Conversion Rate Adjustments. The Conversion Rate shall be subject to adjustment from time to time by the Company as follows: (a) If the Company shall, at any time and from time to time while any of the Series U Debentures are outstanding, issue dividends or make distributions on the Common Stock payable in shares of the Common Stock, then the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to 9:00 a.m., New York City time (the “Open of Business”) on the Ex-Date for such dividend or distribution by a fraction: (i) the numerator of which shall be the number of shares of Common Stock outstanding at the Close of Business on the Business Day immediately preceding the Ex-Date for such dividend or distribution, plus the total number of shares of Common Stock constituting such dividend or distribution; and (ii) the denominator of which shall be the number of shares of Common Stock outstanding at the Close of Business on the Business Day immediately preceding such Ex-Date. Such increase shall become effective immediately after the Open of Business on the Ex-Date for such dividend or distribution. For the purpose of this paragraph (a), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company. If any dividend or distribution of the type described in this Section 3(a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate which would then be in effect if such dividend or distribution had not been declared. In no event shall the Conversion Rate be decreased pursuant to this Section 3(a). (b) If the Company shall, at any time or from time to time while any of the Series U Debentures are outstanding, distribute to all holders of Common Stock rights, options or warrants to purchase shares of Common Stock for a period expiring within 45 days of the record date for such distribution at less than the average of the Closing Prices of Common Stock for the ten consecutive Trading Days immediately preceding the first public announcement of such distribution, then the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Date for such distribution by a fraction: (i) the numerator of which shall be the number of shares of Common Stock outstanding at the Close of Business on the Business Day immediately preceding the Ex-Date for such distribution, plus the total number of additional shares of Common Stock so offered for purchase; and (ii) the denominator of which shall be the number of shares of Common Stock outstanding on the Close of Business on the Business Day immediately preceding the Ex-Date for such distribution, plus the number of shares of Common Stock that the aggregate offering price of the total number of shares of Common Stock so offered would purchase at the Current Market Price (as defined below) of Common Stock on the first public announcement date for such distribution (determined by multiplying such total number of shares of Common Stock so offered by the exercise price of such rights, options or warrants and dividing the product so obtained by such Current Market Price). Such adjustment shall be successively made whenever any such rights, options or warrants are issued, and shall become effective immediately after the Open of Business on the Ex-Date for such distribution. To the extent that shares of Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if the Ex-Date for such distribution had not occurred. In determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than the average of the Closing Prices of Common Stock for the ten consecutive Trading Days immediately preceding the first public announcement of such distribution, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors (whose determination shall be conclusive, and described in a resolution of the Board of Directors). In no event shall the Conversion Rate be decreased pursuant to this Section 3(b). If the Company elects to make a distribution described in this Section 3(b) that has a per share of Common Stock value equal to more than 15% of the Closing Price of the Common Stock on the day preceding the first public announcement of such distribution, the Company shall give notice to the Holders at least 50 Business Days prior to the Ex-Date for such distribution. (c) If the Company shall, at any time or from time to time while any of the Series U Debentures are outstanding, subdivide or reclassify outstanding shares of Common Stock into a greater number of shares of Common Stock, then the Conversion Rate in effect at the Open of Business on the day upon which such subdivision or reclassification becomes effective shall be proportionately increased, and conversely, if the Company shall, at any time or from time to time while any of the Series U Debentures are outstanding, combine or reclassify outstanding shares of Common Stock into a smaller number of shares of Common Stock, then the Conversion Rate in effect at the Open of Business on the day upon which such combination or reclassification becomes effective shall be proportionately decreased. In each such case, the Conversion Rate shall be adjusted by multiplying such Conversion Rate by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such subdivision, reclassification or combination and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such subdivision, reclassification or combination. Such increase or reduction (solely in the case of any combination or reclassification of outstanding shares of Common Stock into a smaller number of shares of Common Stock), as the case may be, shall become effective immediately after the Open of Business on the day upon which such subdivision, reclassification or combination becomes effective. (d) If the Company shall, at any time or from time to time while any of the Series U Debentures are outstanding, distribute to all holders of Common Stock any of its Capital Stock (as defined below), assets (including shares of any subsidiary of the Company or business unit of the Company), or debt securities or rights to purchase securities of the Company (excluding (i) any dividends or distributions described in Section 3(a), (ii) any rights, options or warrants described in Section 3(b) and (iii) any dividends