Execution Copy









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                                SCI SYSTEMS, INC.

                   3% Convertible Subordinated Notes Due 2007


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                          SUPPLEMENTAL INDENTURE NO. 1
          TO THE SUBORDINATED INDENTURE DATED AS OF THE DATE HEREOF AND
                           BETWEEN THE PARTIES HERETO

                           Dated as of March 15, 2000


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                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

                                     TRUSTEE


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<PAGE>
                                SCI Systems, Inc.
                   3% Convertible Subordinated Notes Due 2007



                          SUPPLEMENTAL INDENTURE NO. 1

                  SUPPLEMENTAL  INDENTURE No. 1 (the "Supplemental  Indenture"),
dated as of March 15,  2000,  between SCI  Systems,  Inc.,  a  corporation  duly
organized and existing under the laws of the State of Delaware (the  "Company"),
and Bank One Trust Company, National Association, a national banking association
duly  organized  and existing  under the federal laws of the United  States,  as
Trustee (the "Trustee").

                                    RECITALS

                  The  Company  and  the  Trustee  have  heretofore  executed  a
Subordinated   Indenture  (the  "Base   Indenture"   and,   together  with  this
Supplemental Indenture, the "Indenture"),  dated as of March 15, 2000, providing
for the issuance from time to time of series of the  Company's  Securities to be
issued in one or more series as therein provided.

                  Sections 201 and 301 of the Base Indenture provide for various
matters with respect to any series of Securities issued under the Base Indenture
to be established in an indenture supplemental to the Base Indenture.

                  Section 901 of the Base Indenture provides for the Company and
the Trustee to enter into an  indenture  supplemental  to the Base  Indenture to
establish  the form or terms of Securities of any series as provided by Sections
201 and 301 of the Base Indenture.

                  For and in  consideration  of the premises and the issuance of
the Notes provided for herein,  it is mutually  covenanted  and agreed,  for the
equal and proportionate benefit of the Holders of the Notes, as follows:

                                   Article 1

                     RELATION TO BASE INDENTURE; DEFINITIONS

                  Section 1.1.    Relation to Base Indenture.  This Supplemental
Indenture  constitutes  an  integral  part of the  Indenture.  In the  event  of
inconsistencies between the Base Indenture and this Supplemental Indenture,  the
terms hereof shall govern.

                  Section 1.2.    Certain Definitions.  For all purposes of this
Supplemental  Indenture,  except as otherwise  expressly  provided or unless the
context otherwise requires:

                  (1)      capitalized terms used herein without definition have
         the meanings specified in the Base Indenture;

                  (2)      all other terms used herein without definition  which
         are  defined  in the TIA,  either  directly  or  by  reference therein,
         have  the  meanings assigned to them therein;

                  (3)      all  accounting  terms not otherwise  defined  herein
         have  the  meanings  assigned  to them  in  accordance  with  generally
         accepted  accounting  principles,  and,   except  as  otherwise  herein
         expressly provided, the term "generally accepted accounting principles"
         with respect to any computation  required or permitted hereunder  means
         such  accounting  principles as are  generally  accepted in the  United
         States of America;

                  (4)      unless the context otherwise requires,  any reference
         to an  "Article" or a  "Section" refers to an Article or a Section,  as
         the case may be, of this Supplemental Indenture;

                  (5)      the words "herein",  "hereof',  "hereunder" and other
         words of similar import  refer to this Indenture  as a whole and not to
         any  particular Article, Section or other subdivision; and

                  (6)      the  following  terms have the  meanings  assigned to
         them in this Article and include the plural as well as the singular:

                  "Affiliate"  of any  specified  Person  means any other Person
directly or indirectly  controlling or controlled by or under direct or indirect
common control with such specified Person.  For the purposes of this definition,
"control"  (including,  with  correlative  meanings,  the  terms  "controlling",
"controlled  by" and "under common control  with"),  as used with respect to any
Person, means the possession,  directly or indirectly, of the power to direct or
cause the  direction  of the  management  or  policies of such  Person,  whether
through the ownership of voting securities or by agreement or otherwise.

                  "Board of Directors" means, with respect to any Person, either
the board of directors of such Person or any duly authorized committee thereof.

                  "Board  Resolution"  means, with respect to any Person, a copy
of a  resolution  certified by the  secretary or an assistant  secretary of such
Person to have been duly adopted by the Board of Directors of such Person and to
be in full force and effect on the date of such certification,  and delivered to
the Trustee.

                  "Business  Day"  means,  each  Monday,   Tuesday,   Wednesday,
Thursday and Friday which is not a day on which banking institutions in The City
of New York are authorized or obligated by law, regulation or executive order to
close.

                  "Capital Stock" means, with respect to any Person, any and all
shares,  interests,  partnership  interests,  participation  rights  in or other
equivalents  (however  designated) of such Person's equity (however  designated)
whether now outstanding or issued after the date of this Indenture.

                  "Change of Control" means any event where: (i) any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the "beneficial  owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act) of shares  representing  more than 50% of the combined  voting
power of the then outstanding securities entitled to vote generally in elections
of directors of the Company,  (ii) the Company  consolidates with or merges into
any other Person, or any other Person merges into the Company,  and, in the case
of any such  transaction,  the outstanding  Common Stock is reclassified into or
exchanged for any other property or securities,  unless the  stockholders of the
Company   immediately  before  such  transaction  own,  directly  or  indirectly
immediately  following  such  transaction,  at least a majority of the  combined
voting  power  of the  then  outstanding  voting  securities  entitled  to  vote
generally  in elections of  directors  of the  corporation  resulting  from such
transaction in substantially the same respective  proportions as their ownership
of the Voting Stock immediately  before such transaction,  (iii) the Company and
its Subsidiaries,  taken as a whole, sell, assign, convey, transfer or lease all
or  substantially  all the  assets  of the  Company  or of the  Company  and its
Subsidiaries,  taken  as a  whole,  as  applicable,  (other  than to one or more
wholly-owned  Subsidiaries  of the  Company)  or (iv) any  time  the  Continuing
Directors do not  constitute a majority of the Board of Directors of the Company
(or, if applicable, a successor corporation to the Company);  provided, however,
that (a) a Change of Control  under clause (i), (ii) or (iii) above shall not be
deemed to have  occurred if the Daily Market Price per share of Common Stock for
any five  Trading Days within the period of 10  consecutive  Trading Days ending
immediately after the later of the Change of Control or the public  announcement
of the Change of Control  (in the case of a Change of Control  under  clause (i)
above) or the period of 10 consecutive  Trading Days ending  immediately  before
the Change of Control (in the case of a Change of Control  under  clause (ii) or
(iii) above) shall equal or exceed 105% of the Conversion  Price of the Notes in
effect on the date of such Change of Control or the public  announcement of such
Change of Control,  as applicable,  or (b) a Change of Control under clause (i),
(ii) or (iii) above shall not be deemed to have  occurred if at least 90% of the
consideration in the Change of Control transaction consists of shares of capital
stock  traded on a U.S.  national  securities  exchange  or quoted on the NASDAQ
National  Market (the  "NNM") or other  established  automated  over-the-counter
trading market in the United States,  and as a result of such  transaction,  the
Notes become convertible solely into such capital stock.

                  "Commission" means the Securities and Exchange Commission,  as
from time to time constituted, created under the Exchange Act or, if at any time
after the  execution  of this  Indenture  such  Commission  is not  existing and
performing the duties now assigned to it under the TIA, then the body performing
such duties at such time.

                  "Common Stock" means  the  Company's  common stock,  $0.10 par
value per share.

                  "Company" means the Person named as the "Company" in the first
paragraph of this  Supplemental  Indenture,  until a successor Person shall have
become  such  pursuant  to the  applicable  provisions  of this  Indenture,  and
thereafter "Company" shall mean such successor Person.

                  "Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of the Company who (i) was a member of such
Board of  Directors  on the date of this  Indenture  or (ii) was  nominated  for
election or elected to such Board of  Directors  with the approval of a majority
of the  Continuing  Directors who were members of such Board of Directors at the
time of such nomination or election.

                  "Daily  Market  Price"  means  the  price of a share of Common
Stock on the relevant  date,  determined  (a) on the basis of the last  reported
sale price  regular  way of the Common  Stock as  reported on the New York Stock
Exchange (the "NYSE"), or if the Common Stock is not then listed on the NYSE, as
reported on the  principal  national  securities  exchange upon which the Common
Stock  is  listed,  or (b) if  there  is no  such  reported  sale  on the day in
question,  on the basis of the average of the  closing bid and asked  quotations
regular way as so reported, or (c) if the Common Stock is not listed on the NYSE
or on any national securities exchange,  on the basis of the average of the high
bid  and  low  asked  quotations  regular  way on the  day  in  question  in the
over-the-counter  market as reported by the National  Association  of Securities
Dealers Automated Quotation System, or if not so quoted, as reported by National
Quotation Bureau, Incorporated, or a similar organization.

                  "Designated Event" means the occurrence of a Change of Control
or a Termination of Trading.

                  "Holder"  of a Note  means the  Person in whose name a Note is
registered in the Security Register.

                  "Issuance Date" means March 15, 2000.

                  "Exchange Act"  means the  Securities Exchange Act of 1934, as
amended.

                  "Officers'  Certificate"  means a certificate signed on behalf
of the Company by two  officers of the  Company,  one of whom must be  principal
executive  officer,  the  principal  financial  officer,  the  treasurer  or the
principal  accounting  officer of the Company  that meets the  requirements  set
forth in Section 102 of the Base Indenture.

                  "Opinion of Counsel" means a written  opinion of counsel,  who
may be counsel for the Company, and who shall be acceptable to the Trustee. Each
such opinion shall include the statements  provided for in TIA Section 314(e) to
the extent applicable.

                  "Person"  means  any  individual,  corporation,   partnership,
limited liability  company,  joint venture,  association,  joint-stock  company,
trust,  unincorporated  organization  or  government  or any agency or political
subdivision thereof or any other entity.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Subsidiary" of a Person means any corporation, association or
other business entity of which more than 50% of the total voting power of shares
of Capital Stock entitled  (without regard to the occurrence of any contingency)
to vote in the  election of  directors,  managers or trustees  thereof is at the
time owned or controlled,  directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person or a combination thereof.

                  "Termination of Trading" means an event where the Common Stock
(or other  securities  into  which the Notes are then  convertible)  is  neither
listed for trading on a United States national  securities exchange nor approved
for trading on the NNM or other established automated  over-the-counter  trading
market in the United States.

