Common use of Adjustment of Conversion Rate Clause in Contracts

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer as follows: (a) If the Issuer issues Common Shares to all holders of the Common Shares as a dividend or distribution on the Common Shares, or if the Issuer effects a stock split or stock combination, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date OS1 = the number of Common Shares outstanding immediately after such event (b) In case of an issuance to all holders of Common Shares of any rights, options or warrants to purchase Common Shares for a period expiring 45 days or less from the date of issuance of such rights, options or warrants at less than the Last Reported Sale Price of the Common Shares on the Business Day immediately preceding the announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date X = the total number of Common Shares issuable pursuant to such rights Y = the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights (c) In case of a dividend or other distribution to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above and (y) any dividend or distribution paid exclusively in cash), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding Common Share on the Ex-Dividend Date for such distribution Notwithstanding the foregoing, the Conversion Rate will be adjusted based on the following formula with respect to an adjustment pursuant to this clause (c) where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date FMV0 = the average of the sale prices of such Capital Stock or equity interest distributed to holders of the Common Shares applicable to one of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date MP0 = the average of the Last Reported Sale Prices of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date (d) In case of dividends or other distributions consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common Shares, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price C = the amount in cash per Common Share the Issuer distributes to holders of Common Shares (and for which no adjustment has been made) (e) In case the Issuer or one or more of its Subsidiaries make purchases of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares to the extent that the cash and value of any other consideration included in the payment per Common Share exceeds the Current Market Price per Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect on the Expiration Date CR1 = the Conversion Rate in effect immediately after the Expiration Date FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration paid or payable for Common Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “purchased shares”) OS1 = the number of Common Shares outstanding immediately after the Expiration Date less any purchased shares OS0 = the number of Common Shares outstanding immediately after the Expiration Date, including any purchased shares SP1 = the Last Reported Sale Price of the Common Shares on the Trading Day next succeeding the Expiration Date (f) To the extent the holders of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrence, then clauses (a) through (e) of this Section 12.05 hereof shall not apply to such event or occurrence. (g) For the avoidance of doubt, no payment or issuance of securities to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To the extent that the Issuer has a shareholder rights plan in effect upon conversion of the Notes into Common Shares, holders will receive, in addition to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, to all holders of Common Shares, any Capital Stock, evidences of indebtedness or assets or property as described above, subject to readjustment in the event of the expiration, termination or redemption of such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible Consideration. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.

Appears in 4 contracts

Samples: Indenture (Nortel Networks Corp), Indenture (Nortel Networks LTD), Indenture (Nortel Networks Corp)

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Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If the Issuer Company issues Common Shares to all holders of the Common Shares Stock as a dividend or distribution on the Common SharesStock to all holders of Common Stock, or if the Issuer Company effects a stock share split or stock share combination, the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x OS1/OS0 where CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event; CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account; OS0 = the number of shares of Common Shares Stock outstanding at the close of business on the Ex-Dividend Date immediately prior to such event; and OS1 = the number of shares of Common Shares Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 4.06(a) shall become effective on the date that is immediately after (x) the date fixed for the determination of stockholders entitled to receive such dividend or other distribution or (y) the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in this clause Section 4.06(a) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (b) In case of an issuance If the Company issues to all holders of Common Shares of Stock any rights, warrants, options or warrants to purchase Common Shares other securities entitling them for a period expiring of not more than 45 days or less from after the date of issuance thereof to subscribe for or purchase Common Stock, or if the Company issues to all holders of such rightsCommon Stock securities convertible into Common Stock for a period of not more than 45 days after the date of issuance thereof, options in either case at an exercise price per share of Common Stock or warrants at a conversion price per share of Common Stock less than the Last Reported Sale Closing Price of the Common Shares Stock on the Business Day immediately preceding the time of announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date X = the total number of Common Shares issuable pursuant to such rights Y = the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights (c) In case of a dividend or other distribution to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above and (y) any dividend or distribution paid exclusively in cash), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price FMV = the fair market value CR0 x (as determined by the Issuer’s Board of Directors) of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding Common Share on the Ex-Dividend Date for such distribution Notwithstanding the foregoing, the Conversion Rate will be adjusted based on the following formula with respect to an adjustment pursuant to this clause (cOS0+X)/(OS0+Y) where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event; CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date FMV0 = the average of the sale prices of taking such Capital Stock or equity interest distributed to holders of the Common Shares applicable to one of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date MP0 = the average of the Last Reported Sale Prices of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date (d) In case of dividends or other distributions consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common Shares, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price C = the amount in cash per Common Share the Issuer distributes to holders of Common Shares (and for which no adjustment has been made) (e) In case the Issuer or one or more of its Subsidiaries make purchases of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares to the extent that the cash and value of any other consideration included in the payment per Common Share exceeds the Current Market Price per Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect on the Expiration Date CR1 = the Conversion Rate in effect immediately after the Expiration Date FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration paid or payable for Common Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “purchased shares”) OS1 = the number of Common Shares outstanding immediately after the Expiration Date less any purchased shares event into account; OS0 = the number of Common Shares outstanding immediately after the Expiration Date, including any purchased shares SP1 = the Last Reported Sale Price of the Common Shares on the Trading Day next succeeding the Expiration Date (f) To the extent the holders of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrence, then clauses (a) through (e) of this Section 12.05 hereof shall not apply to such event or occurrence. (g) For the avoidance of doubt, no payment or issuance of securities to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To the extent that the Issuer has a shareholder rights plan in effect upon conversion of the Notes into Common Shares, holders will receive, in addition to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, to all holders of Common Shares, any Capital Stock, evidences of indebtedness or assets or property as described above, subject to readjustment in the event of the expiration, termination or redemption of such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note Stock outstanding immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible Consideration. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.event;

Appears in 4 contracts

Samples: Indenture (Service Corporation International), Indenture (Service Corporation International), Indenture (Stewart Enterprises Inc)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If the Issuer Company issues Common Shares to all holders of the Common Shares Stock as a dividend or distribution on the Common SharesStock to all holders of Common Stock, or if the Issuer Company effects a stock share split or stock share combination, the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x OS1/OS0 CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account OS0 = the number of shares of Common Shares Stock outstanding at the close of business on the Ex-Dividend Date immediately prior to such event OS1 = the number of shares of Common Shares Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 4.06(a) shall become effective on the date that is immediately after (x) the ex-dividend date for such distribution or (y) the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in this clause Section 4.06(a) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (b) In case of an issuance If the Company issues to all holders of Common Shares of Stock any rights, warrants, options or warrants to purchase Common Shares other securities entitling them for a period expiring of not more than 45 days or less from after the date of issuance thereof to subscribe for or purchase Common Stock, or if the Company issues to all holders of such rightsCommon Stock securities convertible into Common Stock for a period of not more than 45 days after the date of issuance thereof, options in either case at an exercise or warrants at a conversion price per share of Common Stock less than the Last Reported Sale Closing Price of the Common Shares Stock on the Business Day immediately preceding the time of announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date X = the total number of Common Shares issuable pursuant to such rights Y = the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights (c) In case of a dividend or other distribution to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above and (y) any dividend or distribution paid exclusively in cash), the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (OS0+X)/(OS0+Y) CR0 = the Conversion Rate in effect at the close of business immediately prior to the Exadjustment relating to such event CR1 = the new Conversion Rate taking such event into account OS0 = the number of shares of Common Stock outstanding immediately prior to such event X = the total number of shares of Common Stock issuable pursuant to such rights, warrants, options, other securities or convertible securities Y = the number of shares of Common Stock equal to the quotient of (A) the aggregate price payable to exercise such rights, warrants, options, other securities or convertible securities divided by (B) the average of the Closing Prices of the Common Stock for the 10 consecutive Trading Days prior to the Business Day immediately preceding the date of announcement for the issuance of such rights, warrants, options, other securities or convertible securities. For purposes of this Section 4.06(b), in determining whether any rights, warrants, options, other securities or convertible securities entitle the holders to subscribe for or purchase, or exercise a conversion right for, Common Stock at less than the applicable Closing Price of the Common Stock, and in determining the aggregate exercise or conversion price payable for such Common Stock, there shall be taken into account any consideration received by the Company for such rights, warrants, options, other securities or convertible securities and any amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined by the Board of Directors of the Company. Any adjustment made pursuant to this Section 4.06(b) shall become effective on the ex-Dividend Date dividend date for the distribution. If any right, warrant, option, other security or convertible security described in this Section 4.06(b) is not exercised or converted prior to the expiration of the exercisability or convertibility thereof, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such right, warrant, option, other security or convertible security had not been so issued. (c) If the Company distributes capital stock, evidences of indebtedness or other assets or property of the Company to all holders of Common Stock, excluding: (1) dividends, distributions, rights, warrants, options, other securities or convertible securities referred to in Section 4.06(a) or (b) above, (2) dividends or distributions paid exclusively in cash, and (3) Spin-Offs described below in this Section 4.06(c), then the Conversion Rate will be adjusted based on the following formula: CR1 = CR0 x SP0/(SP0-FMV) CR0 = the Conversion Rate in effect immediately after prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate taking such event into account SP0 = the Current Market Closing Price of the Common Stock on the Trading Day immediately preceding the earlier of the Record Date or the ex-dividend date for such distribution FMV = the fair market value (as determined in good faith by the Issuer’s Board of DirectorsDirectors of the Company) of the shares of Capital Stockcapital stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Share Stock on the Exearlier of the record date or the ex-Dividend Date dividend date for such distribution. An adjustment to the Conversion Rate made pursuant to this paragraph shall be made successively whenever any such distribution Notwithstanding is made and shall become effective on the foregoingex-dividend date for such distribution. If the Company distributes to all holders of Common Stock capital stock of any class or series, or similar equity interest, of or relating to any Subsidiaries or any other business units of the Company (a “Spin-Off”), the Conversion Rate in effect immediately before the close of business on the date fixed for determination of holders of Common Stock entitled to receive such distribution will be adjusted based on the following formula with respect to an adjustment pursuant to this clause formula: CR1 = CR0 x (c) where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, FMV0+MP0)/MP0 CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account FMV0 = the average of the sale prices Closing Prices of such Capital Stock the capital stock or similar equity interest distributed to holders of the Common Shares Stock applicable to one share of Common Stock over the first 10 consecutive Trading Days after the effective date of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the ExSpin-Dividend Date Off MP0 = the average of the Last Reported Sale Closing Prices of the Common Shares Stock over the first 10 consecutive Trading Days commencing after the effective date of the Spin-Off. An adjustment to the Conversion Rate made pursuant to this paragraph will occur after the close of business on and including the fifth 10th consecutive Trading Day after the Exeffective date of the Spin-Dividend DateOff; provided that in respect of any conversion within the 10 consecutive Trading Days immediately following the effective date of any Spin-Off, references in this clause 4.06(c) with respect to 10 consecutive Trading Days shall be deemed replaced with such lesser number of consecutive Trading Days as have elapsed. If any such dividend or distribution described in this Section 4.06(c) is declared but not paid or made, the new Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (d) In case of dividends If the Company pays or other distributions makes any dividend or distribution consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common SharesStock, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account SP0 = the Current Market Closing Price of the Common Stock on the Trading Day immediately preceding the ex-dividend date for such distribution C = the amount in cash per Common Share share that the Issuer Company distributes to holders of its Common Shares (and Stock. An adjustment to the Conversion Rate made pursuant to this Section 4.06(d) shall become effective on the ex-dividend date for which no adjustment has such dividend or distribution. If any dividend or distribution described in this Section 4.06(d) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been made)declared. (e) In case If the Issuer Company or one or more any of its Subsidiaries make purchases makes a payment in respect of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares Stock to the extent that the cash and value of any other consideration included in the payment per share of Common Share Stock exceeds the Current Market Closing Price per of the Common Share Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration DateTime”), the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (AC + (SP1 x OS1))/(SP1 x OS0) CR0 = the Conversion Rate in effect on immediately prior to the Expiration Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Expiration Date FMV taking such event into account AC = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration (as determined by the Board of Directors of the Company) paid or payable for Common Shares validly tendered Stock purchased in such tender or exchanged and not withdrawn as exchange offer OS0 = the number of shares of Common Stock outstanding immediately prior to the Expiration Date (the “purchased shares”) date such tender or exchange offer expires OS1 = the number of shares of Common Shares Stock outstanding immediately after such tender or exchange offer expires (after giving effect to the Expiration Date less any purchased purchase or exchange of shares OS0 = the number of Common Shares outstanding immediately after the Expiration Date, including any purchased shares pursuant to such tender or exchange offer) SP1 = the Last Reported Sale Price average of the Closing Prices of Common Shares Stock for the 10 consecutive Trading Days commencing on the Trading Day next succeeding the Expiration Datedate such tender or exchange offer expires. If the application of the foregoing formula would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate will be made. Any adjustment to the Conversion Rate made pursuant to this Section 4.06(e) shall become effective on the date immediately following the determination of the average of the Closing Prices of Common Stock for purposes of SP1 above. If the Company or one of its Subsidiaries is obligated to purchase Common Stock pursuant to any such tender or exchange offer but is permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the new Conversion Rate shall be readjusted to be the Conversion Rate that would be in effect if such tender or exchange offer had not been made. (f) To Notwithstanding the extent the holders of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrence, then clauses foregoing subsections (a) through (e) of this Section 12.05 hereof 4.06, the Conversion Rate shall not apply to such event or occurrence. (g) For the avoidance exceed 45.5580 shares per $1,000 principal amount of doubtSecurities, no payment or issuance other than on account of securities to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments to the Conversion Rate in the manner set forth in clauses subsections (a) through (e) of this Section 12.054.06. (g) In addition to the adjustments pursuant to clauses (a) through (e) above, the Company may, in its sole discretion, increase the Conversion Rate in order to avoid or diminish any U.S. federal income tax to holders of Common Stock resulting from any dividend or distribution of capital stock (or rights to acquire Common Stock) or from any event treated as such for U.S. federal income tax purposes. The Company may also, from time to time, to the extent permitted by applicable law, increase the Conversion Rate by any amount for any period if the Company has determined that such increase would be in the best interests of the Company. If the Company makes such determination, it will be conclusive and the Company will mail to holders of the Securities a notice of the increased Conversion Rate and the period during which it will be in effect at least fifteen (15) days prior to the date the increased Conversion Rate takes effect in accordance with applicable law. (h) To If the extent that the Issuer Company has in effect a shareholder rights plan in effect while any Securities remain outstanding, Holders will receive, upon a conversion of Securities in respect of which the Notes into Company is required to deliver shares of Common Shares, holders will receiveStock, in addition to such shares of Common Stock, rights under the Common SharesCompany’s stockholder rights agreement unless, prior to conversion, the rights under the rights planhave expired, terminated or been redeemed or unless prior to any conversion, the rights have separated from the Common SharesStock. If the rights provided for in the rights plan adopted by the Company have separated from the Common Stock in accordance with the provisions of the applicable stockholder rights agreement so that Holders would not be entitled to receive any rights in respect of Common Stock, in which case if any, that the Company is required to deliver upon conversion of Securities, the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, Company had distributed to all holders of Common Shares, any Capital StockStock capital stock, evidences of indebtedness or other assets or property as described pursuant to Section 4.06(c) above, subject to readjustment in upon the event of the subsequent expiration, termination or redemption of such the rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) For purposes of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares4.06, the amount and kind number of distributions that shares of Common Stock at any time outstanding shall not include shares held in the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion treasury of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose Company but shall include shares issuable in respect of clause 212(1) (b) (vii) (E) scrip certificates issued in lieu of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation fractions of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option shares of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible ConsiderationCommon Stock. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.

Appears in 1 contract

Samples: Indenture (Morgans Hotel Group Co.)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If the Issuer Company issues Common Shares to all holders of the Common Shares Stock as a dividend or distribution on the Common SharesStock to all holders of Common Stock, or if the Issuer Company effects a stock share split or stock share combination, the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x OS1/OS0 where CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account OS0 = the number of shares of Common Shares Stock outstanding at the close of business on the Ex-Dividend Date immediately prior to such event OS1 = the number of shares of Common Shares Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 4.06(a) shall become effective on the date that is immediately after (x) the ex-dividend date for such distribution or (y) the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in this clause Section 4.06(a) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (b) In case of an issuance If the Company issues to all holders of Common Shares of Stock any rights, warrants, options or warrants to purchase Common Shares other securities entitling them for a period expiring of not more than 45 days or less from after the date of issuance thereof to subscribe for or purchase Common Stock, or if the Company issues to all holders of such rightsCommon Stock securities convertible into Common Stock for a period of not more than 45 days after the date of issuance thereof, options in either case at an exercise or warrants at a conversion price per share of Common Stock less than the Last Reported Sale Closing Price of the Common Shares Stock on the Business Day immediately preceding the time of announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date X = the total number of Common Shares issuable pursuant to such rights Y = the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights (c) In case of a dividend or other distribution to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above and (y) any dividend or distribution paid exclusively in cash), the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (OS0+X)/(OS0+Y) where CR0 = the Conversion Rate in effect at the close of business immediately prior to the Exadjustment relating to such event CR1 = the new Conversion Rate taking such event into account OS0 = the number of shares of Common Stock outstanding immediately prior to such event X = the total number of shares of Common Stock issuable pursuant to such rights, warrants, options, other securities or convertible securities Y = the number of shares of Common Stock equal to the quotient of (A) the aggregate price payable to exercise such rights, warrants, options, other securities or convertible securities divided by (B) the average of the Closing Prices of the Common Stock for the 10 consecutive Trading Days prior to the Business Day immediately preceding the date of announcement for the issuance of such rights, warrants, options, other securities or convertible securities. For purposes of this Section 4.06(b), in determining whether any rights, warrants, options, other securities or convertible securities entitle the holders to subscribe for or purchase, or exercise a conversion right for, Common Stock at less than the applicable Closing Price of the Common Stock, and in determining the aggregate exercise or conversion price payable for such Common Stock, there shall be taken into account any consideration received by the Company for such rights, warrants, options, other securities or convertible securities and any amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined by the Board of Directors of the Company. Any adjustment made pursuant to this Section 4.06(b) shall become effective on the ex-Dividend Date dividend date for the distribution. If any right, warrant, option, other security or convertible security described in this Section 4.06(b) is not exercised or converted prior to the expiration of the exercisability or convertibility thereof, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such right, warrant, option, other security or convertible security had not been so issued. (c) If the Company distributes capital stock, evidences of indebtedness or other assets or property of the Company to all holders of Common Stock, excluding: (1) dividends, distributions, rights, warrants, options, other securities or convertible securities referred to in Section 4.06(a) or (b) above, (2) dividends or distributions paid exclusively in cash, and (3) Spin-Offs described below in this Section 4.06(c), then the Conversion Rate will be adjusted based on the following formula: CR1 = CR0 x SP0/(SP0-FMV) where CR0 = the Conversion Rate in effect immediately after prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate taking such event into account SP0 = the Current Market Closing Price of the Common Stock on the Trading Day immediately preceding the ex-dividend date for such distribution FMV = the fair market value (as determined in good faith by the Issuer’s Board of DirectorsDirectors of the Company) of the shares of Capital Stockcapital stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Share Stock on the Exearlier of the record date or the ex-Dividend Date dividend date for such distribution. An adjustment to the Conversion Rate made pursuant to this paragraph shall be made successively whenever any such distribution Notwithstanding is made and shall become effective on the foregoingex-dividend date for such distribution. If the Company distributes to all holders of Common Stock capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit of the Company (a “Spin-Off”), the Conversion Rate in effect immediately before the close of business on the date fixed for determination of holders of Common Stock entitled to receive such distribution will be adjusted based on the following formula with respect to an adjustment pursuant to this clause formula: CR1 = CR0 x (c) FMV0+MP0)/MP0 where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account FMV0 = the average of the sale prices Closing Prices of such Capital Stock the capital stock or similar equity interest distributed to holders of the Common Shares Stock applicable to one share of Common Stock over the first 10 consecutive Trading Days after the effective date of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the ExSpin-Dividend Date Off MP0 = the average of the Last Reported Sale Closing Prices of the Common Shares Stock over the first 10 consecutive Trading Days commencing after the effective date of the Spin-Off. An adjustment to the Conversion Rate made pursuant to this paragraph will occur after the close of business on and including the fifth 10th consecutive Trading Day after the Exeffective date of the Spin-Dividend DateOff; provided that in respect of any conversion within the 10 consecutive Trading Days immediately following the effective date of any Spin-Off, references in this clause 4.06(c) with respect to 10 consecutive Trading Days shall be deemed replaced with such lesser number of consecutive Trading Days as have elapsed. If any such dividend or distribution described in this Section 4.06(c) is declared but not paid or made, the new Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (d) In case of dividends If the Company pays or other distributions makes any dividend or distribution consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common SharesStock, the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 X SP0 - T SP0 - C where CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account SP0 = the Current Market Closing Price of the Common Stock on the Trading Day immediately preceding the ex-dividend date for such distribution T = the dividend threshold amount, which shall initially be $0.06 per fiscal quarter, adjusted as described below to take into account events that cause adjustments to the Conversion Rate and as further adjusted to account for any change in the frequency of payment of the Company’s regular dividend; provided that the dividend threshold amount shall be deemed to be zero if the dividend is not a regularly scheduled dividend C = the amount in cash per Common Share share that the Issuer Company distributes to holders of its Common Shares (Stock. An adjustment to the Conversion Rate made pursuant to this Section 4.06(d) shall become effective on the ex-dividend date for such dividend or distribution. If any dividend or distribution described in this Section 4.06(d) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. If the Company fails to pay a cash dividend or distribution for a period in which a regularly scheduled dividend has in prior periods been paid in accordance with past practice, the Conversion Rate shall be adjusted using the formula in this Section 4.06(d), with the ex-dividend date being deemed to be the third trading day in the second month of the fiscal quarter in question, and for “C” being deemed to be zero. Whenever the Conversion Rate is adjusted, the dividend threshold amount shall be adjusted by multiplying such dividend threshold amount by a fraction, the numerator of which no is the Conversion Rate prior to adjustment has been made)and the denominator of which is the Conversion Rate following such adjustment. (e) In case If the Issuer Company or one or more any of its Subsidiaries make purchases subsidiaries makes a payment in respect of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares Stock to the extent that the cash and value of any other consideration included in the payment per share of Common Share Stock exceeds the Current Market Closing Price per of the Common Share Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration DateTime”), the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (AC + (SP1 x OS1))/(SP1 x OS0) where CR0 = the Conversion Rate in effect on immediately prior to the Expiration Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Expiration Date FMV taking such event into account AC = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration (as determined by the Board of Directors of the Company) paid or payable for Common Shares validly tendered Stock purchased in such tender or exchanged and not withdrawn as exchange offer OS0 = the number of shares of Common Stock outstanding immediately prior to the Expiration Date (the “purchased shares”) date such tender or exchange offer expires OS1 = the number of shares of Common Shares Stock outstanding immediately after such tender or exchange offer expires (after giving effect to the Expiration Date less any purchased purchase or exchange of shares OS0 = the number of Common Shares outstanding immediately after the Expiration Date, including any purchased shares pursuant to such tender or exchange offer) SP1 = the Last Reported Sale Price average of the Closing Prices of Common Shares Stock for the 10 consecutive Trading Days commencing on the Trading Day next succeeding the Expiration Datedate such tender or exchange offer expires. If the application of the foregoing formula would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate will be made. Any adjustment to the Conversion Rate made pursuant to this Section 4.06(e) shall become effective on the date immediately following the determination of the average of the Closing Prices of Common Stock for purposes of SP1 above. If the Company or one of its subsidiaries is obligated to purchase Common Stock pursuant to any such tender or exchange offer but is permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the new Conversion Rate shall be readjusted to be the Conversion Rate that would be in effect if such tender or exchange offer had not been made. (f) To Notwithstanding the extent foregoing subsections (a) through (e) of this Section 4.06, the holders Conversion Rate shall not exceed 28.9268 shares per $1,000 principal amount of Notes may participate Securities, other than on an as-converted basis equally with account of adjustments to the Conversion Rate in the manner set forth in subsections (a) through (e) of this Section 4.06. (g) In addition to the adjustments pursuant to clauses (a) through (e) above, the Company may, in its sole discretion, increase the Conversion Rate in order to avoid or diminish any U.S. federal income tax to holders of Common Shares in Stock resulting from any dividend or distribution of capital shares (or rights to acquire Common Stock) or from any event or occurrencetreated as such for U.S. federal income tax purposes. The Company may also, then from time to time, to the extent permitted by applicable law, increase the Conversion Rate by any amount for any period if the Company has determined that such increase would be in the best interests of the Company. If the Company makes such determination, it will be conclusive and the Company will mail to holders of the Securities a notice of the increased Conversion Rate and the period during which it will be in effect at least fifteen (15) days prior to the date the increased Conversion Rate takes effect in accordance with applicable law. (h) If the Company has in effect a rights plan while any Securities remain outstanding, then, in lieu of any adjustment required pursuant to clauses (a) through (e) of this Section 12.05 hereof shall not apply to such event or occurrence. (g) For the avoidance of doubt4.06, no payment or issuance of securities to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To the extent that the Issuer has Holders will receive, upon a shareholder rights plan in effect upon conversion of Securities in respect of which the Notes into Company is required to deliver shares of Common Shares, holders will receiveStock, in addition to such shares of Common Stock, rights under the Common SharesCompany’s stockholder rights agreement unless, prior to conversion, the rights under the rights planhave expired, terminated or been redeemed or unless prior to any conversion, the rights have separated from the Common SharesStock. If the rights provided for in the rights plan adopted by the Company have separated from the Common Stock in accordance with the provisions of the applicable stockholder rights agreement so that Holders would not be entitled to receive any rights in respect of Common Stock, in which case if any, that the Company is required to deliver upon conversion of Securities, the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, Company had distributed to all holders of Common Shares, any Capital StockStock capital stock, evidences of indebtedness or other assets or property as described pursuant to Section 4.06(c) above, subject to readjustment in upon the event of the subsequent expiration, termination or redemption of the rights. Other than as specified above in this clause 4.06(h), there will not be any adjustment to the Conversion Rate as the result of issuance of any such rights, the distribution of separate certificates representing such rights, the exercise or redemption of such rights in accordance with any rights plan or the termination or invalidation of any such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) For purposes of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares4.06, the amount and kind number of distributions that shares of Common Stock at any time outstanding shall not include shares held in the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion treasury of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose Company but shall include shares issuable in respect of clause 212(1) (b) (vii) (E) scrip certificates issued in lieu of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation fractions of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option shares of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible ConsiderationCommon Stock. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.

