EXHIBIT (a)(1)(i)
OFFER TO PURCHASE
Dycom Industries, Inc.
Offer to Purchase for Cash Any and
All Outstanding 0.75% Convertible Senior Notes due 2021
(CUSIP No. 267475AB7)
THE OFFER (AS DEFINED BELOW) WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON JUNE 2, 2020, UNLESS EXTENDED OR EARLIER TERMINATED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED, THE
“EXPIRATION TIME”). HOLDERS MUST VALIDLY TENDER THEIR CONVERTIBLE NOTES (AS DEFINED BELOW) PRIOR TO THE EXPIRATION
TIME TO BE ELIGIBLE TO RECEIVE THE CONSIDERATION (AS DEFINED BELOW) PLUS ACCRUED INTEREST (AS DEFINED BELOW). TENDERS OF CONVERTIBLE
NOTES MAY BE WITHDRAWN PRIOR TO THE EXPIRATION TIME, BUT NOT THEREAFTER.
Dycom Industries, Inc. (“Dycom,”
the “Company,” “we,” “us,” or “our”) hereby
offers, upon the terms and subject to the conditions set forth in this Offer to Purchase (this “Offer to Purchase”),
to purchase any and all of the outstanding 0.75% Convertible Senior Notes due 2021 of the Company (the “Convertible Notes”)
that are validly tendered and not validly withdrawn prior to the Expiration Time, for cash in an amount equal to $950
per $1,000 principal amount of Convertible Notes purchased (the “Consideration”). The Company refers
to the offer to purchase the Convertible Notes as the “Offer”.
The Company’s obligation to
accept for payment, and to pay for, any Convertible Notes validly tendered pursuant to the Offer is subject to satisfaction or
waiver of all the conditions described in this Offer to Purchase. The conditions to the Offer are for the sole benefit of the Company
and may be asserted by the Company, regardless of the circumstances giving rise to any such condition and may be waived by the
Company, in whole or in part, at any time and from time to time, in the sole discretion of the Company. See “Conditions to
the Offer.”
The Offer is open to all holders of record
of Convertible Notes (each, a “Holder” and, collectively, “Holders”). If a Holder validly
tenders its Convertible Notes prior to the Expiration Time and the Company accepts such Convertible Notes for payment, upon the
terms and subject to the conditions of the Offer, the Company will also pay to such Holder all accrued and unpaid interest on such
Convertible Notes from and including the last interest payment date of March 15, 2020 up to, but not including, the Payment Date
(as defined herein) (“Accrued Interest”). No tenders will be valid if submitted after the Expiration Time.
Any Holder desiring to tender, and any
beneficial owner of Convertible Notes desiring that the Holder tender, all or any portion of such Holder’s Convertible Notes
must comply with the procedures for tendering Convertible Notes set forth herein in “Procedures for Tendering and Withdrawing
Convertible Notes”.
Any questions or requests for assistance
concerning the Offer may be directed to Goldman Sachs & Co. LLC and BofA Securities, Inc. (the “Dealer Managers”)
or D. F. King & Co., Inc. (the “Information Agent”) at the addresses and telephone numbers set forth on
the back cover of this Offer to Purchase. Requests for additional copies of this Offer to Purchase or any other related documents
may be directed to the Information Agent at the address and telephone numbers set forth on the back cover of this Offer to Purchase.
Beneficial owners of Convertible Notes should be aware that their broker, dealer, commercial bank, trust company or other nominee
may establish its own earlier deadlines for participation in the Offer. Accordingly, beneficial owners wishing to participate in
the Offer should contact their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to
determine the times by which such owner must take action in order to participate in the Offer. D. F. King & Co., Inc. is acting
as depositary (the “Depositary”) in connection with the Offer.
OUR BOARD OF DIRECTORS HAS APPROVED
THE OFFER. HOWEVER, NONE OF THE COMPANY, ITS MANAGEMENT OR BOARD OF DIRECTORS (OR COMMITTEE THEREOF), THE DEALER MANAGERS, THE
INFORMATION AGENT OR THE DEPOSITARY MAKES ANY RECOMMENDATION IN CONNECTION WITH THE OFFER. YOU SHOULD CONSULT YOUR OWN FINANCIAL
AND TAX ADVISORS, AND READ CAREFULLY AND EVALUATE THE INFORMATION IN THIS OFFER TO PURCHASE, INCLUDING OUR REASONS FOR THE OFFER,
BEFORE TAKING ANY ACTION WITH RESPECT TO THE OFFER. EACH HOLDER MUST
MAKE ITS OWN DECISION AS TO WHETHER TO TENDER ITS CONVERTIBLE
NOTES AND, IF SO, THE PRINCIPAL AMOUNT OF THE CONVERTIBLE NOTES TO TENDER.
THE OFFER HAS NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), NOR HAS THE SEC PASSED UPON THE FAIRNESS OR MERITS
OF THE OFFER OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS OFFER TO PURCHASE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Dealer Managers for the Offer
are:
Goldman
Sachs & Co. LLC
BofA Securities
May 5, 2020
IMPORTANT INFORMATION
Upon the terms and subject to the satisfaction
or waiver of all conditions set forth herein, the Company will notify the Depositary, promptly after the Expiration Time, of which
Convertible Notes tendered are accepted for payment pursuant to the Offer. If a Holder validly tenders its Convertible Notes prior
to the Expiration Time and does not validly withdraw its Convertible Notes prior to the Expiration Time and the Company accepts
such Convertible Notes for payment, upon the terms and subject to the conditions of the Offer, the Company will pay such Holder
the Consideration and Accrued Interest for such Convertible Notes on the Payment Date (as defined below). Convertible Notes accepted
for purchase pursuant to the Offer will be accepted only in principal amounts of $1,000 or an integral multiple thereof.
Notwithstanding any other provisions
of the Offer, the Company’s obligation to accept for payment, and to pay for, any Convertible Notes validly tendered and
not validly withdrawn pursuant to the Offer is subject to the satisfaction or waiver of all conditions set forth herein. See “Conditions
to the Offer.”
Payment for the Convertible Notes will
be made by the deposit of immediately available funds by the Company with the Depositary or at its direction promptly following
the Expiration Time, and is expected to be within two (2) business days following the Expiration Time (the date of payment with
respect to the Offer being referred to herein as the “Payment Date”). The Depositary will act as agent for the
tendering Holders for the purpose of receiving payments from the Company and transmitting such payments to such Holders. See “Acceptance
for Payment and Payment.”
Subject to compliance with applicable
law, the Company expressly reserves the right, in its sole discretion, to (i) terminate the Offer prior to the Expiration
Time and not accept for payment any Convertible Notes tendered in the Offer if certain events described under “Conditions
to the Offer” occur, (ii) waive or modify in whole or in part any or all of the conditions of the Offer prior to any acceptance
for payment for Convertible Notes, (iii) extend the Expiration Time to a later date and/or time as announced by the Company or
(iv) amend the terms of the Offer. Any extension, termination, waiver or amendment will be followed as promptly as practicable
by a public announcement thereof. In the case of an extension, the amendment shall be issued no later than 9:00 a.m., New York
City time, on the next business day after the last previously scheduled or announced Expiration Time. The foregoing rights are
in addition to the Company’s right to delay the acceptance for payment for Convertible Notes tendered pursuant to the Offer,
or the payment for Convertible Notes accepted for payment, in order to permit any or all conditions to the Offer to be satisfied
or waived or to comply in whole or in part with any applicable law, subject, in each case, however, to Rules 13e-4 and 14e-1 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which require that an offeror pay the
consideration offered or return the securities deposited by or on behalf of the holders thereof promptly after the termination
or withdrawal of a tender offer.
In the event that the Offer is terminated,
withdrawn or otherwise lawfully not consummated, the Consideration and Accrued Interest will not be paid or become payable to Holders
who have validly tendered their Convertible Notes pursuant to the Offer. In any such event, the Convertible Notes previously tendered
pursuant to the Offer will be promptly returned to the tendering Holders.
From time to time after the tenth (10th)
business day following the Expiration Time or other date of termination of the Offer, the Company or its affiliates may acquire
any Convertible Notes that are not tendered pursuant to the Offer through open market purchases, privately negotiated transactions,
tender offers, exchange offers, redemptions or otherwise, upon such terms and at such prices as the Company or any such affiliate
may determine, which may be more or less than the price to be paid pursuant to the Offer and could be for cash or other consideration.
Pursuant to Rule 13e-4(f)(6) under the Exchange Act, neither we nor our affiliates may purchase Convertible Notes until ten (10)
business days after the expiration or termination of the Offer, other than the Company’s purchases of Convertible Notes in
connection with the Offer. There can be no assurance as to which, if any, of these alternatives (or combinations thereof) the Company
or its affiliates will choose to pursue in the future.
NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS WITH RESPECT TO THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE AND
RELATED DOCUMENTS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THE DELIVERY OF THIS OFFER TO PURCHASE SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE HEREIN IS CURRENT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF SUCH INFORMATION. THE COMPANY DISCLAIMS
ANY OBLIGATION TO UPDATE OR REVISE ANY OF THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN.
THIS OFFER TO PURCHASE DOES NOT CONSTITUTE
AN OFFER TO PURCHASE IN ANY JURISDICTION, DOMESTIC OR FOREIGN, IN WHICH, OR TO OR FROM ANY PERSON TO OR FROM WHOM, IT IS UNLAWFUL
TO MAKE SUCH OFFER UNDER APPLICABLE SECURITIES OR “BLUE SKY” LAWS.
THIS OFFER TO PURCHASE CONTAIN AND
INCORPORATE BY REFERENCE IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
The Convertible Notes are represented
by one or more global certificates registered in the name of Cede & Co., the nominee of the Depository Trust Company (“DTC”),
and held in book-entry form through DTC. DTC is the only registered holder of the Convertible Notes. DTC facilitates the clearance
and settlement of securities transactions through electronic book-entry changes in accounts of DTC participants.
Only Holders—i.e., record owners,
as reflected on the Company’s registry of ownership—are entitled to tender Convertible Notes. A beneficial owner of
the Convertible Notes that are held of record by a broker, dealer, commercial bank, trust company or other nominee must instruct
such broker, dealer, commercial bank, trust company or other nominee to tender the Convertible Notes on the beneficial owner’s
behalf.
DTC has authorized DTC participants that
hold Convertible Notes on behalf of beneficial owners of Convertible Notes to tender their Convertible Notes as if they were Holders.
The Depositary and DTC have confirmed that the Offer is eligible for DTC’s Automated Tender Offer Program (“ATOP”).
Accordingly, to effect such a tender of Convertible Notes, DTC participants must tender their Convertible Notes to DTC through
ATOP and follow the procedures set forth in “Procedures for Tendering and Withdrawing Convertible Notes—Convertible
Notes Held Through DTC.” Holders desiring to tender their Convertible Notes on the day when the Expiration Time occurs should
be aware that they must allow sufficient time for completion of the ATOP procedures during normal business hours of DTC on such
day.
Tendering Holders will not be obligated
to pay brokerage fees or commissions or the fees and expenses of the Dealer Managers, the Information Agent or the Depositary.
See “Dealer Managers, Information Agent and Depositary.”