                  "Trading Day" means (A) if the  applicable  security is listed
or  admitted  for  trading on the New York Stock  Exchange  or another  national
securities  exchange,  a day on which the New York Stock  Exchange or such other
national  securities  exchange  is  open  for  business,  (B) if the  applicable
security is quoted on the NNM, a day on which  trades may be made thereon or (C)
if the applicable security is not so listed, admitted for trading or quoted, any
day other than a Saturday or Sunday or a day on which  banking  institutions  in
the State of New York are  authorized  or obligated  by law or execute  order to
close.

                  "Trustee"  means  the  party  named  as  such  above  until  a
successor  replaces it in  accordance  with the  applicable  provisions  of this
Indenture and thereafter means the successor.

                  "Trust  Officer" means any officer within the corporate  trust
department  of  the  Trustee,  including  any  vice  president,  assistant  vice
president,  assistant secretary, assistant treasurer, trust officer or any other
authorized officer of the Trustee who customarily  performs functions similar to
those  performed  by the  persons  who at  the  time  shall  be  such  officers,
respectively, and who shall have direct responsibility for the administration of
this Indenture or to whom any corporate trust matter is referred because of such
person's knowledge of and familiarity with the particular subject.

                  Section 1.3.      Other Definitions.

                                                                   Defined in
                  Term                                               Section

                  Base Indenture..................................Recitals
                  Commencement Date...............................4.4
                  Conversion Date.................................5.6
                  Conversion Price................................5.6
                  Conversion Shares...............................5.8
                  Current Market Price............................5.8
                  Default.........................................Base Indenture
                  Designated Event Offer..........................4.3
                  Designated Event Payment........................4.3
                  Designated Event Payment Date...................4.4
                  Depository......................................Base Indenture
                  Distribution Date...............................5.6
                  Distribution Record Date........................5.6
                  Event of Default................................Base Indenture
                  Excess Payment .................................5.6
                  Global Securities...............................Base Indenture
                  Indenture.......................................Recitals
                  Interest Payment Date...........................Base Indenture
                  Notes...........................................2.1
                  Purchase Date...................................5.6
                  Paying Agent....................................2.4
                  Registrar.......................................2.4
                  Regular Record Date.............................Base Indenture
                  Rights..........................................5.6
                  Security Register...............................Base Indenture
                  Senior Indebtedness.............................Base Indenture
                  Supplemental Indenture..........................Recitals
                  Tender Period...................................4.4
                  TIA.............................................Base Indenture
                  Voting Stock....................................Base Indenture


                                    Article 2

                                    THE NOTES

                  Section  2.1.  Title  of  the  Securities.  There  shall  be a
series of Securities designated the "3% Convertible Subordinated Notes due 2007"
(the "Notes").

                  Section  2.2.  Limitation on Aggregate Principal Amount of the
Notes.  The  aggregate  principal  amount  of the  Notes  shall  be  limited  to
$575,000,000.

                  Section  2.3.  Form,  Dating  and  Denomination  of the Notes.
The Notes and the Trustee's certificate of authentication shall be substantially
in the form of Exhibit A, which is a part of this Indenture.  The Notes may have
notations, legends or endorsements required by law, stock exchange rule or usage
(provided that any such notation,  legend or endorsement required by usage is in
a form acceptable to the Company). The Company shall provide any such notations,
legends or endorsements to the Trustee in writing.  The Notes shall be dated the
date of their  authentication.  The Notes  shall be issued in  book-entry  form,
without  coupons,  in  denominations  of $1,000 of principal amount and integral
multiples of $1,000.

                  Section  2.4.  Registrar,  Paying Agent and Conversion  Agent.
The Company shall  maintain an office or agency where Notes may be presented for
registration  of transfer  or for  exchange  ("Registrar"),  an office or agency
where Notes may be  presented  for purchase or payment  ("Paying  Agent") and an
office or  agency  where  Notes may be  presented  for  conversion  ("Conversion
Agent").  The Registrar shall keep a register of the Notes and of their transfer
and  exchange.  The  Company  may  have one or more  co-registrars,  one or more
additional paying agents and one or more additional  conversion agents. The term
Paying Agent includes any additional  paying agent.  The term  Conversion  Agent
includes any additional  conversion  agent. The Registrar shall be a "Securities
Registrar"  under the Base  Indenture  and the Paying  Agent  shall be a "Paying
Agent" under the Base Indenture.

                  The Company shall enter into an appropriate  agency  agreement
with any Registrar,  Paying Agent,  Conversion Agent or co-registrar  (provided,
however,  that a separate  agreement  shall not be  necessary in the case of the
Trustee  serving  in any such  capacity).  The  agreement  shall  implement  the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee in writing of the name and address of any such agent. If the Company
fails to maintain a Registrar,  Paying Agent or  Conversion  Agent,  the Trustee
shall act as such and shall be entitled  to  appropriate  compensation  from the
Company therefor.

                  The  Company  initially  appoints  the  Trustee as  Registrar,
Conversion  Agent and Paying Agent in connection with the Notes, and the Trustee
accepts such appointment. In acquiring such appointments,  the Trustee shall, to
the extent serving in any such capacity,  be entitled to each of the immunities,
benefits,  indemnifications and rights of reimbursement provided to it under the
Indenture as Trustee.

                  Section  2.5.  Paying  Agent to Hold Money and Notes in Trust.
Except as otherwise provided herein, on or prior to each due date of payments in
respect of any Note,  the Company  shall  deposit with the Paying Agent a sum of
money (in  immediately  available  funds if deposited on the due date) or Common
Stock  sufficient  to make such payments when so becoming due. The Company shall
require  each Paying Agent (other than the Trustee) to agree in writing that the
Paying  Agent shall hold in trust for the benefit of Holders of the Notes or the
Trustee  all money and Common  Stock held by the Paying  Agent for the making of
payments in respect of the Notes and shall  notify the Trustee of any default by
the Company in making any such payment.  At any time during the  continuance  of
any such  default,  the Paying  Agent  shall,  upon the  written  request of the
Trustee,  forthwith  pay to the  Trustee  all money and Common  Stock so held in
trust.  If the Company,  a Subsidiary  or an Affiliate of either of them acts as
Paying Agent, it shall segregate the money and Common Stock held by it as Paying
Agent and hold it as a separate  trust fund. The Company at any time may require
a Paying  Agent to pay all money and Common  Stock held by it to the Trustee and
to account for any funds and Common  Stock  disbursed  by it. Upon doing so, the
Paying Agent shall have no further liability for the money or Common Stock.

                                    Article 3

                                    INTEREST

                  Section  3.1.  Payment of Interest.  Interest  shall accrue on
the Notes at a rate of 3% per annum from March 15, 2000.  The  Interest  Payment
Dates in respect of the Notes shall be March 15 and  September  15 of each year,
commencing  September  15,  2000.  The Regular  Record  Dates in respect of such
Interest  Payment  Dates  shall  be  March  1  and  September  1 of  each  year,
respectively,  commencing  September 1, 2000. The Depository for the Notes shall
be the Depositary Trust Company and so long as the Notes are Global  Securities,
the interest payable on the Notes will be paid to Cede & Co., the nominee of the
Depository,  or its registered  assigns as the  registered  owner of such Global
Securities. Subject to the provisions of Section 308 of the Base Indenture, each
Note  delivered  under this Indenture  upon  registration  of transfer of, or in
exchange for, or in lieu of, or in substitution for, any other Note, shall carry
the rights to interest accrued and unpaid, and to accrue,  which were carried by
such other Note.

                  Section  3.2.  Computation of Interest.  Interest on the Notes
shall be computed on the basis of a 360-day  year  consisting  of twelve  30-day
months.  In the event that any  principal of or premium,  if any, or interest on
the Notes is not paid when due, then except to the extent permitted by law, such
overdue principal,  premium,  if any and interest shall bear interest until paid
at the rate of interest set forth in Section 3.1, compounded semi-annually.

                                    Article 4

                                   REDEMPTION

                  Section  4.1.  Optional Redemption. The Company may redeem all
or any portion of the Notes, at the times,  upon the terms and at the redemption
prices set forth in each of the Notes.  Any redemption  pursuant to this Section
4.1 shall be made  pursuant  to the  provisions  of  Article  Eleven of the Base
Indenture.

                  Section  4.2.  Selection of Notes to be Redeemed. If less than
all the Notes are to be  redeemed,  the  Trustee  shall  select  the Notes to be
redeemed  by a method  that  complies  with the  requirements  of the  principal
national securities exchange,  if any, on which the Notes are listed, or, if the
Notes are not so listed,  on a pro rata basis, by lot or by such other method as
the Trustee considers fair and appropriate. The Trustee shall make the selection
not more than 60 days and not less than 30 days before the redemption  date from
Notes outstanding not previously  called for redemption.  The Trustee may select
for redemption portions of the principal of Notes that have denominations larger
than $1,000. Notes and portions of them it selects shall be in principal amounts
of $1,000 or integral  multiples of $1,000.  Provisions of this  Indenture  that
apply to Notes called for redemption  also apply to portions of Notes called for
redemption.  The  Trustee  shall  notify the  Company  promptly  of the Notes or
portions of Notes to be called for redemption.

                  If any Note  selected for partial  redemption  is converted in
part after such  selection,  the converted  portion of such Note shall be deemed
(so far as may be) to be the portion to be selected  for  redemption.  The Notes
(or portions  thereof) so selected  shall be deemed duly selected for redemption
for all  purposes  hereof,  notwithstanding  that any such Note is  converted in
whole or in part  before  the  mailing  of the  notice of  redemption.  Upon any
redemption of less than all the Notes,  the Company and the Trustee may treat as
outstanding any Notes  surrendered for conversion during the period 15 days next
preceding  the  mailing  of a  notice  of  redemption  and  need  not  treat  as
outstanding any Note  authenticated and delivered during such period in exchange
for the unconverted portion of any Note converted in part during such period.

                  Section  4.3.  Designated Event Offer.  Upon the occurrence of
a Designated  Event,  each Holder of Notes shall have the right,  in  accordance
with this  Section  4.3 and  Section  4.4  hereof,  to  require  the  Company to
repurchase all or any part (equal to $1,000 or an integral  multiple thereof) of
such  Holder's  Notes  pursuant  to the terms of an offer  made as  provided  in
Section 4.4 (the "Designated  Event Offer") at a purchase price equal to 100% of
the principal amount thereof,  plus accrued and unpaid interest, if any, thereon
to the Designated Event Payment Date (the "Designated Event Payment").

