon conversion, the values of the senior convertible debentures will be equal to the aggregate principal amount with no premiums.
|
(2)
|
IFC mortgage loan, including interest, relates to the
$75.0 million
borrowed as of
July 3, 2011
. Under the loan agreement, SPML is required to repay the amount borrowed, starting 2 years after the date of borrowing, in 10 equal semiannual installments over the following 5 years. SPML is required to pay interest of LIBOR plus 3% per annum on outstanding borrowings.
|
(3)
|
CEDA loan, including interest, relates to the proceeds of the
$30.0 million
aggregate principal amount of the Bonds. The Bonds mature on April 1, 2031. On June 1, 2011 the Bonds were converted to bear interest at a fixed rate of 8.50% through maturity.
|
(4)
|
Société Générale revolving credit facility, including interest, relates to the Euro 75.0 million outstanding balance as of
July 3, 2011
(
$108.6 million
based on the exchange rates as of
July 3, 2011
), and matures on November 23, 2011. Interest periods are monthly. We are required to pay interest on outstanding borrowings of EURIBOR plus 2.70% per annum on or after May 26, 2011.
|
(5)
|
SPTL and AUO will contribute additional amounts to AUOSP in the second half of fiscal 2011 through 2014 amounting to
$271.0 million
by each shareholder, or such lesser amount as the parties may mutually agree. Further, in connection with a purchase agreement with a non-public company we will be required to provide additional financing to such party of up to $4.9 million, subject to certain conditions.
|
(6)
|
Customer advances relate to advance payments received from customers for future purchases of solar power products and future polysilicon purchases.
|
(7)
|
Operating lease commitments primarily relate to: (i) six solar power systems leased from Wells Fargo over minimum lease terms of up to 20 years; (ii) a 10-year lease agreement with an unaffiliated third party for our headquarters in San Jose, California starting in May 2011 and expiring in April 2021; (iii) an 11-year lease agreement with an unaffiliated
|
(8)
|
Utility obligations relate to our 11-year lease agreement with an unaffiliated third party for our administrative, research and development offices in Richmond, California.
|
(9)
|
Non-cancellable purchase orders relate to purchases of raw materials for inventory and manufacturing equipment from a variety of vendors.
|
(10)
|
Purchase commitments under agreements relate to arrangements entered into with several suppliers, including joint ventures, for polysilicon, ingots, wafers, solar cells and solar panels as well as agreements to purchase solar renewable energy certificates from solar installation owners in New Jersey. These agreements specify future quantities and pricing of products to be supplied by the vendors for periods up to 10 years and there are certain consequences, such as forfeiture of advanced deposits and liquidated damages relating to previous purchases, in the event that we terminate the arrangements.
Where pricing is specified for future periods, in some contracts, we may reduce our purchase commitment under the contract if we obtain a bona fide third party offer at a price that is a certain percentage lower than the applicable purchase price in the existing contract. If market prices decrease, we intend to use such provisions to either move our purchasing to another supplier or to force the initial supplier to reduce its price to remain competitive with market pricing.
|
Period
|
|
Total Number of Shares Purchased
(in thousands) (1)
|
|
Average Price
Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares That May Yet Be Purchased Under the Publicly Announced Plans or Programs
|
|||||
April 4, 2011 through May 1, 2011
|
|
2
|
|
|
$
|
16.58
|
|
|
—
|
|
|
—
|
|
May 2, 2011 through June 29, 2011
|
|
42
|
|
|
$
|
21.23
|
|
|
—
|
|
|
—
|
|
June 30, 2011 through July 3, 2011
|
|
26
|
|
|
$
|
19.07
|
|
|
—
|
|
|
—
|
|
|
|
70
|
|
|
$
|
20.29
|
|
|
—
|
|
|
—
|
|
(1)
|
The total number of shares purchased includes only shares surrendered to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees.
|
Exhibit Number
|
|
Description
|
|
|
|
2.1
|
|
Tender Offer Agreement, dated April 28, 2011, between SunPower Corporation and Total Gas & Power USA, SAS (incorporated by reference to Exhibit 2.1 of Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 2, 2011).
|
2.2
|
|
Amendment to Tender Offer Agreement, dated June 7, 2011, between SunPower Corporation and Total Gas & Power USA, SAS (incorporated by reference to Exhibit 2.1 of Registrant's Current Report on Form 8-K filed with the Securities and Exchanged Commission on June 7, 2011).
|
3.1
|
|
By-laws of SunPower Corporation, as amended and restated on June 14, 2011 (incorporated by reference to Exhibit 3.1 of Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 15, 2011).
|
4.1
|
|
Registration Rights Agreement, dated April 28, 2011, between SunPower Corporation and Total Gas & Power USA, SAS (incorporated by reference to Exhibit 10.6 of Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 2, 2011).
|
4.2
|
|
Amendment to Rights Agreement, dated April 28, 2011, by and between SunPower Corporation and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 4.1 of Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 2, 2011).
|
4.3
|
|
Amendment No. 2 to Rights Agreement, dated June 14, 2011, by and between SunPower Corporation and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 4.1 of Registrant's Current Report on Form 8-K filed with the Securities and Exchanged Commission on June 15, 2011).
|
10.1*
|
|
First Amendment and Consent to Credit Agreement, dated April 19, 2011, by and among SunPower Corporation, the Guarantors party thereto, Union Bank, N.A. as Administrative Agent, and other Lenders party thereto.
|
10.2*
|
|
Second Amendment to Credit Agreement, dated April 29, 2011, by and among SunPower Corporation, the Guarantors party thereto, Union Bank, N.A. as Administrative Agent, and the other Lenders party thereto.
|
10.3*
|
|
Third Amendment to Credit Agreement, dated May 11, 2011, by and among SunPower Corporation, the Guarantors party thereto, union Bank, N.A. as Administrative Agent, and the other Lenders party thereto.
|
10.4*
|
|
Second Share Kun Pledge Agreement, dated April 27, 2010, by and among SunPower Corporation, the Financial Institutions named therein as Pledgees, and union Bank, N.A., as Administrative Agent.
|
10.5
|
|
Tender Offer Agreement Guaranty, dated April 27, 2010, between SunPower Corporation and Total S.A. (incorporated by reference to Exhibit 10.1 of Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 2, 2011).
|
10.6
|
|
Credit Support Agreement, dated April 28, 2011, between SunPower Corporation and Total S.A.(incorporated by reference to Exhibit 10.2 of Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 2, 2011).
|
10.7
|
|
Amendment to Credit Support Agreement, dated June 7, 2011, between SunPower Corporation and Total S.A. (incorporated by reference to Exhibit 10.1 of Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 7, 2011).
|
10.8
|
|
Affiliation Agreement, dated April 28, 2011. between SunPower Corporation and Total Gas & Power USA, SAS (incorporated by reference to Exhibit 10.3 of Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 2, 2011).
|
10.9
|
|
Amendment to Affiliation Agreement, dated June 7, 2011, between SunPower Corporation and Total Gas & Power USA, SAS (incorporated by reference to Exhibit 10.2 of Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 7, 2011).
|
10.10
|
|
Affiliation Agreement Guaranty, dated April 28, 2011, between SunPower Corporation and Total S.A. (incorporated by reference to Exhibit 10.4 of Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 2, 2011).