There are no guaranteed delivery provisions
provided for by the Company in connection with the Offer under the terms of this Offer to Purchase or any other related documents.
Accordingly, you must allow sufficient time for the necessary tender procedures to be completed during the normal business hours
of DTC on or prior to the Expiration Time. If you hold your Convertible Notes through a broker, dealer, commercial bank, trust
company or other nominee, you should be aware that such entity may establish its own earlier deadlines for participation in the
Offer. Tenders not completed prior to the Expiration Time will be disregarded and of no effect (unless the Offer has been extended
and such tenders are completed prior to the expiration of the extended Offer). Holders must tender their Convertible Notes in accordance
with the procedures set forth herein.
Table of Contents
Page
| SUMMARY TERM SHEET |
1 |
| WHERE YOU CAN FIND ADDITIONAL INFORMATION |
5 |
| INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE |
5 |
| FORWARD-LOOKING STATEMENTS |
6 |
| ABOUT THE COMPANY |
7 |
| THE OFFER |
8 |
| PROCEDURES FOR TENDERING AND WITHDRAWING CONVERTIBLE NOTES |
10 |
| ACCEPTANCE FOR PAYMENT AND PAYMENT |
13 |
| CONDITIONS TO THE OFFER |
14 |
| IMPACT OF THE OFFER ON RIGHTS OF THE HOLDERS OF THE CONVERTIBLE NOTES |
16 |
| ADDITIONAL CONSIDERATIONS CONCERNING THE OFFER |
18 |
| MARKET INFORMATION ABOUT THE CONVERTIBLE NOTES |
20 |
| CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS |
21 |
| DEALER MANAGERS, INFORMATION AGENT AND DEPOSITARY |
25 |
| SOLICITATION AND EXPENSES |
26 |
| MISCELLANEOUS |
27 |
SUMMARY TERM SHEET
The following summary is provided
solely for the convenience of Holders of the Convertible Notes. This summary is not intended to be complete and is qualified in
its entirety by reference to, and should be read in conjunction with, the information appearing elsewhere or incorporated by reference
in this Offer to Purchase and any supplements hereto or thereto. To understand the Offer fully and for a more complete description
of the terms of the Offer, we urge you to read carefully this Offer to Purchase and the other related materials that constitute
part of the Offer in their entirety. Each of the capitalized terms used in this summary and not defined herein has the meaning
set forth elsewhere in this Offer to Purchase.
| The Company |
Dycom Industries, Inc., a Florida corporation. |
| The Convertible Notes |
0.75% Convertible Senior Notes due 2021 of the Company. See “Impact of the Offer on Rights of the Holders of the Convertible Notes.” |
| The Offer |
The Company is offering to purchase, upon the terms and subject to the conditions described herein, any and all of the Convertible Notes validly tendered and not validly withdrawn prior to the Expiration Time, in each case for the Consideration and Accrued Interest for such Convertible Notes on the Payment Date. See “The Offer.” |
| Purpose of the Offer; Source and Amount of Funds |
The purpose of the Offer is to purchase any and all of the outstanding Convertible Notes in order to retire the debt associated with the Convertible Notes. The Company expects to fund purchases of Convertible Notes tendered in the Offer with cash on hand. See “The Offer—Purpose of the Transaction” and “The Offer— Source and Amount of Funds.” |
| Consideration; Accrued Interest |
The Consideration offered is cash in an amount
equal to $950 per $1,000 principal amount of Convertible Notes purchased in the
Offer. If a Holder validly tenders and does not validly withdraw its Convertible Notes prior to the Expiration Time and
the Company accepts such Convertible Notes for payment, upon the terms and subject to the conditions of the Offer, the Company
will pay such Holder the Consideration and Accrued Interest for such Convertible Notes on the Payment Date. With respect
to any Convertible Notes purchased in the Offer, “Accrued Interest” means unpaid interest accrued on such Convertible
Notes pursuant to their terms up to, but not including, the Payment Date. See “The Offer.” |
| Payment Date |
The Payment Date for the Offer is expected to be promptly after the Expiration Time. The Company expects payment to be made within two (2) business days of the Expiration Time. See “Acceptance for Payment and Payment.” |
| Expiration Time |
The Offer will expire at 12:00 midnight, New York City time, on June 2, 2020, unless extended or earlier terminated by the Company. See “The Offer—Expiration Time; Extension; Amendment; Termination.” |
| Withdrawal Rights |
Holders may withdraw their tendered Convertible Notes at any time prior to the Expiration Time. After the Expiration |
| |
Time, tendered Convertible Notes may not be withdrawn except in the limited circumstances described herein. See “Procedures for Tendering and Withdrawing Convertible Notes—Withdrawal of Tenders; Absence of Appraisal Rights.” |
| Conditions to the Offer |
Notwithstanding any other provision of the Offer, the
Company’s obligation to accept for payment, and pay for, any Convertible Notes validly tendered and not validly withdrawn
pursuant to the Offer is conditioned on satisfaction of all of the conditions described herein. The Company expressly reserves
the right, in its sole discretion but subject to applicable law, to (i) terminate the Offer prior to the Expiration Time and not
accept for payment any Convertible Notes tendered in the Offer if certain events described under “Conditions to the Offer”
occur, (ii) waive or modify in whole or in part any or all of the conditions of the Offer prior to any acceptance for payment of
Convertible Notes, (iii) extend the Expiration Time to a later date and time as announced by the Company or (iv) amend the terms
of the Offer.
The Company also reserves the right, in its sole discretion,
to delay the acceptance for payment for Convertible Notes tendered in the Offer, or to delay the payment for Convertible Notes
so accepted, in order to permit any or all conditions of the Offer to be satisfied or waived or to comply in whole or in part with
any applicable law, subject in each case, however, to Rules 13e-4 and 14e-1 under the Exchange Act, which require that an offeror
pay the consideration offered or return the securities deposited by or on behalf of the holders thereof promptly after the termination
or withdrawal of a tender offer. See “Conditions to the Offer.” |
| Procedures for Tendering and Withdrawing Convertible Notes |
The Convertible Notes are represented by one or more
global certificates registered in the name of Cede & Co., the nominee DTC, and held in book-entry form through DTC. DTC is
the only registered holder of the Convertible Notes. DTC facilitates the clearance and settlement of securities transactions through
electronic book-entry changes in accounts of DTC participants.
Only a person who is the record owner of a Convertible
Note, as reflected in the Company’s registry of ownership, is the Holder of that Convertible Note and is entitled to tender
that Convertible Note in the Offer. Beneficial owners of Convertible Notes who hold their interests through a nominee or other
person are not the Holders of those Convertible Notes and, if they wish such Convertible Notes to be tendered in the Offer, they
must arrange for the Holders to effect the tender for them.
Any beneficial owner who holds Convertible Notes in
book-entry form through DTC and who desires that the Convertible Notes be tendered should request the owner’s |
| |
broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for the owner prior to the Expiration Time. See “Procedures
for Tendering and Withdrawing Convertible Notes—Convertible Notes Held by Record Holders.”
Holders of Convertible Notes who are tendering by book-entry
transfer to the Depositary’s account at DTC must execute the tender through ATOP. DTC Participants (as defined herein) that
are accepting the Offer must transmit their acceptance to DTC, which will verify the acceptance and execute a book-entry delivery
to the Depositary’s account at DTC. DTC will then send an Agent’s Message (as defined herein) to the Depositary for
its acceptance. Delivery of the Agent’s Message by DTC will satisfy the terms of the Offer as to the tender of Convertible
Notes.
There are no guaranteed delivery provisions
provided for by the Company in connection with the Offer under the terms of this Offer to Purchase or any other related documents.
Accordingly, Holders must allow sufficient time for the necessary tender procedures to be completed during the normal business
hours of DTC on or prior to the Expiration Time. Holders that hold Convertible Notes through a broker, dealer, commercial bank,
trust company or other nominee should be aware that such entity may establish its own earlier deadlines for participation in the
Offer. See “Procedures for Tendering and Withdrawing Convertible Notes—Convertible Notes Held Through DTC.” |
| Untendered and/or Unpurchased Convertible Notes |
Convertible Notes not tendered and/or accepted for payment pursuant to the Offer will remain outstanding. Although the Company has no obligation to do so, the Company may effect a satisfaction and discharge of the indenture governing the Convertible Notes or otherwise purchase and/or redeem the untendered Convertible Notes in any lawful manner available to the Company. See “Additional Considerations Concerning the Offer.” Pursuant to Rule 13e-4(f)(6) under the Exchange Act, neither the Company nor its affiliates may purchase Convertible Notes, other than the Company’s purchases of Convertible Notes in connection with the Offer, until ten (10) business days after the expiration or termination of the Offer. |
| Acceptance for Payment and Payment |
Upon the terms and subject to the conditions set forth herein,
the Company will, promptly after the Expiration Time, accept for payment any and all outstanding Convertible Notes validly tendered
and not validly withdrawn prior to the Expiration Time. If a Holder validly tenders and does not validly withdraw its Convertible
Notes prior to the Expiration Time and the Company accepts such Convertible Notes for payment, upon the terms and subject to the
conditions of the Offer, the Company will pay such Holder the Consideration and Accrued Interest for such Convertible Notes on
the Payment Date, which is expected to be within two (2) business days of the Expiration Time.
|
| |
Payments for Convertible Notes accepted for payment will
be made on the Payment Date by the deposit of immediately available funds by the Company with or at the direction of the Depositary.
The Depositary will act as agent for the tendering Holders for the purpose of receiving payments from the Company and transmitting
such payments to such Holders. Any Convertible Notes validly tendered and accepted for payment pursuant to the Offer will be cancelled.
Any Convertible Notes tendered but not accepted for payment pursuant to the Offer will be returned to the Holders promptly after
the Expiration Time. See “Acceptance for Payment and Payment.” |
| Convertible Bond Hedge and Warrant Transactions |
In connection with the Offer, we expect to
agree with each of Goldman Sachs & Co. LLC, Bank of America, N.A. and Wells Fargo Bank, National Association (the “Option
Counterparties”) to terminate certain convertible bond hedge transactions and separate warrant transactions between us
and the Option Counterparties. We had entered into the convertible bond hedge transactions and warrant transactions with the Option
Counterparties at the time of the offering of the Convertible Notes. We expect to terminate the convertible bond hedge transactions
and warrant transactions in an amount corresponding to the portion of the Convertible Notes accepted for purchase in the Offer.
In connection with these terminations, the Company may receive payments from and make payments to the Option Counterparties in
amounts that depend on the market price of the Company’s common stock during the related valuation period. Goldman Sachs
& Co. LLC and Bank of America, N.A., are each affiliates of a Dealer Manager.
In connection with the termination of the convertible
bond hedge and warrant transactions and unwinding of their existing hedge positions with respect to such transactions, we are advised
that the Option Counterparties or their respective affiliates expect to sell shares of our common stock in secondary market transactions,
and/or unwind various derivative transactions with respect to our common stock, shortly after the expiration of the Offer. This
activity could decrease (or reduce the magnitude of any increase in) the market price of our common stock at that time and it could
adversely affect the market value of the Convertible Notes that remain outstanding following the consummation of the Offer.