                  Section  4.4.  Designated Event Procedures. In the event that,
pursuant to Section 4.3 hereof,  the Company shall  commence a Designated  Event
Offer, the Company shall follow the procedures in this Section 4.4.

                  The  Designated  Event  Offer  shall  remain open for a period
specified by the Company which shall be no less than 30 days and no more than 60
days from and  including  the date of the mailing of notice  provided  for below
(the "Commencement Date"), except to the extent that a longer period is required
by  applicable  law (the "Tender  Period").  On the day (the  "Designated  Event
Payment  Date")  immediately  following the last day of the Tender  Period,  the
Company  shall  purchase  the  principal  amount of Notes duly  surrendered  for
repurchase and not withdrawn.

                  If a Designated  Event Payment Date is after a Regular  Record
Date and before the  related  Interest  Payment  Date,  accrued  interest to the
related  Interest  Payment  Date will be paid to the  Persons in whose names the
Notes (or one or more predecessor Notes) are registered at the close of business
on such Regular Record Date, notwithstanding the repurchase of any such Notes on
such Designated  Event Payment Date, and no additional  interest will be payable
to Holders who tender Notes for purchase on such Designated Event Payment Date.

                  The Company shall  provide the Trustee with written  notice of
the Designated Event Offer on any of the Notes not prior to 90 days and prior to
60 days  preceding the  Designated  Event Payment Date, and upon receipt of such
notice the Trustee shall notify the Depository of such Designated  Event Payment
Date pursuant to the  requirements  of the Letter of  Representations  among the
Company, the Trustee and the Depository.

                  Within 30 days  following  any  Designated  Event,  unless the
Company  is  entitled  to  and  has  previously  elected  to  redeem  all of the
outstanding  Notes at its option and has previously  given Holders notice of its
intention to redeem all of the outstanding  Notes in accordance with Section 4.1
of this Indenture, the Company or the Trustee (at the request and expense of the
Company) shall send, by first class mail, a notice to each of the Holders, which
shall govern the terms of the Designated Event Offer and shall state:

                  (a)      that  the  Designated  Event  Offer  is  being   made
         pursuant to this Section 4.4  and  that all Notes validly tendered will
         be accepted for payment;

                  (b)      the purchase price (as determined in accordance  with
         Section 4.4 hereof), the length of time the Designated Event Offer will
         remain open and the Designated Event Payment Date;

                  (c)      that any Note or portion thereof not validly tendered
         or  accepted for  payment will  continue to  accrue  interest  and will
         continue to have conversion rights;

                  (d)      that,  unless the Company defaults in the  payment of
         the Designated Event  Payment,  any  Note or  portion  thereof accepted
         for payment  pursuant to  the  Designated  Event  Offer shall  cease to
         accrue  interest  from  and after the Designated Event Payment Date and
         will cease to have conversion rights after the Designated Event Payment
         Date;

                  (e)      that  Holders  electing  to  have  a Note or  portion
         thereof  purchased  pursuant  to  any  Designated  Event  Offer will be
         required to  surrender the Note,  with  the  form  entitled  "Option of
         Holder To Elect Purchase",  that is  set  forth in  Exhibit  A  hereto,
         on the reverse of the Note completed,  to a Paying Agent at the address
         specified  in the notice (which shall include an address in the Borough
         of  Manhattan,  The City of New York) prior to the close of business on
         the third  Business  Day preceding the Designated Event Payment Date;

                  (f)      that  Holders  will  be  entitled  to withdraw  their
         election if a  Paying Agent  receives,  not  later  than  the  close of
         business  on the second Business  Day  preceding the  Designated  Event
         Payment Date, a letter or  facsimile  transmission  setting  forth  the
         name of the  Holder,  the  principal  amount  of  the  Notes or portion
         thereof delivered for purchase  and  a  statement  that such  Holder is
         withdrawing  its  election  to  have  such  Notes or  portions  thereof
         purchased; and

                  (g)      that Holders  whose  Notes  are being  purchased only
         in part will be  issued  new  Notes equal in  principal  amount  to the
         unpurchased  portion  of  the  Notes  surrendered,   which  unpurchased
         portion  must  be  equal to  $1,000 in  principal amount or an integral
         multiple thereof.

                  In addition, the notice shall contain all instructions,  other
information  and materials that the Company shall  reasonably  deem necessary to
enable such Holders to tender Notes pursuant to the Designated Event Offer or to
withdraw  tendered  Notes.  If the  Company is not  required to mail such notice
because,  as provided above, it has previously  given notice of its intention to
redeem the Notes in whole but the Company thereafter  defaults in the payment of
the redemption  price  (including  accrued  interest) on any of the Notes on the
relevant  redemption  date,  then the  Company  shall be required to give notice
pursuant to this  Section 4.4 no later than the second  Business  Day  following
such redemption date, in which case the Tender Period shall be 30 days except to
the extent that a longer period is required by applicable law. In the event that
the Company is required by applicable law to extend the Tender Period beyond the
Designated  Event  Payment Date set forth in such notice,  the Company  will, as
promptly  as  possible,  issue  a press  release  and  send  notice  to  Holders
announcing such extension and the new Designated Event Payment Date, which press
release  and  notice  shall  state  the  new  deadlines  for   surrendering  and
withdrawing Notes.

                  Prior to 10:00  A.M.  (New York City  Time) on the  Designated
Event Payment Date,  the Company shall  irrevocably  deposit with the Trustee or
the  Paying  Agent  in  immediately  available  funds  an  amount  equal  to the
Designated  Event  Payment in respect of all Notes or portions  thereof  validly
tendered and not withdrawn, such funds to be held for payment in accordance with
the terms of this Section 4.4. On the Designated Event Payment Date, the Company
shall,  to the  extent  lawful,  (i) accept for  payment  the Notes or  portions
thereof validly tendered pursuant to the Designated Event Offer, (ii) deliver or
cause to be delivered to the Trustee the Notes so accepted and (iii)  deliver to
the Trustee an Officers'  Certificate  identifying the Notes or portions thereof
tendered and not  withdrawn to the Company and stating that such Notes have been
accepted for payment by the Company in accordance with the terms of this Section
4.4.  The  Paying  Agent  shall  promptly  (but in any case not later  than five
calendar days after the  Designated  Event Payment Date) mail or deliver to each
Holder of Notes so accepted for payment an amount equal to the Designated  Event
Payment for such Notes, and the Trustee shall promptly  authenticate and mail or
otherwise  deliver to each such Holder a new Note equal in  principal  amount to
any  unpurchased  portion of the Note  surrendered;  provided that each new Note
shall be in a principal amount of $1,000 or an integral  multiple  thereof.  Any
Notes not so accepted shall be promptly  mailed or otherwise  delivered by or on
behalf of the Company to the Holders thereof. The Company will publicly announce
the results of the Designated  Event Offer on, or as soon as practicable  after,
the Designated Event Payment Date.

                  The  Designated  Event  Offer  shall be made by the Company in
compliance  with all  applicable  provisions  of the  Exchange Act and any other
securities laws and regulations (including,  without limitation, Rules 13e-4 and
14e-1  under the  Exchange  Act) to the  extent  such laws and  regulations  are
applicable in connection  with the repurchase of the Notes in connection  with a
Designated Event.

                                    Article 5

                                   CONVERSION

                  Section  5.1.  Conversion  Privilege.  A  Holder  of any  Note
may convert the  principal  amount  thereof (or any portion  thereof  that is an
integral multiple of $1,000) into fully paid and nonassessable  shares of Common
Stock at any time following the Issuance Date and prior to the close of business
on the Business Day immediately preceding the final maturity date of the Note at
the  Conversion  Price then in effect,  except  that,  with  respect to any Note
called for  redemption,  such  conversion  right shall terminate at the close of
business on the Business Day  immediately  preceding the redemption date (unless
the Company shall default in making the redemption  payment when it becomes due,
in which case the conversion  right shall  terminate at the close of business on
the date on which such  default is cured).  The number of shares of Common Stock
issuable  upon  conversion  of a Note is  determined  by dividing the  principal
amount of the Note converted by the Conversion Price in effect on the Conversion
Date.

                  "Conversion Price" means  $56.23,  as the same may be adjusted
from time to time as provided in this Article V.

                  Provisions of this  Indenture  that apply to conversion of all
of a Note also apply to  conversion of a portion of it. A Holder of Notes is not
entitled  to any rights of a holder of Common  Stock  until such Holder of Notes
has  converted  such Notes into Common  Stock,  and only to the extent that such
Notes are deemed to have been converted into Common Stock under this Article V.

                  Section  5.2.  Conversion Procedure.  To  convert  a  Note,  a
Holder must satisfy the  requirements in paragraph 10 of the Notes.  The date on
which the Holder satisfies all of those requirements is the conversion date (the
"Conversion  Date"). As promptly as practicable on or after the Conversion Date,
the Company shall issue and deliver to the Trustee a certificate or certificates
for the number of whole shares of Common Stock  issuable upon the conversion and
a check or other  payment  for any  fractional  share  in an  amount  determined
pursuant to Section 5.3. Such  certificate or  certificates  will be sent by the
Trustee to the Conversion Agent for delivery to the Holder.  The Person in whose
name the certificate is registered shall become the stockholder of record on the
Conversion  Date and,  as of such date,  such  Person's  rights as a Holder with
respect to the converted Note shall cease;  provided,  however,  that, except as
otherwise  provided in this Section 5.2, no surrender of a Note on any date when
the stock  transfer  books of the Company  shall be closed shall be effective to
constitute  the Person  entitled to receive the shares of Common Stock upon such
conversion as the  stockholder  of record of such shares of Common Stock on such
date, but such surrender shall be effective to constitute the Person entitled to
receive such shares of Common Stock as the stockholder of record thereof for all
purposes at the close of business on the next succeeding day on which such stock
transfer books are open; provided,  further, however, that such conversion shall
be at the Conversion  Price in effect on the date that such Note shall have been
surrendered  for  conversion,  as if the stock transfer books of the Company had
not been closed.