or distributions described in Section 3(e) or Section 3(f) (such Capital Stock, assets, debt securities or rights to purchase securities of the Company hereinafter in this Section 3(d) called the “Distributed Assets”)), then the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Date for such distribution by a fraction: (i) the numerator of which will be the Current Market Price of Common Stock on the Business Day immediately preceding the Ex-Date for such distribution, and (ii) the denominator of which will be the Current Market Price of Common Stock on the Business Day immediately preceding the Ex-Date for such distribution, minus the Fair Market Value (as defined below), as determined by the Board of Directors in a Board Resolution, of the portion of Distributed Assets so distributed applicable to one share of Common Stock. Such increase shall become effective immediately after the Open of Business on the Ex-Date for such distribution; provided that if “the Fair Market Value, as determined by the Board of Directors in a Board Resolution, of the portion of Distributed Assets so distributed applicable to one share of Common Stock” as set forth above is equal to or greater than “the Current Market Price of Common Stock on the Business Day immediately preceding the Ex-Date for such distribution” as set forth above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder shall receive on the date on which the Distributed Assets are distributed to holders of Common Stock, for each $25.00 principal amount of Series U Debentures, the amount of Distributed Assets such Holder would have received on the record date for such distribution had such Holder owned a number of shares of Common Stock equal to the Conversion Rate as of the Ex-Date for such distribution. In the event that such distribution is not so made, the Conversion Rate shall again be adjusted to be the Conversion Rate which would then be in effect if such distribution had not been declared. In no event shall the Conversion Rate be decreased pursuant to this Section 3(d). If the Board of Directors determines the Fair Market Value of any distribution for purposes of this Section 3(d) by reference to the actual or when issued trading market for any Distributed Assets comprising all or part of such distribution, it must in doing so consider the prices in such market over the same period (the “Reference Period”) used in computing the Current Market Price for purposes of clause (i) above, unless the Board of Directors determines in good faith that determining the Fair Market Value during the Reference Period would not be in the best interest of the Holders. Notwithstanding anything to the contrary in this Section 3(d), if the Company distributes Capital Stock of, or similar equity interests in, a subsidiary of the Company or other business unit of the Company (a “Spin-Off”), then, in lieu of the adjustment set forth above, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately after the Close of Business on the fifteenth Trading Day immediately following the Ex-Date for such Spin-Off by a fraction: (i) the numerator of which will be the sum of (A) the average of the Closing Prices of Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the ten consecutive Trading Day period immediately following, and including, the fifth Trading Day after the Ex-Date for the Spin-Off and (B) the average of the Closing Prices of Common Stock over the ten consecutive Trading Day period immediately following, and including, the fifth Trading Day after the Ex-Date for the Spin-Off; and (ii) the denominator of which is the average of the Closing Prices of Common Stock over the ten consecutive Trading Day period immediately following, and including, the fifth Trading Day after the Ex-Date for the Spin-Off. In no event shall the Conversion Rate be decreased pursuant to this Section 3(d). If the Company elects to make a distribution described in this Section 3(d) that has a per share of Common Stock value equal to more than 15% of the Closing Price of the Common Stock on the day preceding the first public announcement of such distribution, the Company shall give notice to Holders at least 50 Business Days prior to the Ex-Date for such distribution. 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 hereof (and no adjustment to the Conversion Rate will 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 pursuant to the first adjustment formula in this paragraph (d). If any such right or warrant, including any such existing rights or warrants distributed prior to the date hereof, 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 was made, (1) in the case of any such rights or warrants that 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 that 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. For purposes of paragraphs (a), (b) and (d), any dividend or distribution to which paragraph (d) is applicable that also includes shares of Common Stock, or rights or warrants to subscribe for or purchase shares of Common Stock (or both), shall be deemed instead to be: (1) a dividend or distribution of the evidences of indebtedness, assets or shares of capital stock other than such shares of Common Stock or rights or warrants (and any Conversion Rate adjustment required by paragraph (d) with respect to such dividend or distribution shall then be made), immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants (and any further Conversion Rate adjustment required by paragraphs (a) and (b) with respect to such dividend or distribution shall then be made), except any shares of Common Stock included in such dividend or distribution shall not be deemed “outstanding at the Close of Business on the Business Day immediately preceding the Ex-Date for such dividend or distribution” within the meaning of paragraph (a).
Appears in 2 contracts
Sources: Settlement Agreement (General Motors Corp), Security Agreement (General Motors Corp)
Conversion Rate Adjustments. The Conversion Rate shall be subject to adjustment adjusted from time to time by the Company as follows:Corporation in accordance with the provisions of this Section 9.