Appears in 1 contract

Samples: Indenture (Tektronix Inc)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted by the Issuer from time to time by the Issuer as follows: (a) If the Issuer issues Common Shares to all holders of the Common Shares as a dividend or distribution on the Common Shares to all holders of Common Shares, or if the Issuer effects a stock share split or stock share combination, the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x OS1/OS0 where CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date immediately prior to such event OS1 = the number of Common Shares outstanding immediately after such event. Any adjustment made pursuant to this clause (a) shall become effective on the date that is immediately after (x) the date fixed for the determination of shareholders entitled to receive such dividend or other distribution or (y) the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in this clause (a) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (b) In case of an issuance If the Issuer issues to all holders of Common Shares of any rights, warrants, options or warrants other securities entitling them for a period of not more than 45 days after the date of issuance thereof to subscribe for or purchase Common Shares, or if the Issuer issues to all holders of Common Share securities convertible into Common Shares for a period expiring of not more than 45 days or less from after the date of issuance of such rightsthereof, options in either case at an exercise price per Common Share or warrants at a conversion price per Common Share less than the Last Reported Closing Sale Price of the Common Shares on the Business Day immediately preceding the time of announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date X = the total number of Common Shares issuable pursuant to such rights Y = the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights (c) In case of a dividend or other distribution to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above and (y) any dividend or distribution paid exclusively in cash), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price FMV = the fair market value CR0 x (as determined by the Issuer’s Board of Directors) of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding Common Share on the Ex-Dividend Date for such distribution Notwithstanding the foregoing, the Conversion Rate will be adjusted based on the following formula with respect to an adjustment pursuant to this clause (cOS0+X)/(OS0+Y) where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date FMV0 = the average of the sale prices of taking such Capital Stock or equity interest distributed to holders of the Common Shares applicable to one of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date MP0 = the average of the Last Reported Sale Prices of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date (d) In case of dividends or other distributions consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common Shares, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price C = the amount in cash per Common Share the Issuer distributes to holders of Common Shares (and for which no adjustment has been made) (e) In case the Issuer or one or more of its Subsidiaries make purchases of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares to the extent that the cash and value of any other consideration included in the payment per Common Share exceeds the Current Market Price per Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect on the Expiration Date CR1 = the Conversion Rate in effect immediately after the Expiration Date FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration paid or payable for Common Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “purchased shares”) OS1 = the number of Common Shares outstanding immediately after the Expiration Date less any purchased shares event into account OS0 = the number of Common Shares outstanding immediately after the Expiration Date, including any purchased shares SP1 prior to such event X = the Last Reported total number of Common Shares issuable pursuant to such rights, warrants, options, other securities or convertible securities Y = the number of Common Shares equal to the quotient of (A) the aggregate price payable to exercise such rights, warrants, options, other securities or convertible securities and (B) the average of the Closing Sale Prices of the Common Shares for the 10 consecutive Trading Days prior to the Business Day immediately preceding the date of announcement for the issuance of such rights, warrants, options, other securities or convertible securities. For purposes of this clause (b), in determining whether any rights, warrants, options, other securities or convertible securities entitle the holders to subscribe for or purchase, or exercise a conversion right for, Common Shares at less than the applicable Closing Sale Price of the Common Shares Shares, and in determining the aggregate exercise or conversion price payable for such Common Shares, there shall be taken into account any consideration received by the Issuer for such rights, warrants, options, other securities or convertible securities and any amount payable on the Trading Day next succeeding the Expiration Date (f) To the extent the holders of Notes may participate on an as-converted basis equally exercise or conversion thereof, with the holders value of Common Shares in any event or occurrencesuch consideration, then clauses (a) through (e) if other than cash, to be determined by the Board of this Section 12.05 hereof shall not apply to such event or occurrence. (g) For the avoidance of doubt, no payment or issuance of securities to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any Directors of the adjustments Issuer. If any right, warrant, option, other security or convertible security described in this clause (b) is not exercised or converted prior to the expiration of the exercisability or convertibility thereof, the new Conversion Rate shall be readjusted to the Conversion Rate set forth that would then be in clauses (a) through (e) of this Section 12.05effect if such right, warrant, option, other security or convertible security had not been so issued. (hc) To the extent that If the Issuer has a shareholder rights plan in effect upon conversion distributes capital shares, evidences of indebtedness or other assets or property of the Notes into Common Shares, holders will receive, in addition to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, to all holders of Common Shares, any Capital Stock, evidences of indebtedness or assets or property as described above, subject to readjustment in the event of the expiration, termination or redemption of such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible Consideration. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.excluding:

Appears in 1 contract

Samples: Indenture (Luminent Mortgage Capital Inc)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If In case the Issuer issues Common Shares to all holders of the Common Shares as Company shall (i) pay a dividend or on its Ordinary Shares in Ordinary Shares, (ii) make a distribution on the Common its Ordinary Shares in Ordinary Shares, (iii) subdivide its outstanding Ordinary Shares into a greater number of shares, or if the Issuer effects (iv) combine its outstanding Ordinary Shares into a stock split or stock combinationsmaller number of shares, the Conversion Rate will in effect immediately prior thereto shall be adjusted based on the following formula: CR1 = CR0 x OS1 OS0 where CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-dividend Date CR1 = the Conversion Rate in effect on the Ex-dividend Date OS0 = the number of Ordinary Shares outstanding at the close of business immediately prior to the Ex-dividend Date OS1 = the number of Ordinary Shares outstanding at the close of business immediately prior to the Ex-dividend Date, assuming, for this purpose only, the completion of the event immediately prior to the Ex-dividend Date An adjustment made pursuant to this subsection (a) shall become effective immediately prior to the opening of business on the Ex-dividend Date. (b) In case the Company shall issue rights or warrants to all or substantially all holders of its Ordinary Shares entitling them (for a period expiring not more than 60 days after such record date) to subscribe for or purchase Ordinary Shares at a price per share less than the Current Market Price per Ordinary Share (as determined in accordance with subsection (f) of this Section 11.07 on the record date for the determination of shareholders entitled to receive such rights or warrants), the Conversion Rate in effect immediately prior thereto shall be adjusted based on the following formula: CR1 = CR0 ´ OS0 + X OS0 + Y where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend dividend Date CR1 = the Conversion Rate in effect immediately after on the Ex-Dividend dividend Date OS0 = the number of Common Ordinary Shares outstanding at the close of business on the Ex-Dividend Date OS1 = the number of Common Shares outstanding immediately after such event (b) In case of an issuance to all holders of Common Shares of any rights, options or warrants to purchase Common Shares for a period expiring 45 days or less from the date of issuance of such rights, options or warrants at less than the Last Reported Sale Price of the Common Shares on the Business Day immediately preceding the announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend dividend Date X = the total number of Common Ordinary Shares issuable pursuant to such rights Y = the number of Common Ordinary Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Ordinary Shares for the ten 10 consecutive Trading Days prior to ending on the Business Day immediately preceding the announcement of the issuance of such rightsrights Any such adjustment made pursuant to this subsection (b) shall be made successively whenever any such rights or warrants are issued, and shall become effective immediately prior to the opening of business on the Ex-dividend Date. If at the end of the period during which such rights or warrants are exercisable not all rights or warrants shall have been exercised, the adjusted Conversion Rate shall be immediately readjusted to what it would have been based upon the number of additional Ordinary Shares actually issued. (c) In case of a dividend or other distribution the Company shall distribute to all holders of Common Ordinary Shares any shares of Capital Stock of the Issuer capital stock (other than Common Sharesdividends or distributions of Ordinary Shares on Ordinary Shares to which Section 11.07(a) or applies), evidences of indebtedness or other assets (including securities of any Person other than the Issuer Company, but excluding any distribution in connection with any liquidation, dissolution or assets winding up and excluding all-cash distributions or property any distributions of the Issuer any Ordinary Shares, rights or warrants referred to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (ain Sections 11.07(a) or (b) above and (y) any dividend or distribution paid exclusively in cash11.07(b)), then in each such case the Conversion Rate will shall be adjusted based on the following formula: CR1 = CR0 x XX0 XX0 — FMV where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend dividend Date CR1 = the Conversion Rate in effect immediately after on the Ex-Dividend dividend Date SP0 = the Current Market Price FMV = the fair market value (as determined by the Issuer’s Board of Directors, whose determination shall be conclusive evidence of such fair market value and which shall be evidenced by an Officers’ Certificate delivered to the Trustee) of the shares of Capital Stockcapital stock, evidences of indebtedness, indebtedness or other assets or property distributed with respect to each outstanding Common Ordinary Share on the Ex-Dividend dividend Date for such distribution Notwithstanding the foregoing, the Conversion Rate will be adjusted based on the following formula with With respect to an adjustment pursuant to this clause subsection (c) ), where there has been a payment of a dividend or other distribution on Common the Ordinary Shares of Capital Stock shares of capital stock of, or similar equity interests in, a Subsidiary subsidiary or other business unit of the Issuer that is listed on Company (a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex“Spin-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date FMV0 = the average of the sale prices of such Capital Stock or equity interest distributed to holders of the Common Shares applicable to one of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date MP0 = the average of the Last Reported Sale Prices of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date (d) In case of dividends or other distributions consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common Shares, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price C = the amount in cash per Common Share the Issuer distributes to holders of Common Shares (and for which no adjustment has been made) (e) In case the Issuer or one or more of its Subsidiaries make purchases of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares to the extent that the cash and value of any other consideration included in the payment per Common Share exceeds the Current Market Price per Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Dateoff”), the Conversion Rate will be adjusted based on the following formula: CR1 = CR0 x FMV0 + MP0 MP0 where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the end of the Spin-off Valuation Period CR1 = the Conversion Rate in effect after the end of the Spin-off Valuation Period FMV0 = the average of the sale prices of the capital stock or similar equity interest distributed to holders of Ordinary Shares applicable to one Ordinary Share over the 10 Trading Days commencing on and including the effective date of the spin-off (the “Spin-off Valuation Period”); provided that, in the case of any VWAP Trading Days within a Conversion Period that fall within such ten Trading Day period, in respect of any such VWAP Trading Day, the Spin-Off Valuation Period shall be deemed to include only those Trading Days falling on or between the effective date of such spin-off and such VWAP Trading Day. MP0 = the average of the Last Reported Sale Prices of Ordinary Shares over the Spin-off Valuation Period Any such adjustment made pursuant to this subsection (c) shall be made successively whenever any such distribution is made and shall become effective immediately prior to the opening of business on the Ex-dividend Date, except that any such adjustment made with respect to a Spin-Off shall become effective immediately after the end of the Spin-Off Valuation Period. For the avoidance of doubt, the adjustment in this Section 11.07(c) does not apply to any distributions to the extent that the right to convert 2037 Notes has been changed into the right to convert into Reference Property pursuant to Section 11.11 in respect of such distribution. (d) In case the Company shall, by dividend or otherwise, at any time distribute (a “Triggering Distribution”) to all or substantially all holders of its Ordinary Shares all-cash distributions, excluding any distributions in connection with any liquidation, dissolution or winding up, the Conversion Rate shall be adjusted based on the following formula: CR1 = CR0 ´ XX0 XX0 - C where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-dividend Date CR1 = the Conversion Rate in effect on the Ex-dividend Date SP0 = the Current Market Price C = the amount in cash per share the Company distributes to holders of Ordinary Shares (and for which no adjustment has been made) Any such increase shall become effective immediately prior to the opening of business on the Ex-dividend Date. For the avoidance of doubt, the adjustment in this Section 11.07(d) does not apply to any distributions to the extent that the right to convert 2037 Notes has been changed into the right to convert into Reference Property pursuant to section 11.11 in respect of such distribution. (e) In case the Company or any of its Subsidiaries purchases all or any portion of the Ordinary Shares pursuant to a tender offer, to the extent the cash and value of any other consideration included in the payment per Ordinary Share exceeds the Last Reported Sale Price on the Trading Day next succeeding the last date on which tenders may be made pursuant to such tender offer (the “Expiration Date”), the Conversion Rate shall be adjusted based on the following formula: CR1 = CR0 ´ FMV0 + (SP1 ´ OS1) OS0 ´ SP1 where, CR0 = the Conversion Rate in effect on the Expiration Date CR1 = the Conversion Rate in effect immediately after the Expiration Date FMV FMV0 = the fair market value (as determined by the Issuer’s Board of Directors, whose determination shall be conclusive evidence of such fair market value and which shall be evidenced by an Officers’ Certificate delivered to the Trustee) of the aggregate value of all cash and and/or any other consideration paid or payable for Common Ordinary Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (OS0 = the “purchased shares”) number of Ordinary Shares outstanding immediately prior to the Expiration Date OS1 = the number of Common Shares outstanding immediately after the Expiration Date less any purchased shares OS0 = the number of Common Ordinary Shares outstanding immediately after the Expiration Date, including excluding any purchased shares SP1 = the average of the Last Reported Sale Price of the Common Ordinary Shares over the 10 Trading Days beginning on the Trading Day next succeeding after the Expiration Date Any such increase shall become effective immediately prior to the opening of business on the Ex-dividend Date. In the event that the Company is obligated to purchase shares pursuant to such tender offer, but the Company is permanently prevented by applicable law from effecting any or all such purchases or any or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate which would have been in effect based upon the number of shares actually purchased. If the application of this Section 11.07(e) to any tender offer would result in a decrease in the Conversion Rate, no adjustment shall be made for such tender offer under this Section 11.07(e). For purposes of this Section 11.07(e), the term “tender offer” shall mean and include both tender offers and exchange offers, all references to “purchases” of shares in tender offers (and all similar references) shall mean and include both the purchase of shares in tender offers and the acquisition of shares pursuant to exchange offers, and all references to “tendered shares” (and all similar references) shall mean and include shares tendered in both tender offers and exchange offers. (f) To For the extent the holders purpose of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrencecomputation under subsections (b), then clauses (ac), (d) through and (e) of this Section 12.05 hereof shall not apply 11.07, the “Current Market Price” of the Ordinary Shares on any day means the average of the Last Reported Sale Price of the Ordinary Shares for each of the 10 consecutive Trading Days ending on the earlier of the day in question and the day before the Ex-dividend Date with respect to the issuance or distribution requiring such event or occurrencecomputation. (g) For In any case in which this Section 11.07 shall require that an adjustment be made immediately prior to the avoidance opening of doubtbusiness on the Ex- dividend Date, no payment or the Company may elect to defer (but only until five Business Days following the filing by the Company with the Trustee of the certificate described in Section 11.09) issuing to the Holder of any 2037 Note converted after such Ex-dividend Date any Ordinary Shares issuable upon such conversion over and above any Ordinary Shares issuable upon such conversion only on the basis of the Conversion Rate prior to adjustment; and, in lieu of the shares the issuance of securities which is so deferred, the Company shall issue or cause its transfer agents to any plaintiffs issue due bills or their counsel under other appropriate evidence prepared by the Global Class Action Settlement shall result in any Company of the adjustments right to receive such shares. If any action in respect of which an adjustment to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To the extent that the Issuer has a shareholder rights plan in effect upon conversion of the Notes into Common Shares, holders will receive, in addition to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, to all holders of Common Shares, any Capital Stock, evidences of indebtedness or assets or property as described above, subject to readjustment in the event of the expiration, termination or redemption of such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be is required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note made immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders opening of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer or its successor, as the case may be) only business on the date Ex-dividend Date therefor is not thereafter made or paid by the Company for any Ineligible Consideration would otherwise be duereason, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible Consideration. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior shall be readjusted to the Maturity Date applicable to Conversion Rate which would then be in effect if such series of Notesaction had not occurred.