                  No payment or  adjustment  will be made for accrued and unpaid
interest on a converted Note or for dividends or distributions on,  attributable
to, shares of Common Stock issued upon conversion of a Note, except that, if any
Holder  surrenders  a Note for  conversion  after the close of  business  on any
Regular  Record Date for the payment of an  installment of interest and prior to
the opening of business on the next  succeeding  Interest  Payment  Date,  then,
notwithstanding  such  conversion,  accrued and unpaid interest  payable on such
Note on such Interest  Payment Date shall be paid on such Interest  Payment Date
to the Person who was the Holder of such Note (or one or more predecessor Notes)
at the close of business on such Regular  Record  Date.  In the case of any Note
surrendered for conversion  after the close of business on a Regular Record Date
for the  payment  of an  installment  of  interest  and prior to the  opening of
business on the next succeeding  Interest Payment Date,  then,  unless such Note
has been called for redemption on a redemption date or is to be repurchased on a
Designated  Event Payment Date after such Regular  Record Date and prior to such
Interest  Payment Date,  such Note, when  surrendered  for  conversion,  must be
accompanied  by  payment  in an amount  equal to the  interest  payable  on such
Interest Payment Date on the principal amount of such Note so converted. Holders
of Common  Stock  issued  upon  conversion  will not be  entitled to receive any
dividends  payable to holders of Common  Stock as of any record  time before the
close of business on the Conversion Date.

                  If a Holder  converts more than one Note at the same time, the
number of whole shares of Common Stock  issuable  upon the  conversion  shall be
based on the total principal amount of Notes converted.

                  Upon  surrender  of a Note  that is  converted  in  part,  the
Trustee shall  authenticate  for the Holder a new Note equal in principal amount
to the unconverted portion of the Note surrendered.

                  Section  5.3.  Fractional Shares.  The  Company will not issue
fractional  shares of Common Stock upon  conversion  of a Note. In lieu thereof,
the Company  will pay an amount in cash based upon the Daily Market Price of the
Common Stock on the Trading Day prior to the Conversion Date.

                  Section  5.4.  Taxes   on   Conversion.   The   issuance    of
certificates for shares of Common Stock upon the conversion of any Note shall be
made without charge to the converting  Holder for such  certificates  or for any
tax in respect of the issuance of such certificates, and such certificates shall
be issued in the  respective  names of, or in such names as may be directed  by,
the Holder or Holders of the  converted  Note;  provided,  however,  that in the
event that  certificates  for shares of Common  Stock are to be issued in a name
other  than the  name of the  Holder  of the Note  converted,  such  Note,  when
surrendered for conversion,  shall be accompanied by an instrument of assignment
or transfer,  in form  satisfactory to the Company,  duly executed by the Holder
thereof or such  Holder's  duly  authorized  attorney;  and  provided,  further,
however,  that the  Company  shall not be  required  to pay any tax which may be
payable in respect of any transfer  involved in the issuance and delivery of any
such certificates in a name other than that of the Holder of the converted Note,
and the  Company  shall not be required  to issue or deliver  such  certificates
unless or until the Person or Persons requesting the issuance thereof shall have
paid to the  Company  the  amount of such tax or shall have  established  to the
satisfaction of the Company that such tax has been paid or is not applicable.

                  Section  5.5.  Company to Provide Stock.  The Company shall at
all times reserve and keep available,  free from preemptive  rights,  out of its
authorized  but unissued  Common Stock,  solely for the purpose of issuance upon
conversion of Notes as herein provided,  a sufficient number of shares of Common
Stock to permit the  conversion  of all  outstanding  Notes for shares of Common
Stock.

                  All shares of Common Stock which may be issued upon conversion
of  the  Notes  shall  be  duly  authorized,  validly  issued,  fully  paid  and
nonassessable  when so issued.  The Company  shall take such action from time to
time as shall be  necessary  so that par value of the Common  Stock shall at all
times be equal to or less than the Conversion Price then in effect.

                  The Company shall from time to time take all action  necessary
so that  the  Common  Stock  which  may be  issued  upon  conversion  of  Notes,
immediately  upon  its  issuance  will be  listed  on the  principal  securities
exchanges,  interdealer  quotation systems  (including the NNM) and markets,  if
any, on which other shares of Common Stock are then listed or quoted.

                  Section  5.6.  Adjustment of Conversion Price.  The Conversion
Price shall be subject to adjustment from time to time as follows:

                  (a)      In case the  Company  shall  (1) pay  a  dividend  in
shares of Common Stock to holders of Common Stock,  (2) make a  distribution  in
shares of Common Stock to holders of Common Stock, (3) subdivide its outstanding
shares of Common  Stock into a greater  number of shares of Common  Stock or (4)
combine its  outstanding  shares of Common Stock into a smaller number of shares
of Common Stock, the Conversion Price in effect immediately prior to such action
shall be  adjusted  so that the Holder of any Note  thereafter  surrendered  for
conversion  shall be entitled  to receive  the number of shares of Common  Stock
which such Holder would have owned  immediately  following  such action had such
Notes been converted  immediately prior thereto. Any adjustment made pursuant to
this subsection (a) shall become effective  immediately after the record date in
the case of a dividend or distribution  and shall become  effective  immediately
after the effective  date in the case of a subdivision  or  combination.  In the
event such dividend or distribution is not paid or made, or such  subdivision or
combination is not effected,  the Conversion Price shall be adjusted immediately
to be the  Conversion  Price  which  would  then be in effect if such  dividend,
distribution, subdivision or combination had not occurred.

                  (b)      In case the Company shall issue rights or warrants to
all holders of Common Stock  entitling them to subscribe for or purchase  shares
of Common Stock (or  securities  convertible  into Common  Stock) at a price per
share (or having a  conversion  price per share)  less than the  Current  Market
Price per share (as  determined  pursuant to subsection (f) below) of the Common
Stock on the  record  date for  determining  the  holders  of the  Common  Stock
entitled  to receive  such rights or  warrants,  the  Conversion  Price shall be
adjusted so that the same shall equal the price  determined by  multiplying  the
Conversion Price in effect  immediately  prior to such record date by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
as of the close of  business  on such  record  date plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares of
Common  Stock  so  offered  for  subscription  or  purchase  (or  the  aggregate
conversion  price of the  convertible  securities so offered)  would purchase at
such Current Market Price,  and of which the denominator  shall be the number of
shares  of Common  Stock  outstanding  on such  record  date plus the  number of
additional  shares of Common Stock so offered for  subscription  or purchase (or
into  which  the  convertible  securities  so  offered  are  convertible).  Such
adjustments  shall become effective  immediately after such record date. For the
purposes of this  subsection  (b),  the number of shares of Common  Stock at any
time  outstanding  shall not include  shares held in the treasury of the Company
but shall include  shares  issuable in respect of scrip  certificates  issued in
lieu of fractions of shares of such Common  Stock.  The Company  shall not issue
any rights, options or warrants in respect of shares of Common Stock held in the
treasury of the Company.

                  (c)      In case the Company  shall distribute  to all holders
of Common  Stock  shares of Capital  Stock of the  Company  (other  than  Common
Stock),  evidences  of  indebtedness,  cash,  rights or warrants  entitling  the
holders  thereof to subscribe for or purchase  securities  (other than rights or
warrants   described  in  subsection  (b)  above)  or  other  assets  (including
securities  of Persons  other than the Company but  excluding  (i)  dividends or
distributions  paid  exclusively  in  cash,  (ii)  dividends  and  distributions
described in subsection (a) above and (iii) distributions in connection with the
consolidation,  merger or transfer of assets covered by Section  5.13),  then in
each such case the  Conversion  Price  shall be  adjusted so that the same shall
equal  the  price  determined  by  multiplying  the  Conversion  Price in effect
immediately  prior to the record  date for the  determination  of the holders of
Common Stock  entitled to receive such  distribution  by a fraction of which the
numerator  shall  be  the  Current  Market  Price  (determined  as  provided  in
subsection  (f) below) of the  Common  Stock on such  record  date less the fair
market value on such record date (as determined by the Board of Directors, whose
determination  shall be  conclusive  evidence  of such  fair  market  value  and
described in a Board Resolution  delivered to the Trustee) of the portion of the
evidences of indebtedness,  shares of Capital Stock, cash,  rights,  warrants or
other assets so distributed  applicable to one share of Common Stock (determined
on the basis of the  number of shares of the  Common  Stock  outstanding  on the
record date), and of which the denominator shall be such Current Market Price of
the Common Stock.  Such adjustment shall become effective  immediately after the
record date for the  determination  of the holders of Common  Stock  entitled to
receive such  distribution.  In the event such distribution is not paid or made,
the Conversion  Price shall be adjusted  immediately to be the Conversion  Price
which  would  then  be  in  effect  if  such   distribution  had  not  occurred.
Notwithstanding  the foregoing,  in case the Company shall distribute  rights or
warrants to subscribe  for  additional  shares of the  Company's  Capital  Stock
(other than rights or warrants  referred to in subsection (b) above)  ("Rights")
to all  holders  of  Common  Stock,  the  Company  may,  in lieu of  making  any
adjustment  pursuant to the foregoing  provisions of this Section  5.6(c),  make
proper  provision so that each Holder of a Note who  converts  such Note (or any
portion  thereof) after the record date for such  distribution  and prior to the
expiration  or  redemption  of the Rights shall be entitled to receive upon such
conversion,  in  addition  to the  shares of  Common  Stock  issuable  upon such
conversion  (the  "Conversion  Shares"),  a number of Rights to be determined as
follows:  (i) if  such  conversion  occurs  on or  prior  to the  date  for  the
distribution to the holders of Rights of separate  certificates  evidencing such
Rights (the "Distribution Date"), the same number of Rights to which a holder of
a number of shares of Common Stock equal to the number of  Conversion  Shares is
entitled  at the  time of such  conversion  in  accordance  with the  terms  and
provisions  of the  Rights;  and  (ii)  if  such  conversion  occurs  after  the
Distribution  Date, the same number of Rights to which a holder of the number of
shares of Common Stock into which the principal  amount of the Note so converted
was  convertible  immediately  prior to the  Distribution  Date  would have been
entitled on the Distribution Date in accordance with the terms and provisions of
the Rights.