|
10.11
|
|
Research & Collaboration Agreement, dated April 28, 2011, between SunPower Corporation and Total Gas & Power USA, SAS (incorporated by reference to Exhibit 10.5 of Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 2, 2011).
|
10.12
|
|
Amendment to Research & Collaboration Agreement, dated June 7, 2011, between SunPower Corporation and Total Gas & Power USA, SAS (incorporated by reference to Exhibit 10.3 of Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 7, 2011).
|
|
SUNPOWER CORPORATION
|
|
|
|
|
Dated: August 9, 2011
|
By:
|
/s/ DENNIS V. ARRIOLA
|
|
|
|
|
|
Dennis V. Arriola
|
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
Exhibit Number
|
|
Description
|
|
|
|
10.1*
|
|
First Amendment and Consent to Credit Agreement, dated April 19, 2011, by and among SunPower Corporation, the Guarantors party thereto, Union Bank, N.A. as Administrative Agent, and the other Lenders party thereto.
|
10.2*
|
|
Second Amendment to Credit Agreement, dated April 29, 2011, by and among SunPower Corporation, the Guarantors party thereto, Union Bank, N.A. as Administrative Agent, and the other Lenders party thereto.
|
10.3*
|
|
Third Amendment to Credit Agreement, dated May 11, 2011, by and among SunPower Corporation, the Guarantors party thereto, Union Bank, N.A. as Administrative Agent, and the other Lenders party thereto.
|
10.4*
|
|
Second Share Kun Pledge Agreement, dated April 27, 2010, by and among SunPower Corporation, the Financial Institutions named therein as Pledgees, and Union Bank, N.A., as Administrative Agent.
|
10.13*+
|
|
Form of Retention Agreement, dated May 20, 2011, by and between SunPower Corporation and certain executive officers.
|
10.14*†
|
|
Amendment No. 1 to Euro 75,000,000 Revolving Credit Agreement, dated May 25, 2011, among SunPower Corporation, SunPower Corporation Malta Holdings Limited, and Société Générale, Milan Branch.
|
10.15*
|
|
New Bank Joinder Agreement, dated May 27, 2011, by and among SunPower Corporation, Deutsche Bank AG New York Branch, as Administrative Agent, and Credit Agricole Corporate and Investment Bank.
|
10.16*
|
|
First Supplement to Loan Agreement, dated June 1, 2011, by and between California Enterprise Development Authority and SunPower Corporation, relating to $30,000,000 California Enterprise Development Authority Tax Exempt Recovery Zone Facility Revenue Bonds (SunPower Corporation - Headquarters Project) Series 2010.
|
10.17*+
|
|
Outside Director Compensation Policy, as amended on June 15, 2011.
|
31.1*
|
|
Certification by Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a).
|
31.2*
|
|
Certification by Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a).
|
32.1*
|
|
Certification Furnished Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS*^
|
|
XBRL Instance Document.
|
101.SCH*^
|
|
XBRL Taxonomy Schema Document.
|
101.CAL*^
|
|
XBRL Taxonomy Calculation Linkbase Document.
|
101.LAB*^
|
|
XBRL Taxonomy Label Linkbase Document.
|
101.PRE*^
|
|
XBRL Taxonomy Presentation Linkbase Document.
|
101.DEF*^
|
|
XBRL Taxonomy Definition Linkbase Document.
|
a.
|
the representations and warranties of each Loan Party set forth in the Credit Agreement or any other Loan Document were true and correct when made and remain true, correct and complete in all material respects as of the date hereof (except to the extent such representations and warranties expressly refer to an earlier date, in which case they are true, correct and complete in all material respects as of such earlier date); provided that the foregoing materiality qualifications shall not apply to any representations or warranties that are qualified by materiality in the text thereof;
|
b.
|
the Loan Parties have the authority to execute this Amendment and the execution, delivery, and performance by the Loan Parties of this Amendment and the other documents, instruments and agreements delivered or to be delivered in connection herewith (i) are within the corporate or limited liability company powers of each Loan Party and have been duly authorized by all necessary corporate or limited liability company action on the part of each Loan Party, (ii) do not require any governmental or third party consents, except those which have been duly obtained and are in full force and effect, (iii) do not and will not conflict with any requirement of Law, any Loan Party's operating agreement, certificate or articles of incorporation, bylaws, partnership agreement, minutes or resolutions, (iv) after giving effect to this Amendment, do not result in any breach of or constitute a default under any agreement or instrument to which any Loan Party or any of their respective Subsidiaries is a party or by which they or any of their respective properties are bound, and (v) do not result in or require the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance of any nature upon any of the assets or properties of any Loan Party;
|
c.
|
this Amendment and the other instruments and agreements delivered or to be delivered by any Loan Party in connection herewith have been duly executed and delivered by each Loan Party and constitute the legal, valid, and binding obligation of each Loan Party, enforceable against such Loan Party in accordance with their respective terms, except to the extent that (i) enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors, (ii) enforcement may be subject to general principles of equity, and (iii) the availability of the remedies of specific performance and injunctive relief may be subject to the discretion of the court before which any proceedings for such remedies may be brought;
|
d.
|
no event has occurred or failed to occur that is, or, with notice or lapse of time or both would constitute, a Default, an Event of Default, or a breach or failure of any condition under any Loan Document; and
|
e.
|
after giving effect to this Amendment, no Loan Party has any offset, defense, counterclaim, dispute or disagreement of any kind or nature whatsoever with respect to their respective liabilities, obligations and indebtedness arising under or in connection with any Loan Documents.
|
a.
|
Borrower, each Guarantor and the Required Lenders shall have executed and delivered to the Agent, this Amendment;
|
b.
|
the Loans shall have been fully repaid together with any amounts owing due to prepayment of LIBOR Rate Loans prior to the expiration of the applicable Interest Period for such Loans, such that the Total Revolving Outstandings are reduced to Zero Dollars ($0.00);
|
c.
|
The Loan Parties shall have received all other consents and waivers required pursuant to the terms of any documents or agreements relating to Indebtedness of the Loan Parties, including all consents required under the DB Facility;
|
d.
|
The representations and warranties of Borrower and each Guarantor under the Credit Agreement, the other Loan Documents and this Amendment, as applicable, shall be true and correct in all material respects as of the date hereof (except to the extent such representations and warranties expressly refer to an earlier date, in which case they are true, correct and complete in all material respects as of such earlier date); provided that the foregoing materiality qualifications shall not apply to any representations or warranties that are qualified by materiality in the text thereof;
|
e.
|
The Agent shall have received for the account of the Lenders, in immediately available funds, a fee in the amount of $5,000 which fee shall be non-refundable and fully earned upon receipt; and
|
f.
|
The Agent shall have received in immediately available funds, all out-of-pocket costs and expenses (including reasonable attorneys' fees and costs) incurred by the Agent in connection with this Amendment and the transactions contemplated hereby and invoiced to the Borrower prior to the date on which this Amendment is otherwise to become effective; provided that the failure to invoice any such amounts to the Borrower prior to such date shall not preclude the Agent from seeking reimbursement of such amounts, or excuse the Borrower from paying or reimbursing such amounts, following the effective date of this Amendment.