For a discussion of the potential impact of any market or
other activity by Option Counterparties or their respective affiliates in connection with the termination of the convertible bond
hedge transactions and warrant transactions, see “Additional Considerations Concerning the Offer—Termination of Convertible
Bond Hedge and Warrant Transactions and Effect on Notes Not Purchased in the Offer.” |
| Certain U.S. Federal Income Tax Considerations |
For a discussion of certain U.S. federal income tax considerations relating to the Offer, see “Certain U.S. Federal Income Tax Considerations.” |
| Brokerage Commission |
No brokerage commissions are payable by Holders to the Dealer Managers, the Information Agent, the Company, the Trustee or the Depositary. |
| Dealer Managers |
Goldman Sachs & Co. LLC and BofA Securities, Inc. |
| Depositary |
D. F. King & Co., Inc. |
| Information Agent |
D. F. King & Co., Inc. |
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We are required to file annual, quarterly
and current reports, proxy statements and other information with the SEC. Our filings with the SEC are also available to the public
through the SEC’s website at www.sec.gov. In addition, our filings are available to the public free of charge on our
corporate website at www.dycomind.com. The information included or referred to on our website is not part of this Offer
to Purchase.
The Company has filed with the SEC a
Tender Offer Statement on Schedule TO (the “Schedule TO”), pursuant to Section 13(e) of the Exchange Act and
Rule 13e-4 promulgated thereunder, furnishing certain information with respect to the Offer. The Schedule TO, together with any
exhibits or amendments thereto, may be examined and copies may be obtained at the same places and in the same manner as set forth
above.
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE
The following documents filed with the
SEC with respect to the Company are incorporated herein by reference and shall be deemed to be a part hereof (other than any portions
of the respective filings that were furnished to, rather than filed with, the SEC under applicable SEC rules) (the “Incorporated
Documents):
| · | Our Annual Report on Form 10-K for the fiscal year ended January 25, 2020 filed on March 2, 2020; |
| · | Our Current Reports on Form 8-K filed on March 23, 2020 (as amended by our Current Report on Form 8-K/A filed on March 23,
2020), March 24, 2020 and March 30, 2020; and |
| · | Our Definitive Proxy Statement on Schedule 14A filed on April 9, 2020. |
The information contained in each of
the documents listed above speaks only as to the date of such document. Any statement contained herein or contained in a document
incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Offer to Purchase to the extent
that a statement contained herein or in any other subsequently filed document or report that also is incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Offer to Purchase.
Statements contained in this Offer to
Purchase as to the contents of any contract or other document referred to in this Offer to Purchase do not purport to be complete
and, where reference is made to the particular provisions of such contract or other document, such provisions are qualified in
all respects by reference to all of the provisions of such contract or other document. References herein to the Offer to Purchase
include all Incorporated Documents as incorporated herein, unless the context otherwise requires.
Certain sections of this Offer to Purchase
are incorporated by reference in and constitute part of the Schedule TO filed by the Company with the SEC on May 5, 2020 pursuant
to Section 13(e) of the Exchange Act and Rule 13e-4 promulgated thereunder. The sections so incorporated are identified in the
Schedule TO.
The Company will promptly provide without
charge to each person to whom this Offer to Purchase is delivered, upon written or oral request, copies of any or all documents
and reports described above and incorporated by reference into this Offer to Purchase (other than exhibits to such documents, unless
such documents are specifically incorporated by reference). Written or telephone requests for such copies should be directed to
the Information Agent at the address and telephone numbers set forth on the back cover of this Offer to Purchase.
FORWARD-LOOKING STATEMENTS
This Offer to Purchase and the documents incorporated
by reference in this Offer to Purchase contain forward-looking statements. Forward-looking statements can be identified with words
such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “project,”
“forecast,” “target,” “outlook,” “may,” “should,” “could,”
and similar expressions, as well as statements written in the future tense. We describe our respective risks, uncertainties and
assumptions that could affect the outcome or results of operations in the “Risk Factors” section of our Annual Report
on Form 10-K for the fiscal year ended January 25, 2020. The accuracy of such forward-looking statements are subject to risks and
uncertainties that could cause actual performance or results to differ materially from those expressed in our forward-looking statements.
Important factors, assumptions, uncertainties, and risks that could cause such differences include, but are not limited to:
| · | the recent global pandemic of COVID-19, caused by a novel strain of the coronavirus, and the impact of its consequences; |
| · | future economic conditions and trends in the industries we serve; |
| · | customer capital budgets and spending
priorities; |
| · | the effect of changes in tax law; |
| · | projections of revenues, income or loss, or capital expenditures; |
| · | our plans for future operations, growth and services, including contract backlog; |
| · | our plans for future acquisitions, dispositions, or financial needs; |
| · | expected benefits and synergies of businesses
acquired and future opportunities for the combined
businesses; |
| · | anticipated outcomes of contingent events, including litigation; |
| · | availability of capital; |
| · | restrictions imposed by our credit agreement; |
| · | use of our cash flow to service our debt; |
| · | potential liabilities and other adverse effects arising from occupational health, safety, and other regulatory matters; |
| · | potential exposure to environmental liabilities; |
| · | determinations as to whether the carrying value of our assets is impaired; |
| · | assumptions relating to any of the foregoing;
and |
| · | other risks outlined in our periodic filings with the SEC. |
Our forward-looking statements are expressly
qualified in their entirety by this cautionary statement. Except as required by the federal securities laws, we do not undertake
to update or revise forward-looking statements to reflect events or circumstances arising after the date of those statements or
to reflect the occurrence of anticipated or unanticipated events.
ABOUT THE COMPANY
Dycom Industries, Inc. is a leading provider
of specialty contracting services throughout the United States. Since our incorporation in the State of Florida in 1969, we have
expanded our scope and service offerings organically and through acquisitions. Our geographic presence and substantial workforce
provide the scale needed to quickly execute on opportunities to service existing and new customers. Our consolidated contract revenues
for the fiscal year ended January 25, 2020 were approximately $3.340 billion.
We supply telecommunications providers with
a comprehensive portfolio of specialty services, including program management; planning; engineering and design; aerial, underground,
and wireless construction; maintenance; and fulfilment services for telecommunications providers. Additionally, we provide underground
facility locating services for various utilities, including telecommunications providers, and other construction and maintenance
services for electric and gas utilities. We supply the labor, tools, and equipment necessary to provide these services to our customers.
Engineering Services. We provide engineering
services to telecommunications providers, including the planning and design of aerial, underground, and buried fiber optic, copper,
and coaxial cable systems that extend from the telephone company hub location, or cable operator headend, to the consumer’s
home or business. We also plan and design wireless networks in connection with the deployment of new and
enhanced macro cell and new small cell sites. Additionally, we obtain
rights of way and permits in support of our engineering activities and those of our customers as well as provide program and project
management and inspection personnel in conjunction with engineering services or on a stand
-alone basis.
Construction, Maintenance, and Installation
Services. We also provide a range of construction, maintenance, and installation services, including the placement and splicing
of fiber, copper, and coaxial cables. We excavate trenches in which to place these cables; place related structures, such as poles,
anchors, conduits, manholes, cabinets, and closures; place drop lines from main distribution lines to the consumer’s home
or business; and maintain and remove these facilities. We provide these services for both telephone companies and cable multiple
system operators in connection with the deployment, expansion, or maintenance of new and existing networks. We also provide tower
construction, lines and antenna installation, foundation and equipment pad construction, and small cell site placement for wireless
carriers, as well as equipment installation and material fabrication and site testing services. For cable multiple system operators,
we install and maintain customer premise equipment such as digital video recorders, set top boxes and modems. We also perform construction
and maintenance services for electric and gas utilities and other customers. In addition, we provide underground facility locating
services for a variety of utility companies, including telecommunications providers. Our underground facility locating services
include locating telephone, cable television, power, water, sewer, and gas lines.
THE OFFER
Introduction
The Company hereby offers, upon the
terms and subject to the conditions set forth in this Offer to Purchase, to purchase for cash any and all of the Convertible Notes
that are validly tendered and not validly withdrawn prior to the Expiration Time for the Consideration of $950
per $1,000 principal amount of the Convertible Notes so purchased, plus Accrued Interest on such Convertible Notes.
Upon the terms and subject to the satisfaction
or waiver of all conditions set forth herein, the Company will, promptly after the Expiration Time, accept for payment any and
all Convertible Notes validly tendered and not validly withdrawn prior to the Expiration Time. If a Holder validly tenders its
Convertible Notes prior to the Expiration Time and does not validly withdraw its Convertible Notes prior to the Expiration Time
and the Company accepts such Convertible Notes for payment, upon the terms and subject to the conditions of the Offer, the Company
will pay such Holder the Consideration and Accrued Interest for such Convertible Notes on the Payment Date, which is expected to
be within two (2) business days of the Expiration Time.
Convertible Notes accepted for payment
pursuant to the Offer will be accepted only in principal amounts of $1,000 or an integral multiple thereof.
Consideration; Accrued Interest
The Consideration for the Convertible
Notes accepted for payment will be paid on the Payment Date, which is expected to be promptly after the Expiration Time. Such payments
will be made by the deposit of immediately available funds by the Company with or at the direction of the Depositary. The Depositary
will act as agent for the tendering Holders for the purpose of receiving payments from the Company and transmitting such payments
to such Holders. See “Acceptance for Payment and Payment.”
Tenders of Convertible Notes pursuant
to the Offer may be validly withdrawn at any time prior to the Expiration Time by following the procedures described herein. If
Holders validly withdraw previously tendered Convertible Notes, such Holders will not receive the Consideration, unless such Convertible
Notes are validly retendered and not again withdrawn prior to the Expiration Time (and the Company accepts the Convertible Notes
for payment, upon the terms and subject to the conditions of the Offer).
Holders whose Convertible Notes are accepted
for payment pursuant to the Offer will be entitled to receive Accrued Interest on those Convertible Notes—i.e., unpaid interest
that has accrued on those Convertible Notes pursuant to their terms from the last semi-annual interest payment date (which was
March 15, 2020) up to, but excluding, the Payment Date. Under no circumstances will any additional interest be payable because
of any delay in the transmission of funds to the Holders of purchased Convertible Notes.
Expiration Time; Extension; Amendment; Termination
The term “Expiration Time”
means 12:00 midnight, New York City time, at the end of June 2, 2020 unless and until the Company shall, in its sole discretion,
have extended this time, in which event the term “Expiration Time” shall mean the new time and date as determined
by the Company. The Company may extend the Expiration Time for any purpose, including to permit the satisfaction or waiver of all
conditions to the Offer or for any other reason. In order to extend the Expiration Time, the Company will notify DTC and will make
a public announcement prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration
Time. Any such announcement will state that the Company is extending the Offer for a specified period or on a daily basis. Without
limiting the manner in which the Company may choose to make a public announcement of any extension of the Offer, the Company will
not, unless required by law, have any obligation to publish, advertise or otherwise communicate any such public announcement other
than issuing a timely press release.
The Company’s obligation to accept
for payment, and pay for, any Convertible Notes validly tendered and not validly withdrawn prior to the Expiration Time is conditioned
on satisfaction or waiver of all the conditions described herein. See “Conditions to the Offer.”
