Adaptec 2001 Annual Report Download - page 75

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75
Company may redeem any portion of the notes at a price of 100% of the principal amount of
notes, plus a “ make whole” amount for accrued and unpaid interest to the redemption date.
These notes are subject to restrictive covenants including those concerning payments on the
notes and other indebtedness. In the event of a change in control of the Company, the
noteholders may require the Company to repurchase their notes.
NOTE 8. Commitments and Conti ngencies
Operating leases. The Company leases its facilities under operating lease agreements, w hich
expire at various dates through December 31, 2011.
Rent expense for the years ended December 31, 2001, 2000 and 1999 was $15.9 million, $8.3
million and $4.4 million, respectively. Excluded from rent expense for 2001 was additional rent
of $3.4 million related to excess facilities, w hich have been accrued in the restructuring charges
for 2001.
In connection with the restructuring charges recorded in 2001, the Company recorded a charge
of $128.3 million for exiting and terminating certain lease facilities included in the table below.
Minimum future rental payments under these leases are as follow s:
Supply agreements. The Company has wafer supply agreements with two independent
foundries, w hich expire in December 2003. Under these agreements, the suppliers are obligated
to provide certain quantities of w afers per year. Neither of the agreements have minimum unit
volume purchase requirements but the Company is obligated under one of the agreements to
purchase in future periods a minimum percentage of its total annual wafer requirements,
provided that the foundry is able to continue to offer competitive technology, pricing, quality
and delivery.
Investment agreements. The Company participates in four professionally managed venture
funds that invest in early-stage private technology companies which participate in markets of
strategic interest to the Company. From time to time these funds request additional capital for
private placements. The Company has committed to invest an additional $40.7 million into
these funds, which may be requested by the fund managers at any time over the next eight
years.
Contingencies. In the normal course of business, the Company receives and makes inquiries with
regard to possible patent infringements. Where deemed advisable, the Company may seek or
extend licenses or negotiate settlements. Outcomes of such negotiations may not be
determinable at any point in time; however, management does not believe that such licenses or
Year Ending December 31 (in thousands)
2002 31,747$
2003 31,747
2004 31,559
2005 30,909
2006 30,087
Thereafter 147,308
Total minimum future rental payments under operating leases 303,357$