                  (d)      In case the Company shall,  by dividend or otherwise,
at any time make a distribution  to all holders of its Common Stock  exclusively
in cash (including any distributions of cash out of current or retained earnings
of the  Company  but  excluding  any  cash  that  is  distributed  as  part of a
distribution  requiring a Conversion Price adjustment  pursuant to paragraph (c)
of this Section) in an aggregate  amount that,  together with the sum of (x) the
aggregate  amount of any other  distributions  made  exclusively  in cash to all
holders  of Common  Stock  within  the 12 months  preceding  the date  fixed for
determining the stockholders  entitled to such distribution  (the  "Distribution
Record Date") and in respect of which no Conversion Price adjustment pursuant to
paragraph  (c) or (e) of this Section or this  paragraph  (d) has been made plus
(y) the aggregate  amount of all Excess Payments in respect of any tender offers
or other  negotiated  transactions by the Company or any of its Subsidiaries for
Common Stock concluded within the 12 months  preceding the  Distribution  Record
Date  and in  respect  of which  no  Conversion  Price  adjustment  pursuant  to
paragraphs  (c) or (e) of this  Section  or this  paragraph  (d) has been  made,
exceeds 15% of the product of the Current Market Price per share  (determined as
provided  in  paragraph  (f)  of  this  Section)  of  the  Common  Stock  on the
Distribution  Record  Date  multiplied  by the number of shares of Common  Stock
outstanding  on the  Distribution  Record  Date  (excluding  shares  held in the
treasury of the Company), the Conversion Price shall be reduced so that the same
shall equal the price  determined by multiplying such Conversion Price in effect
immediately  prior  to the  effectiveness  of  the  Conversion  Price  reduction
contemplated by this paragraph (d) by a fraction of which the numerator shall be
the Current  Market Price per share  (determined as provided in paragraph (f) of
this Section) of the Common Stock on the  Distribution  Record Date less the sum
of the aggregate amount of cash and the aggregate Excess Payments so distributed
or  paid  within  such 12  month  period  (including,  without  limitation,  the
distribution  in respect of which such  adjustment is being made)  applicable to
one share of Common Stock (which shall be  determined by dividing the sum of the
aggregate  amount of cash and the aggregate  Excess  Payments so  distributed or
paid within such 12 months (including,  without limitation,  the distribution in
respect  of which  such  adjustment  is being  made) by the  number of shares of
Common Stock  outstanding on the  Distribution  Record Date) and the denominator
shall be such  Current  Market  Price  per  share  (determined  as  provided  in
paragraph  (f) of this Section) of the Common Stock on the  Distribution  Record
Date,  such reduction to become  effective  immediately  prior to the opening of
business on the day  following the  Distribution  Record Date. In the event such
distribution  is not paid or  made,  the  Conversion  Price  shall  be  adjusted
immediately  to be the  Conversion  Price  which would then be in effect if such
distribution had not occurred.

                  (e)      In   case   a   tender   offer  or  other  negotiated
transaction  made by the Company or any Subsidiary of the Company for all or any
portion of the Common Stock shall be  consummated,  if an Excess Payment is made
in  respect  of such  tender  offer  or  other  negotiated  transaction  and the
aggregate  amount  of such  Excess  Payment,  together  with  the sum of (x) the
aggregate amount of any distributions,  by dividend or otherwise, to all holders
of the Common Stock made in cash  (including  any  distributions  of cash out of
current or retained  earnings of the  Company,  but  excluding  any cash that is
distributed as part of a distribution  requiring a Conversion  Price  adjustment
pursuant to paragraph  (c) of this Section)  within the 12 months  preceding the
date  of  payment  of  such  current  negotiated  transaction  consideration  or
expiration  of such  current  tender  offer,  as the case may be (the  "Purchase
Date"),  and as to which no  adjustment  in the  Conversion  Price  pursuant  to
paragraph  (c) or paragraph  (d) of this Section or this  paragraph (e) has been
made plus (y) the  aggregate  amount of all  Excess  Payments  in respect of any
other tender offers or other  negotiated  transactions  by the Company or any of
its  Subsidiaries  for Common Stock concluded within the 12 months preceding the
Purchase  Date and in respect of which no  adjustment  in the  Conversion  Price
pursuant to paragraph (c) or (d) of this Section or this  paragraph (e) has been
made,  exceeds  15% of the  product  of  the  Current  Market  Price  per  share
(determined as provided in paragraph (f) of this Section) of the Common Stock on
the Purchase Date multiplied by the number of shares of Common Stock outstanding
on the Purchase  Date  (including  any tendered  shares but excluding any shares
held in the treasury of the Company),  the Conversion  Price shall be reduced so
that the same shall equal the price  determined by multiplying  such  Conversion
Price in effect  immediately  prior to the effectiveness of the Conversion Price
reduction  contemplated  by  this  paragraph  (e) by a  fraction  of  which  the
numerator shall be the Current Market Price per share (determined as provided in
paragraph (f) of this Section) of the Common Stock on the Purchase Date less the
sum of the  aggregate  amount  of cash  and the  aggregate  Excess  Payments  so
distributed or paid within such 12 month period (including,  without limitation,
the Excess Payment in respect of which such adjustment is being made) applicable
to one share of Common Stock (which shall be  determined  by dividing the sum of
the aggregate amount of cash and the aggregate Excess Payments so distributed or
paid within such 12 months (including, without limitation, the Excess Payment in
respect  of which  such  adjustment  is being  made) by the  number of shares of
Common Stock  outstanding on the Purchase Date and the denominator shall be such
Current Market Price per share  (determined as provided in paragraph (f) of this
Section) of the Common  Stock on the  Purchase  Date,  such  reduction to become
effective  immediately prior to the opening of business on the day following the
Purchase Date.

                  (f)      The  "Current Market Price" per share of Common Stock
on any date shall be deemed to be the average of the Daily Market Prices for the
shorter of (i) 30 consecutive  Business Days ending on the last full Trading Day
on the exchange or market  referred to in  determining  such Daily Market Prices
prior to the time of  determination  or (ii) the period  commencing  on the date
next succeeding the first public  announcement of the issuance of such rights or
such  warrants  or  such  other  distribution  or such  tender  offer  or  other
negotiated  transaction  through  such last full  Trading Day on the exchange or
market referred to in determining  such Daily Market Prices prior to the time of
determination.

                  "Excess  Payment" means the excess of (A) the aggregate of the
cash and fair  market  value (as  determined  by the Board of  Directors  of the
Company,  whose  determination  shall be conclusive evidence of such fair market
value and  described  in a Board  Resolution  delivered to the Trustee) of other
consideration paid by the Company or any of its Subsidiaries with respect to the
shares  of  Common  Stock  acquired  in  a  tender  offer  or  other  negotiated
transaction  over (B) the Daily  Market  Price on the  Trading  Day  immediately
following  the  completion of the tender offer or other  negotiated  transaction
multiplied by the number of acquired shares of Common Stock.

                  In any case in which this  Section 5.6 shall  require  that an
adjustment be made immediately following a record date for an event, the Company
may  elect to  defer,  until  such  event,  issuing  to the  Holder  of any Note
converted  after such record date the shares of Common  Stock and other  Capital
Stock of the Company  issuable upon such conversion over and above the shares of
Common  Stock  and  other  Capital  Stock  of the  Company  issuable  upon  such
conversion on the basis of the  Conversion  Price prior to  adjustment;  and, in
lieu of the shares the issuance of which is so deferred, the Company shall issue
or cause its transfer agents to issue due bills or other appropriate evidence of
the right to receive such shares.

                  Section  5.7.  No Adjustment.  No adjustment in the Conversion
Price shall be required until cumulative adjustments amount to 1% or more of the
Conversion Price as last adjusted; provided, however, that any adjustments which
by reason of this  Section  5.7 are not  required  to be made  shall be  carried
forward and taken into account in any subsequent  adjustment.  All  calculations
under  this  Article  V  shall  be made to the  nearest  cent or to the  nearest
one-hundredth  of a share,  as the case may be. No  adjustment  need be made for
rights to purchase  Common Stock pursuant to a Company plan for  reinvestment of
dividends or interest. No adjustment need be made for a change in the par value,
a change  from par value to no par value,  or a change  from no par value to par
value of the Common Stock.

                  Section  5.8.  Other Adjustments.  In  the  event  that,  as a
result of an adjustment  made  pursuant to Section 5.6 above,  the Holder of any
Note thereafter  surrendered for conversion shall become entitled to receive any
shares of Capital  Stock of the Company  other than shares of its Common  Stock,
thereafter  the  Conversion  Price  of such  other  shares  so  receivable  upon
conversion  of any Notes shall be subject to  adjustment  from time to time in a
manner and on terms as nearly  equivalent as practicable to the provisions  with
respect to Common Stock contained in this Article V.

                  In the event  that any shares of Common  Stock (or  securities
convertible  into Common  Stock)  issuable  upon  exercise of any of the rights,
options or warrants  referred to in Section 5.6(b) and Section 5.6(c) hereof are
not delivered prior to the expiration of such rights,  options, or warrants, the
Conversion  Price  shall be  readjusted  to the  Conversion  Price  which  would
otherwise have been in effect had the adjustment  made upon the issuance of such
rights,  options  or  warrants  been made on the basis of  delivery  of only the
number of such rights, options and warrants which were actually exercised.

                  Section  5.9.  Adjustments for Tax Purposes.  The Company may,
at its option,  make such  reductions in the  Conversion  Price,  in addition to
those required by Section 5.6 above,  as the Board of Directors  deems advisable
to avoid or diminish  any income tax to holders of Common Stock  resulting  from
any dividend or  distribution  of stock (or rights to acquire stock) or from any
event treated as such for federal income tax purposes.

                  Section  5.10. Adjustments by the Company.  The  Company  from
time to time may, to the extent permitted by law, reduce the Conversion Price by
any amount for any period of at least 20 days,  in which case the Company  shall
give at least 15 days' notice of such reduction in accordance with Section 5.11,
if the Board of Directors has made a determination  that such reduction would be
in the best interests of the Company, which determination shall be conclusive.

                  Section  5.11. Notice of Adjustment.  Whenever the  Conversion
Price is adjusted,  the Company shall  promptly mail to Holders at the addresses
appearing on the Registrar's  books a notice of the adjustment and file with the
Trustee  an  Officers'  Certificate  briefly  stating  the facts  requiring  the
adjustment and the manner of computing it.