The Company expressly reserves the right,
in its sole discretion but subject to applicable law, to (i) terminate the Offer prior to the Expiration Time and not accept
for payment any Convertible Notes tendered in the Offer if certain events described under “Conditions to the Offer”
occur, (ii) waive or modify in whole or in part any or all of the conditions of the Offer prior to any acceptance for payment for
Convertible Notes, (iii)
extend the Expiration Time or (iv) amend the terms of the Offer (subject to requirements under Rule 13e-4
and 14e-1 under the Exchange Act). Any extension, termination, waiver or amendment will be followed as promptly as practicable
by a public announcement thereof. Without limiting the manner in which the Company may choose to make such announcement, the Company
will not, unless required by law, have any obligation to publish, advertise or otherwise communicate any such announcement other
than issuing a timely press release.
If the Company extends the Offer or delays
its acceptance for payment of, or payment for, any Convertible Notes tendered in the Offer for any reason, then, without prejudice
to the Company’s rights under the Offer, the Depositary may retain tendered Convertible Notes on behalf of the Company. However,
the ability of the Company to delay acceptance for payment of, or payment for, Convertible Notes that are validly tendered and
not withdrawn prior to the Expiration Time is limited by Rules 13e-4 and 14e-1(c) under the Exchange Act, which require that an
offeror pay the consideration offered or return the securities deposited by or on behalf of Holders promptly after the termination
or withdrawal of a tender offer.
If the Company makes a material change
in the terms and conditions of the Offer or the information concerning the Offer, the Company will disseminate additional offering
materials and extend the Offer to the extent required by law, including Rule 13e-4 and 14e-1 under the Exchange Act.
Purpose of the Transaction
The purpose of the Offer is to purchase
the Convertible Notes in order to retire the debt associated with the Convertible Notes. Any Convertible Notes the Company purchases
in the Offer will be cancelled.
Source and Amount of Funds
The total amount of funds required
to purchase all of the outstanding $292,997,000 aggregate principal amount of the Convertible Notes at a price equal to $950
per $1,000 principal amount is $278,347,150. In addition, the Company will pay Accrued Interest on any Convertible Notes
purchased in the Offer and pay related fees and expenses in connection therewith. The Company expects to use cash on hand to
fund the purchases of Convertible Notes tendered in the Offer as well as the payment of Accrued Interest and fees and expenses.
PROCEDURES FOR TENDERING AND WITHDRAWING
CONVERTIBLE NOTES
The tender of Convertible Notes pursuant
to the Offer and in accordance with the procedures described below will constitute a valid tender of Convertible Notes. If a Holder
validly tenders its Convertible Notes prior to the Expiration Time and does not validly withdraw its Convertible Notes prior to
the Expiration Time and the Company accepts such Convertible Notes for payment, upon the terms and subject to the conditions of
the Offer, the Company will pay such Holder the Consideration and Accrued Interest for such Convertible Notes on the Payment Date.
Any Convertible Notes tendered and validly withdrawn prior to the Expiration Time will be deemed not to have been validly tendered.
Tendering Convertible Notes
The tender of Convertible Notes pursuant
to any of the procedures described in this Offer to Purchase will constitute a binding agreement between the tendering Holder and
the Company upon the terms and subject to the conditions of the Offer. The valid tender of Convertible Notes will constitute the
agreement of the Holder to deliver good and marketable title to all tendered Convertible Notes, free and clear of all liens, charges,
claims, encumbrances, interests and restrictions of any kind.
UNLESS THE CONVERTIBLE NOTES BEING
TENDERED ARE DEPOSITED BY THE HOLDER INTO THE DEPOSITARY’S ACCOUNT AT DTC PRIOR TO THE EXPIRATION TIME, THE COMPANY MAY,
AT ITS OPTION, REJECT SUCH TENDER. PAYMENT FOR CONVERTIBLE NOTES WILL BE MADE ONLY AGAINST DEPOSIT OF VALIDLY TENDERED CONVERTIBLE
NOTES AND DELIVERY OF ALL OTHER REQUIRED DOCUMENTS.
Only registered Holders of Convertible
Notes are authorized to tender their Convertible Notes pursuant to the Offer. Accordingly, to properly tender Convertible Notes
or cause Convertible Notes to be tendered, the following procedures must be followed:
Convertible Notes Held Through DTC
DTC or its nominee is the sole registered
owner—and thus the sole Holder—of Convertible Notes held in book-entry form through DTC. Beneficial owners of Convertible
Notes held through a participant of DTC (i.e., a custodian bank, depositary, broker, trust company or other nominee) (a “DTC
Participant”) are not Holders of the Convertible Notes, and any such beneficial owner that wishes its Convertible Notes
to be tendered in the Offer must instruct the DTC Participant through which its Convertible Notes are held to cause its Convertible
Notes to be tendered and delivered to the Depositary in accordance with DTC’s ATOP procedures as described in this Offer
to Purchase. Beneficial owners and DTC Participants desiring that Convertible Notes be tendered on the day on which the Expiration
Time is to occur should be aware that they must allow sufficient time for completion of the ATOP procedures during normal business
hours of DTC on such day. Such beneficial owners should be aware that such DTC Participant may establish its own earlier deadlines
for participation in the Offer. Accordingly, beneficial owners wishing to participate in the Offer should contact such DTC Participant
as soon as possible in order to determine the times by which such owner must take action in order to participate in the Offer.
The Depositary and DTC have confirmed
that the Offer is eligible for ATOP. Pursuant to an authorization given by DTC to DTC Participants, each DTC Participant that holds
Convertible Notes through DTC and chooses to accept the Offer must transmit its acceptance through ATOP, and DTC will then edit
and verify the acceptance, execute a book-entry delivery to the Depositary’s account at DTC and send an Agent’s Message
(as defined below) to the Depositary for its acceptance. The Depositary will (promptly after the date of this Offer to Purchase)
establish accounts at DTC for purposes of the Offer with respect to Convertible Notes, and any financial institution that is a
DTC Participant may make book-entry delivery of Convertible Notes into the Depositary’s account through ATOP. However, although
delivery of the Convertible Notes may be effected through book-entry transfer into the Depositary’s account through ATOP,
an Agent’s Message in connection with such book-entry transfer and any other required documents must be, in any case, transmitted
to and received by the Depositary at its address set forth on the back cover of this Offer to Purchase prior to the Expiration
Time. Delivery of documents to DTC does not constitute delivery to the Depositary. The confirmation of a book-entry transfer into
the Depositary’s account at DTC as described above is referred to herein as a “Book-Entry Confirmation.”
The term “Agent’s Message”
means a message transmitted by DTC to, and received by, the Depositary and forming a part of the Book-Entry Confirmation, which
states that DTC has received an express
acknowledgment from the tendering participant stating (1) the aggregate principal amount
of Convertible Notes to be tendered by such participant, and (2) that such participant has received copies of the Offer to Purchase
and agrees to be bound by the terms and conditions of the Offer as described herein.
All Convertible Notes are currently held
through DTC and have been issued in the form of global notes (the “Global Convertible Notes”) registered in
the name of Cede & Co., DTC’s nominee. At or as of the close of business on the first business day after the Payment
Date, the aggregate principal amount of the Global Convertible Notes will be reduced to represent the aggregate principal amount
of the Convertible Notes, if any, held through DTC and not tendered pursuant to the Offer.
Information Reporting and Backup Withholding of U.S.
Federal Income Tax
Information reporting requirements will generally apply
to payments of Consideration and Accrued Interest pursuant to the Offer paid by a U.S. paying agent or other U.S. intermediary
to a U.S. Holder. U.S. Holders whose Convertible Notes are tendered and accepted for payment pursuant to the Offer may be subject
to backup withholding with respect to the payments of Consideration and Accrued Interest if such Holder fails to provide the applicable
withholding agent with its correct taxpayer identification number which, in the case of an individual, is its social security number
or individual taxpayer identification number, and certain other information, or otherwise establish a basis for exemption from
backup withholding. Certain U.S. Holders, including corporations, are exempt from these information reporting requirements.
Payments of Accrued Interest to a Non-U.S.
Holder and the amount of any U.S. federal tax withheld from such payments (if any) generally will be reported to the IRS and to
such Non-U.S. Holder. The information reporting and backup withholding rules that apply to payments to a U.S. Holder pursuant to
the Offer generally will not apply to payments to a Non-U.S. Holder pursuant to the Offer if such Non-U.S. Holder certifies under
penalties of perjury that it is not a U.S. person (generally by providing an IRS Form W-8BEN or W-8BEN-E) or otherwise establishes
an exemption. See “Certain U.S. Federal Income Tax Considerations—Information Reporting and Backup Withholding”
in this Offer to Purchase.
Determination of Validity
All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of Convertible Notes pursuant to the procedures described in
this Offer to Purchase and the form and validity of all documents will be determined by the Company in its sole discretion, which
determination will be final and binding on all parties, subject to each Holder’s right to challenge any determination by
the Company in a court of competent jurisdiction. The Company reserves the absolute right to reject any or all tenders that are
not in proper form or the acceptance of or payment for which may, upon the advice of counsel for the Company, be unlawful. The
Company also reserves the absolute right to waive or modify in whole or in part any or all of the conditions of the Offer and any
defect or irregularity in the tender of any particular Convertible Notes. The Company’s interpretation of the terms and conditions
of the Offer will be final and binding, subject to each Holder’s right to challenge any determination by the Company in a
court of competent jurisdiction. The Company is not obligated and does not intend to accept any alternative, conditional or contingent
tenders. Unless waived, any irregularities in connection with tenders must be cured within such time as the Company shall determine.
None of the Company or any of its affiliates or assigns, the Depositary, the Information Agent, the Dealer Managers or any other
person will be under any duty to give notification of any defects or irregularities in such tenders or will incur any liability
to a Holder for failure to give such notification. Tenders of Convertible Notes will not be deemed to have been made until such
irregularities have been cured or waived.
THE METHOD OF DELIVERY OF CONVERTIBLE
NOTES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY ACCEPTANCE THROUGH ATOP, IS AT THE ELECTION AND
RISK OF THE PERSONS TENDERING AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. DELIVERY OF DOCUMENTS
TO DTC DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. IF DELIVERY IS BY MAIL, IT IS SUGGESTED THAT THE HOLDER USE PROPERLY INSURED,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND THAT THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION TIME TO PERMIT
DELIVERY TO THE DEPOSITARY PRIOR TO THE EXPIRATION TIME.
No Guaranteed Delivery
There are no guaranteed delivery provisions
provided for by the Company in connection with the Offer under the terms of this Offer to Purchase any other related documents.
Accordingly, Holders must allow sufficient time for the necessary tender procedures to be completed during the normal business
hours of DTC on or prior to the Expiration Time. Holders that hold Convertible Notes through a broker, dealer, commercial bank,
trust company or other nominee should be aware that such entity may establish its own earlier deadlines for participation in the
Offer. Tenders not completed prior to the Expiration Time will be disregarded and of no effect (unless the Offer has been extended
and such tenders are completed prior to the expiration of the extended Offer). Holders must tender their Convertible Notes in accordance
with the procedures set forth above.