Appears in 1 contract

Samples: Second Supplemental Indenture (Transocean Inc)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If In case the Issuer issues Common Shares to all holders of the Common Shares as Company shall (i) pay a dividend or on its Ordinary Shares in Ordinary Shares, (ii) make a distribution on the Common its Ordinary Shares in Ordinary Shares, (iii) subdivide its outstanding Ordinary Shares into a greater number of shares, or if the Issuer effects (iv) combine its outstanding Ordinary Shares into a stock split or stock combinationsmaller number of shares, the Conversion Rate will in effect immediately prior thereto shall be adjusted based on the following formula: CR1 = CR0 x OS1 OS0 where CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-dividend Date CR1 = the Conversion Rate in effect on the Ex-dividend Date OS0 = the number of Ordinary Shares outstanding at the close of business immediately prior to the Ex-dividend Date OS1 = the number of Ordinary Shares outstanding at the close of business immediately prior to the Ex-dividend Date, assuming, for this purpose only, the completion of the event immediately prior to the Ex-dividend Date An adjustment made pursuant to this subsection (a) shall become effective immediately prior to the opening of business on the Ex-dividend Date. (b) In case the Company shall issue rights or warrants to all or substantially all holders of its Ordinary Shares entitling them (for a period expiring not more than 60 days after such record date) to subscribe for or purchase Ordinary Shares at a price per share less than the Current Market Price per Ordinary Share (as determined in accordance with subsection (f) of this Section 11.07 on the record date for the determination of shareholders entitled to receive such rights or warrants), the Conversion Rate in effect immediately prior thereto shall be adjusted based on the following formula: CR1 = CR0 x OS0 + X OS0 + Y where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend dividend Date CR1 = the Conversion Rate in effect immediately after on the Ex-Dividend dividend Date OS0 = the number of Common Ordinary Shares outstanding at the close of business on the Ex-Dividend Date OS1 = the number of Common Shares outstanding immediately after such event (b) In case of an issuance to all holders of Common Shares of any rights, options or warrants to purchase Common Shares for a period expiring 45 days or less from the date of issuance of such rights, options or warrants at less than the Last Reported Sale Price of the Common Shares on the Business Day immediately preceding the announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend dividend Date X = the total number of Common Ordinary Shares issuable pursuant to such rights Y = the number of Common Ordinary Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Ordinary Shares for the ten consecutive 10 consecu­tive Trading Days prior to ending on the Business Day immediately preceding the announcement of the issuance of such rightsrights Any such adjustment made pursuant to this subsection (b) shall be made successively whenever any such rights or warrants are issued, and shall become effective immediately prior to the opening of business on the Ex-dividend Date. If at the end of the period during which such rights or warrants are exercisable not all rights or warrants shall have been exercised, the adjusted Conversion Rate shall be immediately readjusted to what it would have been based upon the number of additional Ordinary Shares actually issued. (c) In case of a dividend or other distribution the Company shall distribute to all holders of Common Ordinary Shares any shares of Capital Stock of the Issuer capital stock (other than Common Sharesdividends or distributions of Ordinary Shares on Ordinary Shares to which Section 11.07(a) or applies), evidences of indebtedness or other assets (including securities of any Person other than the Issuer Company, but excluding any distribution in connection with any liquidation, dissolution or assets winding up and excluding all-cash distributions or property any distributions of the Issuer any Ordinary Shares, rights or warrants referred to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (ain Sections 11.07(a) or (b) above and (y) any dividend or distribution paid exclusively in cash11.07(b)), then in each such case the Conversion Rate will shall be adjusted based on the following formula: CR1 = CR0 x XX0 XX0 – FMV where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend dividend Date CR1 = the Conversion Rate in effect immediately after on the Ex-Dividend dividend Date SP0 = the Current Market Price FMV = the fair market value (as determined by the Issuer’s Board of Directors, whose determination shall be conclusive evidence of such fair market value and which shall be evidenced by an Officers’ Certificate delivered to the Trustee) of the shares of Capital Stockcapital stock, evidences of indebtedness, indebtedness or other assets or property distributed with respect to each outstanding Common Ordinary Share on the Ex-Dividend dividend Date for such distribution Notwithstanding the foregoing, the Conversion Rate will be adjusted based on the following formula with With respect to an adjustment pursuant to this clause subsection (c) ), where there has been a payment of a dividend or other distribution on Common the Ordinary Shares of Capital Stock shares of capital stock of, or similar equity interests in, a Subsidiary subsidiary or other business unit of the Issuer that is listed on Company (a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex“Spin-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date FMV0 = the average of the sale prices of such Capital Stock or equity interest distributed to holders of the Common Shares applicable to one of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date MP0 = the average of the Last Reported Sale Prices of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date (d) In case of dividends or other distributions consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common Shares, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price C = the amount in cash per Common Share the Issuer distributes to holders of Common Shares (and for which no adjustment has been made) (e) In case the Issuer or one or more of its Subsidiaries make purchases of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares to the extent that the cash and value of any other consideration included in the payment per Common Share exceeds the Current Market Price per Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Dateoff”), the Conversion Rate will be adjusted based on the following formula: CR1 = CR0 x FMV0 + MP0 MP0 where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the end of the Spin-off Valuation Period CR1 = the Conversion Rate in effect after the end of the Spin-off Valuation Period FMV0 = the average of the sale prices of the capital stock or similar equity interest distributed to holders of Ordinary Shares applicable to one Ordinary Share over the 10 Trading Days commencing on and including the effective date of the spin-off (the “Spin-off Valuation Period”); provided that, in the case of any VWAP Trading Days within a Conversion Period that fall within such ten Trading Day period, in respect of any such VWAP Trading Day, the Spin-Off Valuation Period shall be deemed to include only those Trading Days falling on or between the effective date of such spin-off and such VWAP Trading Day. MP0 = the average of the Last Reported Sale Prices of Ordinary Shares over the Spin-off Valuation Period Any such adjustment made pursuant to this subsection (c) shall be made successively whenever any such distribution is made and shall become effective immediately prior to the opening of business on the Ex-dividend Date, except that any such adjustment made with respect to a Spin-Off shall become effective immediately after the end of the Spin-Off Valuation Period. For the avoidance of doubt, the adjustment in this Section 11.07(c) does not apply to any distributions to the extent that the right to convert 2037 Notes has been changed into the right to convert into Reference Property pursuant to Section 11.11 in respect of such distribution. (d) In case the Company shall, by dividend or otherwise, at any time distribute (a “Triggering Distribution”) to all or substantially all holders of its Ordinary Shares all-cash distributions, excluding any distributions in connection with any liquidation, dissolution or winding up, the Conversion Rate shall be adjusted based on the following formula: CR1 = CR0 x XX0 XX0 - C where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-dividend Date CR1 = the Conversion Rate in effect on the Ex-dividend Date SP0 = the Current Market Price C = the amount in cash per share the Company distributes to holders of Ordinary Shares (and for which no adjustment has been made) Any such increase shall become effective immediately prior to the opening of business on the Ex-dividend Date. For the avoidance of doubt, the adjustment in this Section 11.07(d) does not apply to any distributions to the extent that the right to convert 2037 Notes has been changed into the right to convert into Reference Property pursuant to section 11.11 in respect of such distribution. (e) In case the Company or any of its Subsidiaries purchases all or any portion of the Ordinary Shares pursuant to a tender offer, to the extent the cash and value of any other consideration included in the payment per Ordinary Share exceeds the Last Reported Sale Price on the Trading Day next succeeding the last date on which tenders may be made pursuant to such tender offer (the “Expiration Date”), the Conversion Rate shall be adjusted based on the following formula: CR1 = CR0 x FMV0 + (SP1 x OS1) OS0 x SP1 where, CR0 = the Conversion Rate in effect on the Expiration Date CR1 = the Conversion Rate in effect immediately after the Expiration Date FMV FMV0 = the fair market value (as determined by the Issuer’s Board of Directors, whose determination shall be conclusive evidence of such fair market value and which shall be evidenced by an Officers’ Certificate delivered to the Trustee) of the aggregate value of all cash and and/or any other consideration paid or payable for Common Ordinary Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (OS0 = the “purchased shares”) number of Ordinary Shares outstanding immediately prior to the Expiration Date OS1 = the number of Common Shares outstanding immediately after the Expiration Date less any purchased shares OS0 = the number of Common Ordinary Shares outstanding immediately after the Expiration Date, including excluding any purchased shares SP1 = the average of the Last Reported Sale Price of the Common Ordinary Shares over the 10 Trading Days beginning on the Trading Day next succeeding after the Expiration Date Any such increase shall become effective immediately prior to the opening of business on the Ex-dividend Date. In the event that the Company is obligated to purchase shares pursuant to such tender offer, but the Company is permanently prevented by applicable law from effecting any or all such purchases or any or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate which would have been in effect based upon the number of shares actually purchased. If the application of this Section 11.07(e) to any tender offer would result in a decrease in the Conversion Rate, no adjustment shall be made for such tender offer under this Section 11.07(e). For purposes of this Section 11.07(e), the term “tender offer” shall mean and include both tender offers and exchange offers, all references to “purchases” of shares in tender offers (and all similar references) shall mean and include both the purchase of shares in tender offers and the acquisition of shares pursuant to exchange offers, and all references to “tendered shares” (and all similar references) shall mean and include shares tendered in both tender offers and exchange offers. (f) To For the extent the holders purpose of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrencecomputation under subsections (b), then clauses (ac), (d) through and (e) of this Section 12.05 hereof shall not apply 11.07, the “Current Market Price” of the Ordinary Shares on any day means the average of the Last Reported Sale Price of the Ordinary Shares for each of the 10 consecutive Trading Days ending on the earlier of the day in question and the day before the Ex-dividend Date with respect to the issuance or distribution requiring such event or occurrencecomputation. (g) For In any case in which this Section 11.07 shall require that an adjustment be made immediately prior to the avoidance opening of doubtbusiness on the Ex-dividend Date, no payment or the Company may elect to defer (but only until five Business Days following the filing by the Company with the Trustee of the certificate described in Section 11.09) issuing to the Holder of any 2037 Note converted after such Ex-dividend Date any Ordinary Shares issuable upon such conversion over and above any Ordinary Shares issuable upon such conversion only on the basis of the Conversion Rate prior to adjustment; and, in lieu of the shares the issuance of securities which is so deferred, the Company shall issue or cause its transfer agents to any plaintiffs issue due bills or their counsel under other appropriate evidence prepared by the Global Class Action Settlement shall result in any Company of the adjustments right to receive such shares. If any action in respect of which an adjustment to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To the extent that the Issuer has a shareholder rights plan in effect upon conversion of the Notes into Common Shares, holders will receive, in addition to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, to all holders of Common Shares, any Capital Stock, evidences of indebtedness or assets or property as described above, subject to readjustment in the event of the expiration, termination or redemption of such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be is required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note made immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders opening of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer or its successor, as the case may be) only business on the date Ex-dividend Date therefor is not thereafter made or paid by the Company for any Ineligible Consideration would otherwise be duereason, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible Consideration. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior shall be readjusted to the Maturity Date applicable to Conversion Rate which would then be in effect if such series of Notesaction had not occurred.

Appears in 1 contract

Samples: Supplemental Indenture (Transocean Inc)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If the Issuer Company issues shares of Common Shares to all holders of the Common Shares Stock as a dividend or distribution on the Common SharesStock, or if the Issuer Company effects a stock split or stock combination, the Conversion Rate will shall be adjusted based on the following formula: CR'=CR0 x OS' OS0 where, CR0 = the Conversion Rate in effect immediately prior to such event; CR' = the Conversion Rate in effect immediately after such event; OS0 = the number of shares of Common Stock outstanding immediately prior to such event; and OS' = the number of shares of Common Stock outstanding immediately after such event. An 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 subdivision or combination. (b) If the Company issues to all or substantially all holders of its Common Stock any rights or warrants entitling them for a period of not more than 60 days after the Ex-dividend Date for such issuance to subscribe for or purchase shares of Common Stock at a price per share less than the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the time of announcement of such issuance, the Conversion Rate shall be adjusted based on the following formula (provided that the Conversion Rate shall be readjusted to the extent that such rights or warrants are not exercised prior to their expiration): CR'=CR0 x OS0+X OS0+Y where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend dividend Date CR1 for such event; CR' = the Conversion Rate in effect on and immediately after the Ex-Dividend dividend Date for such event; OS0 = the number of shares of Common Shares Stock outstanding at immediately prior to the close Ex-dividend Date for such event; X = the total number of business shares of Common Stock issuable pursuant to such rights or warrants; and Y = the number of shares of Common Stock equal to the aggregate price payable to exercise such rights or warrants divided by the average of the Last Reported Sale Prices of the Common Stock over the ten consecutive Trading Day period ending on the Trading Day immediately preceding the Ex-dividend Date for such distribution. Such adjustment shall be made successively whenever any such rights or warrants are issued, and shall become effective on the Ex-Dividend dividend Date OS1 = of such issuance. (c) If the number Company distributes shares of its Capital Stock, evidences of its indebtedness or other assets or property to all or substantially all holders of the Common Shares outstanding immediately after such event Stock, excluding (1) dividends, distributions and rights or warrants referred to in clause (a) or (b) In case of an issuance above and (2) dividends or distributions in cash referred to all holders of Common Shares of any rightsin clause (d) below, options or warrants to purchase Common Shares for a period expiring 45 days or less from the date of issuance of such rights, options or warrants at less than the Last Reported Sale Price of the Common Shares on the Business Day immediately preceding the announcement of such issuance, in which event then the Conversion Rate will shall be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): formula: CR'=CR0 x XX0 XX0 – FMV where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend dividend Date CR1 for such distribution; CR' = the Conversion Rate in effect on and immediately after the Ex-Dividend dividend Date OS0 for such distribution; SP0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date X = the total number of Common Shares issuable pursuant to such rights Y = the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for Stock over the ten consecutive Trading Days prior to Day period ending on the Business Trading Day immediately preceding the announcement of the issuance of such rights (c) In case of a dividend or other distribution to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above and (y) any dividend or distribution paid exclusively in cash), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price for such distribution; and FMV = the fair market value (as determined by the Issuer’s Board of DirectorsDirectors of the Company) of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Share Stock on the Ex-Dividend dividend Date for such distribution. Such adjustment shall be made successively whenever any such distribution Notwithstanding is made and shall become effective on the foregoingEx-dividend Date for such distribution. In the event that such dividend or distribution is not so paid or made, the Conversion Rate will shall again be adjusted to be the Conversion Rate which would then be in effect if such dividend or distribution had not been declared. If the Board of Directors determines the fair market value of any distribution for purposes of this Section 13.06 by reference to the actual or when issued trading market for any securities, it must in doing so consider the prices in such market over the same period used in computing the market price of the Common Stock as provided above. In the event that the Company has in effect a preferred shares rights plan ("Rights Plan"), upon conversion of the Securities into Common Stock, to the extent that the Rights Plan is still in effect upon such conversion, the Holders of Securities shall receive, in addition to the Common Stock, the rights described therein (whether or not the rights have separated from the Common Stock at the time of conversion), subject to the limitations set forth in the Rights Plan. If the Rights Plan provides that upon separation of rights under such plan from the Common Stock that the Holders would not be entitled to receive any such rights in respect of the Common Stock issuable upon conversion of the Securities, the Conversion Rate shall be adjusted as provided in this Section 13.06(c) (with such separation deemed to be the distribution of such rights), subject to readjustment in the event of the expiration, termination or redemption of the rights. Any distribution of rights or warrants pursuant to a Rights Plan that would allow a Holder to receive upon conversion, in addition to the Common Stock, the rights described therein (whether or not the rights have separated from the Common Stock at the time of conversion), shall not constitute a distribution of rights or warrants pursuant to this Article 13. Rights or warrants distributed by the Company to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Company's Capital Stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events ("Trigger Event"): (i) are deemed to be transferred with such shares of Common Stock, (ii) are not exercisable and (iii) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 13.06(c) (and no adjustment to the Conversion Rate under this Section 13.06 shall be required) until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 13.06(c). If any such right or warrant, including any such existing rights or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and record date with respect to new rights or warrants with such rights (and a termination or expiration of the existing rights or warrants without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 13.06 was made, (1) in the case of any such rights or warrants which shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Rate shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder or holders of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and warrants had not been issued. (d) If the Company shall, by dividend or otherwise, at any time distribute cash to all or substantially all holders of its Common Stock, the Conversion Rate shall be adjusted based on the following formula with respect to an adjustment pursuant to this clause (c) where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSXformula: CR'=CR0 x XX0 XX0 – C where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend dividend Date CR1 for such distribution; CR' = the Conversion Rate in effect on and immediately after the Ex-Dividend dividend Date FMV0 = the average of the sale prices of for such Capital Stock or equity interest distributed to holders of the Common Shares applicable to one of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date MP0 distribution; SP0 = the average of the Last Reported Sale Prices of the Common Shares Stock over the 10 Trading Days commencing on and including the fifth ten consecutive Trading Day after period ending on the Trading Day immediately preceding the Ex-Dividend Date (d) In case dividend Date of dividends or other distributions consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common Shares, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price such distribution; and C = the amount in cash per Common Share the Issuer distributes share distributed to holders of the Common Shares (Stock in such distribution. Such adjustment shall be made successively whenever any such distribution is made and shall become effective on the Ex-dividend Date for such distribution. In the event that such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate which no adjustment has would then be in effect if such dividend or distribution had not been made)declared. (e) In case the Issuer Company or one or more any of its Subsidiaries make purchases shall purchase any shares of the Common Shares Stock pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares offer, to the extent that the cash and value of any other consideration included in the payment per share of Common Share Stock exceeds the Current Market Last Reported Sale Price per of the Common Share Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”)expires, the Conversion Rate will shall be adjusted increased based on the following formula: CR'=CR0 x AC + (SP' x OS') OS0 x SP' where, CR0 = the Conversion Rate in effect on immediately prior to the Expiration Date CR1 effective date of the adjustment; CR' = the Conversion Rate in effect on and immediately after the Expiration Date FMV effective date of the adjustment; AC = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration paid or payable for Common Shares validly tendered or exchanged and not withdrawn (as determined by the Board of Directors of the Expiration Date (the “Company) paid for shares purchased shares”) OS1 = the number of Common Shares outstanding immediately after the Expiration Date less any purchased shares in such tender offer; OS0 = the number of shares of Common Shares Stock outstanding immediately prior to the date such tender offer expires; OS' = the number of shares of Common Stock outstanding immediately after the Expiration Date, including any purchased date such tender offer expires (after giving effect to the purchase of shares SP1 in such tender offer); and SP' = the average of the Last Reported Sale Price Prices of the Common Shares Stock over the ten consecutive Trading Day period commencing on the Trading Day next succeeding the Expiration Datedate such tender offer expires. The foregoing adjustment to the Conversion Rate shall occur on the tenth Trading Day from, and including, the Trading Day next succeeding the date such tender offer expires; provided that in respect of any conversion within ten Trading Days immediately following, and including, the expiration date of any such tender offer, references with respect to ten Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the expiration date of such tender offer and the Conversion Date in determining the applicable Conversion Rate. For purposes of this clause (e) of Section 13.06, the aggregate consideration in any such tender offer shall equal the sum of the aggregate amount of cash consideration and the aggregate fair market value (as determined by the Board of Directors of the Company) of any other consideration payable in such tender offer. In the event that the Company is obligated to purchase shares pursuant to any such tender offer, but the Company is permanently prevented by applicable law from effecting any or all such purchases or any or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate which would have been in effect based upon the number of shares actually purchased. For purposes of this clause (e) of Section 13.06, the term "tender offer" shall mean and include both tender offers and exchange offers, all references to "purchases" of shares in tender offers (and all similar references) shall mean and include both the purchase of shares in tender offers and the acquisition of shares pursuant to exchange offers, and all references to "tendered shares" (and all similar references) shall mean and include shares tendered in both tender offers and exchange offers. (f) To If the extent application of any of the holders of Notes may participate on an as-converted basis equally with the holders of Common Shares formulas set forth in any event or occurrence, then clauses (aSection 13.06(a) through (eSection 13.06(e) would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate shall be made, other than as a result of this a stock combination as set forth in Section 12.05 hereof shall not apply to such event or occurrence13.06(a). (g) For In any case in which this Section 13.06 shall require that an adjustment be made following an Ex-dividend Date, the avoidance of doubt, no payment or issuance of securities Company may elect to any plaintiffs or their counsel under defer (but only until five Business Days following the Global Class Action Settlement shall result in any filing by the Company with the Trustee of the adjustments certificate described in Section 13.09) issuing to the Conversion Rate set forth in clauses (a) through (e) Holder of this Section 12.05. (h) To any Security converted after such Ex-dividend Date the extent that the Issuer has a shareholder rights plan in effect upon conversion shares of Common Stock and other Capital Stock of the Notes into Common Shares, holders will receive, in addition to Company issuable upon such conversion over and above the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, to all holders shares of Common Shares, any Stock and other Capital Stock, evidences of indebtedness or assets or property as described above, subject to readjustment in the event Stock of the expiration, termination or redemption of Company issuable upon such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible Consideration. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% basis of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to adjustment; and, in lieu of the Maturity Date applicable shares the issuance of which is so deferred, the Company shall issue or cause its transfer agent to issue due bills or other appropriate evidence prepared by the Company of the right to receive such series of Notesshares.