|
The “Borrower”
SUNPOWER CORPORATION
By:
/s/ Dennis Arriola
Name: Dennis Arriola
Title: EVP & Chief Financial Officer
|
The “Guarantors”
SUNPOWER CORPORATION, SYSTEMS
By:
/s/ Dennis Arriola
Name: Dennis Arriola
Title: SVP & Chief Financial Officer
|
SUNPOWER NORTH AMERICA LLC
By: SunPower Corporation, its sole member
By:
/s/ Dennis Arriola
Name: Dennis Arriola
Title: Chief Financial Officer
|
|
The “Agent”
UNION BANK, N.A., as Administrative Agent
By:
/s/ James B. Goudy
Name: James B. Goudy
Title: Vice President
|
The “Lenders”
UNION BANK, N.A., as a lender
By:
/s/ James B. Goudy
Name: James B. Goudy
Title: Vice President
|
The “Lenders”
HSBC BANK USA, NATIONAL ASSOCIATION, as a lender
By:
/s/ Jason A. Huck
Name: Jason A. Huck
Title: VP Global Relationship Manager
HSBC Bank USA
|
Entity Type
|
Issuer Name
|
Jurisdiction of Organization
|
Certificate No.
|
Certificate Date
|
No. of Shares/ Type of Shares
|
None.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
|
the representations and warranties of each Loan Party set forth in the Credit Agreement or any other Loan Document were true and correct when made and remain true, correct and complete in all material respects as of the date hereof (except to the extent such representations and warranties expressly refer to an earlier date, in which case they are true, correct and complete in all material respects as of such earlier date); provided that the foregoing materiality qualifications shall not apply to any representations or warranties that are qualified by materiality in the text thereof;
|
b.
|
the Loan Parties have the authority to execute this Amendment and the execution, delivery, and performance by the Loan Parties of this Amendment and the other documents, instruments and agreements delivered or to be delivered in connection herewith (i) are within the corporate or limited liability company powers of each Loan Party and have been duly authorized by all necessary corporate or limited liability company action on the part of each Loan Party, (ii) do not require any governmental or third party consents, except those which have been duly obtained and are in full force and effect, (iii) do not and will not conflict with any requirement of Law, any Loan Party's operating agreement, certificate or articles of incorporation, bylaws, partnership agreement, minutes or resolutions, (iv) after giving effect to this Amendment, do not result in any breach of or constitute a default under any agreement or instrument to which any Loan Party or any of their respective Subsidiaries is a party or by which they or any of their respective properties are bound, and (v) do not result in or require the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance of any nature upon any of the assets or properties of any Loan Party;
|
c.
|
this Amendment and the other instruments and agreements delivered or to be delivered by any Loan Party in connection herewith have been duly executed and delivered by each Loan Party and constitute the legal, valid, and binding obligation of each Loan Party, enforceable against such Loan Party in accordance with their respective terms, except to the extent that (i) enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors, (ii) enforcement may be subject to general principles of equity, and (iii) the availability of the remedies of specific performance and injunctive relief may be subject to the discretion of the court before which any proceedings for such remedies may be brought;
|
d.
|
no event has occurred or failed to occur that is, or, with notice or lapse of time or both would constitute, a Default, an Event of Default, or a breach or failure of any condition under any Loan Document; and
|
e.
|
after giving effect to this Amendment, no Loan Party has any offset, defense, counterclaim, dispute or disagreement of any kind or nature whatsoever with respect to their respective liabilities, obligations and indebtedness arising under or in connection with any Loan Documents.
|
a.
|
The Borrower, each Guarantor and the Required Lenders shall have executed and delivered to the Agent, this Amendment;
|
b.
|
The Borrower and the Lenders shall have executed and delivered to the Agent Korean Share Pledge;
|
c.
|
The Borrower, as Pledgor, shall have caused the Securities Company (as defined in the Korean Share Pledge) to register the name and address of each Pledgee in the Securities Account Registry (as defined in the Korean Share Pledge) as the pledgee of the Pledged Shares (as defined in the Korean Share Pledge) and to deliver to the Agent a copy of the Securities Account Registry showing that such pledge has been registered;
|
d.
|
The Borrower, as Pledgor, shall have caused the Securities Company execute and deliver to the Agent a Confirmation of the Establishment of Kun-Pledge in the form and substance acceptable to the Agent and otherwise do all such acts as may be necessary in order for the Agent to be able to enforce the pledge over the Pledged Shares in the Securities Account (as defined in the Korean Share Pledge) without any further consent, authorization or action by it;
|
e.
|
The Borrower, as Pledgor, shall have
all such acts as may be necessary in order for the Agent to be able to update the Securities Account Registry, including the names and addresses of Pledgees, without any further consent, authorization or action by it;
|
f.
|
The Borrower shall have executed and delivered to the Agent an updated Borrowing Base Certificate;
|
g.
|
The representations and warranties of the Borrower and each Guarantor under the Credit Agreement, the other Loan Documents and this Amendment, as applicable, shall be true and correct in all material respects as of the date hereof (except to the extent such representations and warranties expressly refer to an earlier date, in which case they are true, correct and complete in all material respects as of such earlier date); provided that the foregoing materiality qualifications shall not apply to any representations or warranties that are qualified by materiality in the text thereof;
|
h.
|
The Agent shall have received for the account of the Lenders, in immediately available funds, a fee in the amount of $5,000 which fee shall be non-refundable and fully earned upon receipt; and
|
i.
|
The Agent shall have received in immediately available funds, all out-of-pocket costs and expenses (including reasonable attorneys' fees and costs) incurred by the Agent in connection with this Amendment and the transactions contemplated hereby and invoiced to the Borrower prior to the date on which this Amendment is otherwise to become effective; provided that the failure to invoice any such amounts to the Borrower prior to such date shall not preclude the Agent from seeking reimbursement
|
The “Borrower”
SUNPOWER CORPORATION
By:
/s/ Dennis V. Arriola
Name: Dennis V. Arriola
Title: EVP & CFO
|
The “Guarantors”
SUNPOWER CORPORATION, SYSTEMS
By:
/s/ Dennis V. Arriola
Name: Dennis V. Arriola
Title: SVP & CFO
|
SUNPOWER NORTH AMERICA, LLC
By: SunPower Corporation, its sole member
By:
/s/ Dennis V. Arriola
Name: Dennis V. Arriola
Title: CFO
|
|
The “Agent”
UNION BANK, N.A., as Administrative Agent
By:
/s/ James B. Goudy
Name: James B. Goudy
Title: Vice President
|
The “Lenders”
UNION BANK, N.A., as a lender
By:
/s/ James B. Goudy
Name: James B. Goudy
Title: Vice President
|
The “Lenders”
HSBC BANK USA, NATIONAL ASSOCIATION, as a lender
By:
/s/ Jason A. Huck
Name: Jason A. Huck
Title: VP Global Relationship Manager
HSBC Bank USA
|
Entity Type
|
Issuer Name
|
Jurisdiction of Organization
|
Certificate No.
|
Certificate Date
|
No. of Shares/ Type of Shares
|
Company
|
WOONGJIN ENERGY CO., LTD.