Withdrawal of Tenders; Absence of Appraisal Rights
Withdrawal of Convertible Notes by Holders
may only be accomplished in accordance with the following procedures. Holders may withdraw Convertible Notes tendered in the Offer
at any time prior to the Expiration Time. Thereafter, such tenders are irrevocable except that they may be withdrawn after the
fortieth (40th) business day following the commencement of the Offer, in accordance with Rule 13e-4(f)(2) of the Exchange
Act, unless such Convertible Notes have been accepted for payment as provided in this Offer to Purchase. If the Company extends
the Offer, is delayed in its acceptance for payment of Convertible Notes or is unable to purchase Convertible Notes validly tendered
under the Offer for any reason, then, without prejudice to the Company’s rights under such Offer, the Depositary may nevertheless,
on the Company’s behalf, retain tendered Convertible Notes, and such Convertible Notes may not be withdrawn except to the
extent that the Holder is entitled to withdrawal rights described herein.
For a withdrawal of a tender of Convertible
Notes to be effective, a written or facsimile transmission notice of withdrawal must be received by the Depositary prior to the
Expiration Time, by a properly transmitted “Request Message” through ATOP.
Any such notice of withdrawal must (i)
specify the name of the person who tendered the Convertible Notes to be withdrawn and the name of the participant in DTC whose
name appears on the security position listing as the owner of such Convertible Notes, if different from that of the person who
deposited the Convertible Notes and (ii) contain the description of the Convertible Notes to be withdrawn and the aggregate principal
amount represented by such Convertible Notes.
The Company will determine, in its sole
discretion, all questions as to the form and validity (including time of receipt) of any notice of withdrawal, and its determination
will be final and binding on all parties, subject to each Holder’s right to challenge any determination by the Company in
a court of competent jurisdiction. No withdrawal of Convertible Notes shall be deemed to have been properly made until all defects
and irregularities have been cured or waived. None of the Company or any of its affiliates or assigns, the Depositary, the Information
Agent, the Dealer Managers or any other person will be under any duty to give notification of any defects or irregularities in
any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of tenders of Convertible Notes
may not be rescinded, and any Convertible Notes properly withdrawn will be deemed not to have been validly tendered for purposes
of the Offer. However, Holders may retender withdrawn Convertible Notes by following one of the procedures for tendering Convertible
Notes described herein at any time prior to the Expiration Time.
There are no appraisal or other similar
statutory rights available to Holders in connection with the Offer.
ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions
set forth herein, the Company will, promptly after the Expiration Time, accept for payment any and all outstanding Convertible
Notes validly tendered (or defectively tendered, if such defect has been waived by the Company) and not validly withdrawn pursuant
to the Offer on or prior to the Expiration Time. The Company expects payment to be made within two (2) business days of the Expiration
Time. Any Convertible Notes validly tendered and accepted for payment pursuant to the Offer will be cancelled.
The Company, at its option, may elect
to extend the Expiration Time to a later date and time announced by the Company, provided that public announcement of that
extension will be made not later than 9:00 a.m., New York City time, on the next business day after the last previously scheduled
or announced Expiration Time.
The Company expressly reserves the right,
in its sole discretion, to terminate the Offer and not accept for payment any Convertible Notes tendered in the Offer if any of
the conditions set forth under “Conditions to the Offer” shall not have been satisfied or waived by the Company or
in order to comply in whole or in part with any applicable law. In addition, the Company expressly reserves the right, in its sole
discretion, to delay acceptance for payment of, or payment for, Convertible Notes tendered in the Offer in order to permit any
or all of those conditions to be satisfied or waived or to comply in whole or in part with any applicable law, subject in each
case, however, to Rules 13e-4 and 14e-1(c) under the Exchange Act (which require that an offeror pay the consideration offered
or return the securities deposited by or on behalf of the holders thereof promptly after the termination or withdrawal of a tender
offer). In all cases, payment for Convertible Notes accepted for payment pursuant to the Offer will be made only after timely receipt
by the Depositary of confirmation of book-entry transfer of such Convertible Notes or satisfaction of DTC’s ATOP procedures
on or before the Expiration Time, and any other documents required thereby.
Upon the terms and subject to the conditions
set forth herein, after the Expiration Time, the Company will be deemed to have accepted for payment, and thereby purchased, all
Convertible Notes validly tendered and not validly withdrawn prior to such Expiration Time, if and when the Company gives written
notice to the Depositary of its acceptance for payment of such Convertible Notes. On the Payment Date, the Company will deposit
the Consideration for all Convertible Notes validly tendered and not validly withdrawn in the Offer and accepted for purchase by
the Company, plus Accrued Interest, with or at the direction of the Depositary. The Depositary will act as agent for tendering
Holders for the purpose of receiving payments from the Company and transmitting such payments to such Holders.
If the Company extends the Offer or delays
its acceptance for payment of, or payment for, Convertible Notes tendered in the Offer for any reason, then, without prejudice
to the Company’s rights under the Offer, the Depositary may retain tendered Convertible Notes on behalf of the Company. However,
the ability of the Company to delay such acceptance or payment is limited by Rules 13e-4 and 14e-1(c) under the Exchange Act as
described above.
The Company reserves the right to transfer
or assign, in whole or from time to time in part, to one or more of its affiliates, the right to purchase all or any portion of
the Convertible Notes tendered pursuant to the Offer, but any such transfer or assignment will not relieve the Company of its obligations
under the Offer and will in no way prejudice the rights of a tendering Holder to receive payment for its Convertible Notes validly
tendered and accepted for payment pursuant to such Offer.
Holders whose Convertible Notes are accepted
for payment pursuant to the Offer will be entitled to Accrued Interest on those Convertible Notes. UNDER NO CIRCUMSTANCES WILL
ANY ADDITIONAL INTEREST BE PAYABLE BECAUSE OF ANY DELAY IN THE TRANSMISSION OF FUNDS TO THE HOLDERS OF CONVERTIBLE NOTES PURCHASED
PURSUANT TO THE OFFER.
Tendering Holders of Convertible Notes
will not be required to pay brokerage commissions or fees with respect to the tendering of Convertible Notes pursuant to the Offer.
Notwithstanding any other provision of
the Offer, the Company’s obligation to accept for payment and to pay for any Convertible Notes validity tendered pursuant
to the Offer is conditioned on satisfaction or waiver of all the conditions described herein. See “Conditions to the Offer.”
If the Offer is terminated or the Convertible
Notes are validly withdrawn prior to the Expiration Time, or the Convertible Notes are not accepted for payment, the Consideration
and Accrued Interest will not be paid or become payable. If any tendered Convertible Notes are not purchased pursuant to the Offer
for any reason,
such Convertible Notes will be credited to the account maintained at DTC from which those Convertible Notes were
delivered, promptly following the Expiration Time or termination of the Offer.
CONDITIONS TO THE OFFER
Notwithstanding any other provision of
the Offer, the Company’s obligation to accept for payment, and pay for, any Convertible Notes validly tendered and not validly
withdrawn pursuant to the Offer is conditioned on satisfaction of all the conditions to the Offer. The Offer does not have as a
condition that a minimum principal amount of Convertible Notes be tendered.
General Conditions. Notwithstanding any other provision
of the Offer and subject to applicable law, the Company shall not be required to accept for payment any Convertible Notes validly
tendered in the Offer and may, in its sole discretion, terminate or amend the Offer if on or after May 5, 2020, and at or prior
to the Expiration Time, any of the following events shall occur:
| · | in our reasonable judgment, there has been threatened or instituted or is pending any action, suit or proceeding by any government
or any governmental, regulatory, self-regulatory or administrative authority, tribunal or other body, or by any other person, domestic,
foreign or supranational, before any court, authority, tribunal or other body that directly or indirectly: |
| · | challenges or seeks to make illegal, or seeks to delay, restrict, prohibit or otherwise affect the consummation of the Offer
or the acquisition of some or all of the Convertible Notes pursuant to the Offer; or |
| · | could materially and adversely affect the business, condition (financial or otherwise), income, operations, property or prospects
of the Company and its subsidiaries, taken as a whole, or otherwise materially impair our ability to purchase some or all of the
Convertible Notes pursuant to the Offer; |
| · | in our reasonable judgment, any statute, rule, regulation, judgment, order or injunction, including any settlement or the withholding
of any approval, has been threatened, invoked, proposed, sought, promulgated, enacted, entered, amended, enforced, interpreted
or otherwise deemed to apply by any court, government or governmental, regulatory, self-regulatory or administrative authority,
tribunal or other body, domestic, foreign or supranational, in any manner that directly or indirectly: |
| · | could make the acceptance for payment of, or payment for, some or all of the Convertible Notes illegal or could otherwise delay,
restrict, prohibit or otherwise affect the consummation of the Offer; |
| · | could delay or restrict our ability, or render us unable, to accept for payment or pay for some or all of the Convertible Notes
to be purchased pursuant to the Offer; or |
| · | could materially and adversely affect the business, condition (financial or otherwise), income, operations, property or prospects
of the Company or its subsidiaries, taken as a whole; |
| · | in our reasonable judgment, there has occurred any of the following: |
| · | any general suspension of trading in securities on any United States national securities exchange or in the over-the-counter
market; |
| · | the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, whether or
not mandatory; |
| · | a material change in United States or any other currency exchange rates or a suspension of or limitation on the markets therefor; |
| · | the commencement or escalation of any war, armed hostilities or other national or international calamity, including, but not
limited to, an act of terrorism or an |
| | escalation of the impacts of the recent COVID-19 viral outbreak, directly or indirectly involving
the United States, on or after May 5, 2020; |
| · | any limitation, whether or not mandatory, imposed by any governmental, regulatory, self-regulatory or administrative authority,
tribunal or other body, or any other event, that could materially affect the extension of credit by banks or other lending institutions
in the United States; |
| · | any change in the general political, market, economic or financial conditions, domestically or internationally, that could
materially and adversely affect the business, condition (financial or otherwise), income, operations, property or prospects of
the Company and its subsidiaries, taken as a whole, or trading in the Convertible Notes or in the Company’s common stock; |
| · | any change or changes have occurred or are threatened in the business, condition (financial or otherwise), income, operations,
property or prospects of the Company or any of its subsidiaries that could have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or on the benefits of the Offer to us; |
| · | in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening
thereof; or |
| · | a tender or exchange offer for any or all of our common stock, or any merger, acquisition, business combination or other similar
transaction with or involving us or any of our subsidiaries has been made, proposed or announced by any person or has been publicly
disclosed. |
All of the General Conditions will be
deemed to be satisfied unless we determine, in our reasonable judgment, that any of the events listed above has occurred and that,
regardless of the circumstances giving rise to the event, such event makes it inadvisable to proceed with the Offer or with acceptance
for payment of any Convertible Notes tendered in the Offer.
The foregoing conditions are for the
sole benefit of the Company and may be asserted by the Company in its sole discretion, regardless of the circumstances giving rise
to any such condition and may be waived by the Company in whole or in part, at any time and from time to time, in the sole discretion
of the Company, whether or not any other condition of the Offer is also waived. The failure by the Company at any time to exercise
any of the foregoing rights will not be deemed a waiver of any such or other right and each right will be deemed an ongoing right
which may be asserted at any time and from time to time unless waived, subject to the potential requirement to disseminate additional
offering materials and to extend the Offer, to the extent required by applicable law.