                  Section  5.12. Notice of  Certain  Transactions.  In the event
that:

                  (a)      the Company takes any action which  would  require an
         adjustment in the Conversion Price;

                  (b)      the Company  takes any action that  would  require  a
         supplemental  indenture pursuant to Section 5.13; or

                  (c)      there is a dissolution or liquidation of the Company;

the Company shall mail to Holders at the addresses  appearing on the Registrar's
books and the Trustee a notice stating the proposed record or effective date, as
the case may be. The Company  shall mail the notice at least 15 days before such
date;  however,  failure  to mail such  notice or any defect  therein  shall not
affect the validity of any transaction  referred to in clause (a), (b) or (c) of
this Section 5.12.

                  Section  5.13. Effect  of  Reclassifications,  Consolidations,
Mergers,  Continuances or Sales on Conversion Privilege. If any of the following
shall occur, namely: (i) any reclassification or change of outstanding shares of
Common  Stock  issuable  upon  conversion  of Notes  (other than a change in par
value,  or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination),  (ii) any  consolidation or merger
to which the  Company is a party other than a merger in which the Company is the
continuing  corporation and which does not result in any reclassification of, or
change (other than a change in name,  or par value,  or from par value to no par
value,  or from no par  value to par value or as a result  of a  subdivision  or
combination) in,  outstanding shares of Common Stock, (iii) any continuance in a
new jurisdiction which results in a reclassification of, or change (other than a
change in name, or par value,  or from par value to no par value, or from no par
value to par value) in,  outstanding shares of Common Stock, or (iv) any sale or
conveyance  of  all  or  substantially  all  of  the  property  of  the  Company
(determined on a  consolidated  basis),  then the Company,  or such successor or
purchasing  corporation,  as the case may be, shall, as a condition precedent to
such  reclassification,  change,  consolidation,  merger,  continuance,  sale or
conveyance,  execute and deliver to the Trustee a supplemental indenture in form
reasonably  satisfactory  to the Trustee  providing that the Holder of each Note
then  outstanding  shall have the right to  convert  such Note into the kind and
amount of shares of stock and other  securities  and property  (including  cash)
receivable   upon  such   reclassification,   change,   consolidation,   merger,
continuance,  sale or  conveyance  by a holder of the number of shares of Common
Stock  deliverable  upon  conversion  of such  Note  immediately  prior  to such
reclassification,   change,   consolidation,   merger,   continuance,   sale  or
conveyance.  Such  supplemental  indenture  shall provide for adjustments of the
Conversion  Price which shall be as nearly  equivalent as may be  practicable to
the  adjustments  of the  Conversion  Price  provided for in this Article V. The
foregoing, however, shall not in any way affect the right a Holder of a Note may
otherwise  have,  pursuant to clause (ii) of the last sentence of subsection (c)
of Section 5.6, to receive Rights upon  conversion of a Note. If, in the case of
any such consolidation,  merger,  continuance,  sale or conveyance, the stock or
other securities and property (including cash) receivable  thereupon by a holder
of Common Stock includes  shares of stock or other  securities and property of a
corporation  or other  business  entity other than the  successor or  purchasing
corporation,  as the case may be, in such  consolidation,  merger,  continuance,
sale or conveyance,  then such supplemental  indenture shall also be executed by
such  other  corporation  or  other  business  entity  and  shall  contain  such
additional  provisions  to protect the  interests of the Holders of the Notes as
the Board of Directors of the Company  shall  reasonably  consider  necessary by
reason of the  foregoing.  The  provision of this  Section 5.13 shall  similarly
apply to successive consolidations, mergers, continuances, sales or conveyances.

                  In  the  event  the  Company  shall  execute  a   supplemental
indenture  pursuant to this Section 5.13,  the Company shall  promptly file with
the Trustee (x) an Officers'  Certificate  briefly stating the reasons therefor,
the kind or amount of shares of stock or securities or property (including cash)
receivable by Holders of the Notes upon the  conversion of their Notes after any
such  reclassification,  change,  consolidation,  merger,  continuance,  sale or
conveyance and any adjustment to be made with respect thereto and (y) an Opinion
of Counsel stating that all conditions  precedent  relating to such  transaction
have been complied with, and shall promptly mail notice thereof to all Holders.

                  Section  5.14. Trustee's Disclaimer.  The  Trustee has no duty
to determine  when an  adjustment  under this  Article V should be made,  how it
should  be made or what such  adjustment  should  be or  whether a  supplemental
indenture is required by this Article V, but may accept as  conclusive  evidence
of the  correctness  of any such  adjustment,  and shall be protected in relying
upon,  the  Officers'  Certificate  with  respect  thereto  which the Company is
obligated to file with the Trustee  pursuant to Section 5.11.  The Trustee makes
no representation as to the validity or value of any securities or assets issued
upon  conversion  of Notes,  and the Trustee  shall not be  responsible  for the
Company's failure to comply with any provisions of this Article V.

                  The Trustee shall not be under any responsibility to determine
the  correctness  of any  provisions  contained  in any  supplemental  indenture
executed pursuant to Section 5.13, but may accept as conclusive  evidence of the
correctness  thereof,  and shall be protected  in relying  upon,  the  Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 5.13.

                  Section  5.15. Cancellation  of  Converted  Notes.  All  Notes
delivered for conversion  shall be delivered to the Trustee to be canceled by or
at the direction of the Trustee,  which shall dispose of the same as provided in
Section 311 of the Base Indenture.

                  Section  5.16. Notice of Defaults.  If a  Default or  Event of
Default occurs and is continuing and if it is known to the Trustee,  the Trustee
shall mail to Holders a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default relating to
the failure to pay any  principal of or premium,  if any,  interest on any Note,
the Trustee may  withhold  the notice if and so long as a committee of its Trust
Officers  in  good  faith  determines  that  withholding  the  notice  is in the
interests of Holders.

                  Section  5.17. Reports by Trustee to Holders.  Within  60 days
after the  reporting  date  stated in  Section  702 of the Base  Indenture,  the
Trustee  shall mail to Holders a brief  report dated as of such  reporting  date
that  complies  with TIA  Section  313(a) if and to the extent  required by such
Section 313(a).  The Trustee also shall comply with TIA Section  313(b)(2).  The
Trustee  shall also  transmit  by mail all  reports as  required  by TIA Section
313(c).

                  A copy of each  report at the time of its  mailing  to Holders
shall be filed with the  Commission  and each stock  exchange on which the Notes
are listed.  The Company  shall  notify the Trustee when the Notes are listed on
any stock exchange and of any delisting thereof.

                  Section  5.18. Additional Covenant of the Company.  All shares
of Common Stock  delivered  upon  conversion  of the Notes shall be newly issued
shares or treasury shares, shall be duly authorized,  validly issued, fully paid
and  nonassessable and shall be free from preemptive rights and free of any lien
or  adverse  claim and shall be  listed  or quoted on each  national  securities
exchange or  over-the-counter or other domestic market on which the Common Stock
is then listed or quoted.

                                    Article 6

                                  SUBORDINATION

                  Section  6.1.  Notes  Subordinate to Senior Indebtedness.  The
Company  covenants  and  agrees,  and each  Holder of a Note,  by such  Holder's
acceptance  thereof,  likewise covenants and agrees,  that, to the extent and in
the manner set forth in Article  Fifteen of the Base Indenture the  indebtedness
represented  by the Notes is hereby  expressly made  subordinate  and subject in
right of payment to all Senior Indebtedness.

                                    Article 7

                                  MISCELLANEOUS

                  Section  7.1.  Notices.  Any request,  demand,  authorization,
notice,  waiver,  consent or communication  shall be in writing and delivered in
person or mailed by first-class mail,  postage prepaid,  addressed as follows or
transmitted  by  facsimile  transmission   (confirmed  by  guaranteed  overnight
courier) to the following facsimile numbers:

           if to the Company:

                  SCI Systems, Inc.
                  2101 West Clinton Avenue
                  Huntsville, Alabama 35805

                  Telephone No. (256) 882-4800
                  Facsimile No. (256) 882-4466

                  Attention:  President

           with a copy to:

                  SCI Systems, Inc.
                  2101 West Clinton Avenue
                  Huntsville, Alabama 35805

                  Attention:  Corporate Counsel

           if to the Trustee:

                  Bank One Trust Company, National Association
                  1 Bank One Plaza
                  Suite IL1-0126
                  Chicago, Illinois 60670-0126

                  Telephone No.  (312) 407-5483
                  Facsimile No.  (312) 407-1708

                  Attention:  Diane Swanson,  Global  Corporate  Trust  Services
                  Division

                  The Company or the Trustee by notice given to the other in the
manner  provided  above may  designate  additional  or different  addresses  for
subsequent notices or communications.

                  Any  notice  or  communication  given to a Holder of the Notes
shall be mailed  to the  Holder  of the  Notes,  by  first-class  mail,  postage
prepaid,  at the Holder's address as it appears on the registration books of the
Registrar  and  shall  be  sufficiently  given  if so  mailed  within  the  time
prescribed in this Indenture.

                  Failure to mail a notice or  communication  to a Holder of the
Notes or any defect in it shall not affect its sufficiency with respect to other
Holders  of the  Notes.  If a notice or  communication  is mailed in the  manner
provided above, it is duly given, whether or not received by the addressee.

                  If the Company mails a notice or  communication to the Holders
of the Notes,  it shall mail a copy to the  Trustee and each  Registrar,  Paying
Agent, Conversion Agent or co-registrar.

                  Section  7.2.  Communication  by  Holders with Other  Holders.
Holders of the Notes may  communicate  pursuant to TIA Section 312(b) with other
Holders of the Notes with respect to their  rights  under this  Indenture or the
Notes. The Company, the Trustee, the Registrar, the Paying Agent, the Conversion
Agent and anyone else shall have the protection of TIA Section 312(c).

                  Section  7.3.  Separability  Clause.  In case any provision in
this Indenture or in the Notes shall be invalid,  illegal or unenforceable,  the
validity,  legality and enforceability of the remaining  provisions shall not in
any way be affected or impaired thereby.

                  Section  7.4.  Rules  by  Trustee,  Paying  Agent,  Conversion
Agent and Registrar.  The Trustee may make  reasonable  rules for action by or a
meeting of Holders of the Notes. The Registrar,  Conversion Agent and the Paying
Agent may make reasonable rules for their functions.

                  Section  7.5.  GOVERNING  LAW.  THIS  INDENTURE  AND THE NOTES
SHALL BE GOVERNED BY AND SHALL BE CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

                  Section  7.6.  No   Recourse   Against  Others.   A  director,
officer,  employee or  stockholder,  as such,  of the Company shall not have any
liability for any  obligations  of the Company under the Notes or this Indenture
or for any claim  based on, in  respect of or by reason of such  obligations  or
their  creation.  By accepting a Note,  each Holder of the Notes shall waive and
release  all  such  liability.  The  waiver  and  release  shall  be part of the
consideration for the issue of the Notes.

