Seagate 2004 Annual Report Download - page 59

Table of Contents
• make investments or other restricted payments;
• sell assets;
• issue or sell shares of restricted subsidiaries;
• enter into transactions with affiliates;
• create liens;
• enter into sale/leaseback transactions;
• effect a consolidation or merger; and
These covenants are subject to a number of important qualifications and exceptions, including exceptions that permit us to make
significant dividends. In addition, the obligation to comply with many of the covenants under the indenture governing our 8% senior notes will
cease to apply if the notes achieve investment grade status.
Our existing debt instruments also require us to achieve specified financial and operating results and maintain compliance with specified
financial ratios. Our ability to comply with these ratios may be affected by events beyond our control.
A breach of any of the restrictive covenants described above or our inability to comply with the required financial ratios could result in a
default under our existing debt instruments. If a default occurs, the holders of our outstanding 8% senior notes may elect to declare all of our
outstanding obligations, together with accrued interest and other fees, to be immediately due and payable. If our outstanding indebtedness were
to be accelerated, we cannot assure you that our assets would be sufficient to repay in full that debt and any future indebtedness, which would
cause the market price of our common shares to decline significantly.
SOX 404 Compliance—While we believe that we currently have adequate internal control procedures in place, we are still exposed to
future risks of non
-compliance and will continue to incur costs associated with Section 404 of the Sarbanes-Oxley Act of 2002.
• make certain amendments to our deferred compensation plans.
We have recently completed the evaluation of our internal controls over financial reporting as required by Section 404 of the Sarbanes-
Oxley Act of 2002. Although our assessment, testing, and evaluation resulted in our conclusion that as of July 1, 2005, our internal controls
over financial reporting were effective, we cannot predict the outcome of our testing in future periods. If our internal controls are ineffective in
future periods, our financial results or the market price of our stock could be adversely affected. We will incur additional expenses and
commitment of management’s time in connection with further evaluations.
Ownership of Our Common Shares by Our Sponsor Group—Because our sponsor group, through its ownership of New SAC, will
continue to hold a significant interest in us, the influence of our public shareholders over significant corporate actions will be limited.
As of July 26, 2005, New SAC owns approximately 30.3% of our outstanding common shares. New SAC was formed in connection with
the November 2000 transactions and is owned by our sponsor group and members of our management. Through their ownership of New SAC,
as of July 26, 2005, affiliates of Silver Lake Partners, Texas Pacific Group, August Capital, J.P. Morgan Partners, LLC and investment
partnerships affiliated with Goldman, Sachs & Co. indirectly own approximately 9.6%, 6.7%, 3.5%, 2.0% and 0.7%, respectively, of our
outstanding common shares. In addition, affiliates of Silver Lake Partners, Texas Pacific Group, August Capital, J.P. Morgan Partners, LLC
and investment partnerships affiliated with Goldman, Sachs & Co. directly own approximately 3.3%, 2.3%, 1.2%, 0.7% and 0.2%,
respectively, of our outstanding common shares as of July 26, 2005.
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