|
South Korea
|
[various]
|
[TBD]
|
19,398,510 shares of common stock; representing (as of April 29, 2011) 31.29% of all issued and outstanding shares of the Issuer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
|
the representations and warranties of each Loan Party set forth in the Credit Agreement or any other Loan Document were true and correct when made and remain true, correct and complete in all material respects as of the date hereof (except to the extent such representations and warranties expressly refer to an earlier date, in which case they are true, correct and complete in all material respects as of such earlier date); provided that the foregoing materiality qualifications shall not apply to any representations or warranties that are qualified by materiality in the text thereof;
|
b.
|
the Loan Parties have the authority to execute this Amendment and the execution, delivery, and performance by the Loan Parties of this Amendment and the other documents, instruments and agreements delivered or to be delivered in connection herewith (i) are within the corporate or limited liability company powers of each Loan Party and have been duly authorized by all necessary corporate or limited liability company action on the part of each Loan Party, (ii) do not require any governmental or third party consents, except those which have been duly obtained and are in full force and effect, (iii) do not and will not conflict with any requirement of Law, any Loan Party's operating agreement, certificate or articles of incorporation, bylaws, partnership agreement, minutes or resolutions, (iv) after giving effect to this Amendment, do not result in any breach of or constitute a default under any agreement or instrument to which any Loan Party or any of their respective Subsidiaries is a party or by which they or any of their respective properties are bound, and (v) do not result in or require the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance of any nature upon any of the assets or properties of any Loan Party;
|
c.
|
this Amendment and the other instruments and agreements delivered or to be delivered by any Loan Party in connection herewith have been duly executed and delivered by each Loan Party and constitute the legal, valid, and binding obligation of each Loan Party, enforceable against such Loan Party in accordance with their respective terms, except to the extent that (i) enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors, (ii) enforcement may be subject to general principles of equity, and (iii) the availability of the remedies of specific performance and injunctive relief may be subject to the discretion of the court before which any proceedings for such remedies may be brought;
|
d.
|
no event has occurred or failed to occur that is, or, with notice or lapse of time or both would constitute, a Default, an Event of Default, or a breach or failure of any condition under any Loan Document; and
|
e.
|
after giving effect to this Amendment, no Loan Party has any offset, defense, counterclaim, dispute or disagreement of any kind or nature whatsoever with respect to their respective liabilities, obligations and indebtedness arising under or in connection with any Loan Documents.
|
a.
|
The Borrower, each Guarantor and the Required Lenders shall have executed and delivered to the Agent, this Amendment;
|
b.
|
The representations and warranties of the Borrower and each Guarantor under the Credit Agreement, the other Loan Documents and this Amendment, as applicable, shall be true and correct in all material respects as of the date hereof (except to the extent such representations and warranties expressly refer to an earlier date, in which case they are true, correct and complete in all material respects as of such earlier date); provided that the foregoing materiality qualifications shall not apply to any representations or warranties that are qualified by materiality in the text thereof;
|
c.
|
The Agent shall have received for the account of the Lenders, in immediately available funds, a fee in the amount of $5,000 which fee shall be non-refundable and fully earned upon receipt; and
|
d.
|
The Agent shall have received in immediately available funds, all out-of-pocket costs and expenses (including reasonable attorneys' fees and costs) incurred by the Agent in connection with this Amendment and the transactions contemplated hereby and invoiced to the Borrower prior to the date on which this Amendment is otherwise to become effective; provided that the failure to invoice any such amounts to the Borrower prior to such date shall not preclude the Agent from seeking reimbursement of such amounts, or excuse the Borrower from paying or reimbursing such amounts, following the effective date of this Amendment.
|
The “Borrower”
SUNPOWER CORPORATION
By:
/s/ Dennis V. Arriola
Name: Dennis V. Arriola
Title: EVP & CFO
|
The “Guarantors”
SUNPOWER CORPORATION, SYSTEMS
By:
/s/ Dennis V. Arriola
Name: Dennis V. Arriola
Title: SVP & CFO
|
SUNPOWER NORTH AMERICA, LLC
By: SunPower Corporation, its sole member
By:
/s/ Dennis V. Arriola
Name: Dennis V. Arriola
Title: CFO
|
|
The “Agent”
UNION BANK, N.A., as Administrative Agent
By:
/s/ J. William Bloore
Name: J. William Bloore
Title: Vice President
|
The “Lenders”
UNION BANK, N.A., as a lender
By:
/s/ J. William Bloore
Name: J. William Bloore
Title: Vice President
|
The “Lenders”
HSBC BANK USA, NATIONAL ASSOCIATION, as a lender
By:
/s/ Jason A. Huck
Name: Jason A. Huck
Title: VP Global Relationship Manager
HSBC Bank USA
|
(1)
|
SUNPOWER CORPORATION
, a Delaware corporation (the
“Pledgor”
);
|
(2)
|
THE FINANCIAL INSTITUTIONS
listed in
Schedule I
hereto (individually a
“Pledgee”
and collectively, the
“Pledgees”
, which term shall include their respective successors, transferees and assigns); and
|
(3)
|
UNION BANK, N.A.,
as administrative agent for the Lenders (as defined below) (in such capacity, the
“Administrative Agent”
, which term shall include its successors, transferees and assigns).
|
(A)
|
The Pledgor, the guarantors from time to time party thereto, the Administrative Agent, and the Pledgees, as lenders have entered into that certain Credit Agreement, dated as of October 29, 2010, by and among (including all annexes, exhibits and schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the “
Original Credit Agreement
”) pursuant to which the Pledgees have agreed to make the Loan to or for the benefit of the Pledgor on and subject to the terms and conditions set forth therein.
|
(B)
|
The Pledgor is the legal and beneficial owner of shares of Woongjin Energy Co., Ltd., a company organized under the laws of the Republic of Korea (“
Korea
”), having its principal office at 1316 Gwanpyeong-dong, Yoosung-ku, Daejeon, Korea (the “
Company
”), the details of which are specified in
Schedule II
hereto (together with any Additional Shares (as defined below), the “
Pledged Shares
”).
|
(C)
|
Pursuant to the Original Credit Agreement, the Pledgor, the Pledgees and Administrative Agent entered into that certain Pledge Agreement dated as of October 29, 2010 (the “
First Share Pledge Agreement
”) whereby Pledgor granted a kun-pledge (
Kun-Jil-Kwon
) to the Pledgees and the Administrative Agent of all Pledged Shares owned by the Pledgor pursuant to the terms and conditions therein.
|
(D)
|
The Borrower, the guarantors from time to time party thereto and the Administrative Agent have entered into that First Amendment and Consent to Credit Agreement (the “
First Amendment Agreement
”)
as of April 19, 2011 amending the Original Credit Agreement (the Original Credit Agreement as amended by the First Amendment Agreement, the “
Credit Agreement
”).
|
(E)
|
Pursuant to the First Amendment Agreement, the First Share Pledge Agreement and the
|
(F)
|
Subject to the terms and conditions of the Credit Agreement, the Pledgor and the Pledgees wish to reinstate the kun-pledge over the Pledged Shares, and accordingly to enter into this Pledge Agreement whereby the Pledgor grants a kun-pledge (Kun-Jil-Kwon) to the Pledgees and the Administrative Agent of all Pledged Shares owned by the Pledgor pursuant to the terms and conditions herein.
|
(G)
|
Upon execution, this Pledge Agreement is the Korean Share Pledge referred to in the Credit Agreement.