                  Section  7.7.  Successors.   All agreements of the  Company in
this  Indenture and the Notes shall bind its  successor.  All  agreements of the
Trustee in this Indenture shall bind its successor.

                  Section  7.8.  Multiple  Originals.  The  parties may sign any
number of copies of this  Supplemental  Indenture.  Each signed copy shall be an
original, but all of them together represent the same agreement. One signed copy
is enough to prove this Supplemental Indenture.



<PAGE>





                  IN WITNESS WHEREOF,  the  undersigned,  being duly authorized,
have executed this  Supplemental  Indenture on behalf of the respective  parties
hereto as of the date first above written.

                                            SCI SYSTEMS, INC.


                                            By   _________________________
                                                 Name:
                                                 Title:



Attest:


_________________________
Name:
Title:




[SEAL]


                                            BANK ONE TRUST COMPANY,
                                            NATIONAL ASSOCIATION



                                            By   _________________________
                                                 Name:
                                                 Title:


Attest:


_________________________
Name:
Title:


[SEAL]




<PAGE>



                                                                       EXHIBIT A

                          [FORM OF FACE OF GLOBAL NOTE]

         THIS SECURITY IS A GLOBAL  SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER  REFERRED  TO AND IS  REGISTERED  IN THE NAME OF A  DEPOSITORY  OR A
NOMINEE  THEREOF.  THIS  SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED,  IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITORY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

                  UNLESS  THIS   CERTIFICATE   IS  PRESENTED  BY  AN  AUTHORIZED
REPRESENTATIVE  OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET,  NEW YORK, NEW
YORK 10041) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT  AND  ANY  CERTIFICATE  ISSUED  IN  EXCHANGE  FOR  THIS  CERTIFICATE  IS
REGISTERED  IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS IS  REQUESTED BY AN
AUTHORIZED  REPRESENTATIVE  OF THE  DEPOSITORY  TRUST  COMPANY  (AND ANY PAYMENT
HEREON  IS MADE TO CEDE & CO. OR TO SUCH  OTHER  ENTITY  AS IS  REQUESTED  BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF  FOR VALUE OR  OTHERWISE  BY OR TO ANY  PERSON IS  WRONGFUL,
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                                SCI SYSTEMS, INC.

                    3% Convertible Subordinated Note due 2007

No. R-                                           CUSIP:  783 890 AF3
Issue Date: March 15, 2000                       Aggregate Principal Amount $



                  SCI SYSTEMS, INC., a Delaware corporation,  promises to pay to
_______  or  registered  assigns,  the  principal  amount  of  ________  Dollars
($_________) on March 15, 2007.

Interest Payment Dates:  March 15  and  September 15,  commencing  September 15,
2000.

Record Dates: March 1 and September 1.

                  Reference  is hereby  made to the further  provisions  of this
Note set forth on the reverse  hereof  which  further  provisions  shall for all
purposes have the same effect as if set forth at this place.

                            [Signature Page Follows]

                                       F-1
<PAGE>



                  IN WITNESS WHEREOF, SCI Systems,  Inc. has caused this Note to
be signed  manually or by  facsimile  by its duly  authorized  officers  and its
corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon.


Dated:                                      SCI SYSTEMS, INC.



[SEAL]                                      By   _________________________
                                            Title:


Attest:

_________________________
Title:


TRUSTEE'S CERTIFICATE OF
 AUTHENTICATION


This is one of the Notes referred to in the within-mentioned Indenture.


BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION
as Trustee


By _____________________________
            Authorized Signatory

Dated:__________________________






                                       F-2
<PAGE>




                         [FORM OF REVERSE SIDE OF NOTES]

                    3% Convertible Subordinated Note Due 2007

                  1. Interest.  SCI Systems,  Inc., a Delaware  corporation (the
"Company"), is the issuer of the 3% Convertible Subordinated Notes due 2007 (the
"Notes"),  of which this Note is a part. The Company promises to pay interest on
the Notes in cash  semiannually on each March 15 and September 15, commencing on
September  15,  2000,  to  holders  of record at the  close of  business  on the
immediately preceding March 1 or September 1, as the case may be.

                  Interest on the Notes will accrue from the most recent date to
which  interest has been paid,  or if no interest has been paid,  from March 15,
2000.  Interest will be computed on the basis of a 360-day year of twelve 30-day
months.  To the  extent  lawful,  the  Company  shall  pay  interest  (including
post-petition  interest in any proceeding  under any Bankruptcy  Law) on overdue
principal of and premium,  if any, interest,  on the Notes (in each case without
regard to any applicable grace period) at the rate set forth on the face hereof,
compounded semi-annually.

                  2. Method of Payment.  The  Company  will pay  interest on the
Notes (except defaulted interest) to the Persons who are Holders of the Notes at
the close of  business on the record date for the  applicable  interest  payment
date even though Notes are  canceled  after the record date and on or before the
interest  payment date. The Holder hereof must surrender Notes to a Paying Agent
to collect principal payments. The Company will pay principal,  premium, if any,
interest  in money of the  United  States  that at the time of  payment is legal
tender for payment of public and  private  debts.  However,  the Company may pay
interest  by check  payable in such money.  It may mail an  interest  check to a
Holder's registered address.

                  3. Paying Agent and Registrar.  The Trustee will act as Paying
Agent,  Registrar and Conversion Agent. The Company may change any Paying Agent,
Registrar, or Conversion Agent without prior notice.

                  4. Indenture.  The Company issued the Notes under an Indenture
dated as of March 15, 2000 (the "Base  Indenture"),  between the Company and the
Trustee and the Supplemental  Indenture No. 1 thereto dated as of March 15, 2000
(the  "Supplemental  Indenture"  and,  together  with  the Base  Indenture,  the
"Indenture"),  between  the  Company  and the  Trustee.  The  terms of the Notes
include  those stated in the  Indenture  and those made part of the Indenture by
reference to the TIA.  Capitalized terms used herein and not defined herein have
the meanings  ascribed  thereto in the  Indenture.  The Notes are subject to all
such terms,  and Holders of the Notes are referred to the  Indenture and the TIA
for a statement of those terms.

                  The Notes are  subordinated  and unsecured  obligations of the
Company limited to $575,000,000 aggregate principal amount.

                  The defeasance provisions described in Article Fourteen of the
Base Indenture will not apply to the Notes.

                  5. Optional  Redemption.  The Notes are not  redeemable at the
Company's option prior to March 20, 2003. On such date and thereafter, the Notes
will be subject to  redemption  at the option of the  Company,  in whole or from
time to time in part (in any  integral  multiple  of $1,000),  at the  following
redemption  prices  (expressed  as  percentages  of the  principal  amount),  if
redeemed  during the 12-month  period  beginning March 15 of the years indicated
(or March 20 in the case of 2003):

<TABLE>
<S>                        <C>                               <C>


                           Year                              Redemption Price


                           2003                                   101.71%
                           2004                                   101.29%
                           2005                                   100.86%
                           2006                                   100.43%

</TABLE>

in each case together with accrued  interest to (but  excluding)  the redemption
date  (subject to the right of holders of record on the relevant  record date to
receive  interest due on the  corresponding  interest payment date). On or after
the  redemption  date,  interest will cease to accrue on the Notes,  or portions
thereof,  called for redemption  unless the Company shall default in the payment
of the redemption  price and accrued  interest payable on the redemption date on
the Notes to be redeemed.

                  6. Notice of Redemption.  Notice of redemption  will be mailed
at least 30 days but not more than 60 days  before the  redemption  date to each
Holder of the Notes to be redeemed at such Holder's address of record.  Notes in
denominations  larger  than  $1,000 may be redeemed in part but only in integral
multiples of $1,000. In the event of a redemption of less than all of the Notes,
the Notes will be chosen for  redemption by the Trustee in  accordance  with the
Indenture.  Unless  the  Company  defaults  in making  such  redemption  payment
(including accrued  interest),  or a Paying Agent is prohibited from making such
payment pursuant to the Indenture, by law or otherwise, interest cease to accrue
on the  Notes or  portions  of them  called  for  redemption  on and  after  the
redemption date.

                  If this  Note is  redeemed  subsequent  to a record  date with
respect to any  interest  payment date  specified  above and on or prior to such
interest  payment date, then any accrued  interest will be paid to the Person in
whose name this Note is registered at the close of business on such record date.

                  7. Mandatory  Redemption.  The provisions of Article Twelve of
the Base Indenture  regarding  mandatory  redemption  pursuant to a sinking fund
will not apply to the Notes.

                  8.  Repurchase  at Option of Holder.  If there is a Designated
Event,  the Company  shall be  required  to offer to purchase on the  Designated
Event Payment Date all  outstanding  Notes at a purchase  price equal to 100% of
the principal amount thereof, plus accrued and unpaid interest to the Designated
Event Payment Date;  provided  that, on the terms and subject to the  conditions
set  forth in the  Indenture,  the  Company  shall not be  required  to offer to
purchase the Notes as aforesaid if the Company has given notice of redemption of
all of the  outstanding  Notes to Holders in accordance  with the Indenture.  If
there is a Designated  Event, the Company shall mail a Designated Event Offer to
Holder of Notes prior to any related  Designated Event Payment Date.  Holders of
Notes that are subject to an offer to  purchase  may elect to have such Notes or
portions  thereof in authorized  denominations  purchased by completing the form
entitled "Option of Holder To Elect Purchase" appearing below.  Holders have the
right to withdraw their election by delivering a written notice of withdrawal to
the Company or the Paying Agent in accordance with the terms of the Indenture.

                  9. Subordination. The payment of the principal of, premium, if
any, on,  interest on and any other amounts due on the Notes is  subordinated in
right of payment to all existing and future Senior  Indebtedness of the Company,
as described in the Indenture.  Each Holder, by accepting a Note, agrees to such
subordination  and authorizes and directs the Trustee on its behalf to take such
action as may be necessary or  appropriate to effectuate  the  subordination  so
provided and appoints the Trustee as its attorney-in-fact for such purpose.