Appears in 1 contract

Samples: Indenture (Affymetrix Inc)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If In case the Issuer issues Company shall (i) pay a dividend on its Common Shares Stock in shares of Common Stock, (ii) make a distribution on its Common Stock in shares of Common Stock, (iii) subdivide its outstanding Common Stock into a greater number of shares, or (iv) combine its outstanding Common Stock into a smaller number of shares, the Conversion Rate in effect immediately prior thereto shall be adjusted so that the Holder of any Security thereafter surrendered for conversion shall be entitled to all holders receive that number of shares of Common Stock which it would have owned had such Security been converted immediately prior to the Common Shares as happening of such event. An 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 subdivision or combination. (b) In case the Company shall issue rights, warrants or options to all or substantially all holders of its Common Stock entitling them (for a period commencing no earlier than the record date described below and expiring not more than 60 days after such record date) 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 of Common Stock (as determined in accordance with subsection (g) of this Section 408) on the Common Sharesrecord date for the determination of stockholders entitled to receive such rights, warrants or if the Issuer effects a stock split or stock combinationoptions, the Conversion Rate will in effect immediately prior thereto shall be adjusted by multiplying the Conversion Rate 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 on such record date, plus the number of shares of Common Stock so offered for subscription or purchase (or into which the convertible securities so offered are convertible), and the denominator of which shall be the number of shares of Common Stock outstanding at 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 Securities so offered, which shall be determined by multiplying the number of shares of Common Stock issuable upon conversion of such convertible securities by the Conversion Price per share of Common Stock pursuant to the terms of such convertible securities) would purchase at the current market price per share (as defined in Section 408(g) herein). Such adjustment shall be made successively whenever any such rights, warrants or options are issued, and shall become effective immediately after such record date. If at the end of the period during which such rights, warrants or options are exercisable not all rights, warrants or options shall have been exercised, the adjusted Conversion Rate shall be immediately readjusted to what it would have been based on upon the following formula: wherenumber of additional shares of Common Stock actually issued (or the number of shares of Common Stock issuable upon conversion of convertible securities actually issued). No adjustment shall be made hereunder if as a result the Conversion Rate would decrease. (c) In case the Company shall distribute to all or substantially all holders of its Common Stock any Equity Interests of the Company (other than Common Stock), CR0 = evidences of indebtedness or other non-cash assets (including securities of any person other than the Company but excluding dividends or distributions referred to in subsection (a)(i) or (ii) of this Section 408), or shall distribute to all or substantially all holders of its Common Stock rights, warrants or options to subscribe for or purchase any of its securities (excluding those rights and warrants referred to in subsection (b) of this Section 408), then in each such case the Conversion Rate shall be adjusted by multiplying the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date OS1 = record date for the determination of shareholders entitled to such distribution by a fraction of which the numerator shall be the current market price per share of Common Stock (determined as provided in subsection (g) of this Section 408) on such record date and the denominator shall be such current market price less the fair market value (as determined by the Board of Directors whose determination shall be conclusive and described in a Board Resolution) on such date of the portion of the evidences of indebtedness, shares of capital stock, and other assets to be distributed or of such subscription rights or warrants applicable to one share of Common Stock (determined on the basis of the number of shares of Common Shares Stock outstanding on the record date). Such adjustment shall be made successively whenever any such distribution is made and shall become effective immediately after the record date for the determination of shareholders entitled to receive such event (b) In case of an issuance distribution. Rights or warrants distributed by the Company to all holders of Common Shares Stock entitling the holders thereof to subscribe for or purchase shares of any rightsthe Company's Capital Stock (either initially or under certain circumstances), options which rights or warrants warrants, until the occurrence of a specified event or events ("Trigger Event"): (i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 408(c) (and no adjustment to the Conversion Rate under this Section 408(c) will be required) until the occurrence of the earliest Trigger Event. If such right or warrant is subject to subsequent events, upon the occurrence of which such right or warrant shall become exercisable to purchase Common Shares for different securities, evidences of indebtedness or other assets or entitle the holder to purchase a period expiring 45 days different number or less from amount of the foregoing or to purchase any of the foregoing at a different purchase price, then the occurrence of each such event shall be deemed to be the date of issuance and record date with respect to a new right or warrant (and a termination or expiration of the existing right or warrant without exercise by the holder thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto, that resulted in an adjustment to the Conversion Rate under this Section 408(c), (1) in the case of any such rights or warrants which shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Price shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such rightsredemption or repurchase, options and (2) in the case of such rights or warrants all of which shall have expired or been terminated without exercise, the Conversion Rate shall be readjusted as if such rights and warrants had never been issued. (d) In case the Company shall, by dividend or otherwise, at less than any time make a distribution solely in cash to all or substantially all holders of its Common Stock that satisfies the Last Reported Sale Price conditions described in any of the Common Shares on the Business Day immediately preceding the announcement of such issuance(1), in which event (2) or (3) below (a "Triggering Distribution"), then the Conversion Rate will be adjusted based on as set forth in the following formula corresponding subsection. (provided that 1) If the distribution is neither a quarterly dividend nor any dividend or distribution in connection with the liquidation, dissolution or winding up of the Company, then the Conversion Rate will shall be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = adjusted by multiplying the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = effectiveness of the Conversion Rate in effect immediately after adjustment contemplated by this subsection (d)(1) by a fraction (A) the Ex-Dividend Date OS0 = numerator of which shall be (I) the number current market price per share of Common Shares outstanding at the close Stock (as determined in accordance with subsection (g) of business this Section 408) on the Ex-Dividend Date X = the total number of Common Shares issuable pursuant to such rights Y = the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for the ten consecutive Trading Days prior to the Business Day (the "Determination Date") immediately preceding the announcement day on which the Triggering Distribution is declared by the Company, plus (II) the number obtained by dividing the total amount of the issuance of such rights (c) In case of a dividend or other distribution cash so distributed to all holders of Common Shares Stock by the number of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders shares of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above Stock outstanding on the Determination Date and (yB) any dividend or distribution paid exclusively in cash), the Conversion Rate will denominator of which shall be adjusted based such current market price per share of Common Stock on the following formula: where, CR0 = the Conversion Rate in effect at the close of business Determination Date. Such adjustment shall become effective immediately prior to the Ex-Dividend Date CR1 = opening of business following the Conversion Rate date on which the Triggering Distribution is paid; provided that, in effect immediately after the Ex-Dividend Date SP0 = event the Current Market Price FMV = the fair market value (as determined by the Issuer’s Board of Directors) portion of the shares of Capital Stock, evidences of indebtedness, assets or property cash so distributed with respect to each outstanding Common Share on the Ex-Dividend Date for such distribution Notwithstanding the foregoing, the Conversion Rate will be adjusted based on the following formula with respect to an adjustment pursuant to this clause (c) where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date FMV0 = the average of the sale prices of such Capital Stock or equity interest distributed to holders of the Common Shares applicable to one of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date MP0 = the average of the Last Reported Sale Prices of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date (d) In case of dividends or other distributions consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common Shares, Stock is equal to or greater than the Conversion Rate will be adjusted based market price per share of Common Stock on the following formula: whereDetermination Date, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price C = the amount in cash per Common Share the Issuer distributes to holders of Common Shares (and for which no an adequate adjustment has been made) (e) In case the Issuer or one or more of its Subsidiaries make purchases of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares to the extent that the cash and value of any other consideration included in the payment per Common Share exceeds the Current Market Price per Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may provision shall be made pursuant to such tender or exchange offer (the “Expiration Date”), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect on the Expiration Date CR1 = the Conversion Rate in effect immediately after the Expiration Date FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration paid or payable for Common Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “purchased shares”) OS1 = the number of Common Shares outstanding immediately after the Expiration Date less any purchased shares OS0 = the number of Common Shares outstanding immediately after the Expiration Date, including any purchased shares SP1 = the Last Reported Sale Price of the Common Shares on the Trading Day next succeeding the Expiration Date (f) To the extent the holders of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrence, then clauses (a) through (e) of this Section 12.05 hereof shall not apply to such event or occurrence. (g) For the avoidance of doubt, no payment or issuance of securities to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To the extent that the Issuer has a shareholder rights plan in effect upon conversion of the Notes into Common Shares, holders will receive, in addition to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, to all holders of Common Shares, any Capital Stock, evidences of indebtedness or assets or property as described above, subject to readjustment in the event of the expiration, termination or redemption of such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, Securities shall have the right (at to receive upon conversion the sole option amount of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration cash such holder would otherwise be due, to deliver either have received had such Ineligible Consideration or “prescribed securities” with a market value comparable holder converted each Security immediately prior to such Ineligible Considerationdistribution. (k2) Notwithstanding If the foregoing, no adjustment distribution is a quarterly dividend that equals or exceeds the Quarterly Minimum Dividend (as determined in the Conversion Price on any Note will be required under clauses accordance with subsection (a) through (ed)(4) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.this

Appears in 1 contract

Samples: Indenture (New Century Financial Corp)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If the Issuer issues shares of Common Shares to all holders of the Common Shares Stock are issued as a dividend or distribution on the shares of Common SharesStock, or if the Issuer effects a stock share split or stock combinationshare combination is effected, the Conversion Rate will be adjusted based on the following formula: CR’=CR0 x OS’ OS0 where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 such event CR’ = the Conversion Rate in effect immediately after the Ex-Dividend Date such event OS0 = the number of shares of Common Shares Stock outstanding at the close of business on the Ex-Dividend Date OS1 immediately prior to such event OS’ = the number of shares of Common Shares Stock outstanding immediately after such eventevent An adjustment made pursuant to this subsection (a) shall become effective on the date immediately after (x) the date fixed for the determination of stockholders entitled to receive such dividend or other distribution or (y) the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in this subsection (a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (b) In case of an issuance to all holders of Common Shares of If any rights, warrants, options or other securities (other than any rights or warrants issued pursuant to purchase the a stockholder rights plan (commonly referred to as a “poison pill” plan) referred to in Section 12.5(c)) are issued to all or substantially all of the Holders of shares of Common Shares Stock entitling them for a period expiring 45 of not more than 60 days or less from after the date of issuance thereof to subscribe for or purchase shares of such rightsCommon Stock, options or warrants securities convertible into shares of Common Stock within 60 days after the date of issuance thereof, in either case at an exercise price per share or a conversion price per share less than the Last Reported Sale Price of the Common Shares Stock on the Business Day immediately preceding the time of announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): formula: CR’=CR0 x OS0 + X OS0 + Y where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 such event CR’ = the Conversion Rate in effect immediately after the Ex-Dividend Date such event OS0 = the number of shares of Common Shares Stock outstanding immediately prior to such event, including Common Stock that would be outstanding upon exercise or conversion of all options and convertible securities whether or not such options or convertible securities are actually exercisable or convertible at the close of business on the Ex-Dividend Date such time X = the total number of shares of Common Shares Stock issuable pursuant to such rights rights, warrants, options, other securities or convertible securities Y = the number of shares of Common Shares Stock equal to the aggregate exercise price or conversion price payable to exercise or convert such rights rights, warrants, options, other securities or convertible securities divided by the average of the Last Reported Sale Prices of the Common Shares Stock for the ten 10 consecutive Trading Days prior to the Business Day immediately preceding the date of announcement of the issuance of such rights, warrants, options, other securities or convertible securities An adjustment made pursuant to this subsection (b) shall be made successively whenever such rights, warrants, options, other securities or convertible securities are issued, and shall become effective on the day following the date of announcement of such issuance. If, at the end of the period during which such rights, warrants, options, other securities or convertible securities are exercisable or convertible, not all rights, warrants, options, other securities or convertible securities have been exercised or converted, as the case may be, the adjusted Conversion Rate shall be immediately readjusted to what it would have been based upon the number of additional shares of Common Stock actually issued (or the number of shares of Common Stock actually issued upon conversion of convertible securities actually issued). For purposes of Section 12.1 and this Section 12.5, in determining whether such rights, warrants, options, other securities or convertible securities entitle the Holder to subscribe for or purchase or exercise a conversion right for shares of Common Stock at less than the average Last Reported Sale Price of the Common Stock, and in determining the aggregate exercise or conversion price payable for such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights, warrants, options, other securities or convertible securities and any amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined by the Board of Directors and such determination shall be provided to the Trustee in a Board Resolution. (c) In case If shares of a dividend the Company’s capital stock, evidences of the Company’s indebtedness, shares of the capital stock of the Company’s subsidiaries or other distribution to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer Company or its subsidiaries are distributed to all holders or substantially all of the Holders of shares of Common Shares Stock, excluding: (excluding (xi) any dividenddividends, distribution distributions and rights, warrants, options, other securities or issuance covered by convertible securities referred to in clause (a) or (b) above and above; (yii) any dividend dividends or distribution paid exclusively distributions in cashcash referred to in clause (d) below; and (iii) spin-offs described below in this clause (c), ; then the Conversion Rate will be adjusted based on the following formula: CR’=CR0 x XX0 XX0 —FMV where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend Date CR1 such distribution CR’ = the Conversion Rate in effect immediately after the Ex-Dividend Date such distribution SP0 = the Current Market Price average of the Last Reported Sale Prices of the Common Stock for the ten (10) consecutive Trading Days prior to the Business Day immediately preceding the record date for such distribution FMV = the fair market value (as determined in good faith by the Issuer’s Board of DirectorsDirectors of the Company) of the shares of Capital Stockcapital stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Share Stock on the Ex-Dividend Date record date for such distribution Notwithstanding An adjustment made pursuant to the foregoing, the Conversion Rate will above paragraph shall be adjusted based made successively whenever any such distribution is made and shall become effective on the following formula with day immediately after the dated fixed for the determination of shareholders entitled to receive such distribution. With respect to an adjustment pursuant to this clause (c) where there has been a payment of a dividend or other distribution on the Common Shares Stock of Capital Stock ofshares of capital stock of any class or series, or similar equity interests ininterest, of or relating to a Subsidiary subsidiary or other business unit of the Issuer that is listed Company (referred to as a “spin-off”), the Conversion Rate in effect immediately before the close of business on a U.S. national securities exchange or the TSXrecord date fixed for determination of stockholders entitled to receive the distribution will be increased based on the following formula: CR’=CR0 x FMV0 + MP0 MP0 where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 such distribution CR’ = the Conversion Rate in effect immediately after the Ex-Dividend Date such distribution FMV0 = the average of the sale prices Last Reported Sale Prices of such Capital Stock the capital stock or similar equity interest distributed to holders Holders of the shares of Common Shares Stock applicable to one share of our Common Stock over the first 10 consecutive Trading Days after the effective date of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Exspin-Dividend Date off MP0 = the average of the Last Reported Sale Prices of the Common Shares Stock over the first 10 consecutive Trading Days commencing after the effective date of the spin-off The adjustment to the Conversion Rate under the preceding paragraph will occur on and including the fifth 10th Trading Day after the Exeffective date of the spin-Dividend Date off. If any such dividend or distribution described in this subsection (dc) In case of dividends is declared but not paid or other distributions consisting exclusively of cash (excluding any cash made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. Rights or warrants distributed upon an amalgamation, merger, share exchange, consolidation or combination) by the Company to all holders of Common SharesStock entitling the holders thereof to subscribe for or purchase shares of the Company’s capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events specified in such rights or warrants or related instruments or agreements governing the same (a “Trigger Event”): (i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Common Stock; shall be deemed not to have been distributed for purposes of this Section 12.5(c) (and no adjustment to the Conversion Rate under this Section 12.5(c) will be required) until the occurrence of the earliest Trigger Event. If such right or warrant is subject to subsequent events, upon the occurrence of which such right or warrant shall become exercisable to purchase different distributed assets, evidences of indebtedness or other assets or entitle the Holder to purchase a different number or amount of the foregoing or to purchase any of the foregoing at a different purchase price, then the occurrence of each such event shall be deemed to be the date of issuance and the Conversion Record Date with respect to a new right or warrant (and a termination or expiration of the existing right or warrant without exercise by the Holder thereof); in addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto, that resulted in an adjustment to the Conversion Rate under this Section 12.5(c): (i) in the case of any such rights or warrants which shall all have been redeemed or purchased without exercise by any Holders thereof, the Conversion Rate will shall be adjusted based on the following formula: wherereadjusted upon such final redemption or purchase to give effect to such distribution or Trigger Event, CR0 = the Conversion Rate in effect immediately prior as applicable, as though it were a cash distribution, equal to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price C = the amount in cash per Common Share the Issuer distributes to holders share redemption or purchase price received by a holder of Common Shares (and for which no adjustment has been made) (e) In case the Issuer or one or more of its Subsidiaries make purchases of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares to the extent that the cash and value of any other consideration included in the payment per Common Share exceeds the Current Market Price per Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant Stock with respect to such tender rights or exchange offer warrants (the “Expiration Date”assuming such holder had retained such rights or warrants), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect on the Expiration Date CR1 = the Conversion Rate in effect immediately after the Expiration Date FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration paid or payable for Common Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “purchased shares”) OS1 = the number of Common Shares outstanding immediately after the Expiration Date less any purchased shares OS0 = the number of Common Shares outstanding immediately after the Expiration Date, including any purchased shares SP1 = the Last Reported Sale Price of the Common Shares on the Trading Day next succeeding the Expiration Date (f) To the extent the holders of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrence, then clauses (a) through (e) of this Section 12.05 hereof shall not apply to such event or occurrence. (g) For the avoidance of doubt, no payment or issuance of securities to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To the extent that the Issuer has a shareholder rights plan in effect upon conversion of the Notes into Common Shares, holders will receive, in addition to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, made to all holders of Common Shares, any Capital Stock, evidences Stock as of indebtedness the date of such redemption or assets or property as described above, subject to readjustment purchase; and (ii) in the event of the expiration, termination or redemption case of such rights. (i) The Issuer may from time to timerights or warrants which shall have expired or been terminated without exercise, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate shall be readjusted as if such rights and warrants had never been issued. For purposes of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee this Section 12.5(c) and holders of the Notes of such series. The Issuer may make such increases in the Conversion RateSection 12.5(a) and Section 12.5(b), in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution to which this Section 12.5(c) is applicable that also includes shares of Common Shares Stock, a subdivision or combination of Common Stock to which Section 12.5(a) applies, or rights or warrants to subscribe for or purchase shares of Common Stock to which Section 12.5(b) applies (or rights any combination thereof), shall be deemed instead to acquire Common Shares) or from any event treated as such for income tax purposes.be: (jA) The Issuer will not be required a dividend or distribution of the evidence of indebtedness, shares of capital stock or other assets or property, other than such shares of Common Stock, such subdivision or combination or such rights, warrants, options or other securities to adjust the which Section 12.5(a) and Section 12.5(b) apply, respectively (and any Conversion Rate for any of the transactions described in clauses (a) through (e) of reduction required by this Section 12.05 if 12.5(c) with respect to such dividend or distribution shall then be made), immediately followed by (B) a dividend or distribution of such shares of Common Stock, such subdivision or combination or such rights, warrants, options or other securities (and any further Conversion Rate reduction required by Section 12.5(a) and Section 12.5(b) with respect to such dividend or distribution shall then be made), except: (1) the Issuer instead makes proper provision so that each holder effective date of Notes who converts a Note such dividend or distribution shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders determination of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be stockholders entitled to receive such Ineligible Consideration but the Issuer dividend or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer other distribution” or its successor, as the case may be) only on the date on which such split or combination becomes effective,” as applicable for purposes of Section 12.5(a) and the “time of announcement of such issuance” for purposes of Section 12.5(b); and (2) any Ineligible Consideration would otherwise shares of Common Stock included in such dividend or distribution shall not be due, to deliver either such Ineligible Consideration or deemed prescribed securities” with a market value comparable outstanding immediately prior to such Ineligible Consideration. (kevent” for purposes of Section 12.5(a) Notwithstanding the foregoing, no adjustment and any reduction or increase in the Conversion Price on any Note will number of shares of Common Stock resulting from such subdivision or combination shall be required under clauses (a) through (e) of this Section 12.05 unless disregarded in connection with such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notesdividend or distribution.