|
1.1
|
Words and expressions defined in the Credit Agreement shall, unless otherwise defined herein or the context otherwise requires, have the same meaning when used in this Pledge Agreement. References to any agreement or document shall be construed as references to such agreement or document as varied, amended, novated or supplemented from time to time. In addition, as used in this Pledge Agreement:
|
1.2
|
“Additional Shares”
means any and all Equity Interests in the Company in which the Pledgor acquires any beneficial interest at any time after the date of this Pledge Agreement (including, without limitation, any newly issued shares subscribed for by the Pledgor in the Company).
|
1.4
|
“Secured Obligations”
shall mean the Obligations, as defined in the Credit Agreement, including, without limitation, all of the Pledgor's obligations hereunder and under the other Loan Documents.
|
1.6
|
“Securities Company”
means Daishin Securities Co., Ltd.
|
2.1
|
The Pledgor hereby pledges to the Pledgees by way of first priority kun-pledge (the
“Kun-Pledge”,
kun-jilkwon
in Korean), all of its right, title and interest in the Pledged Shares, and the Pledgees hereby accept such Kun-Pledge of the Pledged Shares, as collateral security for the due and punctual payment, performance and discharge in full of the Secured Obligations.
|
2.2
|
The Pledgor hereby agrees to provide a Kun-Pledge in favor of the Pledgees over all of its rights, title and interests in the Additional Shares, substantially simultaneously with the acquisition of such Additional Shares, and the Pledgees accept such Kun-Pledge over such Additional Shares pursuant to the terms and conditions contained herein, as collateral security for the due and punctual payment, performance and discharge in full of the Secured Obligations. For the avoidance of doubt, the Pledgor and the Pledgees
|
|
2
|
Share Kun-Pledge Agreement
|
2.3
|
As security for the due and punctual payment, performance and discharge in full of the Secured Obligations, the Pledgor hereby assigns to the Pledgees all of its rights, title, interest, benefits and claims with respect to the Pledged Shares
|
(a)
|
it owns the shares identified in Schedule II hereto, and such shares were duly authorized and issued and are fully paid-in and non-assessable;
|
(b)
|
it has full rights, titles and interests in the Pledged Shares free and clear of all Liens (save for the Kun-Pledge created hereunder);
|
(c)
|
it has not pledged, assigned or otherwise transferred to any third party any interest in the Pledged Shares (other than the Kun-Pledge pursuant to this Pledge Agreement);
|
(d)
|
it is duly organized, validly existing under the laws of the jurisdiction of its organization and has all necessary corporate power, authority and legal right to execute, deliver, and perform its obligations under, this Pledge Agreement;
|
(e)
|
it has taken all steps necessary to authorize its execution, delivery and performance of this Pledge Agreement;
|
(f)
|
it has obtained all authorizations from Governmental Authorities in any jurisdiction and any third parties necessary in order to execute, deliver and perform this Pledge Agreement;
|
(g)
|
its execution, delivery and performance of this Pledge Agreement are not in conflict with any applicable Law, its Organization Documents, or any indenture, deed, agreement or undertaking entered into by it or by which it is bound;
|
(h)
|
this Pledge Agreement constitutes the legal, valid and binding obligations of the Pledgor enforceable in accordance with its terms;
|
(j)
|
this Pledge Agreement is in proper legal form under the law of Korea for the enforcement thereof against the Pledgor under such law, and all formalities required in Korea to be taken by the Pledgor for the validity and enforceability of
|
|
3
|
Share Kun-Pledge Agreement
|
(k)
|
the Pledged Shares are deposited with the Korea Securities Depository through the Securities Company, and the name and address of the Pledgor is registered in the registry of client account of the Securities Company for the Securities Account (the “Securities Account Registry”).
|
4.1
|
At any time before the Obligations of the Company under the Loan Documents have been unconditionally and irrevocably paid and discharged in full:
|
(a)
|
it shall not initiate or concur in: (i) the appointment of any receiver, manager, liquidator, trustee or similar officer for the Company or any of its assets, properties or revenues; or (ii) any proceeding for the winding up or voluntary or involuntary reorganization, composition or bankruptcy of the Company;
|
(b)
|
it shall not assign, transfer, sell, further pledge or otherwise encumber any of the Pledged Shares; and
|
(c)
|
it shall from time to time promptly, but in any event no later than seven Business Days, upon the acquisition of or the subscription for (as applicable) any Additional Shares:
|
A.
|
execute and deliver a supplemental agreement (the
“Supplemental Agreement”
, which shall form part of this Pledge Agreement), together with the Administrative Agent on behalf of the Pledgees, substantially in the form of
Exhibit B
hereto (or such other form reasonably satisfactory to the Administrative Agent) to the Administrative Agent; and
|
B.
|
cause the Company to record the name and address of each of the Pledgees in the shareholders registry of the Company as the pledgees of such Additional Shares and deliver the copy of such shareholders registry to the Administrative Agent.
|
4.2
|
Immediately upon the execution of this Pledge Agreement, it shall cause the Securities Company to: (i) register the name and address of each Pledgee in the Securities Account Registry as the pledgee of the Pledged Shares and to deliver to the Administrative Agent a copy of the Securities Account Registry showing that such pledge has been registered; (ii) do all such acts as may be necessary in order for the Administrative Agent to be able to enforce the pledge over the Pledged Shares in the Securities Account without any further consent, authorization or action by the Pledgor, including, but not limited to, executing and delivering to the Administrative Agent a Confirmation of the
|
|
4
|
Share Kun-Pledge Agreement
|
6.1
|
If an Event of Default under the Credit Agreement has occurred and is continuing, and the Pledgor has received notice of the same from the Administrative Agent, the Administrative Agent on its own behalf and on behalf of the Pledgees shall become forthwith entitled to put into force and to exercise all or any of the rights and power possessed by the Pledgees as pledgees of the Pledged Shares, including without limitation, the power to:
|
(a)
|
transfer any or all of the Pledged Shares from the Securities Account to a Pledgee's or the Administrative Agent's securities account by giving a written notice in the form and substance attached to Confirmation of the Establishment of Kun-Pledge as Exhibit 1to the Securities Company;
|
(b)
|
exercise, to the extent permitted by applicable Law, all voting, consensual and other powers of ownership pertaining to the Pledged Shares as if the Pledgees were the sole and absolute owners thereof (and the Pledgor agrees that at such time and upon the Administrative Agent's request it will take all such actions as may be necessary to give effect to such right);
|
(c)
|
demand, sue for, collect or receive, in the name of the Administrative Agent or in the name of the Pledgor, any money or property at any time payable or receivable on account of or in exchange for any of the Pledged Shares, but shall be under no obligation to do so; and
|
(d)
|
to the extent permitted by and in accordance with applicable Law, assign, sell or
|
|
5
|
Share Kun-Pledge Agreement
|
6.2
|
If the proceeds (as defined below) of such sale, collection or other realization of all or any part of the Pledged Shares pursuant to Section 6.1 hereof are insufficient to cover the costs and expenses of such realization and the payment in full of the Secured Obligations, the Pledgor shall remain liable for such deficiency.
|
6.3
|
The Administrative Agent and the Pledgees shall incur no liability as a result of the sale of the Pledged Shares or any part thereof, at any public or private sale pursuant to Sect
i
on 6.1 hereof and otherwise. The Pledgor hereby waives any claims against the Administrative Agent or any Pledgee arising by reason of the fact that the price at which the Pledged Shares have been sold at such private sale may be less than the price at which it could have been sold otherwise
|
6.4
|
The proceeds (as defined below) of any sale or other realization of all or any part of the Pledged Shares shall be applied by the Administrative Agent in accordance with the Credit Agreement. As used in this Section 6, the
“proceeds”
shall mean cash, securities and other property realized in respect of, and distributions in kind of, the Pledged Shares, including any thereof received under any reorganization, liquidation or adjustment of debt of the Pledgor.
|
|
6
|
Share Kun-Pledge Agreement
|
11.1
|
Notices
.