(a) If the Company shall, at any time and from time Corporation shall hereafter pay a dividend or make a distribution to time while any all holders of the Series U Debentures are outstanding, issue dividends or make distributions on the outstanding Common Stock payable in shares of the Common Stock, then the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to 9:00 a.m., New York City time (at the “Open opening of Business”) business on the Ex-date following the Record Date for shall be increased by multiplying such dividend or distribution Conversion Rate by a fraction:,
(i) the numerator of which shall be the sum of the number of shares of Common Stock outstanding at the Close close of Business business on the Business Day immediately preceding the Ex-such Record Date for such dividend or distribution, plus and the total number of shares of Common Stock constituting such dividend or other distribution; and
(ii) the denominator of which shall be the number of shares of Common Stock outstanding at the Close close of Business business on the Business Day immediately preceding such Ex-Record Date. Such increase shall become effective immediately after the Open opening of Business business on the Ex-Date for day following such dividend or distribution. For the purpose of this paragraph (a), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the CompanyRecord Date. If any dividend or distribution of the type described in this Section 3(a8(a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate which that would then be in effect if such dividend or distribution had not been declared. In no event shall the Conversion Rate be decreased pursuant to this Section 3(a).
(b) If the Company shall, at any time Corporation shall issue rights or from time to time while any of the Series U Debentures are outstanding, distribute warrants to all holders of any class of Common Stock rights, options entitling them (for a period expiring within forty-five (45) days after the Record Date for such issuance) to subscribe for or warrants to purchase shares of Common Stock for at a period expiring within 45 days of the record date for such distribution at price per share less than the average of Current Market Price on the Closing Prices of Common Stock Record Date for the ten consecutive Trading Days immediately preceding the first public announcement of such distributionissuance, then the Conversion Rate shall be increased adjusted so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the Open of Business on the Ex-such Record Date for such distribution by a fraction:,
(i) the numerator of which shall be the number of shares of Common Stock outstanding at the Close close of Business business on the Business Day immediately preceding the Ex-such Record Date for such distribution, plus the total number of additional shares of Common Stock so offered for subscription or purchase; and
(ii) the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the Close of Business on the Business Day immediately preceding the Ex-such Record Date for such distribution, plus the number of shares of Common Stock that which the aggregate offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at the Current Market Price (as defined below) of Common Stock on the first public announcement date for such distribution (determined by multiplying such total number of shares of Common Stock so offered by the exercise price of such rights, options or warrants and dividing the product so obtained by such Current Market Price). Such adjustment shall be successively made whenever any such rights, options or warrants are issued, and shall become effective immediately after the Open opening of Business business on the Ex-Date for day following such distributionRecord Date. To the extent that shares of Common Stock are not delivered after pursuant to such rights or warrants, upon the expiration or termination of such rights, options rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments adjustment made upon the issuance of such rights, options rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if the Ex-such Record Date for such distribution had not occurredbeen fixed. In determining whether any rights, options rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than the average of the Closing Prices of Common Stock for the ten consecutive Trading Days immediately preceding the first public announcement of such distributionCurrent Market Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company Corporation for such rights, options rights or warrants and any amount payable on exercise or conversion thereof, the value Fair Market Value of such consideration, if other than cash, to be determined by the Board of Directors Directors, whose determination shall be conclusive.
(c) If the outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and conversely, if the outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective.
(d) If the Corporation shall, by dividend or otherwise, distribute to all holders of its Common Stock shares of any class of Capital Stock of the Corporation (other than any dividends or distributions to which Section 9(a) applies) or evidences of its indebtedness or assets (including securities, but excluding (i) any rights or warrants referred to in 9(b) or (ii) any dividend or distribution (x) paid exclusively in cash or (y) referred to in Section 9(a) or Section 9(g) (any of the foregoing, subject to the exclusions specified in clauses (i) and (ii) of the immediately preceding parenthetical, hereinafter referred to in this Section 9(d) as the “Distributed Property”), then, in each such case, the Conversion Rate shall be adjusted so that the same shall be equal to the rate determined by multiplying the Conversion Rate in effect on the Record Date with respect to such distribution by a fraction,
(i) the numerator of which shall be the Current Market Price on such Record Date; and
(ii) the denominator of which shall be the Current Market Price on such Record Date less the Fair Market Value (as determined by the Board of Directors, whose determination shall be conclusive, and described in a resolution of the Board of Directors). In no event shall the Conversion Rate be decreased pursuant to this Section 3(b). If the Company elects to make a distribution described in this Section 3(b) that has a per share of Common Stock value equal to more than 15% of the Closing Price of the Common Stock on the day preceding the first public announcement of such distribution, the Company shall give notice to the Holders at least 50 Business Days prior to the Ex-Record Date for such distribution.