                  10.  Conversion.  The  Holder  of  any  Note  has  the  right,
exercisable  at any time  prior to the close of  business  on the  Business  Day
immediately  preceding  the final  maturity  date of the Note,  to  convert  the
principal amount thereof (or any portion thereof that is an integral multiple of
$1,000)  into shares of Common Stock at the initial  Conversion  Price of $56.23
per share, subject to adjustment under certain  circumstances as provided in the
Indenture,  except that if a Note is called for redemption, the conversion right
will  terminate  at the  close  of  business  on the  Business  Day  immediately
preceding  the date fixed for  redemption  (unless the Company  shall default in
making the redemption payment,  including interest when it becomes due, in which
case the conversion  right shall  terminate at the close of business on the date
on which such default is cured).

                  Beneficial  owners of interests in the Global  Securities  may
exercise  their  right  of  conversion  by  delivering  to  the  Depository  the
appropriate instructions for conversion pursuant to the Depository's procedures.
Upon  conversion,  no  adjustment or payment will be made for accrued and unpaid
interest  on the  Notes so  converted  or for  dividends  or  distributions  on,
attributable  to, any Common Stock  issued on  conversion  of the Notes,  except
that, if any Holder surrenders a Note for conversion after the close of business
on a record  date for the  payment  of  interest  and  prior to the  opening  of
business  on  the  next  interest  payment  date,  then,   notwithstanding  such
conversion,  the interest  payable on such interest payment date will be paid on
such interest payment date to the Person who was the Holder of such Note on such
record date. Any Notes  surrendered  for conversion  during the period after the
close of business on any record date for the payment of interest  and before the
opening of business on the next succeeding  interest  payment date (except Notes
called for redemption on a redemption  date or to be repurchased on a Designated
Event  Payment  Date during such period)  must be  accompanied  by payment in an
amount  equal to the  interest  payable  on such  interest  payment  date on the
principal  amount of Notes so  converted.  The number of shares of Common  Stock
issuable  upon  conversion  of a Note is  determined  by dividing the  principal
amount of the Note converted by the Conversion Price in effect on the Conversion
Date. No fractional  shares will be issued upon conversion but a cash adjustment
will be made for any fractional interest.

                  A Note in respect of which a Holder has  delivered  an "Option
of Holder to Elect Purchase" form appearing below  exercising the option of such
Holder to require the Company to purchase such Note may be converted only if the
notice of exercise is withdrawn  as provided  above and in  accordance  with the
terms of the  Indenture.  The above  description  of  conversion of the Notes is
qualified by reference  to, and is subject in its entirety to, the more complete
description thereof contained in the Indenture.

                  11.  Denominations,  Transfer,  Exchange and Replacement.  The
Notes are in registered form,  without  coupons,  in denominations of $1,000 and
integral multiples of $1,000. The transfer of Notes may be registered, and Notes
may be  exchanged,  as provided in the  Indenture.  The  Registrar may require a
Holder,  among other things,  to furnish  appropriate  endorsements and transfer
documents  and to pay any taxes and fees  required  by law or  permitted  by the
Indenture.  The Registrar need not exchange or register the transfer of any Note
or portion of a Note selected for redemption  (except the unredeemed  portion of
any Note being  redeemed in part).  Also,  it need not  exchange or register the
transfer of any Note for a period  beginning  at the opening of business 15 days
before the day of  selection  of Notes to be redeemed and ending at the close of
business on the day of mailing the notice of such redemption.  Replacement Notes
for lost,  stolen or mutilated  Notes may be issued in accordance with the terms
of the Indenture.

                  12. Persons Deemed Owners. The registered Holder of a Note may
be treated as its owner for all purposes.

                  13.  Unclaimed Money. If money for the payment of principal of
or premium,  if any,  interest on Notes  remains  unclaimed  for two years,  the
Trustee  and the Paying  Agent  shall pay the money  back to the  Company at its
written request. After that, Holders of Notes entitled to the money must look to
the Company for payment,  unless an abandoned  property law  designates  another
Person,  and all  liability of the Trustee and such Paying Agent with respect to
such money shall cease.

                  14. Defaults and Remedies.  The Notes shall have the Events of
Default as set forth in Section  501 of the Base  Indenture.  Subject to certain
limitations in the  Indenture,  if an Event of Default occurs and is continuing,
the  Trustee,  by  notice  to the  Company,  or the  Holders  of at least 25% in
aggregate  principal  amount  of the then  outstanding  Notes,  by notice to the
Company  and the  Trustee,  may  declare  all the  Notes  to be due and  payable
immediately, except that in the case of an Event of Default arising from certain
events of bankruptcy or insolvency,  all unpaid principal,  premium, if any, and
accrued  and  unpaid  interest  on  the  Notes  shall  become  due  and  payable
immediately without further action or notice.

                  The  Holders of a majority  in  principal  amount of the Notes
then  outstanding by written  notice to the Trustee may rescind an  acceleration
and its  consequences if the rescission  would not conflict with any judgment or
decree and if all existing  Events of Default  have been cured or waived  except
nonpayment  of  principal,  premium,  if any, and  interest  that has become due
solely because of the acceleration. Holders may not enforce the Indenture or the
Notes  except as  provided  in the  Indenture.  Subject to certain  limitations,
Holders of a majority in principal amount of the then  outstanding  Notes issued
under the  Indenture  may direct the  Trustee  in its  exercise  of any trust or
power. The Company must furnish compliance certificates to the Trustee annually.
The  above  description  of Events of  Default  and  remedies  is  qualified  by
reference  to, and subject in its  entirety  to, the more  complete  description
thereof contained in the Indenture.

                  15.  Amendments,  Supplements and Waivers.  Subject to certain
exceptions,  the Indenture or the Notes may be amended or supplemented  with the
consent of the  Holders of at least a majority in  principal  amount of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange  offer for Notes),  and any existing  default may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Notes (including consents obtained in connection with a tender offer or exchange
offer for Notes).  Without the consent of any Holder, the Indenture or the Notes
may  be  amended,  among  other  things,  to  cure  any  ambiguity,   defect  or
inconsistency,  to  provide  for  assumption  by a  successor  of the  Company's
obligations  to Holders,  to make any change that does not adversely  affect the
rights of any Holder,  to qualify the Indenture under the TIA, or to comply with
the requirements of the Commission in order to maintain the qualification of the
Indenture under the TIA.

                  16.  Trustee  Dealings with the Company.  The Trustee,  in its
individual or any other  capacity,  may become the owner or pledgee of the Notes
and may otherwise  deal with the Company or an Affiliate of the Company with the
same  rights  it would  have,  as if it were not  Trustee,  subject  to  certain
limitations  provided for in the  Indenture  and in the TIA.  Any Paying  agent,
Transfer Agent or Conversion Agent may do the same with like rights.

                  17. No Recourse Against Others. A director,  officer, employee
or  stockholder,  as such,  of the Company  shall not have any liability for any
obligations  of the Company  under the Notes or the  Indenture  or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder, by accepting a Note, waives and releases all such liability.  The waiver
and release are part of the consideration for the issue of the Notes.

                  18. Governing Law; Indenture to Control.  THE INTERNAL LAWS OF
THE STATE OF NEW YORK SHALL  GOVERN THE  INDENTURE  AND THE  SECURITIES  WITHOUT
REGARD,  TO THE EXTENT PERMITTED BY LAW, TO CONFLICT OF LAW PROVISIONS  THEREOF.
IN THE EVENT OF ANY CONFLICT  BETWEEN THE PROVISIONS OF THIS SECURITY ON THE ONE
HAND AND THE INDENTURE, ON THE OTHER HAND, THE PROVISIONS OF THE INDENTURE SHALL
CONTROL.

                  19.  Authentication.  The  Notes  shall  not  be  valid  until
authenticated by the manual signature of an authorized  signatory of the Trustee
or an authenticating agent.

                  20. Abbreviations.  Customary abbreviations may be used in the
name of a Holder or an assignee,  such as: TEN COM (for tenants in common),  TEN
ENT (for  tenants by the  entireties),  JT TEN (for joint  tenants with right of
survivorship and not as tenants in common),  CUST (for  Custodian),  and U/G/M/A
(for Uniform Gifts to Minors Act).

                  21.  Definitions.  Capitalized  terms not defined in this Note
have the meanings given to them in the Indenture.

<PAGE>


                  The  Company  will  furnish  to any  Holder of the Notes  upon
written request and without charge a copy of the Indenture.  Request may be made
to:

                                    SCI Systems, Inc.
                                    2101 West Clinton Avenue
                                    Huntsville, Alabama 35805
                                    Attention:  Corporate Counsel



<PAGE>

<TABLE>
<S>                                                          <C>




                  ASSIGNMENT FORM                                               CONVERSION NOTICE
To assign this Note, fill form below:                        To convert this Note into the Common Stock of the
                                                             Company, check the box:

I or we assign and transfer this Note to:                    ----
                                                             :  :
----------------------------------                           ----
:                                :
----------------------------------                           To convert only part of this Note, state the principal
                                                             amount to be converted  (which must be $1,000 or an
(Insert assignee's Soc. Sec. or tax ID no.)                  integral multiple of $1,000):
---------------------------------                                        --------------------------------
                                                                         :$                             :
---------------------------------                                        --------------------------------
---------------------------------
                                                             If you want the stock certificate made out in another
_________________________________                            person's name, fill in the form below:
(Print or type assignee's
Name, address and zip code and soc. sec. Or tax ID no.)               --------------------------------
                                                                      :                              :
irrevocably appoint                                                   --------------------------------
_____________________ agent
to transfer this Note on the books
of the Company.
The agent may substitute another to act for him.
______________________________________
______________________________________
______________________________________
______________________________________
(Print or type other person's name, address and zip code)
--------------------------------------------------------------------------------------------------------------------
Date: ___________________
Your signature:

_________________________

------------------------------------------------------------ ---------------------------------------------------------
                        (Sign exactly as your name appears on the other side of this Note)
</TABLE>



<PAGE>


                       OPTION OF HOLDER TO ELECT PURCHASE


         If you elect to have this Note or a portion thereof  repurchased by the
Company pursuant to Section 4.4 of the Supplemental Indenture, check the box:

         If the purchase  is  in  part,  indicate  the  portion  ($1,000  or any
integral multiple thereof) to be purchased:  ____________

                           Your Signature:______________________________________
                                          (Sign exactly as your name  appears on
                                           the other side of this Note)


Date:  ____________

Medallion Signature Guarantee: _______________________