All notices, requests and other communications hereunder shall be given in the manner and to the addresses specified in the Credit Agreement.
|
11.2
|
Severability
. If any of the provisions of this Pledge Agreement shall contravene any Law or be held invalid, this Pledge Agreement shall be construed as if not containing those provisions, and the rights and obligations of the parties hereto shall be construed and enforced accordingly.
|
11.3
|
Amendments, Changes and Modifications
. This Pledge Agreement shall not be amended, changed, modified, altered or terminated, unless the prior written approval of the Pledgor and the Administrative Agent is obtained. This Pledge Agreement shall not be amended by an oral agreement.
|
11.4
|
Counterparts
. This Pledge Agreement may be executed in multiple counterparts, each
|
|
7
|
Share Kun-Pledge Agreement
|
11.5
|
Heading
. Headings and titles herein are for convenience only and shall not affect the construction or interpretation of this Pledge Agreement.
|
11.6
|
Entire Agreement
.
This Pledge Agreement, together with other Loan Documents, is intended by the parties as the written final expression of each party's obligations and rights in connection with the Kun-Pledge of the Pledged Shares and the Security Assignment and supersedes all prior and contemporaneous understandings or agreements concerning the subject matter hereof. The Kun-Pledge is made in conjunction with the security interest granted to the Agent under the Pledge Agreement dated October 29, 2010 by and between the Pledgor as grantor and the Administrative Agent as administrative agent for the Lenders governed by the laws of the State of California (the
“U.S. Pledge Agreement”
). The rights, powers and remedies of the Administrative Agent and the Pledgees with respect to the Kun-Pledge are in addition to those set forth in the Credit Agreement, the U.S. Pledge Agreement and the other Loan Documents, and those which are now or hereafter available to the Administrative Agent or any Pledgee as a matter of law or equity. Each right, power and remedy of the Administrative Agent and/or the Pledgees provided for herein or in the Credit Agreement, the U.S. Pledge Agreement or any of the other Loan Documents, or now or hereafter existing at law or in equity, shall be cumulative and concurrent and shall be in addition to every right, power or remedy provided for herein, and the exercise by the Administrative Agent or any Pledgee of any one or more of the rights, powers or remedies provided for in this Pledge Agreement, the Credit Agreement, the U.S. Pledge Agreement or any of the other Loan Documents, or now or hereafter existing at law or in equity, shall not preclude the simultaneous or later exercise by any person, including the Administrative Agent, of any or all other rights, powers or remedies.
|
11.7
|
Conflict
.
In the case of a conflict between the provisions of this Pledge Agreement and the provisions of Credit Agreement, the provisions of the Credit Agreement shall prevail. In the case of a conflict between the provisions of this Pledge Agreement and the provisions of the pledge agreement dated October 29, 2010 between the Pledgor and the Administrative Agent, which pledge agreement is governed by the laws of the State of California, the provisions of this Pledge Agreement shall prevail.
|
11.8
|
No Waiver
.
Neither the Administrative Agent nor any Pledgee shall, by any act, delay, indulgence, omission or otherwise, except by an express written instrument clearly indicating an intention to waive, be deemed to have waived any right or remedy hereunder or to have acquiesced in any Event of Default. No failure to exercise, nor any delay in exercising on the part of the Administrative Agent and the Pledgees, any rights, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power, privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
|
11.9
|
Remedies Cumulative
.
The rights and remedies provided herein are cumulative and
|
|
8
|
Share Kun-Pledge Agreement
|
11.10
|
Action by Pledgees
. To the extent permitted by Law, all notices which may be given to the Pledgees hereunder, and all rights and remedies which may be exercised by the Pledgees hereunder, shall be given or exercised by and through the Administrative Agent and not by any one or more Pledgees directly.
|
11.11
|
Governing Law and Jurisdiction
. This Pledge Agreement and the security created pursuant hereto shall be governed by the laws of Korea in all respects, including matters of construction, validity and performance. The parties hereto agree that any legal action or proceeding arising out of or relating to this Pledge Agreement may be brought in the Seoul Central District Court in Seoul, Korea and the Pledgor hereby irrevocably submits to the non-exclusive jurisdiction of such court.
|
|
9
|
Share Kun-Pledge Agreement
|
|
10
|
Share Kun-Pledge Agreement
|
|
11
|
Share Kun-Pledge Agreement
|
By
/s/ James B. Goody
Name: James B. Goody
Title: Vice President
|
|
|
12
|
Share Kun-Pledge Agreement
|
HSBC BANK USA, NATIONAL ASSOCIATION
By
/s/ Jason A. Huck
Name: Jason Alexander Huck
Title: Vice President, Relationship Manager
|
|
|
13
|
Share Kun-Pledge Agreement
|
|
14
|
Share Kun-Pledge Agreement
|
Shareholder
|
Type of Shares
|
Number of Shares
|
Sunpower Corporation
|
Ordinary
|
19,398,510 shares of common stock; representing 31.24% of all issued and outstanding shares of the Company
|
(a)
|
exercise, to the extent permitted by applicable Law, all voting, consensual and other powers of ownership pertaining to the Pledged Shares as if the Bank were the sole and absolute owners thereof (and the Shareholder agrees that at such time and upon the Bank's request it will take all such actions as may be necessary to give effect to such right);
|
(b)
|
demand, sue for, collect or receive, in the name of the Bank or in the name of the Shareholder, any money or property at any time payable or receivable on account of or in exchange for any of the Pledged Shares, but shall be under no obligation to do so; and
|
(c)
|
to the extent permitted by and in accordance with applicable Law, assign, sell or otherwise dispose of the Pledged Shares to such person, at a public or a private sale, and upon such terms as the Bank may reasonably determine, and the Bank or any Pledgee or anyone else may be the purchaser, pledgee or recipient of any or all of the Pledged Shares and thereafter hold the same absolutely, free from any claims or rights whatsoever, including any rights of redemption, of the Pledgor.
|
Shareholder
|
Type of Shares
|
Number of Shares
|
Sunpower Corporation
|
Ordinary
|
19,398,510 shares of common stock; representing 31.24% of all issued and outstanding shares of the Company
|
Shareholder
|
Type of Shares
|
Number of Shares
|
Sunpower Corporation
|
|
|
SHARE KUN-PLEDGE AGREEMENT
dated as of April 27, 2011
among
SUNPOWER CORPORATOIN
as Pledgor
THE FINANCIAL INSTITUTIONS
named herein as Pledgees
UNION BANK, N.A.
as Administrative Agent
relating to
CREDIT AGREEMENT DATED AS OF OCTOBER 29, 2010
|
|
Section
|
Page
|
|
|
Section 1.