The Company expressly reserves the right,
in its sole discretion but subject to applicable law, to (i) terminate the Offer prior to the Expiration Time and not accept
for payment any Convertible Notes tendered in the Offer if certain events described under “Conditions to the Offer”
occur, (ii) waive or modify in whole or in part any or all of the conditions of the Offer prior to any acceptance for payment for
Convertible Notes, (iii) extend the Expiration Time to a later date and time as announced by the Company or (iv) amend the terms
of the Offer (subject to requirements under Rule 13e-4 and 14e-1 under the Exchange Act). Any extension, termination, waiver or
amendment will be followed as promptly as practicable by a public announcement thereof. In the case of an extension, the amendment
shall be issued no later than 9:00 a.m., New York City time, on the next business day after the last previously scheduled or announced
Expiration Time. In the event that the Company extends the Offer, the term “Expiration Time” with respect to such extended
Offer shall mean the time and date on which the Offer, as so extended, shall expire. Without limiting the manner in which the Company
may choose to make such announcement, the Company shall not, unless required by law, have any obligation to publish, advertise
or otherwise communicate any such announcement other than by issuing a press release.
IMPACT OF THE OFFER ON RIGHTS OF
THE HOLDERS OF THE CONVERTIBLE NOTES
As of May 5, 2020, the Company had outstanding
$292,997,000 aggregate principal amount of its 0.75% Convertible Senior Notes due 2021. If the Company accepts Convertible Notes
for payment, upon the terms and subject to the conditions of the Offer, the Company will pay the Holders the Consideration and
Accrued Interest for all Convertible Notes purchased from them in the Offer, and thereby such Holders will give up certain rights
associated with their ownership of such Convertible Notes. Below is a summary of certain rights that such Holders will forgo if
such Convertible Notes are purchased in the Offer.
The summary below does not purport to
describe all of the terms of the Convertible Notes. Please refer to the Indenture by and between the Company, and U.S. Bank, National
Association, as trustee, dated as of September 15, 2015 filed on September 15, 2015 as Exhibit 4.1 to the Company’s Current
Report on Form 8-K (the “Indenture”), for the terms of the Convertible Notes. See “Where You Can Find
Additional Information.”
Interest
Holders of Convertible Notes purchased
in the Offer will forgo regular semi-annual payments of interest accruing on the principal of the Convertible Notes at the rate
of 0.75% per annum from and after the Payment Date.
Conversion Rights of Holders
Holders of Convertible Notes purchased
in the Offer will forgo the right to elect to convert those Convertible Notes into cash, shares of our common stock or a combination
of the two (at a rate of 10.3211 shares per $1,000 principal amount of Convertible Notes, which equates to an initial conversion
price of approximately $96.89 per share of common stock subject to adjustment as provided in the Indenture) under the following
circumstances: (1) during any fiscal quarter commencing after October 24, 2015 (and only
during such fiscal quarter) if the last reported sale price of the Company’s common stock for at least twenty (20) trading
days (whether or not consecutive) during the thirty (30) consecutive trading days period ending on the last trading day
of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price on such
trading day ($125.96 assuming an applicable conversion price of $96.89); (2) during the five (5) consecutive business
day period after any five (5) consecutive trading day period (the “measurement period”) in which the trading price
per $1,000 principal amount of Notes for each trading day of such measurement period was less than 98% of the product
of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such trading day;
or (3) upon the occurrence of specified corporate events. On or after June 15, 2021 until the close of business on the second
scheduled trading day immediately preceding the maturity date, Holders may convert all or a portion of their Notes at any time
regardless of the foregoing circumstances. Upon conversion, the Notes will be settled, at the Company’s election, in cash,
shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock. The Company intends to
settle the principal amount of the Notes with cash.
Arrangements Concerning the Convertible Notes
In connection with the issuance of the
Convertible Notes in 2015, the Company entered into separate convertible note hedge transactions (the “convertible note
hedge transactions”) and warrant
transactions (the “warrant transactions”
and, together with the convertible note hedge transactions,
the “option transactions”) with certain
financial institutions (the “option counterparties”). The option transactions are intended to reduce the potential
dilution to common stockholders from any conversion of the Convertible Notes and/or to offset any potential cash payments upon
conversion in excess of the principal amount of the Convertible Notes.
In order to reflect the reduced principal
amount of Convertible Notes that will be outstanding as a result of the repurchases, the Company expects to enter into agreements
with the option counterparties to terminate a portion of the option transactions in connection with the repurchases of the Convertible
Notes pursuant to the Offer. In connection with these terminations, the Company may receive payments from and make payments to
the option counterparties in amounts that depend on the market price of the Company’s common stock during the related valuation
period.
This description of the terms of the option
transactions is qualified in its entirety by the terms of the underlying agreements, each of which is filed as an exhibit to the
Schedule TO and incorporated by reference herein.
Right of Holders to Receive Principal at Maturity
Holders of Convertible Notes purchased
in the Offer will forgo the right to receive payment of the full principal amount of those Convertible Notes on the maturity date
for the Convertible Notes. The Convertible Notes are scheduled to mature on September 15, 2021, but the maturity is subject to
acceleration upon certain events of default.
Right of Holders to Require Purchase by the Company
Holders of Convertible Notes purchased
in the Offer will forgo the right to require the Company to purchase for cash all or a portion of such Holders’ Convertible
Notes upon the occurrence of a Fundamental Change (as defined in the Indenture), at a price equal to 100% of the principal amount
of the Convertible Notes to be purchased plus any accrued and unpaid interest, if any, to the purchase date.
This description of the terms of the
Convertible Notes and the Indenture is qualified in its entirety by the terms of the Indenture, which is filed as an exhibit to
the Schedule TO and incorporated by reference herein.
ADDITIONAL CONSIDERATIONS CONCERNING
THE OFFER
The following considerations, in addition
to the other information described elsewhere herein or incorporated by reference herein, should be carefully considered by each
holder and owner of Convertible Notes before deciding whether the Convertible Notes should be tendered in the Offer. See “Where
You Can Find Additional Information” and “Incorporation of Certain Documents by Reference.”
Position of the Company Concerning the Offer
Holders of Convertible Notes purchased
in the Offer will receive cash in an amount that is less than the principal amount of those Convertible Notes and, following the
Payment Date, will forgo interest, conversion and other rights associated with these Convertible Notes. Neither the Company
nor its management or board of directors (or committee thereof) nor the Dealer Managers, Depositary or the Information Agent makes
any recommendation to any Holder or owner of Convertible Notes as to whether the Holder should tender or refrain from tendering
any or all of such Holder’s Convertible Notes, and none of them has authorized any person to make any such recommendation.
Holders and owners are urged to evaluate carefully all information included or incorporated by reference in this Offer to Purchase,
consult their investment and tax advisors and make their own decisions whether to tender Convertible Notes, and, if so, the principal
amount of Convertible Notes to tender.
Tax Treatment of Purchase of Convertible Notes in the
Offer
The sale of a Convertible Note pursuant
to the Offer will be a taxable transaction for U.S. federal income tax purposes. Please see “Certain U.S. Federal Income
Tax Considerations” for a more detailed discussion.
Limited Trading Market for Convertible Notes Not Purchased
in the Offer
The Convertible Notes are not listed
on any national or regional securities exchange. To the extent that Convertible Notes are tendered and accepted for payment pursuant
to the Offer, the trading market for Convertible Notes that remain outstanding is likely to be more limited. In addition, a debt
security with a smaller outstanding principal amount available for trading (a smaller “float”) may command a lower
price than would a comparable debt security with a larger float. Thus, the market price for Convertible Notes that are not tendered
and accepted for payment pursuant to the Offer may be adversely affected to the extent that the Offer reduces the float for such
Convertible Notes. There is no assurance that an active market in the Convertible Notes will exist or as to the prices at which
the Convertible Notes may trade after consummation of the Offer.
Trading Price of Convertible Notes
Because the Convertible Notes are convertible
into shares of the Company’s common stock, the trading price of the Convertible Notes is directly affected by factors affecting
the trading price of the Company’s common stock, the general level of interest rates and the Company’s credit quality.
It is impossible to predict whether the price of the Company’s common stock or interest rates will rise or fall or whether
the Company’s credit ratings will improve or decline in the future. The trading prices of the Company’s common stock
and the Convertible Notes are influenced by several factors, many of which are out of the Company’s control.
Treatment of Convertible Notes Not Purchased in the
Offer
Convertible Notes not tendered and/or
accepted for payment in the Offer will remain outstanding. The terms and conditions governing the Convertible Notes, including
the covenants and other protective provisions contained in the Indenture governing the Convertible Notes, will remain unchanged.
No amendment to the Indenture is being sought. Pursuant to Rule 13e-4(f)(6) under the Exchange Act, neither we nor our affiliates
may purchase any Convertible Notes, other than the Company’s purchases of Convertible Notes in connection with the Offer,
until ten (10) business days after the expiration or termination of the Offer. From time to time after the tenth (10th)
business day following the Expiration Time or other date of termination of the Offer, we or our affiliates may acquire Convertible
Notes that remain outstanding through open market purchases, privately negotiated transactions, tender offers, exchange offers
or otherwise, upon such terms and at such prices as we or they may determine, which may be more or less than the price to be paid
pursuant to the Offer and could be for cash or other consideration.
There can be no assurance as to which,
if any, of these alternatives (or combinations thereof) we or our affiliates will choose to pursue in the future.
Termination of Convertible Bond Hedge
and Warrant Transactions and Effect on Notes Not Purchased in the Offer
In connection with
the Offer, we expect to agree with the Option Counterparties to terminate certain convertible bond hedge transactions and warrant
transactions between us and the Option Counterparties. We had entered into the convertible bond hedge transactions and separate
warrant transactions with the Option Counterparties at the time of the offering of the Convertible Notes. In connection with the
purchase of the Convertible Notes, we expect to terminate the convertible bond hedge transactions and warrant transactions in an
amount corresponding to the portion of the Convertible Notes tendered and accepted for purchase in the Offer. In connection with
these terminations, the Company may receive payments from and make payments to the Option Counterparties in amounts that depend
on the market price of the Company’s common stock during the related valuation period.
In connection with the termination of
the convertible bond hedge and warrant transactions and unwinding of their existing hedge positions with respect to such transactions,
we are advised that the Option Counterparties or their respective affiliates expect to sell shares of our common stock in secondary
market transactions, and/or unwind various derivative transactions with respect to our common stock, shortly after the expiration
of the Offer. This activity could decrease (or reduce the magnitude of any increase in) the market price of our common stock at
that time and it could adversely affect the market value of the Convertible Notes that remain outstanding following the consummation
of the Offer.
MARKET INFORMATION ABOUT THE CONVERTIBLE
NOTES
There is no established reporting system
or trading market for trading in the Convertible Notes. To the extent that the Convertible Notes are traded, prices of the Convertible
Notes may fluctuate greatly depending on the trading volume and the balance between buy and sell orders.