(c) If the Company shall, at any time or from time to time while any of the Series U Debentures are outstanding, subdivide or reclassify outstanding shares of Common Stock into a greater number of shares of Common Stock, then the Conversion Rate in effect at the Open of Business on the day upon which such subdivision or reclassification becomes effective shall be proportionately increased, and conversely, if the Company shall, at any time or from time to time while any of the Series U Debentures are outstanding, combine or reclassify outstanding shares of Common Stock into a smaller number of shares of Common Stock, then the Conversion Rate in effect at the Open of Business on the day upon which such combination or reclassification becomes effective shall be proportionately decreased. In each such case, the Conversion Rate shall be adjusted by multiplying such Conversion Rate by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such subdivision, reclassification or combination and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such subdivision, reclassification or combination. Such increase or reduction (solely in the case of any combination or reclassification of outstanding shares of Common Stock into a smaller number of shares of Common Stock), as the case may be, shall become effective immediately after the Open of Business on the day upon which such subdivision, reclassification or combination becomes effective.
(d) If the Company shall, at any time or from time to time while any of the Series U Debentures are outstanding, distribute to all holders of Common Stock any of its Capital Stock (as defined below), assets (including shares of any subsidiary of the Company or business unit of the Company), or debt securities or rights to purchase securities of the Company (excluding (i) any dividends or distributions described in Section 3(a), (ii) any rights, options or warrants described in Section 3(b) and (iii) any dividends or distributions described in Section 3(e) or Section 3(f) (such Capital Stock, assets, debt securities or rights to purchase securities of the Company hereinafter in this Section 3(d) called the “Distributed Assets”)), then the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Date for such distribution by a fraction:
(i) the numerator of which will be the Current Market Price of Common Stock on the Business Day immediately preceding the Ex-Date for such distribution, and
(ii) the denominator of which will be the Current Market Price of Common Stock on the Business Day immediately preceding the Ex-Date for such distribution, minus the Fair Market Value (as defined below), as determined by the Board of Directors in a Board Resolution, of the portion of the Distributed Assets so distributed Property applicable to one share of Common StockStock (determined on the basis of the number of shares of the Common Stock outstanding on such Record Date). Such increase adjustment shall become effective immediately after prior to the Open opening of Business business on the Ex-Date for day following such distributionRecord Date; provided that if “the then Fair Market Value, Value (as so determined by the Board of Directors in a Board Resolution, Directors) of the portion of the Distributed Assets so distributed Property applicable to one share of Common Stock” as set forth above Stock is equal to or greater than “the Current Market Price of Common Stock on the Business Day immediately preceding the Ex-Date for such distribution” as set forth aboveRecord Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder holder of Convertible Perpetual Preferred Stock shall have the right to receive on the date on which the Distributed Assets are distributed to holders of Common Stock, for each $25.00 principal amount of Series U Debentures, upon conversion the amount of Distributed Assets Property such Holder holder would have received had such holder converted each share of its Convertible Perpetual Preferred Stock on the record date for such distribution had such Holder owned a number Record Date. To the extent that any of shares of Common Stock equal the Distributed Property is not distributed, the Conversion Rate shall be readjusted to the Conversion Rate as that would then be in effect had the adjustment made been made on the basis of only the Ex-Date for Distributed Property actually distributed. If 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 that would then be in effect if such dividend or distribution had not been declared. In no event shall the Conversion Rate be decreased pursuant to this Section 3(d). If the Board of Directors determines the Fair Market Value of any distribution for purposes of this Section 3(d9(d) by reference to the actual or when issued trading market for any Distributed Assets comprising all or part of such distributionsecurities, it must in doing so consider the prices in such market over the same period (the “Reference Period”) used in computing the Current Market Price for purposes of clause (i) above, unless the Board of Directors determines in good faith that determining the Fair Market Value during the Reference Period would not be in the best interest of the Holders. Notwithstanding anything to the contrary in this Section 3(d), if the Company distributes Capital Stock of, or similar equity interests in, a subsidiary of the Company or other business unit of the Company (a “Spin-Off”), then, in lieu of the adjustment set forth above, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately after the Close of Business on the fifteenth Trading Day immediately following the Ex-Date for such Spin-Off by a fraction:
(i) the numerator of which will be the sum of (A) the average of the Closing Prices of Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the ten consecutive Trading Day period immediately following, and including, the fifth Trading Day after the Ex-Date for the Spin-Off and (B) the average of the Closing Prices of Common Stock over the ten consecutive Trading Day period immediately following, and including, the fifth Trading Day after the Ex-Date for the Spin-Off; and