|
Interpretation
|
1
|
|
Section 2.
|
Establishment of Kun-Pledge
|
2
|
|
Section 3.
|
Pledgor's Representations and Warranties
|
3
|
|
Section 4.
|
Pledgor's Obligations
|
4
|
|
Section 5.
|
Dividends and Voting Rights
|
5
|
|
Section 6.
|
Enforcement by Administrative Agent and Pledges
|
5
|
|
Section 7.
|
Attorney-in-fact
|
6
|
|
Section 8.
|
Assignment
|
6
|
|
Section 9.
|
Further Assurance
|
7
|
|
Section 10.
|
Termination and Release of Securities
|
7
|
|
Section 11.
|
Miscellaneous
|
7
|
|
|
|
|
|
|
|
|
|
SCHEDULES
|
|
|
|
|
|
|
|
Schedule I
|
List of Pledgees
|
|
|
Schedule II
|
Details of Shares
|
|
|
|
|
|
|
EXHIBITS
|
|
|
|
|
|
|
|
Exhibit A
|
Form of Power of Attorney
|
|
|
Exhibit B
|
Form of Supplemental Agreement
|
|
CONFIDENTIAL TREATEMENT REQUESTED
CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHGANGE COMMISSION
|
1
|
Amendments
|
|
1.1
|
Section 1.01 is hereby amended by adding the following terms in the proper alphabetical order:
|
|
1.2
|
The definition of “
Applicable Margin
” in Section 1.01 is hereby amended by deleting it in its entirety and replacing it with the following:
|
|
1.3
|
The definition of “
Change of Control
” in Section 1.01 is hereby amended by deleting it in its entirety and replacing it with the following:
|
|
1.4
|
The definition of “
Maturity Date
” in Section 1.01 is hereby amended by deleting the reference to “May 23, 2011” and replacing it with “November 23, 2011”.
|
|
1.5
|
The definition of “
Termination Date
” in Section 1.01 is hereby amended by deleting reference to “April 23, 2011” and replacing it with “October 23, 2011”.
|
|
1.6
|
Section 2.05(a) is hereby amended by deleting it in its entirety and replacing it with the following:
|
|
(i)
|
for the period from and including May 23
,
2011 to and including May 25, 2011, interest shall be calculated at a rate per annum equal to the sum of (x) EONIA for each day during this period plus (y) the Applicable Margin plus (z) Mandatory Costs, if any, and shall be payable on the date of execution of this Amendment; and
|
|
(ii)
|
for the period from and including May 26
,
2011 to and including June 22, 2011, interest shall be calculated at a rate per annum equal to sum of (x) the
|
|
|
Reference Banks rate for such period plus (y) the Applicable Margin plus (z) Mandatory Costs, if any, and shall be payable on June 23 , 2011 . ” |
|
1.7
|
A new Section 2.08(c) shall be added as follows:
|
|
1.8
|
Section 2.13 is hereby amended by deleting it in its entirety and replacing it with the following:
|
|
1.9
|
A new Section 2.14 shall be added as follows:
|
|
1.10
|
A new Section 5.01(l) shall be added as follows:
|
|
1.11
|
A new Section 5.02(b)(xix) shall be added as follows:
|
|
1.12
|
Section 5.03(a) is hereby amended by deleting such section in its entirety and replacing it with the following:
|
|
1.13
|
Section 5.03(d) is hereby amended by deleting the words ‘”from and after the fourth fiscal quarter of 2010”.
|
|
1.14
|
Section 5.03(e) is hereby amended by deleting such section in its entirety.
|
|
1.15
|
Section 6.01(n) is hereby amended by deleting such section in its entirety and replacing it with the following:
|
|
1.16
|
Schedule 3.01 is hereby amended by deleting such schedule in its entirety and replacing it with the new Schedule 3.01 appended hereto.
|
|
1.17
|
Schedule 4.02(f) is hereby amended by deleting such schedule in its entirety and replacing it with the new Schedule 4.02(f) appended hereto.
|
|
1.18
|
Schedule 5.02(a) is hereby amended by deleting such schedule in its entirety and replacing it with the new Schedule 5.02(a) appended hereto.
|
2
|
Arrangement Fee
|
3
|
Effectiveness
|
|
(a)
|
There shall have occurred no Material Adverse Change since January 2, 2011;
|
|
(b)
|
There shall exist no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of the Borrower’s Subsidiaries pending or threatened before any court, governmental agency or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect or (ii) purports to affect the legality, validity or enforceability of any of the Loan Documents or the consummation of the transactions contemplated hereby;
|
|
(c)
|
All governmental and third party consents and approvals necessary in connection with the transactions contemplated hereby shall have been obtained (without the imposition of any conditions that are not acceptable to the Lender) and shall remain in effect, and no law or regulation shall be applicable in the reasonable judgment of the Lender that
|
|
|
restrains, prevents or imposes materially adverse conditions upon the transactions contemplated hereby;
|
|
(d)
|
The following statements shall be true and the Lender shall have received a certificate signed by a duly authorized officer of each Loan Party, dated the Effective Date, stating that:
|
|
(i)
|
The representations and warranties contained in Section 4.01 of the Credit Agreement (as amended by this Amendment) are correct on and as of the Amendment No. 1 Effective Date, and
|
|
(ii)
|
No event has occurred and is continuing that constitutes a Default; |
|
(e)
|
The Lender shall have received on or before the Amendment No. 1 Effective Date the following, each dated such date, in form and substance satisfactory to the Lender:
|
|
(i)
|
Certified copies of the (A) resolutions of the Board of Directors (or an authorized committee thereof) of each Loan Party approving the terms of, and authorizing entry into the this Amendment, (B) resolutions of the shareholders of the Borrower approving the terms of and authorizing entry into this Amendment, (C) the Constituent Documents of each Loan Party as in effect on the date the resolutions specified in clause (A) were adopted and (D) all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to the this Amendment, and a certificate of the Secretary or an Assistant Secretary of each Loan Party certifying the absence of any change or amendment to the Constituent Documents of such Loan Party since the date the resolutions specified in clause (A) were adopted;
|
|
(ii)
|
A certificate of the Secretary or an Assistant Secretary of each Loan Party certifying that (A) the names and true signatures of the officers of such Loan Party authorized to sign the this Amendment and the other documents to which it is a party to be delivered by it hereunder, and (B) the documents listed in this Section 3 are correct, complete and in full force and effect and have not been amended or superseded as of the date of the certificate;
|
|
(iii)
|
A Compliance Certificate from the Parent signed by the Chief Financial Officer or Secretary of the Parent; and
|
|
(iv)
|
A favorable opinion of (A) Jones Day, New York counsel for the Loan Parties and (B) Mamo TCV Advocates, Maltese counsel to the Loan Parties, each in a form and substance satisfactory to the Lender; and
|
|
(f)
|
The Borrower shall have paid the Arrangement Fee and all other accrued fees, costs and expenses of the Lender (including the accrued fees and expenses of counsel to the Lender).
|
4
|
Reaffirmation of Guaranty
|
5
|
Defined Terms; Interpretation; Etc.