Appears in 1 contract

Samples: Indenture (Ual Corp /De/)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If the Issuer Company issues Common Shares to all holders of the Common Shares Stock as a dividend or distribution on the Common SharesStock to all holders of Common Stock, or if the Issuer Company effects a stock share split or stock share combination, the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x OS1/OS0 where CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account OS0 = the number of shares of Common Shares Stock outstanding at the close of business on the Ex-Dividend Date immediately prior to such event OS1 = the number of shares of Common Shares Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 4.06(a) shall become effective on the date that is immediately after (x) the date fixed for the determination of stockholders entitled to receive such dividend or other distribution or (y) the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in this clause Section 4.06(a) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (b) In case of an issuance If the Company issues to all holders of Common Shares of Stock any rights, warrants, options or warrants to purchase Common Shares other securities entitling them for a period expiring of not more than 45 days or less from after the date of issuance thereof to subscribe for or purchase Common Stock, or if the Company issues to all holders of such rightsCommon Stock securities convertible into Common Stock for a period of not more than 45 days after the date of issuance thereof, options in either case at an exercise price per share of Common Stock or warrants at a conversion price per share of Common Stock less than the Last Reported Sale Closing Price of the Common Shares Stock on the Business Day immediately preceding the time of announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date X = the total number of Common Shares issuable pursuant to such rights Y = the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights (c) In case of a dividend or other distribution to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above and (y) any dividend or distribution paid exclusively in cash), the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (OS0+X)/(OS0+Y) where CR0 = the Conversion Rate in effect at the close of business immediately prior to the Exadjustment relating to such event CR1 = the new Conversion Rate taking such event into account OS0 = the number of shares of Common Stock outstanding immediately prior to such event X = the total number of shares of Common Stock issuable pursuant to such rights, warrants, options, other securities or convertible securities Y = the number of shares of Common Stock equal to the quotient of (A) the aggregate price payable to exercise such rights, warrants, options, other securities or convertible securities and (B) the average of the Closing Prices of the Common Stock for the 10 consecutive Trading Days prior to the Business Day immediately preceding the date of announcement for the issuance of such rights, warrants, options, other securities or convertible securities. For purposes of this Section 4.06(b), in determining whether any rights, warrants, options, other securities or convertible securities entitle the holders to subscribe for or purchase, or exercise a conversion right for, Common Stock at less than the applicable Closing Price of the Common Stock, and in determining the aggregate exercise or conversion price payable for such Common Stock, there shall be taken into account any consideration received by the Company for such rights, warrants, options, other securities or convertible securities and any amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined by the Board of Directors of the Company. Any adjustment made pursuant to this Section 4.06(b) shall become effective on the date that is immediately after the date fixed for the determination of shareholders entitled to receive such rights, warrants, options, other securities or convertible securities. If any right, warrant, option, other security or convertible security described in this Section 4.06(b) is not exercised or converted prior to the expiration of the exercisability or convertibility thereof, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such right, warrant, option, other security or convertible security had not been so issued. (c) If the Company distributes capital stock, evidences of indebtedness or other assets or property of the Company to all holders of Common Stock, excluding: (1) dividends, distributions, rights, warrants, options, other securities or convertible securities referred to in Section 4.06(a) or (b) above, (2) dividends or distributions paid exclusively in cash, and (3) Spin-Dividend Date Offs described below in this Section 4.06(c), then the Conversion Rate will be adjusted based on the following formula: CR1 = CR0 x SP0/(SP0-FMV) where CR0 = the Conversion Rate in effect immediately after prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate taking such event into account SP0 = the Current Market Closing Price of the Common Stock on the Trading Day immediately preceding the ex-dividend date for such distribution FMV = the fair market value (as determined in good faith by the Issuer’s Board of DirectorsDirectors of the Company) of the shares of Capital Stockcapital stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Share Stock on the Exearlier of the record date or the ex-Dividend Date dividend date for such distribution. An adjustment to the Conversion Rate made pursuant to this paragraph shall be made successively whenever any such distribution Notwithstanding is made and shall become effective on the foregoingex-dividend date for such distribution. If the Company distributes to all holders of Common Stock capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit of the Company (a “Spin-Off”), the Conversion Rate in effect immediately before the close of business on the date fixed for determination of holders of Common Stock entitled to receive such distribution will be adjusted based on the following formula with respect to an adjustment pursuant to this clause formula: CR1 = CR0 x (c) FMV0+MP0)/MP0 where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account FMV0 = the average of the sale prices Closing Prices of such Capital Stock the capital stock or similar equity interest distributed to holders of the Common Shares Stock applicable to one share of Common Stock over the first 10 consecutive Trading Days after the effective date of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the ExSpin-Dividend Date Off MP0 = the average of the Last Reported Sale Closing Prices of the Common Shares Stock over the first 10 consecutive Trading Days commencing after the effective date of the Spin-Off. An adjustment to the Conversion Rate made pursuant to this paragraph will occur on the 10th Trading Day from and including the fifth Trading Day after effective date of the ExSpin-Dividend DateOff. If any such dividend or distribution described in this Section 4.06(c) is declared but not paid or made, the new Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (d) In case of dividends If the Company pays or other distributions makes any dividend or distribution consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common SharesStock, the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (SP0-T)/(SP0-C) where CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account SP0 = the Current Market Price average of the Closing Prices of the Common Stock over the 10 consecutive Trading-Day period ending on the Trading Day immediately preceding the ex-dividend date for such distribution T = the Dividend Threshold Amount, which shall initially be $0.06 per quarter, adjusted to take into account events that cause adjustments to the Conversion Rate and as further adjusted to account for any change in the frequency of payment of regular dividends by the Company; provided that the Dividend Threshold Amount shall be deemed to be zero if the dividend is not a regularly scheduled dividend C = the amount in cash per share of Common Share Stock that the Issuer Company distributes to holders of Common Shares (Stock. An adjustment to the Conversion Rate made pursuant to this Section 4.06(d) shall become effective on the ex-dividend date for such dividend or distribution. If any dividend or distribution described in this Section 4.06(d) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. If the Company fails to pay a cash dividend or distribution for a period in which a regularly scheduled dividend has in prior periods been paid in accordance with past practice, the Conversion Rate shall be adjusted using the formula in this Section 4(d), with the ex-dividend date being deemed to be the second to last trading day in the second month of the calendar quarter in question, and for “C” being deemed to be zero. Whenever the Conversion Rate is adjusted, the Dividend Threshold Amount shall be adjusted by multiplying such Dividend Threshold Amount by a fraction, the numerator of which is the Conversion Rate prior to adjustment and the denominator of which is the Conversion Rate following such adjustment, except that no such adjustment has been madewill be made to the Dividend Threshold Amount on account of any adjustment to the Conversion Rate pursuant to this Section 4(d). (e) In case If the Issuer Company or one or more any of its Subsidiaries make purchases subsidiaries makes a payment in respect of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares Stock to the extent that the cash and value of any other consideration included in the payment per share of Common Share Stock exceeds the Current Market Closing Price per of the Common Share Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration DateTime”), the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (AC + (SP1 x OS1))/(SP1 x OS0) where CR0 = the Conversion Rate in effect on immediately prior to the Expiration Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Expiration Date FMV taking such event into account AC = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration (as determined by the Board of Directors of the Company) paid or payable for Common Shares validly tendered Stock purchased in such tender or exchanged and not withdrawn as exchange offer OS0 = the number of shares of Common Stock outstanding immediately prior to the Expiration Date (the “purchased shares”) date such tender or exchange offer expires OS1 = the number of shares of Common Shares Stock outstanding immediately after such tender or exchange offer expires (after giving effect to the Expiration Date less any purchased purchase or exchange of shares OS0 = the number of Common Shares outstanding immediately after the Expiration Date, including any purchased shares pursuant to such tender or exchange offer) SP1 = the Last Reported Sale Price average of the Closing Prices of Common Shares Stock for the 10 consecutive Trading Days commencing on the Trading Day next succeeding the Expiration Datedate such tender or exchange offer expires. If the application of the foregoing formula would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate will be made. Any adjustment to the Conversion Rate made pursuant to this Section 4.06(e) shall become effective on the date immediately following the determination of the average of the Closing Prices of Common Stock for purposes of SP1 above. If the Company or one of its subsidiaries is obligated to purchase Common Stock pursuant to any such tender or exchange offer but is permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the new Conversion Rate shall be readjusted to be the Conversion Rate that would be in effect if such tender or exchange offer had not been made. (f) To Notwithstanding the extent provisions of this Section 4.06, the holders Conversion Rate shall not exceed ___shares per $1,000 principal amount of Notes may participate on an as-converted basis equally with Securities, subject to adjustment in the holders of Common Shares manner that the Conversion Rate is subject to adjustment as set forth in any event or occurrence, then clauses subsections (a) through (e) of this Section 12.05 hereof shall not apply to such event or occurrence4.06. (g) For the avoidance of doubt, no payment or issuance of securities In addition to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments pursuant to the Conversion Rate set forth in clauses (a) through (e) above, the Company may increase the Conversion Rate in order to avoid or diminish any income tax to holders of this Section 12.05Common Stock resulting from any dividend or distribution of capital shares (or rights to acquire Common Stock) or from any event treated as such for income tax purposes. The Company may also, from time to time, to the extent permitted by applicable law, increase the Conversion Rate by any amount for any period if the Company has determined that such increase would be in the best interests of the Company. If the Company makes such determination, it will be conclusive and the Company will mail to Holders of the Securities a notice of the increased Conversion Rate and the period during which it will be in effect at least fifteen (15) days prior to the date the increased Conversion Rate takes effect in accordance with applicable law. (h) To If the extent that the Issuer Company has in effect a shareholder rights plan in effect while any Securities remain outstanding, Holders will receive, upon a conversion of Securities in respect of which the Notes into Company is required to deliver shares of Common Shares, holders will receiveStock, in addition to such shares of Common Stock, rights under the Common SharesCompany’s stockholder rights agreement unless, prior to conversion, the rights under the rights planhave expired, terminated or been redeemed or unless prior to any conversion, the rights have separated from the Common SharesStock. If the rights provided for in the rights plan adopted by the Company have separated from the Common Stock in accordance with the provisions of the applicable stockholder rights agreement so that Holders would not be entitled to receive any rights in respect of Common Stock, in which case if any, that the Company is required to deliver upon conversion of Securities, the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, Company had distributed to all holders of Common Shares, any Capital StockStock capital stock, evidences of indebtedness or other assets or property as described pursuant to Section 4.06(c) above, subject to readjustment in upon the event of the subsequent expiration, termination or redemption of such the rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) For purposes of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares4.06, the amount and kind number of distributions that shares of Common Stock at any time outstanding shall not include shares held in the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion treasury of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose Company but shall include shares issuable in respect of clause 212(1) (b) (vii) (E) scrip certificates issued in lieu of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation fractions of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option shares of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible ConsiderationCommon Stock. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.

Appears in 1 contract

Samples: Indenture (Mylan Bertek Pharmaceuticals Inc.)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series (i) In case the Company shall (aa) pay a dividend on Common Stock in Common Stock, (bb) subdivide its outstanding shares of Notes Common Stock, or (cc) combine its outstanding shares of Common Stock into a smaller number of shares, the conversion rate in effect immediately prior thereto shall be adjusted from time retroactively as provided below so that the holder of this Debenture thereafter surrendered for conversion shall be entitled to time by receive the Issuer as follows:number of shares of Common Stock of the Company which he or she would have owned or have been entitled to receive after the happening of any of the events described above had this Debenture been converted immediately prior to the happening of such (aii) If In case the Issuer issues Company shall issue (aa) shares of its Common Shares Stock in a public offering at a price per share less than the current market price per share of Common Stock (as defined in subsection (iv) below) at the record date mentioned below, (bb) shares of its Common Stock in a non-public transaction, at a price per share of less than 75% less than the current market price per share of Common Stock (as defined in subsection (iv) below) at the record date mentioned below, or (cc) rights or warrants to all holders of its Common Stock entitling them (for a period expiring within 45 days after the record date mentioned below) to subscribe for or purchase shares of Common Shares Stock at a price per share less than the current market price per share of Common Stock (as defined in subsection (iv) below) at the record date mentioned below, the number of shares of Common Stock into which each $1,000 principal amount of this Debenture shall thereafter be convertible shall be determined by multiplying the number of shares of Common Stock into which $1,000 principal amount of this Debenture was theretofore convertible by a dividend or distribution fraction, of which the numerator shall be the number of shares of Common Stock outstanding on the record date mentioned below plus the number of additional shares of Common SharesStock offered for purchase or subscription, and of which the denominator shall be the number of shares of Common Stock outstanding 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 would purchase at such current market price per share of Common Stock. Such adjustment shall be made whenever such shares of Common Stock, rights or if the Issuer effects a stock split or stock combinationwarrants are issued, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect and shall become effective retroactively immediately after the Ex-Dividend Date OS0 = record date for the determination of stockholders entitled to receive such shares of Common Stock, rights or warrants; provided, however, in the case of rights or warrants, in the event that all the shares of Common Stock offered for subscription or purchase are not delivered upon the exercise of such rights or warrants, upon the expiration of such rights or warrants the conversion rate shall be readjusted to the conversion rate which would have been in effect had the numerator and the denominator of the foregoing fraction and the resulting adjustment been made based upon the number of Common Shares outstanding at the close of business on the Ex-Dividend Date OS1 = the number shares of Common Shares outstanding immediately after such eventStock actually delivered (biii) In case of an issuance the Company shall distribute to all holders of its Common Shares Stock shares of any rightsits capital stock (including shares of its Common Stock), options evidences of its indebtedness or assets (excluding cash dividends paid out of the earned surplus of the Company) or rights or warrants to subscribe or purchase Common Shares for a period expiring 45 days or less from the date of issuance of (excluding those referred to in Subsection (ii) above), then in each such rights, options or warrants at less than the Last Reported Sale Price of the Common Shares on the Business Day immediately preceding the announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = case the number of Common Shares outstanding at the close of business on the Ex-Dividend Date X = the total number shares of Common Shares issuable pursuant to such rights Y = Stock into which each $1,000 principal amount of this Debenture shall thereafter be convertible shall be determined by multiplying the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights (c) In case of a dividend or other distribution to all holders shares of Common Shares Stock into which such principal amount of Capital Stock this Debenture was theretofore convertible by a fraction, of which the Issuer (other than Common Shares) or evidences of indebtedness of numerator shall be the Issuer or assets or property of the Issuer to all holders current market price per share of Common Shares Stock (excluding as determined in accordance with the provisions of Subsection (xiv) any dividend, distribution or issuance covered by clause (abelow) or (b) above and (y) any dividend or distribution paid exclusively in cash), the Conversion Rate will be adjusted based on the following formula: whererecord date mentioned below and of which the denominator shall be such current market price per share of Common Stock, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price FMV = less the fair market value (as determined by the Issuer’s Board of Directors, whose determination shall be conclusive) of that portion of the shares of Capital Stock, evidences of indebtednesscapital stock, assets or property evidences of indebtedness so distributed with respect to each outstanding or of such rights or warrants applicable to, one share of Common Share on the Ex-Dividend Date for Stock. Such adjustments shall be made whenever any such distribution Notwithstanding the foregoingis made, the Conversion Rate will be adjusted based on the following formula with respect to an adjustment pursuant to this clause (c) where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect and shall become effective retroactively immediately after the Ex-Dividend Date FMV0 = record date for the determination of stockholders entitled to receive such distribution. (iv) For the purpose of any computation under Subsection (ii) or (iii) above, the current market price per share of Common Stock at any date shall be deemed to be the average of the sale daily closing prices of such Capital Stock or equity interest distributed to holders of for the Common Shares applicable to one of the Common Shares over the 10 Trading 15 consecutive Business Days commencing 20 Business Days before the day in question. The closing price for each day shall be the reported last sale price or, in case no such reported sale takes place on and including the fifth Trading Day after the Ex-Dividend Date MP0 = such day, the average of the Last Reported Sale Prices of reported closing bid and asked prices, in either case as reported on the New York Stock Exchange, or, if at any time the Common Shares over Stock is not listed or admitted to trading on such Exchange, on the 10 Trading Days commencing principal national securities exchange on and including which the fifth Trading Day after the Ex-Dividend Date (d) In case of dividends Common Stock is listed or other distributions consisting exclusively of cash (excluding admitted to trading, or if not listed or admitted to trading on any cash distributed upon an amalgamation, merger, share national securities exchange, consolidation or combination) to all holders of Common Shares, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price C = the amount in cash per Common Share the Issuer distributes to holders of Common Shares (and for which no adjustment has been made) (e) In case the Issuer or one or more of its Subsidiaries make purchases of Common Shares pursuant to a tender offer or exchange offer any trading market maintained by the Issuer or one or more National Association of its Subsidiaries for Common Shares to the extent that the cash and value of any other consideration included in the payment per Common Share exceeds the Current Market Price per Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”)Securities Dealers, the Conversion Rate will be adjusted based on the following formula: whereInc. or, CR0 = the Conversion Rate in effect on the Expiration Date CR1 = the Conversion Rate in effect immediately after the Expiration Date FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration paid or payable for Common Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “purchased shares”) OS1 = the number of Common Shares outstanding immediately after the Expiration Date less any purchased shares OS0 = the number of Common Shares outstanding immediately after the Expiration Date, including any purchased shares SP1 = the Last Reported Sale Price of the Common Shares on the Trading Day next succeeding the Expiration Date (f) To the extent the holders of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrence, then clauses (a) through (e) of this Section 12.05 hereof shall not apply to such event or occurrence. (g) For the avoidance of doubt, no payment or issuance of securities to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To the extent that the Issuer has a shareholder rights plan in effect upon conversion of the Notes into Common Shares, holders will receive, in addition to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, to all holders of Common Shares, any Capital Stock, evidences of indebtedness or assets or property as described above, subject to readjustment in the event of the expiration, termination or redemption of such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible Consideration. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.Common

Appears in 1 contract

Samples: Debenture Purchase Agreement (Barringer Technologies Inc)