Our common stock, which may be issued
upon conversion of the Convertible Notes, is listed on The New York Stock Exchange under the symbol “DY.” The following
table sets forth, for the periods indicated, the high and low sale prices for our common stock for the periods indicated.
| Fiscal year ending January 30, 2021 |
High |
Low |
| Second Quarter (through May 4, 2020) |
$ 35.08 |
$ 29.69 |
| First Quarter |
45.36 |
13.49 |
| Fiscal year ending January 25, 2020 |
|
|
| Fourth Quarter |
$ 54.36 |
$ 44.41 |
| Third Quarter |
58.66 |
40.47 |
| Second Quarter |
59.99 |
45.55 |
| First Quarter |
63.67 |
43.33 |
| Fiscal year ended January 26, 2019 |
|
|
| Fourth Quarter |
$ 76.01 |
$ 49.39 |
| Third Quarter |
89.80 |
67.05 |
| Second Quarter |
116.20 |
89.93 |
| First Quarter |
122.80 |
103.42 |
| Fiscal year ended January 27, 2018 |
|
|
| Fourth Quarter |
$ 120.60 |
$ 85.58 |
| Third Quarter |
90.88 |
76.07 |
On May 4, 2020, the last reported sale
price of our common stock on The New York Stock Exchange was $29.69 per share.
We had 31,585,403 shares of common stock
with a par value of $0.33 1/3 outstanding at February 24, 2020.
HOLDERS ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR OUR COMMON STOCK AND THE CONVERTIBLE NOTES PRIOR TO MAKING ANY DECISION WITH RESPECT TO THE OFFER.
CERTAIN U.S. FEDERAL INCOME TAX
CONSIDERATIONS
The following is a summary of certain
U.S. federal income tax consequences of the tender of Convertible Notes pursuant to the Offer and the receipt of the Consideration
and Accrued Interest. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”),
existing, temporary and proposed Treasury regulations promulgated thereunder, and rulings and administrative and judicial decisions
now in effect, all of which are subject to change (possibly on a retroactive basis). This summary assumes that the Holders of the
Convertible Notes have held their Convertible Notes as “capital assets” within the meaning of Section 1221 of the Code.
This summary does not discuss all aspects
of U.S. federal income taxation which may be relevant to Holders in light of their particular circumstances or to certain types
of Holders subject to special U.S. federal income tax rules (e.g., financial institutions, broker-dealers, insurance companies,
expatriates, tax-exempt organizations, Holders who hold their Convertible Notes as part of a hedge, straddle or conversion or other
integrated transaction, U.S. Holders (as defined below) that have a “functional currency” other than the U.S. dollar,
Holders that elect to mark-to-market their securities and Holders subject to the alternative minimum tax), nor does it address
state, local or foreign tax consequences or any U.S. federal tax consequences (e.g., estate or gift tax or the Medicare tax on
certain investment income) other than U.S. federal income tax consequences. In addition, the Company has not sought a formal legal
opinion from the Internal Revenue Service (the “IRS”) or from its tax counsel regarding any U.S. federal income
tax consequences of tendering Convertible Notes pursuant to the Offer and there is no assurance that the IRS would not challenge
any of the conclusions set forth herein.
EACH HOLDER IS URGED TO CONSULT SUCH
HOLDER’S TAX ADVISOR REGARDING THE SPECIFIC U.S. FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE
OFFER.
U.S. Holders
For purposes of this summary, a “U.S.
Holder” is a beneficial owner of a Convertible Note that is for U.S. federal income tax purposes:
| · | an individual who is a citizen or resident of the United States, |
| · | a corporation that is created or organized in, or under the laws of, the United States, any state thereof or the District of
Columbia, |
| · | an estate, the income of which is subject to U.S. federal income tax regardless of its source, or |
| · | a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of the trust
and one or more United States persons have the authority to control all substantial decisions of the trust or (ii) it has a valid
election in effect to be treated as a U.S. person. |
If a partnership (or other entity or
arrangement classified as a partnership for U.S. federal income tax purposes) holds Convertible Notes, the U.S. federal income
tax treatment of the partnership and each partner in such partnership will generally depend on the status of the partner and the
activities of the partnership. Partnerships that are Holders of Convertible Notes, and partners in such partnerships, should consult
their tax advisors regarding the U.S. federal, state, local and foreign tax consequences to them of tendering Convertible Notes.
Sale of Convertible Notes Pursuant
to the Offer. The receipt of the Consideration by a U.S. Holder in exchange for the Convertible Notes pursuant to the Offer
will be a taxable transaction for U.S. federal income tax purposes. A U.S. Holder generally will recognize gain or loss in an amount
equal to the difference between (i) the gross amount of the Consideration paid to such U.S. Holder in respect of its tendered Convertible
Notes (which does not include payments of Accrued Interest) and (ii) such U.S. Holder’s adjusted tax basis in its tendered
Convertible Notes. A U.S. Holder’s adjusted tax basis in a Convertible Note generally will equal the U.S. Holder’s
initial cost of such Convertible Note, increased by any market discount previously included in income by such U.S. Holder (assuming
such U.S. Holder has elected to include market discount in gross income currently as it accrues) and decreased by the amount of
any bond premium previously amortized by such U.S. Holder. Except to the extent a U.S. Holder is subject to the market discount
rules discussed below, any such
gain or loss generally will be capital gain or loss and will be long-term capital gain or loss
if such Holder has held such Convertible Notes for more than one year at the time of disposition. For non-corporate U.S. Holders,
certain preferential tax rates may apply to any long-term capital gain that is recognized. The deductibility of capital losses
is subject to limitations.
An exception to the capital gain treatment
described in the preceding paragraph applies to a U.S. Holder who holds a Convertible Note with “market discount.”
Market discount generally is the amount by which the principal amount of the Convertible Note exceeded the U.S. Holder’s
tax basis in the Convertible Note immediately after its acquisition. A Convertible Note will not be considered to have market discount
if such excess is de minimis (i.e., less than 1/4 of 1% of the principal amount of the Convertible Note multiplied by the
number of complete years from the U.S. Holder’s acquisition date of the Convertible Note to its maturity date). Any gain
realized by the U.S. Holder of a Convertible Note with market discount in excess of a de minimis amount will be treated
as ordinary income to the extent that market discount has accrued (on a straight line basis or, at the election of the U.S. Holder,
on a constant yield basis) from the U.S. Holder’s acquisition date to the date of sale, unless the U.S. Holder has previously
elected to include market discount in income currently as it accrues. Gain in excess of such accrued market discount will be subject
to the capital gains rules described above. U.S. Holders should consult their tax advisors regarding the proper method for calculating
market discount.
The gross amount of the payments of Accrued
Interest generally will be treated as ordinary interest income to the extent not previously included in income.
U.S. Holders That Do Not Tender Their
Convertible Notes Pursuant to the Offer or Whose Convertible Notes Are Not Accepted for Purchase. A U.S. Holder that does not
tender its Convertible Notes pursuant to the Offer or does not have its tender of Convertible Notes accepted for purchase pursuant
to the Offer will not recognize any gain or loss as a result of the Offer and such U.S. Holder will continue to have the same tax
basis, adjusted issue price, holding period, market discount (if any) and amortizable bond premium (if any) with respect to the
retained Convertible Notes.
Non-U.S. Holders
For purposes of this summary, a “Non-U.S.
Holder” is a beneficial owner of a Convertible Note that is neither a U.S. Holder nor a partnership (or other entity or arrangement
classified as a partnership for U.S. federal income tax purposes). The U.S. federal income tax rules governing Non-U.S. Holders
are complex and special rules may apply to certain Non-U.S. Holders such as “controlled foreign corporations” and “passive
foreign investment companies.” Non-U.S. Holders should consult their tax advisors regarding the U.S. federal, state, local
and foreign tax consequences to them of tendering Convertible Notes, including the application of any applicable income tax treaties.
Sale of Convertible Notes Pursuant
to the Offer. The receipt of the Consideration by a Non-U.S. Holder in exchange for a Convertible Note will be a taxable transaction
for U.S. federal income tax purposes. Subject to the discussions of Accrued Interest and backup withholding below, any gain recognized
by a Non-U.S. Holder from the sale of the Convertible Notes generally will not be subject to U.S. federal income tax unless:
| · | such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business within the United States
and, if required under an applicable income tax treaty, such gain is attributable to a permanent establishment or fixed base maintained
in the United States by the Non-U.S. Holder (in either case such gain would be taxable as discussed below); |
| · | the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition
and certain other conditions are satisfied (in which case the Non-U.S. Holder will generally be subject to U.S. federal income
tax at a 30% rate (or at a reduced rate under an applicable income tax treaty) on such gain (net of certain U.S. source capital
losses)); or |
| · | the Company is or has been a U.S. real property holding corporation, as defined in Section 897 of the Code, at any time within
the five-year period preceding the disposition or the Non-U.S. Holder’s holding period, whichever period is shorter and certain
other requirements are met. The Company does not believe that it has been, currently is, or will become a U.S. real property holding
corporation. |
Subject to the discussion of backup withholding
and FATCA below, the gross amount of the payments of Accrued Interest to a Non-U.S. Holder generally will not be subject to U.S.
federal income tax or withholding tax, provided that:
| · | the Non-U.S. Holder does not, directly or indirectly, actually or constructively, own 10% or more of the total combined voting
power of all classes of stock of the Company entitled to vote; |
| · | the Non-U.S. Holder is not a “controlled foreign corporation” that is considered related to the Company through
stock ownership; |
| · | such Non-U.S. Holder is not a bank that acquired its Convertible Notes in consideration for an extension of credit made pursuant
to a loan agreement entered into in the ordinary course of its trade or business; |
| · | the Accrued Interest is not effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the
United States; and |
| · | either (A) the Non-U.S. Holder certifies to the Company or the paying agent on IRS Form W-8BEN or IRS Form W-8BEN-E, under
penalties of perjury, that it is not a U.S. person and provides its name and address and certain other information, or (B) the
Notes are held through certain foreign intermediaries and the beneficial owner of the Notes satisfies certain certification requirements
of the applicable Treasury regulations and, in either case, neither the Company nor the paying agent has actual knowledge or reason
to know that such beneficial owner is a U.S. person. Special certification rules apply to certain Non-U.S. Holders that are entities
rather than individuals. |
A Non-U.S. Holder that does not qualify
for exemption from U.S. federal income tax under the preceding sentence generally will be subject to withholding of U.S. federal
income tax at a 30% rate (unless an applicable income tax treaty provides for a lower rate) on payments of Accrued Interest that
are not effectively connected with the conduct of a U.S. trade or business. In order to claim an exemption from U.S. federal withholding
tax or a reduced withholding rate provided by an applicable income tax treaty or to claim exemption from U.S. federal withholding
tax because the Accrued Interest is effectively connected with the conduct of a U.S. trade or business, the Non-U.S. Holder must
provide either: (i) a properly executed IRS Form W-8BEN or IRS Form W-8-BEN-E claiming an exemption from U.S. federal withholding
tax or reduced rate of tax under an applicable tax treaty, or (ii) a properly executed IRS Form W-8ECI stating that the Accrued
Interest is not subject to withholding tax because it is effectively connected with the conduct of a U.S. trade or business.