|
6
|
Counterparts
|
7
|
Governing Law, Submission to Jurisdiction and Service of Process
|
SUNPOWER CORPORATION
|
||
/s/ Dennis Arriola
|
||
By
|
Dennis Arriola
|
|
Title:
|
EVP & CFO
|
|
SUNPOWER CORPORATION MALTA HOLDINGS LIMITED
|
||
/s/ Dennis Arriola
|
||
By
|
Dennis Arriola
|
|
Title:
|
Director
|
|
Lender
|
||
/s/ Leonardo Pecciarini
|
||
Lending Office
|
SOCIÉTÉ GÉNÉRALE, MILAN BRANCH
|
|
By
|
Leonardo Pecciarini
|
|
Title:
|
Attorney
|
|
1.
|
In November 2009, the Audit Committee of the Board of Directors of Parent (the “Audit Committee”) initiated an independent investigation regarding certain unsubstantiated accounting entries. The Audit Committee announced the results of its investigation in March 2010. For information regarding the Audit Committee's investigation, a description of the control deficiencies identified by management as a result of the investigation as well as subsequent remediation, see Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8: Financial Statements and Supplementary Data in Parent's Annual Report on Form 10-K for the year ended January 3, 2010, and Item 9A: Controls and Procedures in Parent's Annual Reports on Form 10-K for the year ended January 3, 2010 and for the year ended January 2, 2011.
|
|
2.
|
Three securities class action lawsuits were filed against the Parent and certain of its current and former officers and directors in the United States District Court for the Northern District of California on behalf of a class consisting of those who acquired the Parent
’
s securities from April 17, 2008 through November 16, 2009. The cases were consolidated as Plichta v. SunPower Corp. et al., Case No. CV-09-5473-RS (N.D. Cal.), and lead plaintiffs and lead counsel were appointed on March 5, 2010. Lead plaintiffs filed a consolidated complaint on May 28, 2010. The actions arise from the Parent
’
s Audit Committee's investigation announcement on November 16, 2009 regarding certain unsubstantiated accounting entries. The consolidated complaint alleges that the defendants made material misstatements and omissions concerning the Parent
’
s financial results for 2008 and 2009, seeks an unspecified amount of damages, and alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Sections 11 and 15 of the Securities Act of 1933. The Parent believes it has meritorious defenses to these allegations and will vigorously defend itself in these matters. The court held a hearing on the defendants' motions to dismiss the consolidated complaint on November 4, 2010. The court dismissed the consolidated complaint with leave to amend on March 1, 2011. An amended complaint was filed on April 18, 2011. Parent's management currently believes that the ultimate outcome of the lawsuits will not have a Material Adverse Effect.
|
|
3.
|
Derivative actions purporting to be brought on the Parent
’
s behalf have also been filed in state and federal courts against several of the Parent
’
s current and former officers and directors based on the same events alleged in the securities class action lawsuits described above. The California state derivative cases were consolidated as In re SunPower Corp. S'holder Derivative Litig., Lead Case No. 1-09-CV-158522 (Santa Clara Sup. Ct.), and co-lead counsel for plaintiffs have been appointed. The complaints assert state-law claims for breach of fiduciary duty, abuse of control, unjust enrichment, gross mismanagement, and waste of corporate assets. Plaintiffs are scheduled to file a consolidated complaint after entry of an order deciding defendants' motion to dismiss the amended class action complaint. The federal derivative complaints were consolidated as In re SunPower Corp. S'holder Derivative Litig., Master File No. CV-09-05731-RS (N.D. Cal.), and lead plaintiffs and co-lead counsel were appointed on January 4, 2010. The complaints assert state-law claims for breach of fiduciary duty, waste of corporate assets, and unjust enrichment, and seek an unspecified amount of damages. Plaintiffs filed a consolidated complaint on May 13, 2011. The Parent intends to oppose the derivative plaintiffs' efforts to pursue this litigation on the Parent
’
s behalf. Parent's management currently believes that the ultimate outcome of the lawsuits will not have a Material Adverse Effect.
|
|
1.
|
Liens on deposit account number *** maintained in the name of Parent with Wells Fargo Bank, N.A., investment account number *** maintained in the name of Parent with Wells Fargo Bank, N.A., and multi-currency account numbers *** and *** maintained in the name of Parent with Wells Fargo Bank, N.A.’s Cayman Islands branch, securing the Wells Fargo Indebtedness (as defined in
Schedule 5.02(b)
).
|
|
2.
|
Liens in connection with the CEDA Bond Documentation.
|
Address:
Credit Agricole Corporate and Investment Bank
1301 Avenue of the Americas
New York NY 10006
|
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK
By: __
/s/ Laure Duvernay
________________
Name: Laure Duvernay
Title: Vice President
|
|
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK
By: __
/s/ Thibault Berger____
____________
Name: Thibault Berger
Title: Vice President
|
SUNPOWER CORPORATION
By: __
/s/ Dennis Arriola
______________
Name: Dennis Arriola
Title: EVP & CFO
|
DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent and as Issuing Bank
By: __
/s/ Ross Levitsky
_______________
Name: Ross Levitsky
Title: Managing Director
By: __
/s/Wolfgang Winter
_____________
Name: Wolfgang Winter
Title: Managing Director
|
Section 1
.
Supplement to Loan Agreement
|
1
|
|
ARTICLE IX
ADDITIONAL COVENANTS OF THE BORROWER
|
|
|
Section 9.1. Definitions
|
2
|
|
Section 9.2. Fixed Rate Covenants of the Borrower
|
21
|
|
(A)
Asset Sales
|
21
|
|
(B)
Changes in Covenants When Bonds Rated Investment Grade
|
22
|
|
(C)
Restricted Payments
|
23
|
|
(D)
Incurrence of Indebtedness and Issuance of Preferred Stock
|
26
|
|
(E)
Divided and Other Payment Restrictions Affecting Restricted Subsidiaries
|
31
|
|
(F)
Merger, Consolidation or Sales of Assets
|
33
|
|
(G)
Transactions with Affiliates
|
34
|
|
(H)
Quarterly Reporting Requirement
|
35
|
|
(I)
Designation of Restricted and Unrestricted Subsidiaries
|
35
|
|
(J)
Limitation on Sale and Leaseback Transactions
|
36
|
|
(K)
Repurchase at the Option of Holders
|
36
|
|
(L)
Change of Control
|
37
|
|
Section 9.2. Fixed Rate; Supplement to Indenture
|
38
|
|
Section 2. Effective Date of First Supplement
|
38
|
|
Section 3. Execution in Counterparts
|
38
|
|
1
|
I have reviewed this Quarterly Report on Form 10-Q of SunPower Corporation;
|
2
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
|
/S/ THOMAS H. WERNER
|
|
|
Thomas H. Werner
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1
|
|
I have reviewed this Quarterly Report on Form 10-Q of SunPower Corporation;
|
2
|
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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/S/ DENNIS V. ARRIOLA
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Dennis V. Arriola
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Executive Vice President and Chief Financial Officer
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(Principal Financial and Accounting Officer)
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/S/ THOMAS H. WERNER
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Thomas H. Werner
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President and Chief Executive Officer
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(Principal Executive Officer)
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/S/ DENNIS V. ARRIOLA
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Dennis V. Arriola
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Executive Vice President and Chief Financial Officer
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(Principal Financial and Accounting Officer)
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