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Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If In case the Issuer issues Common Shares to all holders of the Common Shares as Company shall (i) pay a dividend or on its shares of Common Stock in shares of Common Stock, (ii) make a distribution on the its shares of Common SharesStock in shares of Common Stock, (iii) subdivide its outstanding shares of Common Stock into a greater number of shares, or if the Issuer effects (iv) combine its outstanding shares of Common Stock into a stock split or stock combinationsmaller number of shares, the Conversion Rate will in effect immediately prior thereto shall be adjusted based on the following formula: CR1 = CR0 x OS1 OS0 where CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-dividend Date CR1 = the Conversion Rate in effect on the Ex-dividend Date OS0 = the number of shares of Common Stock outstanding at the close of business immediately prior to the Ex-dividend Date OS1 = the number of shares of Common Stock outstanding at the close of business immediately prior to the Ex-dividend Date, assuming, for this purpose only, the completion of the event immediately prior to the Ex-dividend Date An adjustment made pursuant to this subsection (a) shall become effective immediately prior to the opening of business on the Ex-dividend Date. (b) In case the Company shall issue rights or warrants to all or substantially all holders of shares of Common Stock entitling them (for a period expiring not more than 60 days after such record date) to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price per share of Common Stock (as determined in accordance with subsection (f) of this Section 12.07 on the Ex-dividend Date for the determination of shareholders entitled to receive such rights or warrants), the Conversion Rate in effect immediately prior thereto shall be adjusted based on the following formula: CR1 = CR 0 ´ OS0 + X OS0 + Y where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend dividend Date CR1 = the Conversion Rate in effect immediately after on the Ex-Dividend dividend Date OS0 = the number of shares of Common Shares Stock outstanding at the close of business on the Ex-Dividend Date OS1 = the number of Common Shares outstanding immediately after such event (b) In case of an issuance to all holders of Common Shares of any rights, options or warrants to purchase Common Shares for a period expiring 45 days or less from the date of issuance of such rights, options or warrants at less than the Last Reported Sale Price of the Common Shares on the Business Day immediately preceding the announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend dividend Date X = the total number of shares of Common Shares Stock issuable pursuant to such rights Y = the number of shares of Common Shares Stock equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the shares of Common Shares Stock for the ten 10 consecutive Trading Days prior to ending on the Business Day immediately preceding the announcement Ex-dividend Date Any such adjustment made pursuant to this subsection (b) shall be made successively whenever any such rights or warrants are issued, and shall become effective immediately prior to the opening of business on the Ex-dividend Date. If at the end of the issuance period during which such rights or warrants are exercisable not all rights or warrants shall have been exercised, the adjusted Conversion Rate shall be immediately readjusted to what it would have been based upon the number of such rightsadditional shares of Common Stock actually issued. (c) In case of a dividend or other distribution the Company shall distribute to all or substantially all of the holders of Common Shares Stock any shares of Capital Stock of the Issuer (other than Common Shares) or capital stock, evidences of indebtedness or other assets (but excluding any distribution in connection with any liquidation, dissolution or winding up and excluding all-cash distributions or any distributions of the Issuer or assets or property of the Issuer to all holders any shares of Common Shares (excluding (x) any dividendStock, distribution rights or issuance covered by clause (awarrants referred to in Sections 12.07(a) or (b) above and (y) any dividend or distribution paid exclusively in cash12.07(b)), then in each such case the Conversion Rate will shall be adjusted based on the following formula: CR1 = CR0 x XX0 XX0 – FMV where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend dividend Date CR1 = the Conversion Rate in effect immediately after on the Ex-Dividend dividend Date SP0 = the Current Market Price FMV = the fair market value (as determined by the Issuer’s Board of Directors, whose determination shall be conclusive evidence of such fair market value and which shall be evidenced by an Officers’ Certificate delivered to the Trustee) of the shares of Capital Stockcapital stock, evidences of indebtedness, indebtedness or other assets or property distributed with respect to each outstanding share of Common Share Stock on the Ex-Dividend dividend Date for such distribution Notwithstanding the foregoing, the Conversion Rate will be adjusted based on the following formula with With respect to an adjustment pursuant to this clause subsection (c) ), where there has been a payment of a dividend or other distribution on the shares of Common Shares Stock of Capital Stock shares of capital stock of, or similar equity interests in, a Subsidiary subsidiary or other business unit of the Issuer that is listed on Company (a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex“Spin-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date FMV0 = the average of the sale prices of such Capital Stock or equity interest distributed to holders of the Common Shares applicable to one of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date MP0 = the average of the Last Reported Sale Prices of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date (d) In case of dividends or other distributions consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common Shares, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price C = the amount in cash per Common Share the Issuer distributes to holders of Common Shares (and for which no adjustment has been made) (e) In case the Issuer or one or more of its Subsidiaries make purchases of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares to the extent that the cash and value of any other consideration included in the payment per Common Share exceeds the Current Market Price per Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Dateoff”), the Conversion Rate will be adjusted based on the following formula: CR1 = CR0 x FMV0 + MP0 MP0 where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-dividend Date CR1 = the Conversion Rate in effect on the Ex-dividend Date FMV0 = the average of the sale prices of the capital stock or similar equity interest distributed to holders of shares of Common Stock applicable to one share of Common Stock over the 10 Trading Days commencing on and including the effective date of the Spin-off (the “Spin-off Valuation Period”); provided that, in the case of any VWAP Trading Days within a Conversion Period that fall within such ten Trading Day period, in respect of any such VWAP Trading Day, the Spin-Off Valuation Period shall be deemed to include only those Trading Days falling on or between the effective date of such Spin-off and such VWAP Trading Day. MP0 = the average of the Last Reported Sale Prices of shares of Common Stock over the Spin-off Valuation Period Any such adjustment made pursuant to this subsection (c) shall be made successively whenever any such distribution is made and shall become effective immediately prior to the opening of business on the Ex-dividend Date. For the avoidance of doubt, the adjustment in this Section 12.07(c) does not apply to any distributions to the extent that the right to convert Notes has been changed into the right to convert into Reference Property pursuant to Section 12.11 in respect of such distribution. (d) In case the Company shall, by dividend or otherwise, at any time distribute to all or substantially all holders of its shares of Common Stock an all-cash distribution, excluding any distributions in connection with any liquidation, dissolution or winding up, the Conversion Rate shall be adjusted based on the following formula: CR1 = CR0 ´ XX0 XX0 - C where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-dividend Date CR1 = the Conversion Rate in effect on the Ex-dividend Date SP0 = the Current Market Price C = the amount in cash per share the Company distributes to holders of shares of Common Stock (and for which no other adjustment has been made) Any such increase shall become effective immediately prior to the opening of business on the Ex-dividend Date. For the avoidance of doubt, the adjustment in this Section 12.07(d) does not apply to any distributions to the extent that the right to convert Notes has been changed into the right to convert into Reference Property pursuant to section 12.11 in respect of such distribution. (e) In case the Company or any of its Subsidiaries purchases all or any portion of the shares of Common Stock pursuant to a tender offer, to the extent the cash and value of any other consideration included in the payment per share of Common Stock exceeds the Last Reported Sale Price on the Trading Day next succeeding the last date on which tenders may be made pursuant to such tender offer (the “Expiration Date”), the Conversion Rate shall be adjusted based on the following formula: CR1 = CR0 ´ FMV0 + (SP1 ´ OS1) OS0 ´ SP1 where, CR0 = the Conversion Rate in effect on the Expiration Date CR1 = the Conversion Rate in effect immediately after the Expiration Date FMV FMV0 = the fair market value (as determined by the Issuer’s Board of Directors, whose determination shall be conclusive evidence of such fair market value and which shall be evidenced by an Officers’ Certificate delivered to the Trustee) of the aggregate value of all cash and and/or any other consideration paid or payable for shares of Common Shares Stock validly tendered or exchanged and not withdrawn as of the Expiration Date (OS0 = the “purchased shares”) number of shares of Common Stock outstanding immediately prior to the Expiration Date OS1 = the number of Common Shares outstanding immediately after the Expiration Date less any purchased shares OS0 = the number of Common Shares Stock outstanding immediately after the Expiration Date, including excluding any purchased shares accepted for purchase or exchange SP1 = the average of the Last Reported Sale Price of the shares of Common Shares Stock over the 10 Trading Days beginning on the Trading Day next succeeding after the Expiration Date Any such increase shall become effective immediately prior to the opening of business on the Expiration Date. In the event that the Company is obligated to purchase shares pursuant to such tender offer, but the Company is prevented by applicable law from effecting any or all such purchases or any or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate which would have been in effect based upon the number of shares actually purchased. If the application of this Section 12.07(e) to any tender offer would result in a decrease in the Conversion Rate, no adjustment shall be made for such tender offer under this Section 12.07(e). For purposes of this Section 12.07(e), the term “tender offer” shall mean and include both tender offers and exchange offers, all references to “purchases” of shares in tender offers (and all similar references) shall mean and include both the purchase of shares in tender offers and the acquisition of shares pursuant to exchange offers, and all references to “tendered shares” (and all similar references) shall mean and include shares tendered in both tender offers and exchange offers. (f) To For the extent the holders purpose of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrencecomputation under subsections (b), then clauses (ac), (d) through and (e) of this Section 12.05 hereof shall not apply 12.07, the “Current Market Price” of the shares of Common Stock on any day means the average of the Last Reported Sale Price of the shares of Common Stock for each of the 10 consecutive Trading Days ending on the earlier of the day in question and the day before the Ex-dividend Date with respect to the issuance or distribution requiring such event or occurrencecomputation. (g) For In any case in which this Section 12.07 shall require that an adjustment be made immediately prior to the avoidance opening of doubtbusiness on the Ex-dividend Date, no payment or the Company may elect to defer (but only until five Business Days following the filing by the Company with the Trustee of the certificate described in Section 12.09) issuing to the Holder of any Note converted after such Ex-dividend Date any shares of Common Stock issuable upon such conversion over and above any shares of Common Stock issuable upon such conversion only on the basis of the Conversion Rate prior to adjustment; and, in lieu of the shares the issuance of securities which is so deferred, the Company shall issue or cause its transfer agents to any plaintiffs issue due bills or their counsel under other appropriate evidence prepared by the Global Class Action Settlement shall result in any Company of the adjustments right to receive such shares. If any action in respect of which an adjustment to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To the extent that the Issuer has a shareholder rights plan in effect upon conversion of the Notes into Common Shares, holders will receive, in addition to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, to all holders of Common Shares, any Capital Stock, evidences of indebtedness or assets or property as described above, subject to readjustment in the event of the expiration, termination or redemption of such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be is required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note made immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders opening of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer or its successor, as the case may be) only business on the date Ex-dividend Date therefor is not thereafter made or paid by the Company for any Ineligible Consideration would otherwise be duereason, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible Consideration. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior shall be readjusted to the Maturity Date applicable to Conversion Rate which would then be in effect if such series of Notesaction had not occurred.

Appears in 1 contract

Samples: First Supplemental Indenture (Carrizo Oil & Gas Inc)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If the Issuer issues shares of Common Shares to all holders of the Common Shares Stock are issued as a dividend or distribution on the shares of Common SharesStock, or if the Issuer effects a stock share split or stock combinationshare combination is effected, the Conversion Rate will be adjusted based on the following formula: CR’=CR0 x OS’ OS0 where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 such event CR’ = the Conversion Rate in effect immediately after the Ex-Dividend Date such event OS0 = the number of shares of Common Shares Stock outstanding at the close of business on the Ex-Dividend Date OS1 immediately prior to such event OS’ = the number of shares of Common Shares Stock outstanding immediately after such eventevent An adjustment made pursuant to this subsection (a) shall become effective on the date immediately after (x) the date fixed for the determination of stockholders entitled to receive such dividend or other distribution or (y) the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in this subsection (a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (b) In case of an issuance to all holders of Common Shares of If any rights, warrants, options or other securities (other than any rights or warrants issued pursuant to purchase the a stockholder rights plan (commonly referred to as a “poison pill” plan) referred to in Section 12.5(c)) are issued to all or substantially all of the Holders of shares of Common Shares Stock entitling them for a period expiring 45 of not more than 60 days or less from after the date of issuance thereof to subscribe for or purchase shares of such rightsCommon Stock, options or warrants securities convertible into shares of Common Stock within 60 days after the date of issuance thereof, in either case at an exercise price per share or a conversion price per share less than the Last Reported Sale Price of the Common Shares Stock on the Business Day immediately preceding the time of announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): formula: CR’=CR0 x OS0 + X OS0 + Y where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 such event CR’ = the Conversion Rate in effect immediately after the Ex-Dividend Date such event OS0 = the number of shares of Common Shares Stock outstanding immediately prior to such event, including Common Stock that would be outstanding upon exercise or conversion of all options and convertible securities whether or not such options or convertible securities are actually exercisable or convertible at the close of business on the Ex-Dividend Date such time X = the total number of shares of Common Shares Stock issuable pursuant to such rights rights, warrants, options, other securities or convertible securities Y = the number of shares of Common Shares Stock equal to the aggregate exercise price or conversion price payable to exercise or convert such rights rights, warrants, options, other securities or convertible securities divided by the average of the Last Reported Sale Prices of the Common Shares Stock for the ten 10 consecutive Trading Days prior to the Business Day immediately preceding the date of announcement of the issuance of such rights (c) In case of a dividend , warrants, options, other securities or other distribution convertible securities An adjustment made pursuant to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or this subsection (b) above shall be made successively whenever such rights, warrants, options, other securities or convertible securities are issued, and (y) any dividend shall become effective on the day following the date of announcement of such issuance. If, at the end of the period during which such rights, warrants, options, other securities or distribution paid exclusively in cash)convertible securities are exercisable or convertible, not all rights, warrants, options, other securities or convertible securities have been exercised or converted, as the case may be, the adjusted Conversion Rate will shall be adjusted immediately readjusted to what it would have been based on the following formula: where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding Common Share on the Ex-Dividend Date for such distribution Notwithstanding the foregoing, the Conversion Rate will be adjusted based on the following formula with respect to an adjustment pursuant to this clause (c) where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date FMV0 = the average of the sale prices of such Capital Stock or equity interest distributed to holders of the Common Shares applicable to one of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date MP0 = the average of the Last Reported Sale Prices of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date (d) In case of dividends or other distributions consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common Shares, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price C = the amount in cash per Common Share the Issuer distributes to holders of Common Shares (and for which no adjustment has been made) (e) In case the Issuer or one or more of its Subsidiaries make purchases of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares to the extent that the cash and value of any other consideration included in the payment per Common Share exceeds the Current Market Price per Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect on the Expiration Date CR1 = the Conversion Rate in effect immediately after the Expiration Date FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration paid or payable for Common Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “purchased shares”) OS1 = the number of additional shares of Common Shares outstanding immediately after the Expiration Date less any purchased shares OS0 = Stock actually issued (or the number of shares of Common Shares outstanding immediately after Stock actually issued upon conversion of convertible securities actually issued). For purposes of Section 12.1 and this Section 12.5, in determining whether such rights, warrants, options, other securities or convertible securities entitle the Expiration Date, including any purchased Holder to subscribe for or purchase or exercise a conversion right for shares SP1 = of Common Stock at less than the average Last Reported Sale Price of the Common Shares Stock, and in determining the aggregate exercise or conversion price payable for such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights, warrants, options, other securities or convertible securities and any amount payable on the Trading Day next succeeding the Expiration Date (f) To the extent the holders of Notes may participate on an as-converted basis equally exercise or conversion thereof, with the holders value of Common Shares in any event or occurrencesuch consideration, then clauses (a) through (e) of this Section 12.05 hereof shall not apply to such event or occurrence. (g) For the avoidance of doubt, no payment or issuance of securities to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To the extent that the Issuer has a shareholder rights plan in effect upon conversion of the Notes into Common Shares, holders will receive, in addition to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributedother than cash, to all holders be determined by the Board of Common Shares, any Capital Stock, evidences of indebtedness or assets or property as described above, subject to readjustment in the event of the expiration, termination or redemption of Directors and such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; determination shall be provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s a Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposesResolution. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible Consideration. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.

Appears in 1 contract

Samples: Indenture (Ual Corp /De/)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time time, without duplication, by the Issuer Company as follows: (a) If the Issuer Company issues Common Shares as a dividend, bonus shares or distribution to all holders of the outstanding Common Shares as a dividend or distribution on the Common Shares, or if the Issuer Company effects a stock split subdivision or stock combination, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date OS1 = the number of Common Shares outstanding immediately after such event (b) In case of an issuance to all holders of Common Shares of any rights, options or warrants to purchase Common Shares for a period expiring 45 days or less from the date of issuance of such rights, options or warrants at less than the Last Reported Sale Price of the Common Shares on the Business Day immediately preceding the announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date X = the total number of Common Shares issuable pursuant to such rights Y = the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights (c) In case of a dividend or other distribution to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above and (y) any dividend or distribution paid exclusively in cash), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding Common Share on the Ex-Dividend Date for such distribution Notwithstanding the foregoing, the Conversion Rate will be adjusted based on the following formula with respect to an adjustment pursuant to this clause (c) where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date FMV0 = the average of the sale prices of such Capital Stock or equity interest distributed to holders of the Common Shares applicable to one of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date MP0 = the average of the Last Reported Sale Prices of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date (d) In case of dividends or other distributions consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders combination of Common Shares, the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (OS1 ÷ OS0) where CR0 = the Conversion Rate in effect immediately prior to at the Ex-Dividend Date close of business on the Record Date; CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Record Date; OS0 = the number of Common Shares issued and outstanding at the close of business on the Record Date prior to giving effect to such event; and OS1 = the number of Common Shares that would be issued and outstanding immediately after, and solely as a result of, such event. (b) In case the Company shall issue to all holders of Common Shares of rights or warrants (including convertible securities) entitling them for a period expiring 60 calendar days or less from the date of issuance of such rights or warrants to purchase Common Shares at an exercise price per share less than (or having a conversion price per share less than) the Current Market Price of the Common Shares as of the Record Date, the Conversion Rate will be adjusted based on the following formula CR1 = CR0 x [(OS0 + X) ÷ (OS0 + Y)] where CR0 = the Conversion Rate in effect at the close of business on the Record Date; CR1 = the Conversion Rate in effect immediately after the Record Date; OS0 = the number of Common Shares issued and outstanding at the close of business on the Record Date; X = the total number of Common Shares issuable pursuant to such rights or warrants (or upon conversion of such securities); and Y = the aggregate price payable to exercise such rights or warrants (or the conversion price for such securities paid upon conversion) divided by the average of the VWAP of the Common Shares over each of the ten consecutive Trading Days prior to the business day immediately preceding the announcement of the issuance of such rights. However, the Conversion Rate shall be readjusted to the extent that any such rights or warrants are not exercised prior to their expiration; provided that such readjustment shall not have any effect on Notes that had been converted prior to such readjustment or on the Common Shares issued pursuant thereto, and such readjustment shall apply only to such Notes that remain outstanding at the time of such readjustment. (c) In case the Company shall make a dividend or other distribution to all holders of Common Shares of the Company’s Share Capital (other than Common Shares), rights or warrants (including convertible securities) to acquire the Company’s Share Capital, evidences of indebtedness of the Company or assets of the Company (excluding any dividend, distribution or issuance covered by Section 14.04(a) or (b) or Section 14.04(d) or (e)) (any of such Share Capital, indebtedness, or other asset, then, in each such case the Conversion Rate shall be adjusted based on the following formula: CR1 = CR0 x [SP0 ÷ (SP0 - FMV)] where CR0 = the Conversion Rate in effect at the close of business on the Record Date; CR1 = the Conversion Rate in effect immediately after the Record Date; SP0 = the Current Market Price of the Common Shares as of the Record Date; and FMV = the fair market value (as determined by the Board of Directors) on the Record Date of the Share Capital, rights or warrants, evidences of indebtedness or assets so distributed, expressed as an amount per Common Share. However, if the transaction that gives rise to an adjustment pursuant to this Section 14.04(c) is one pursuant to which the payment of a dividend, bonus shares or other distribution on Common Shares consists of Share Capital of, or similar equity interests in, a subsidiary or other business unit of the Company (a “Spin-Off”), or consists of any other securities, that are, or, when issued, will be, traded on a securities exchange or quoted on a quotations facility in the U.S. or elsewhere, then the Conversion Rate will instead be adjusted based on the following formula: CR1 = CR0 x [(FMV0 + MP0) ÷ MP0] where CR0 = the Conversion Rate in effect at the close of business on the Record Date; CR1 = the Conversion Rate in effect immediately after the Record Date; FMV0 = the average of the VWAP of the Share Capital or similar equity interests distributed to holders of Common Shares applicable to one of the Company’s Common Shares over each of the ten consecutive Trading Days commencing on and including the third Trading Day after the date on which “ex-distribution trading” commences for such Share Capital or similar equity interest on the principal exchange or other market on which they are then listed or quoted; and MP0 = the average of the VWAP of the Common Shares over each of the ten consecutive Trading Days commencing on and including the third Trading Day after the date on which “ex-distribution trading” commences for such dividend or distribution on the principal exchange or other market on which the Common Shares are then listed or quoted. (d) If the Company makes a distribution consisting exclusively of cash to all holders of Common Shares, excluding (i) any cash that is distributed as part of a distribution referred to in Section 14.04(c) and (ii) any consideration payable in connection with a tender or exchange offer made by the Company or any of its subsidiaries referred to in Section 14.04(e), the Conversion Rate shall be adjusted based on the following formula: CR1 = CR0 x [SP0 ÷ (SP0 – C)] where CR0 = the Conversion Rate in effect at the close of business on the Record Date; CR1 = the Conversion Rate in effect immediately after the Record Date; SP0 = the Current Market Price of the Common Shares as of the Record Date; and C = the amount in cash per Common Share share the Issuer Company distributes to holders of its Common Shares Shares, excluding any cash described in clauses (i) and for which no adjustment has been made(ii) of Section 14.04(d). (e) In case If the Issuer Company or one or more of its Subsidiaries make makes purchases of Common Shares pursuant to a tender offer or exchange offer by the Issuer Company or one or more of its Subsidiaries for Common Shares to the extent (as determined by the Board of Directors) that the cash and value of any other consideration included in the payment per Common Share validly tendered or exchanged exceeds the Current Market Price VWAP per Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”), the Conversion Rate will shall be adjusted increased based on the following formula: where, CR1 = CR0 x [(FMV + (SP1 x OS1)) ÷ (SP1 x OS0)] where CR0 = the Conversion Rate in effect at the close of business on the Expiration Date Date; CR1 = the Conversion Rate in effect immediately after the Expiration Date Date; FMV = the fair market value (as determined by the Issuer’s Board of Directors) ), on the Expiration Date, of the aggregate value of all cash and any other consideration paid or payable for Common Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “purchased sharesPurchased Shares) ); OS1 = the number of Common Shares issued and outstanding immediately after as of the last time tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date Time”) less any purchased shares shares; OS0 = the number of Common Shares issued and outstanding at the Expiration Time, including any Purchased Shares; and SP1 = the average of the VWAP of the Common Shares over each of the ten consecutive Trading Days commencing with the Trading Day immediately after the Expiration Date, including any purchased shares SP1 = the Last Reported Sale Price of the Common Shares on the Trading Day next succeeding the Expiration Date (f) To the extent the holders of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrence, then clauses (a) through (e) of this Section 12.05 hereof shall not apply to such event or occurrence. (g) For the avoidance of doubt, no payment or issuance of securities to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To the extent that the Issuer has a shareholder rights plan in effect upon conversion of the Notes into Common Shares, holders will receive, in addition to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, to all holders of Common Shares, any Capital Stock, evidences of indebtedness or assets or property as described above, subject to readjustment in the event of the expiration, termination or redemption of such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible Consideration. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.

