Adaptec 2009 Annual Report Download - page 45

Annual Report
As of December 27, 2009, we have the following commitments:
(in thousands) Total 2010 2011 2012 2013 2014
After
2014
CONTRACTUAL OBLIGATIONS
Operating Lease Obligations:
Minimum rental payments ........ $ 27,131 $ 8,901 $ 6,908 $2,901 $2,607 $2,442 $ 3,372
Estimated operating cost
payments .................... 12,310 4,059 2,698 1,287 1,142 1,136 1,988
Long Term Debt:
Principal repayment ............. 68,340 — ————68,340
Interest payments ............... 24,605 1,538 1,538 1,538 1,538 1,538 16,915
Purchase and other Obligations ........ 12,562 4,670 6,598 1,294 — — —
$144,948 $19,168 $17,742 $7,020 $5,287 $5,116 $90,615
In addition to the amounts shown in the table above, we have recorded a $46.0 million liability for
unrecognized tax benefits as of December 27, 2009 and we are uncertain as to if or when such amounts may be
realized.
On October 26, 2005, we issued $225 million aggregate principal amount of 2.25% senior convertible notes
due 2025 (the “Notes”) and have recorded these Notes as long-term debt. Issuance costs of $6.8 million have
been deferred and are being amortized over seven years. During 2008, we repurchased $156.7 million principal
amount of our Notes for $138.3 million and expensed $3.2 million related to unamortized debt issue costs and
transaction costs resulting in a net gain of $15.0 million. At December 27, 2009, $68.3 million of these Notes
remained outstanding and $0.6 million of unamortized debt issue costs were included in investments and other
assets.
The Notes rank equal in right of payment with our other unsecured senior indebtedness and mature on
October 15, 2025 unless earlier redeemed by us at our option, or converted or put to us at the option of the
holders. Interest is payable semi-annually in arrears on April 15 and October 15 of each year, commencing on
April 15, 2006. We may redeem all or a portion of the Notes at par on and after October 20, 2012. The holders
may require that we repurchase Notes on October 15 of each of 2012, 2015 and 2020.
Holders may convert the Notes into the right to receive the conversion value (i) when our stock price
exceeds 120% of the approximately $8.80 per share initial conversion price for a specified period, (ii) in certain
change in control transactions and (iii) when the trading price of the Notes does not exceed a minimum price
level. For each $1,000 principal amount of Notes, the conversion value represents the amount equal to 113.6687
shares multiplied by the per share price of our common stock at the time of conversion. If the conversion value
exceeds $1,000 per $1,000 in principal of Notes, we will pay $1,000 in cash and may pay the amount exceeding
$1,000 in cash, stock or a combination of cash and stock, at our election.
We entered into a Registration Rights Agreement with the holders of the Notes, under which we are
required to keep the shelf registration statement effective until the earlier of (i) the sale pursuant to the shelf
registration statement of all of the Notes and/or shares of common stock issuable upon conversion of the Notes
and (ii) the expiration of the holding period applicable to such securities held by non-affiliates under Rule 144
under the Securities Act, or any successor provision, subject to certain permitted exceptions.
We will be required to pay liquidated damages, subject to some limitations, to the holders of the Notes if we
fail to comply with our obligations to register the Notes and the common stock issuable upon conversion of the
Notes or the registration statement does not become effective within the specified time periods. In no event will
liquidated damages accrue after the second anniversary of the date of issuance of the Notes or at a rate exceeding
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