If the gain recognized from the sale
of the Convertible Notes or the Accrued Interest is effectively connected with the conduct by a Non-U.S. Holder of a trade or business
within the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment
maintained by the Non-U.S. Holder), such gain or Accrued Interest will be subject to U.S. federal income tax on a net income basis
at regular U.S. federal income tax rates generally in the same manner as a U.S. Holder (and, in the case of corporate Non-U.S.
Holders, a 30% (or a lower applicable income tax treaty rate) branch profits tax may also apply on such corporate Non-U.S. Holder’s
effectively connected earnings and profits (as determined for U.S. federal income tax purposes).
Non-U.S. Holders should consult their
tax advisors regarding the availability of a refund of any U.S. federal withholding tax that is applied to payments made to such
Non-U.S. Holder with respect to the sale of a Convertible Note pursuant to the Offer.
Non-U.S. Holders That Do Not Tender
Their Convertible Notes Pursuant to the Offer or Whose Convertible Notes Are Not Accepted for Purchase. A Non-U.S. Holder that
does not tender its Convertible Notes pursuant to the Offer or does not have its tender of Convertible Notes accepted for purchase
pursuant to the Offer will not recognize any gain or loss as a result of the Offer.
Information Reporting and Backup Withholding
Information reporting requirements will
generally apply to Consideration on the sale of Convertible Notes and to Accrued Interest paid by a U.S. paying agent or other
U.S. intermediary to a U.S. Holder pursuant to the Offer. U.S. Holders whose Convertible Notes are tendered and accepted for payment
pursuant to the Offer
may be subject to backup withholding with respect to the Consideration on the sale of such Convertible Notes
if such Holder fails to provide the applicable withholding agent with its correct taxpayer identification number (“TIN”)
which, in the case of an individual, is its social security number or individual taxpayer identification number, and certain other
information, or otherwise establish a basis for exemption from backup withholding. Certain U.S. Holders, including corporations,
are exempt from these information reporting requirements.
Any cash payments attributable to Accrued
Interest that are paid to a Non-U.S. Holder, and amounts withheld from such payments, if any, generally will be reported to the
IRS and to such Non-U.S. Holder. Copies of information returns that are filed with the IRS may also be made available under the
provisions of an applicable treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder resides or is
established. A Non-U.S. Holder’s receipt of Consideration pursuant to the Offer and Accrued Interest may be subject to additional
information reporting and backup withholding unless the Non-U.S. Holder provides a certification of such Holder’s non-U.S.
status under penalties of perjury or otherwise establishes that the Holder qualifies for an exemption, provided that the payor
does not have actual knowledge or reason to know that such Holder is a United States person or that the conditions of any other
exemption are in fact not satisfied. Each Non-U.S. Holder can establish an exemption from backup withholding by providing a properly
completed IRS Form W-8BEN, W-8BEN-E or other Form W-8 appropriate to the Non-U.S. Holder’s circumstances.
Backup withholding is not an additional
tax. The amount of any backup withholding from a payment to a tendering Holder will be allowed as a credit against such Holder’s
U.S. federal income tax liability. If backup withholding results in an overpayment of U.S. federal income taxes, a refund or credit
may be obtained from the IRS, provided the required information is furnished to the IRS on a timely basis. Holders should consult
their tax advisors about the filing of a U.S. federal income tax return in order to obtain a refund.
Foreign Account Tax Compliance Act
Sections 1471 through 1474 of the Code
and the Treasury Regulations thereunder, commonly referred to as the Foreign Account Tax Compliance Act (FATCA), generally impose
a 30% withholding tax on payments of Accrued Interest with respect to the Convertible Notes if paid to a foreign entity unless:
(i) in the case of a foreign financial institution, such institution enters into an agreement with the U.S. government to withhold
on certain payments, and to collect and provide to the U.S. tax authorities information regarding U.S. account holders of such
institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are foreign
entities with U.S. owners); (ii) in the case of a non-financial foreign entity, the entity either certifies it does not have any
“substantial U.S. owners” (as defined in the Code) or furnishes identifying information regarding each substantial
U.S. owner (generally by providing the applicable IRS Form W-8BEN or IRS Form W-8BEN-E or any successor form) or (iii) the foreign
financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules and provides appropriate
documentation (such as the applicable IRS Form W-8BEN or IRS Form W-8BEN-E or any successor form). The United States has entered
into intergovernmental agreements with certain non-U.S. jurisdictions, and may enter into additional intergovernmental agreements
that modify the FATCA withholding regime described above.
Non-U.S. Holders are urged to consult
their tax advisors regarding FATCA and the application of these requirements to their tender of the Convertible Notes pursuant
to the Offer.
DEALER MANAGERS, INFORMATION AGENT
AND DEPOSITARY
We have retained Goldman Sachs &
Co. LLC and BofA Securities, Inc. to act as the Dealer Managers in connection with the Offer. In their role as Dealer Managers,
the Dealer Managers may contact Holders, brokers, dealers and similar entities and may provide information regarding the Offer
to those that they contact or persons that contact the Dealer Managers. The Dealer Managers will receive reasonable and customary
compensation for their services and will be reimbursed for certain of their out-of-pocket expenses in connection therewith. We
also have agreed to indemnify the Dealer Managers against certain liabilities in connection with the Offer, including certain liabilities
under the federal securities laws.
The Dealer Managers and their affiliates
engage in various investment banking, commercial banking and financial advisory transactions with us and our affiliates. In addition,
from time to time, the Dealer Managers and their affiliates may effect transactions for their respective accounts or the accounts
of customers, and hold on behalf of themselves or their customers, long or short positions in the Company’s debt or equity
securities or loans, and may do so in the future.
D. F. King & Co., Inc. has been appointed
the Information Agent for the Offer and will be paid customary fees for its services and will be reimbursed for its reasonable
out-of-pocket expenses in connection therewith. We have also agreed to indemnify the Information Agent for certain liabilities
under U.S. federal or state law or otherwise caused by, relating to or arising out of the Offer. Requests for additional copies
of documentation may be directed to the Information Agent at the address and telephone numbers set forth on the back cover of this
Offer to Purchase.
D. F. King & Co., Inc. has been appointed
the Depositary for the Offer and will be paid customary fees for its services and will be reimbursed for its reasonable out-of-pocket
expenses in connection therewith. We have also agreed to indemnify the Depositary for certain liabilities under U.S. federal or
state law or otherwise caused by, relating to or arising out of the Offer. All deliveries and correspondence sent to the Depositary
should be directed to the address set forth on the back cover of this Offer to Purchase.
SOLICITATION AND EXPENSES
In connection with the Offer, the Company’s
directors and officers and its respective affiliates may solicit tenders by use of the mails, personally or by telephone, facsimile,
telegram, electronic communication or other similar methods. The Company may, if requested, pay brokerage houses and other custodians,
nominees and fiduciaries the customary handling and mailing expenses incurred by them in forwarding copies of this Offer to Purchase
and related documents to the beneficial owners of the Convertible Notes and in handling or forwarding tenders of Convertible Notes
by their customers.
We will not pay any fees or commissions
to brokers, dealers or other persons (other than fees to the Dealer Managers and the Information Agent and Depositary as described
above) for soliciting tenders of Convertible Notes pursuant to the Offer. Holders and owners holding Convertible Notes through
banks, brokers, dealers, trust companies or other nominees are urged to consult them to determine whether transaction costs may
apply if they tender the Convertible Notes through banks, brokers, dealers, trust companies or other nominees and not directly
to the Depositary. We will, however, upon request, reimburse banks, brokers, dealers, trust companies or other nominees for customary
mailing and handling expenses incurred by them in forwarding the Offer to Purchase and related materials to the beneficial owners
of the Convertible Notes held by them as a nominee or in a fiduciary capacity. No bank, broker, dealer, trust company or other
nominee has been authorized to act as our agent or the agent of the Dealer Managers, the Information Agent or the Depositary for
purposes of the Offer. None of the Dealer Managers, the Information Agent or the Depositary assumes any responsibility for the
accuracy or completeness of the information concerning the Company or incorporated by reference in this Offer to Purchase or for
any failure by the Company to disclose events that may have occurred which may affect the significance or accuracy of such information.
Tendering Holders will not be obligated
to pay brokerage fees or commissions to or the fees and expenses of the Dealer Managers, the Information Agent or the Depositary.
MISCELLANEOUS
Securities Ownership
Currently neither the Company nor any
of its majority-owned subsidiaries beneficially owns any Convertible Notes. In addition, based on the Company’s records and
on information provided to the Company by its directors and executive officers, to the Company’s knowledge after making reasonable
inquiry, none of its directors, executive officers or controlling persons beneficially own any Convertible Notes.
Recent Securities Transactions
Other than as set forth below, based
on the Company’s records and on information provided to the Company by its directors, executive officers, affiliates and
subsidiaries, neither the Company nor, to the Company’s knowledge after making reasonable inquiry, any of its affiliates
or subsidiaries or persons controlling the Company, and, to the Company’s knowledge after making reasonable inquiry, none
of the directors or executive officers of the Company or any of its subsidiaries, have effected any transactions involving the
Convertible Notes during the sixty (60) days prior to the date of this Offer to Purchase.
On March 24, 2020, we repurchased an
aggregate of $167 million principal amount of the Convertible Notes in separate privately negotiated transactions at a purchase
price of $880 per $1,000 principal amount. In connection with that repurchase, we terminated the convertible bond hedge transactions
and warrant transactions described elsewhere in this Offer to Purchase in an amount corresponding to the purchased portion of the
Convertible Notes.
Other Material Information
We are not aware of any jurisdiction
where the making of the Offer is not in compliance with applicable law. If we become aware of any jurisdiction where the making
of the Offer or the acceptance of Convertible Notes pursuant thereto is not in compliance with applicable law, we will make a good
faith effort to comply with the applicable law. If, after such good faith effort, we cannot comply with the applicable law, the
Offer will not be made to (nor will tenders be accepted from or on behalf of) the Holders of Convertible Notes in such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of us by the Dealer Managers or one or more registered brokers or dealers licensed under
the laws of that jurisdiction.
The Depositary for the Offer is:
D. F. King & Co., Inc.
By Mail, By Hand and Overnight Delivery:
48 Wall Street – 22nd
Floor
New York, New York 10005
| By Facsimile (for eligible institutions only): |
Confirmation call: |
| |
|
| (212) 709-3328 |
(212) 269-5552 |
| Attn: Andrew Beck |
|
Any questions or requests for assistance
may be directed to the Dealer Managers or the Information Agent at the addresses and telephone numbers set forth below. Requests
for additional copies of this Offer to Purchase or the Incorporated Documents may be directed to the Information Agent. Beneficial
owners may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer
is:
D. F. King & Co., Inc.
48 Wall Street – 22nd
Floor
New York, New York 10005
Banks and broker call: (212) 269-5550
All others call toll free: (866) 530-8635
Email: dycom@dfking.com
The Dealer Managers for the Offer
are:
| Goldman Sachs & Co. LLC |
BofA Securities, Inc. |
| Attention: Liability Management Group |
Attention: Liability Management Group |
| 200 West Street |
620 S. Tryon Street, 20th Floor |
| New York, NY 10282 |
Charlotte, North Carolina 28255 |
| Collect: (212) 902-2995 |
Collect: (980) 388-3646 |
| Toll Free: (800) 828-3182 |
debt_advisory@bofa.com |