Appears in 1 contract

Samples: Indenture (MF Global Ltd.)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If the Issuer Company issues Common Shares to all holders of the Common Shares Stock as a dividend or distribution on the Common SharesStock to all holders of Common Stock, or if the Issuer Company effects a stock share split or stock share combination, the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x OS1/OS0 where CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account OS0 = the number of shares of Common Shares Stock outstanding at the close of business on the Ex-Dividend Date immediately prior to such event OS1 = the number of shares of Common Shares Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 4.06(a) shall become effective on the date that is immediately after (x) the date fixed for the determination of stockholders entitled to receive such dividend or other distribution or (y) the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in this clause Section 4.06(a) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (b) In case of an issuance If the Company issues to all holders of Common Shares of Stock any rights, warrants, options or warrants to purchase Common Shares other securities entitling them for a period expiring of not more than 45 days or less from after the date of issuance thereof to subscribe for or purchase Common Stock, or if the Company issues to all holders of such rightsCommon Stock securities convertible into Common Stock for a period of not more than 45 days after the date of issuance thereof, options in either case at an exercise price per share of Common Stock or warrants at a conversion price per share of Common Stock less than the Last Reported Sale Closing Price of the Common Shares Stock on the Business Day immediately preceding the time of announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date X = the total number of Common Shares issuable pursuant to such rights Y = the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights (c) In case of a dividend or other distribution to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above and (y) any dividend or distribution paid exclusively in cash), the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (OS0+X)/(OS0+Y) where CR0 = the Conversion Rate in effect at the close of business immediately prior to the Exadjustment relating to such event CR1 = the new Conversion Rate taking such event into account OS0 = the number of shares of Common Stock outstanding immediately prior to such event X = the total number of shares of Common Stock issuable pursuant to such rights, warrants, options, other securities or convertible securities Y = the number of shares of Common Stock equal to the quotient of (A) the aggregate price payable to exercise such rights, warrants, options, other securities or convertible securities and (B) the average of the Closing Prices of the Common Stock for the 10 consecutive Trading Days prior to the Business Day immediately preceding the date of announcement for the issuance of such rights, warrants, options, other securities or convertible securities. For purposes of this Section 4.06(b), in determining whether any rights, warrants, options, other securities or convertible securities entitle the holders to subscribe for or purchase, or exercise a conversion right for, Common Stock at less than the applicable Closing Price of the Common Stock, and in determining the aggregate exercise or conversion price payable for such Common Stock, there shall be taken into account any consideration received by the Company for such rights, warrants, options, other securities or convertible securities and any amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined by the Board of Directors of the Company. Any adjustment made pursuant to this Section 4.06(b) shall become effective on the date that is immediately after the date fixed for the determination of shareholders entitled to receive such rights, warrants, options, other securities or convertible securities. If any right, warrant, option, other security or convertible security described in this Section 4.06(b) is not exercised or converted prior to the expiration of the exercisability or convertibility thereof, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such right, warrant, option, other security or convertible security had not been so issued. (c) If the Company distributes capital stock, evidences of indebtedness or other assets or property of the Company to all holders of Common Stock, excluding: (1) dividends, distributions, rights, warrants, options, other securities or convertible securities referred to in Section 4.06(a) or (b) above, (2) dividends or distributions paid exclusively in cash, and (3) Spin-Dividend Date Offs described below in this Section 4.06(c), then the Conversion Rate will be adjusted based on the following formula: CR1 = CR0 x SP0/(SP0-FMV) where CR0 = the Conversion Rate in effect immediately after prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate taking such event into account SP0 = the Current Market Closing Price of the Common Stock on the Trading Day immediately preceding the ex-dividend date for such distribution FMV = the fair market value (as determined in good faith by the Issuer’s Board of DirectorsDirectors of the Company) of the shares of Capital Stockcapital stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Share Stock on the Exearlier of the record date or the ex-Dividend Date dividend date for such distribution. An adjustment to the Conversion Rate made pursuant to this paragraph shall be made successively whenever any such distribution Notwithstanding is made and shall become effective on the foregoingex-dividend date for such distribution. If the Company distributes to all holders of Common Stock capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit of the Company (a “Spin-Off”), the Conversion Rate in effect immediately before the close of business on the date fixed for determination of holders of Common Stock entitled to receive such distribution will be adjusted based on the following formula with respect to an adjustment pursuant to this clause formula: CR1 = CR0 x (c) FMV0+MP0)/MP0 where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account FMV0 = the average of the sale prices Closing Prices of such Capital Stock the capital stock or similar equity interest distributed to holders of the Common Shares Stock applicable to one share of Common Stock over the first 10 consecutive Trading Days after the effective date of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the ExSpin-Dividend Date Off MP0 = the average of the Last Reported Sale Closing Prices of the Common Shares Stock over the first 10 consecutive Trading Days commencing after the effective date of the Spin-Off. An adjustment to the Conversion Rate made pursuant to this paragraph will occur on the 10th Trading Day from and including the fifth Trading Day after effective date of the ExSpin-Dividend DateOff. If any such dividend or distribution described in this Section 4.06(c) is declared but not paid or made, the new Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (d) In case of dividends If the Company pays or other distributions makes any dividend or distribution consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common SharesStock, the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x SP0/(SP0-C) where CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account SP0 = the Current Market Closing Price of the Common Stock on the Trading Day immediately preceding the ex-dividend date for such distribution C = the amount in cash per share of Common Share Stock that the Issuer Company distributes to holders of Common Shares (and Stock. An adjustment to the Conversion Rate made pursuant to this Section 4.06(d) shall become effective on the ex-dividend date for which no adjustment has such dividend or distribution. If any dividend or distribution described in this Section 4.06(d) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been made)declared. (e) In case If the Issuer Company or one or more any of its Subsidiaries make purchases subsidiaries makes a payment in respect of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares Stock to the extent that the cash and value of any other consideration included in the payment per share of Common Share Stock exceeds the Current Market Closing Price per of the Common Share Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration DateTime”), the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (AC + (SP1 x OS1))/(SP1 x OS0) where CR0 = the Conversion Rate in effect on immediately prior to the Expiration Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Expiration Date FMV taking such event into account AC = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration (as determined by the Board of Directors of the Company) paid or payable for Common Shares validly tendered Stock purchased in such tender or exchanged and not withdrawn as exchange offer OS0 = the number of shares of Common Stock outstanding immediately prior to the Expiration Date (the “purchased shares”) date such tender or exchange offer expires OS1 = the number of shares of Common Shares Stock outstanding immediately after such tender or exchange offer expires (after giving effect to the Expiration Date less any purchased purchase or exchange of shares OS0 = the number of Common Shares outstanding immediately after the Expiration Date, including any purchased shares pursuant to such tender or exchange offer) SP1 = the Last Reported Sale Price average of the Closing Prices of Common Shares Stock for the 10 consecutive Trading Days commencing on the Trading Day next succeeding the Expiration Datedate such tender or exchange offer expires. If the application of the foregoing formula would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate will be made. Any adjustment to the Conversion Rate made pursuant to this Section 4.06(e) shall become effective on the date immediately following the determination of the average of the Closing Prices of Common Stock for purposes of SP1 above. If the Company or one of its subsidiaries is obligated to purchase Common Stock pursuant to any such tender or exchange offer but is permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the new Conversion Rate shall be readjusted to be the Conversion Rate that would be in effect if such tender or exchange offer had not been made. (f) To Notwithstanding the extent the holders of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrence, then clauses foregoing subsections (a) through (e) of this Section 12.05 hereof 4.06, the Conversion Rate shall not apply exceed 28 shares per $1,000 principal amount of Securities, other than on account of adjustments to such event or occurrencethe Conversion Rate in the manner set forth in subsections (a) through (c) of this Section 4.06. (g) For the avoidance of doubt, no payment or issuance of securities In addition to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments pursuant to the Conversion Rate set forth in clauses (a) through (e) above, the Company may increase the Conversion Rate in order to avoid or diminish any income tax to holders of this Section 12.05Common Stock resulting from any dividend or distribution of capital shares (or rights to acquire Common Stock) or from any event treated as such for income tax purposes. The Company may also, from time to time, to the extent permitted by applicable law, increase the Conversion Rate by any amount for any period if the Company has determined that such increase would be in the best interests of the Company. If the Company makes such determination, it will be conclusive and the Company will mail to holders of the Securities a notice of the increased Conversion Rate and the period during which it will be in effect at least fifteen (15) days prior to the date the increased Conversion Rate takes effect in accordance with applicable law. (h) To If the extent that the Issuer Company has in effect a shareholder rights plan in effect while any Securities remain outstanding, Holders will receive, upon a conversion of Securities in respect of which the Notes into Company is required to deliver shares of Common Shares, holders will receiveStock, in addition to such shares of Common Stock, rights under the Common SharesCompany’s stockholder rights agreement unless, prior to conversion, the rights under the rights planhave expired, terminated or been redeemed or unless prior to any conversion, the rights have separated from the Common SharesStock. If the rights provided for in the rights plan adopted by the Company have separated from the Common Stock in accordance with the provisions of the applicable stockholder rights agreement so that Holders would not be entitled to receive any rights in respect of Common Stock, in which case if any, that the Company is required to deliver upon conversion of Securities, the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, Company had distributed to all holders of Common Shares, any Capital StockStock capital stock, evidences of indebtedness or other assets or property as described pursuant to Section 4.06(c) above, subject to readjustment in upon the event of the subsequent expiration, termination or redemption of such the rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of the Notes of any series by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Rate, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) For purposes of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares4.06, the amount and kind number of distributions that shares of Common Stock at any time outstanding shall not include shares held in the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion treasury of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose Company but shall include shares issuable in respect of clause 212(1) (b) (vii) (E) scrip certificates issued in lieu of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation fractions of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option shares of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible ConsiderationCommon Stock. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.

Appears in 1 contract

Samples: Indenture (Anixter International Inc)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted subject to adjustments from time to time by the Issuer as follows: (a) If In case the Issuer issues Common Shares to all holders of the Common Shares as Company shall pay or make a dividend or other distribution on in shares of Common Stock, subdivide outstanding shares of Common Stock into a greater number of shares of Common Stock or combine the outstanding shares of Common Shares, or if the Issuer effects Stock into a stock split or stock combinationlesser number of shares of Common Stock, the Conversion Rate will in effect at the opening of business on the day following the Record Date fixed for the determination of shareholders entitled to receive such dividend or other distribution, or the Record Date for such subdivision or combination, as the case may be, shall be adjusted based on the following formula: OS(1) CR(1) = CR(0) X ---- OS(0) where, CR0 CR(0) = the Conversion Rate in effect immediately prior to at the Ex-Dividend close of business on the Record Date CR1 CR(1) = the Conversion Rate in effect immediately after the Ex-Dividend Record Date OS0 OS(0) = the number of shares of Common Shares Stock outstanding at the close of business on the Ex-Dividend Date OS1 Record Date (1) = the number of shares of Common Shares Stock that would be outstanding immediately after such eventevent If, after any such Record Date, any dividend or distribution is not in fact paid or the outstanding shares of Common Stock are not subdivided or combined, as the case may be, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, or subdivide or combine the outstanding shares of Common Stock, as the case may be, to the Conversion Rate that would have been in effect if such Record Date had not been fixed. (b) In case of an issuance the Company shall issue rights or warrants to all holders of its Common Shares Stock entitling them to subscribe for or purchase shares of any rights, options or warrants to purchase Common Shares Stock for a period expiring 45 days or less from the date of issuance of such rights, options rights or warrants at a price per share less than (or having a conversion price per share less than) the Last Reported Sale Current Market Price of the Common Shares on the Business Day immediately preceding the announcement of such issuanceStock, in which event the Conversion Rate will in effect at the opening of business on the day following the Record Date shall be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): formula: OS(0) + X CR(1) = CR(0) X --------- 0S(0) + Y where, CR0 CR(0) = the Conversion Rate in effect immediately prior to at the Ex-Dividend close of business on the Record Date CR1 CR(1) = the Conversion Rate in effect immediately after the Ex-Dividend Record Date OS0 OS(0) = the number of shares of Common Shares Stock outstanding at the close of business on the Ex-Dividend Record Date X = the total number of shares of Common Shares Stock issuable pursuant to such rights Y = the number of shares of Common Shares Stock equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares Stock for the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rightsrights If, after any such Record Date, any such rights or warrants are not in fact issued, or are not exercised prior to the expiration thereof, the Conversion Rate shall be immediately readjusted, effective as of the date such rights or warrants expire, or the date the Board of Directors determines not to issue such rights or warrants, to the Conversion Rate that would have been in effect if the unexercised rights or warrants had never been granted or such Record Date had not been fixed, as the case may be. (c) In case of the Company shall pay a dividend or other distribution consisting exclusively of cash to all holders of its Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above and (y) any dividend or distribution paid exclusively in cash)Stock, the Conversion Rate will in effect at the opening of business on the day following the Record Date for such dividend or distribution shall be adjusted based on the following formula: SP(0) CR(1) = CR(0) X --------- SP(0) - C where, CR0 = the Conversion Rate in effect at the close of business immediately prior to on the Ex-Dividend Record Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Record Date SP0 = the Current Market Price C = the amount in cash per share distributed by the Company to holders of Common Stock In the event that C is greater than or equal to SP0, in lieu of the adjustment contemplated, Holders will be entitled to participate ratably in the cash distribution as though their Notes had been converted to shares of Common Stock on the applicable date of calculation for the amounts to be received by holders of Common Stock. If after any such Record Date, any such dividend or distribution is not in fact made, the Conversion Rate shall be immediately readjusted, effective as of the date of the Board of Directors determines not to make such dividend or distribution, to the Conversion Rate that would have been in effect if such Record Date had not been fixed. (d) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock shares of its capital stock (other than Common Stock) or evidences of its indebtedness or assets (including cash or securities, but excluding (i) any rights or warrants referred to in Section 10.07(b), (ii) any dividend or distribution paid exclusively in cash, (iii) any dividend or distribution referred to in Section 10.07(a) or 10.07(e), and (iv) mergers or consolidations to which Section 10.15 applies), the Conversion Rate in effect at the opening of business on the day following the Record Date for such dividend or distribution shall be adjusted based on the following formula: SP(0) CR(1) = CR(0) X ----------- SP(0) - FMV where, CR(0) = the Conversion Rate in effect at the close of business on the Record Date CR(1) = the Conversion Rate in effect immediately after the Record Date SP(0) = the Current Market Price FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the shares of Capital Stockcapital stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Share Stock on the Ex-Dividend Record Date for such distribution Notwithstanding In the foregoingevent that FMV is greater than or equal to SP0, in lieu of the adjustment contemplated, Holders will be entitled to participate ratably in the relevant distribution as though their Notes had been converted to shares of Common Stock on the applicable date of calculation for the amounts to be received by holders of Common Stock. If after any such Record Date, any such dividend or distribution is not in fact made, the Conversion Rate will shall be adjusted based on immediately readjusted, effective as of the following formula with respect date of the Board of Directors determines not to an adjustment pursuant to this clause (c) where there has been a payment of a make such dividend or other distribution on Common Shares of Capital Stock ofdistribution, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = to the Conversion Rate that would have been in effect immediately prior to if such Record Date had not been fixed. Rights or warrants distributed by the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date FMV0 = the average of the sale prices of such Capital Stock or equity interest distributed to holders of the Common Shares applicable to one of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date MP0 = the average of the Last Reported Sale Prices of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date (d) In case of dividends or other distributions consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) Company to all holders of Common SharesStock entitling the holders thereof to subscribe for or purchase shares of the Company's Capital Stock (either initially or under certain circumstances), which rights or warrants, until the Conversion Rate will occurrence of a specified event or events ("TRIGGER EVENT"): (i) are deemed to be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price C = the amount in cash per Common Share the Issuer distributes to holders transferred with such shares of Common Shares (and for which no adjustment has been made)Stock, (eii) In case the Issuer or one or more are not exercisable, and (iii) are also issued in respect of its Subsidiaries make purchases future issuances of Common Shares pursuant Stock shall be deemed not to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries have been distributed for Common Shares to the extent that the cash and value of any other consideration included in the payment per Common Share exceeds the Current Market Price per Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect on the Expiration Date CR1 = the Conversion Rate in effect immediately after the Expiration Date FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration paid or payable for Common Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “purchased shares”) OS1 = the number of Common Shares outstanding immediately after the Expiration Date less any purchased shares OS0 = the number of Common Shares outstanding immediately after the Expiration Date, including any purchased shares SP1 = the Last Reported Sale Price of the Common Shares on the Trading Day next succeeding the Expiration Date (f) To the extent the holders of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrence, then clauses (a) through (e) purposes of this Section 12.05 hereof shall not apply to such event or occurrence. 10.07(d) (g) For the avoidance of doubt, and no payment or issuance of securities to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments adjustment to the Conversion Rate set forth in clauses (a) through (e) of under this Section 12.05. (h10.07(d) To will be required) until the extent that the Issuer has a shareholder rights plan in effect upon conversion occurrence of the Notes into Common Sharesearliest Trigger Event. If such right or warrant is subject to subsequent events, holders will receive, in addition upon the occurrence of which such right or warrant shall become exercisable to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, to all holders of Common Shares, any Capital Stockpurchase different securities, evidences of indebtedness or other assets or property as described aboveentitle the holder to purchase a different number or amount of the foregoing or to purchase any of the foregoing at a different purchase price, subject then the occurrence of each such event shall be deemed to readjustment be the date of issuance and Record Date with respect to a new right or warrant (and a termination or expiration of the existing right or warrant without exercise by the holder thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the expirationtype described in the preceding sentence) with respect thereto, termination or redemption of such rights. (i) The Issuer may from time that resulted in an adjustment to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of under this Section 10.07(d): (1) in the Notes case of any series such rights or warrants that shall all have been redeemed or repurchased without exercise by any amount for any period of at least 20 days; provided that the Issuer gives at least 15 days’ prior notice of such increase to the Trustee and holders of the Notes of such series. The Issuer may make such increases in the Conversion Ratethereof, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Shares resulting from any dividend or distribution of Common Shares (or rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled readjusted upon such final redemption or repurchase to receive upon conversion, in addition give effect to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) such distribution or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successorTrigger Event, as the case may be, shall have as though it were a cash distribution, equal to the right (at the sole option per share redemption or repurchase price received by a holder of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible Consideration. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect Common Stock with respect to such Note; provided that rights or warrant (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the Issuer will date of such redemption or repurchase, and (i2) carry forward any adjustments that are less than 1% in the case of such rights or warrants all of which shall have expired or been terminated without exercise, the Conversion Rate with respect shall be readjusted as if such rights and warrants had never been issued. For purposes of this Section 10.07(d) and Section 10.07(a) and 10.07(b), any dividend or distribution to such Note and take them into account when determining subsequent adjustmentswhich this Section 10.07(d) applies that also includes shares of Common Stock or a subdivision or combination of Common Stock to which Section 10.07(a) applies, or rights or warrants to subscribe for or purchase shares of Common Stock to which Section 10.07(b) applies (ii) make or any carry forward adjustments not otherwise effected with respect combination thereof), shall be deemed instead to any series of Notes upon conversion of any Notes of such series upon be: (x1) a conversion after a call for redemption dividend or distribution of the evidences of indebtedness, assets, shares of capital stock, rights or warrants other than such shares of Common Stock, such subdivision or combination or such rights or warrants to which Section 10.07(a) and 10.07(b) apply, respectively (and any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.Conversion Rate increase required by this 10.07

Appears in 1 contract

Samples: Indenture (Charter Communications Inc /Mo/)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If the Issuer Company issues Common Shares to all holders of the Common Shares Stock as a dividend or distribution on the Common SharesStock to all holders of Common Stock, or if the Issuer Company effects a stock share split or stock share combination, the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x OS1/OS0 where CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account OS0 = the number of shares of Common Shares Stock outstanding at the close of business on the Ex-Dividend Date immediately prior to such event OS1 = the number of shares of Common Shares Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 4.06(a) shall become effective on the date that is immediately after (x) the date fixed for the determination of stockholders entitled to receive such dividend or other distribution or (y) the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in this clause Section 4.06(a) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (b) In case of an issuance If the Company issues to all holders of Common Shares of Stock any rights, warrants, options or warrants to purchase Common Shares other securities entitling them for a period expiring of not more than 45 days or less from after the date of issuance thereof to subscribe for or purchase Common Stock, or if the Company issues to all holders of such rightsCommon Stock securities convertible into Common Stock for a period of not more than 45 days after the date of issuance thereof, options in either case at an exercise price per share of Common Stock or warrants at a conversion price per share of Common Stock less than the Last Reported Sale Closing Price of the Common Shares Stock on the Business Day immediately preceding the time of announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date X = the total number of Common Shares issuable pursuant to such rights Y = the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights (c) In case of a dividend or other distribution to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above and (y) any dividend or distribution paid exclusively in cash), the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (OS0+X)/(OS0+Y) where CR0 = the Conversion Rate in effect at the close of business immediately prior to the Exadjustment relating to such event CR1 = the new Conversion Rate taking such event into account OS0 = the number of shares of Common Stock outstanding immediately prior to such event X = the total number of shares of Common Stock issuable pursuant to such rights, warrants, options, other securities or convertible securities Y = the number of shares of Common Stock equal to the quotient of (A) the aggregate price payable to exercise such rights, warrants, options, other securities or convertible securities and (B) the average of the Closing Prices of the Common Stock for the 10 consecutive Trading Days prior to the Business Day immediately preceding the date of announcement for the issuance of such rights, warrants, options, other securities or convertible securities. For purposes of this Section 4.06(b), in determining whether any rights, warrants, options, other securities or convertible securities entitle the holders to subscribe for or purchase, or exercise a conversion right for, Common Stock at less than the applicable Closing Price of the Common Stock, and in determining the aggregate exercise or conversion price payable for such Common Stock, there shall be taken into account any consideration received by the Company for such rights, warrants, options, other securities or convertible securities and any amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined by the Board of Directors of the Company. Any adjustment made pursuant to this Section 4.06(b) shall become effective on the date that is immediately after the date fixed for the determination of shareholders entitled to receive such rights, warrants, options, other securities or convertible securities. If any right, warrant, option, other security or convertible security described in this Section 4.06(b) is not exercised or converted prior to the expiration of the exercisability or convertibility thereof, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such right, warrant, option, other security or convertible security had not been so issued. (c) If the Company distributes capital stock, evidences of indebtedness or other assets or property of the Company to all holders of Common Stock, excluding: (1) dividends, distributions, rights, warrants, options, other securities or convertible securities referred to in Section 4.06(a) or (b) above, (2) dividends or distributions paid exclusively in cash, and (3) Spin-Dividend Date Offs described below in this Section 4.06(c), then the Conversion Rate will be adjusted based on the following formula: CR1 = CR0 x SP0/(SP0-FMV) where CR0 = the Conversion Rate in effect immediately after prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate taking such event into account SP0 = the Current Market Closing Price FMV = of the Common Stock on the Trading Day immediately preceding the ex-dividend date for such distribution FMV= the fair market value (as determined in good faith by the Issuer’s Board of DirectorsDirectors of the Company) of the shares of Capital Stockcapital stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Share Stock on the Exearlier of the record date or the ex-Dividend Date dividend date for such distribution. An adjustment to the Conversion Rate made pursuant to this paragraph shall be made successively whenever any such distribution Notwithstanding is made and shall become effective on the foregoingex-dividend date for such distribution. If the Company distributes to all holders of Common Stock capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit of the Company (a “Spin-Off”), the Conversion Rate in effect immediately before the close of business on the date fixed for determination of holders of Common Stock entitled to receive such distribution will be adjusted based on the following formula with respect to an adjustment pursuant to this clause formula: CR1 = CR0 x (c) FMV0+MP0)/MP0 where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account FMV0 = the average of the sale prices Closing Prices of such Capital Stock the capital stock or similar equity interest distributed to holders of the Common Shares Stock applicable to one share of Common Stock over the first 10 consecutive Trading Days after the effective date of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the ExSpin-Dividend Date Off MP0 = the average of the Last Reported Sale Closing Prices of the Common Shares Stock over the first 10 consecutive Trading Days commencing after the effective date of the Spin-Off. An adjustment to the Conversion Rate made pursuant to this paragraph will occur on the 10th Trading Day from and including the fifth Trading Day after effective date of the ExSpin-Dividend DateOff. If any such dividend or distribution described in this Section 4.06(c) is declared but not paid or made, the new Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (d) In case of dividends If the Company pays or other distributions makes any dividend or distribution consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common SharesStock, the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (SP0-T)/(SP0-C) where CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Ex-Dividend Date taking such event into account SP0 = the Current Market Price average of the Closing Prices of the Common Stock over the 10 consecutive Trading-Day period ending on the Trading Day immediately preceding the ex-dividend date for such distribution T = the Dividend Threshold Amount, which shall initially be $0.06 per quarter, adjusted to take into account events that cause adjustments to the Conversion Rate and as further adjusted to account for any change in the frequency of payment of regular dividends by the Company; provided that the Dividend Threshold Amount shall be deemed to be zero if the dividend is not a regularly scheduled dividend C = the amount in cash per share of Common Share Stock that the Issuer Company distributes to holders of Common Shares (Stock. An adjustment to the Conversion Rate made pursuant to this Section 4.06(d) shall become effective on the ex-dividend date for such dividend or distribution. If any dividend or distribution described in this Section 4.06(d) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. If the Company fails to pay a cash dividend or distribution for a period in which a regularly scheduled dividend has in prior periods been paid in accordance with past practice, the Conversion Rate shall be adjusted using the formula in this Section 4(d), with the ex-dividend date being deemed to be the second to last trading day in the second month of the calendar quarter in question, and for “C” being deemed to be zero. Whenever the Conversion Rate is adjusted, the Dividend Threshold Amount shall be adjusted by multiplying such Dividend Threshold Amount by a fraction, the numerator of which is the Conversion Rate prior to adjustment and the denominator of which is the Conversion Rate following such adjustment, except that no such adjustment has been madewill be made to the Dividend Threshold Amount on account of any adjustment to the Conversion Rate pursuant to this Section 4(d). (e) In case If the Issuer Company or one or more any of its Subsidiaries make purchases subsidiaries makes a payment in respect of Common Shares pursuant to a tender offer or exchange offer by the Issuer or one or more of its Subsidiaries for Common Shares Stock to the extent that the cash and value of any other consideration included in the payment per share of Common Share Stock exceeds the Current Market Closing Price per of the Common Share Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration DateTime”), the Conversion Rate will be adjusted based on the following formula: where, CR1 = CR0 x (AC + (SP1 x OS1))/(SP1 x OS0) where CR0 = the Conversion Rate in effect on immediately prior to the Expiration Date adjustment relating to such event CR1 = the new Conversion Rate in effect immediately after the Expiration Date FMV taking such event into account AC = the fair market value (as determined by the Issuer’s Board of Directors) of the aggregate value of all cash and any other consideration (as determined by the Board of Directors of the Company) paid or payable for Common Shares validly tendered Stock purchased in such tender or exchanged and not withdrawn as exchange offer OS0 = the number of shares of Common Stock outstanding immediately prior to the Expiration Date (the “purchased shares”) date such tender or exchange offer expires OS1 = the number of shares of Common Shares Stock outstanding immediately after such tender or exchange offer expires (after giving effect to the Expiration Date less any purchased purchase or exchange of shares OS0 = the number of Common Shares outstanding immediately after the Expiration Date, including any purchased shares pursuant to such tender or exchange offer) SP1 = the Last Reported Sale Price average of the Closing Prices of Common Shares Stock for the 10 consecutive Trading Days commencing on the Trading Day next succeeding the Expiration Datedate such tender or exchange offer expires. If the application of the foregoing formula would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate will be made. Any adjustment to the Conversion Rate made pursuant to this Section 4.06(e) shall become effective on the date immediately following the determination of the average of the Closing Prices of Common Stock for purposes of SP1 above. If the Company or one of its subsidiaries is obligated to purchase Common Stock pursuant to any such tender or exchange offer but is permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the new Conversion Rate shall be readjusted to be the Conversion Rate that would be in effect if such tender or exchange offer had not been made. (f) To Notwithstanding the extent provisions of this Section 4.06, the holders Conversion Rate shall not exceed 51.2821 shares per $1,000 principal amount of Notes may participate on an as-converted basis equally with Securities, subject to adjustment in the holders of Common Shares manner that the Conversion Rate is subject to adjustment as set forth in any event or occurrence, then clauses subsections (a) through (e) of this Section 12.05 hereof shall not apply to such event or occurrence4.06. (g) For the avoidance of doubt, no payment or issuance of securities In addition to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any of the adjustments pursuant to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To the extent that the Issuer has a shareholder rights plan in effect upon conversion of the Notes into Common Shares, holders will receive, in addition to the Common Sharesabove, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case Company may increase the Conversion Rate will be adjusted at the time of separation as if the Issuer distributed, in order to all avoid or diminish any United States federal income tax to holders of Common SharesStock resulting from any dividend or distribution of capital shares (or rights to acquire Common Stock) or from any event treated as such for United States federal income tax purposes. The Company may also, any Capital Stock, evidences of indebtedness or assets or property as described above, subject to readjustment in the event of the expiration, termination or redemption of such rights. (i) The Issuer may from time to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchangelaw, increase the Conversion Rate of the Notes of any series by any amount for any period if the Company has determined that such increase would be in the best interests of the Company. If the Company makes such determination, it will be conclusive and the Company will mail to Holders of the Securities a notice of the increased Conversion Rate and the period during which it will be in effect at least 20 days; provided that the Issuer gives at least 15 days’ fifteen (15) days prior notice of such increase to the Trustee and holders date the increased Conversion Rate takes effect in accordance with applicable law. (h) If the Company has in effect a rights plan while any Securities remain outstanding, Holders will receive, upon a conversion of Securities in respect of which the Notes Company is required to deliver shares of such series. The Issuer may make such increases in the Conversion RateCommon Stock, in addition to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to holders such shares of Common Shares resulting from any dividend or distribution of Common Shares (or Stock, rights to acquire Common Shares) or from any event treated as such for income tax purposes. (j) The Issuer will not be required to adjust under the Conversion Rate for any of the transactions described in clauses (a) through (e) of this Section 12.05 if the Issuer instead makes proper provision so that each holder of Notes who converts a Note shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that ifCompany’s stockholder rights agreement unless, prior to conversion, the date that is five years rights have expired, terminated or been redeemed or unless the rights have separated from the Issue Date, holders of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be entitled to receive such Ineligible Consideration but the Issuer or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer or its successor, as the case may be) only on the date any Ineligible Consideration would otherwise be due, to deliver either such Ineligible Consideration or “prescribed securities” with a market value comparable to such Ineligible Consideration. (k) Notwithstanding the foregoing, no adjustment in the Conversion Price on any Note will be required under clauses (a) through (e) of this Section 12.05 unless such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notes.the

Appears in 1 contract

Samples: Indenture (Mylan Laboratories Inc)

Adjustment of Conversion Rate. The Conversion Rate applicable to any series of Notes shall be adjusted from time to time by the Issuer Company as follows: (a) If the Issuer issues shares of Common Shares to all holders of the Common Shares Stock are issued as a dividend or distribution on the shares of Common SharesStock, or if the Issuer effects a stock share split or stock combinationshare combination is effected, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 such event CR’ = the Conversion Rate in effect immediately after the Ex-Dividend Date such event OS0 = the number of shares of Common Shares Stock outstanding at the close of business on the Ex-Dividend Date OS1 immediately prior to such event OS’ = the number of shares of Common Shares Stock outstanding immediately after such eventevent An adjustment made pursuant to this subsection (a) shall become effective on the date immediately after (x) the date fixed for the determination of stockholders entitled to receive such dividend or other distribution or (y) the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in this subsection (a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (b) In case of an issuance to all holders of Common Shares of If any rights, warrants, options or other securities (other than any rights or warrants issued pursuant to purchase the a stockholder rights plan (commonly referred to as a “poison pill” plan) referred to in Section 12.5(c)) are issued to all or substantially all of the Holders of shares of Common Shares Stock entitling them for a period expiring 45 of not more than 60 days or less from after the date of issuance thereof to subscribe for or purchase shares of such rightsCommon Stock, options or warrants securities convertible into shares of Common Stock within 60 days after the date of issuance thereof, in either case at an exercise price per share or a conversion price per share less than the Last Reported Sale Price of the Common Shares Stock on the Business Day immediately preceding the time of announcement of such issuance, in which event the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration): where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date OS0 = the number of Common Shares outstanding at the close of business on the Ex-Dividend Date X = the total number of Common Shares issuable pursuant to such rights Y = the number of Common Shares equal to the aggregate price payable to exercise such rights divided by the average of the Last Reported Sale Prices of the Common Shares for the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights (c) In case of a dividend or other distribution to all holders of Common Shares of Capital Stock of the Issuer (other than Common Shares) or evidences of indebtedness of the Issuer or assets or property of the Issuer to all holders of Common Shares (excluding (x) any dividend, distribution or issuance covered by clause (a) or (b) above and (y) any dividend or distribution paid exclusively in cash), the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect at the close of business immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 = the Current Market Price FMV = the fair market value (as determined by the Issuer’s Board of Directors) of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding Common Share on the Ex-Dividend Date for such distribution Notwithstanding the foregoing, the Conversion Rate will be adjusted based on the following formula with respect to an adjustment pursuant to this clause (c) where there has been a payment of a dividend or other distribution on Common Shares of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Issuer that is listed on a U.S. national securities exchange or the TSX: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 = the Conversion Rate in effect immediately after the Ex-Dividend Date FMV0 = the average of the sale prices of such Capital Stock or equity interest distributed to holders of the Common Shares applicable to one of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date MP0 = the average of the Last Reported Sale Prices of the Common Shares over the 10 Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date (d) In case of dividends or other distributions consisting exclusively of cash (excluding any cash distributed upon an amalgamation, merger, share exchange, consolidation or combination) to all holders of Common Shares, the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend Date CR1 such event CR’ = the Conversion Rate in effect immediately after the Ex-Dividend Date SP0 such event OS0 = the Current Market Price C number of shares of Common Stock outstanding immediately prior to such event, including Common Stock that would be outstanding upon exercise or conversion of all options and convertible securities whether or not such options or convertible securities are actually exercisable or convertible at such time X = the amount in cash per Common Share the Issuer distributes to holders total number of shares of Common Shares (and for which no adjustment has been made) (e) In case Stock issuable pursuant to such rights, warrants, options, other securities or convertible securities Y = the Issuer or one or more number of its Subsidiaries make purchases shares of Common Shares pursuant Stock equal to a tender offer the aggregate exercise price or exchange offer conversion price payable to exercise or convert such rights, warrants, options, other securities or convertible securities divided by the Issuer or one or more average of its Subsidiaries the Last Reported Sale Prices of the Common Stock for Common Shares the 10 consecutive Trading Days prior to the extent that Business Day immediately preceding the cash and value date of any announcement of the issuance of such rights, warrants, options, other consideration included in the payment per Common Share exceeds the Current Market Price per Common Share on the Trading Day next succeeding the last date on which tenders securities or exchanges may be convertible securities An adjustment made pursuant to this subsection (b) shall be made successively whenever such tender rights, warrants, options, other securities or exchange offer convertible securities are issued, and shall become effective on the day following the date of announcement of such issuance. If, at the end of the period during which such rights, warrants, options, other securities or convertible securities are exercisable or convertible, not all rights, warrants, options, other securities or convertible securities have been exercised or converted, as the case may be, the adjusted Conversion Rate shall be immediately readjusted to what it would have been based upon the number of additional shares of Common Stock actually issued (or the “Expiration Date”number of shares of Common Stock actually issued upon conversion of convertible securities actually issued). For purposes of Section 12.1 and this Section 12.5, in determining whether such rights, warrants, options, other securities or convertible securities entitle the Holder to subscribe for or purchase or exercise a conversion right for shares of Common Stock at less than the average Last Reported Sale Price of the Common Stock, and in determining the aggregate exercise or conversion price payable for such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights, warrants, options, other securities or convertible securities and any amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined by the Board of Directors and such determination shall be provided to the Trustee in a Board Resolution. (c) If shares of the Company’s capital stock, evidences of the Company’s indebtedness, shares of the capital stock of the Company’s subsidiaries or other assets or property of the Company or its subsidiaries are distributed to all or substantially all of the Holders of shares of Common Stock, excluding: (i) dividends, distributions and rights, warrants, options, other securities or convertible securities referred to in clause (a) or (b) above; (ii) dividends or distributions in cash referred to in clause (d) below; and (iii) spin-offs described below in this clause (c); then the Conversion Rate will be adjusted based on the following formula: where, CR0 = the Conversion Rate in effect on the Expiration Date CR1 immediately prior to such distribution CR’ = the Conversion Rate in effect immediately after such distribution SP0 = the Expiration Date average of the Last Reported Sale Prices of the Common Stock for the ten (10) consecutive Trading Days prior to the Business Day immediately preceding the record date for such distribution FMV = the fair market value (as determined in good faith by the Issuer’s Board of DirectorsDirectors of the Company) of the aggregate value shares of all cash and any other consideration paid capital stock, evidences of indebtedness, assets or payable for Common Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “purchased shares”) OS1 = the number property distributed with respect to each outstanding share of Common Shares outstanding Stock on the record date for such distribution An adjustment made pursuant to the above paragraph shall be made successively whenever any such distribution is made and shall become effective on the day immediately after the Expiration Date less dated fixed for the determination of shareholders entitled to receive such distribution. With respect to an adjustment pursuant to this clause (c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of capital stock of any purchased shares OS0 class or series, or similar equity interest, of or relating to a subsidiary or other business unit of the Company (referred to as a “spin-off”), the Conversion Rate in effect immediately before the close of business on the record date fixed for determination of stockholders entitled to receive the distribution will be increased based on the following formula: where, CR0 = the number of Common Shares outstanding Conversion Rate in effect immediately prior to such distribution CR’ = the Conversion Rate in effect immediately after such distribution FMV0 = the Expiration Date, including any purchased shares SP1 = average of the Last Reported Sale Price Prices of the capital stock or similar equity interest distributed to Holders of shares of Common Stock applicable to one share of our Common Stock over the first 10 consecutive Trading Days after the effective date of the spin-off MP0 = the average of the Last Reported Sale Prices of the Common Shares on Stock over the first 10 consecutive Trading Day next succeeding Days after the Expiration Date (f) To the extent the holders of Notes may participate on an as-converted basis equally with the holders of Common Shares in any event or occurrence, then clauses (a) through (e) of this Section 12.05 hereof shall not apply to such event or occurrence. (g) For the avoidance of doubt, no payment or issuance of securities to any plaintiffs or their counsel under the Global Class Action Settlement shall result in any effective date of the adjustments spin-off The adjustment to the Conversion Rate set forth in clauses (a) through (e) of this Section 12.05. (h) To under the extent that preceding paragraph will occur on the Issuer has a shareholder rights plan in effect upon conversion 10th Trading Day after the effective date of the Notes into Common Sharesspin-off. If any such dividend or distribution described in this subsection (c) is declared but not paid or made, holders will receive, in addition to the Common Shares, the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Shares, in which case the Conversion Rate will shall again be adjusted at to be the time of separation as Conversion Rate that would then be in effect if such dividend or distribution had not been declared. Rights or warrants distributed by the Issuer distributed, Company to all holders of Common SharesStock entitling the holders thereof to subscribe for or purchase shares of the Company’s capital stock (either initially or under certain circumstances), any Capital which rights or warrants, until the occurrence of a specified event or events specified in such rights or warrants or related instruments or agreements governing the same (a “Trigger Event”): (i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Common Stock; shall be deemed not to have been distributed for purposes of this Section 12.5(c) (and no adjustment to the Conversion Rate under this Section 12.5(c) will be required) until the occurrence of the earliest Trigger Event. If such right or warrant is subject to subsequent events, upon the occurrence of which such right or warrant shall become exercisable to purchase different distributed assets, evidences of indebtedness or other assets or property as described aboveentitle the Holder to purchase a different number or amount of the foregoing or to purchase any of the foregoing at a different purchase price, subject then the occurrence of each such event shall be deemed to readjustment be the date of issuance and the Conversion Record Date with respect to a new right or warrant (and a termination or expiration of the existing right or warrant without exercise by the Holder thereof); in addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the expirationtype described in the preceding sentence) with respect thereto, termination or redemption of such rights. (i) The Issuer may from time that resulted in an adjustment to time, to the extent permitted by law and subject to applicable rules of any Applicable Securities Exchange, increase the Conversion Rate of under this Section 12.5(c): (1) in the Notes case of any series such rights or warrants which shall all have been redeemed or purchased without exercise by any amount for any period of at least 20 days; provided that Holders thereof, the Issuer gives at least 15 days’ prior notice of Conversion Rate shall be readjusted upon such increase final redemption or purchase to give effect to such distribution or Trigger Event, as applicable, as though it were a cash distribution, equal to the Trustee and holders per share redemption or purchase price received by a holder of the Notes of Common Stock with respect to such series. The Issuer may make rights or warrants (assuming such increases in the Conversion Rateholder had retained such rights or warrants), in addition made to those set forth above, as the Issuer’s Board of Directors deems advisable to avoid or diminish any income tax to all holders of Common Shares resulting from Stock as of the date of such redemption or purchase; and (2) in the case of such rights or warrants which shall have expired or been terminated without exercise, the Conversion Rate shall be readjusted as if such rights and warrants had never been issued. For purposes of this Section 12.5(c) and Sections 12.5(a) and 12.5(b), any dividend or distribution to which this Section 12.5(c) is applicable that also includes shares of Common Shares Stock, a subdivision or combination of Common Stock to which Section 12.5(a) applies, or rights or warrants to subscribe for or purchase shares of Common Stock to which Section 12.5(b) applies (or rights any combination thereof), shall be deemed instead to acquire Common Shares) or from any event treated as such for income tax purposes.be: (j3) The Issuer will not be required a dividend or distribution of the evidence of indebtedness, shares of capital stock or other assets or property, other than such shares of Common Stock, such subdivision or combination or such rights, warrants, options or other securities to adjust the which Sections 12.5(a) and 12.5(b) apply, respectively (and any Conversion Rate for any of the transactions described in clauses (a) through (e) of reduction required by this Section 12.05 if 12.5(c) with respect to such dividend or distribution shall then be made), immediately followed by (4) a dividend or distribution of such shares of Common Stock, such subdivision or combination or such rights, warrants, options or other securities (and any further Conversion Rate reduction required by Sections 12.5(a) and 12.5(b) with respect to such dividend or distribution shall then be made), except: (A) the Issuer instead makes proper provision so that each holder effective date of Notes who converts a Note such dividend or distribution shall be entitled to receive upon conversion, in addition to Common Shares, the amount and kind of distributions that the holder would have been entitled to receive if the holder had converted the Note immediately prior to the date fixed for determining the shareholders entitled to receive the distribution; provided, however, that if, prior to the date that is five years from the Issue Date, holders determination of Notes would otherwise be entitled to receive, upon conversion of the Notes, any property (including cash) or securities that would not constitute “prescribed securities” for the purpose of clause 212(1) (b) (vii) (E) of the Income Tax Act (Canada), or Tax Act (the “Ineligible Consideration”), pursuant to the operation of the foregoing provisions, such holders shall not be stockholders entitled to receive such Ineligible Consideration but the Issuer dividend or the Issuer’s successor, as the case may be, shall have the right (at the sole option of the Issuer other distribution” or its successor, as the case may be) only on the date on which such split or combination becomes effective,” as applicable for purposes of Section 12.5(a) and the “time of announcement of such issuance” for purposes of Section 12.5(b); and (B) any Ineligible Consideration would otherwise shares of Common Stock included in such dividend or distribution shall not be due, to deliver either such Ineligible Consideration or deemed prescribed securities” with a market value comparable outstanding immediately prior to such Ineligible Consideration. (kevent” for purposes of Section 12.5(a) Notwithstanding the foregoing, no adjustment and any reduction or increase in the Conversion Price on any Note will number of shares of Common Stock resulting from such subdivision or combination shall be required under clauses (a) through (e) of this Section 12.05 unless disregarded in connection with such adjustment would require a change of at least 1% of the Conversion Price then in effect with respect to such Note; provided that the Issuer will (i) carry forward any adjustments that are less than 1% of the Conversion Rate with respect to such Note and take them into account when determining subsequent adjustments, (ii) make any carry forward adjustments not otherwise effected with respect to any series of Notes upon conversion of any Notes of such series upon (x) a conversion after a call for redemption of any Notes of such Series, (y) any Change of Control Payment Date applicable to such series of Notes and (z) five Business Days prior to the Maturity Date applicable to such series of Notesdividend or distribution.

Appears in 1 contract

Samples: Indenture (Ual Corp /De/)

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