(ii) the denominator of which is the average of the Closing Prices of Common Stock over the ten consecutive Trading Day period immediately following, and including, the fifth Trading Day after the Ex-Date for the Spin-Off. In no event shall the Conversion Rate be decreased pursuant to this Section 3(d). If the Company elects to make a distribution described in this Section 3(d) that has a per share of Common Stock value equal to more than 15% of the Closing Price of the Common Stock on the day preceding the first public announcement of such distribution, the Company shall give notice to Holders at least 50 Business Days prior to the Ex-Date for such distributionRecord Date. Rights or warrants distributed by the Company Corporation to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the CompanyCorporation’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 hereof of this 9(d) (and no adjustment to the Conversion Rate under this 9(d) will 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 pursuant to the first adjustment formula in under this paragraph (d9(d). If any such right or warrant, including any such existing rights or warrants distributed prior to the date hereof, warrant 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 9(d) was made, (1) in the case of any such rights or warrants that 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 that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such expired or terminated rights and warrants had not been issued. For purposes of paragraphs (athis Section 9(d), (bSection 9(a) and (dSection 9(b), any dividend or distribution to which paragraph (dthis Section 9(d) is applicable that also includes shares of Common Stock, or rights or warrants to subscribe for or purchase shares of Common Stock (or both), shall be deemed instead to be: be (1) a dividend or distribution of the evidences of indebtedness, assets or shares of capital stock Capital Stock other than such shares of Common Stock or rights or warrants (and warrants, as to which any Conversion Rate adjustment required by paragraph (dthis Section 9(d) with respect to such dividend or distribution shall then be made), immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants (and warrants, as to which any further Conversion Rate adjustment required by paragraphs (aSections 9(a) and (b9(b) with respect to such dividend or distribution shall then be made), except any shares of Common Stock included in such dividend or distribution shall not be deemed “outstanding at the Close close of Business business on the Business Day immediately preceding the Ex-Date for such dividend or distributionRecord Date” within the meaning of paragraph (aSections 9(a) and 9(b).
(e) If the Corporation shall, make a distribution consisting exclusively of cash to all holders of its Common Stock (excluding any dividend or distribution in connection with the Corporation’s liquidation, dissolution or winding up), the Conversion Rate will be adjusted by multiplying the applicable Conversion Rate by a fraction,
(i) the numerator of which shall be the Current Market Price on such Record Date; and
(ii) the denominator of which shall be the Current Market Price on such Record Date less the amount of cash so distributed applicable to one share of Common Stock. Such adjustment shall be effective immediately prior to the opening of business on the day following the Record Date; provided that if the portion of the cash so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price on the record date, in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of Convertible Perpetual Preferred Stock shall have the right to receive upon conversion the amount of cash such holder would have received had such holder converted each share of Convertible Perpetual Preferred Stock on the Record Date. To the extent that such dividend or distribution is not made, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustment made been made on the basis of only the dividend or distribution actually made. If such dividend or distribution is not so paid or 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.
(f) If a tender or exchange offer made by the Corporation or any Subsidiary for all or any portion of the Common Stock shall require the payment to stockholders of consideration per share of Common Stock having a Fair Market Value (as determined by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors) that, as of the last time (the “Expiration Time”) tenders or exchanges may be made pursuant to such tender or exchange offer, exceeds the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the Expiration Time by a fraction,
(i) the numerator of which shall be the sum of (x) the Fair Market Value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed so accepted up to any such maximum, being referred to as the “Purchased Shares”) and (y) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) at the Expiration Time and the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time; and
(ii) the denominator of which shall be the number of shares of Common Stock outstanding (including any Purchased Shares) at the Expiration Time multiplied by the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time. Such adjustment shall become effective immediately prior to the opening of business on the day following the Expiration Time. If the Corporation or any such Subsidiary, as the case may be, is obligated to purchase shares pursuant to any such tender or exchange offer, but the Corporation or any such Subsidiary, as the case may be, is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made.
(g) If the Corporation pays a dividend or makes a distribution to all holders of its Common Stock consisting of Capital Stock of any class or series, or similar equity interests, of or relating to a Subsidiary or other business unit of the Corporation, the Conversion Rate shall be increased so that the same shall be equal to the rate determined by multiplying the Conversion Rate in effect on the Record Date with respect to such distribution by a fraction,
(i) the numerator of which shall be the sum of (A) the average of the Closing Sale Prices of the Common Stock for the ten (10) Trading Days commencing on and including the fifth Trading Day after the date on which “ex-dividend trading” commences for such dividend or distribution on The New York Stock Exchange or such other national or regional exchange or market on which such securities are then listed or quoted (the “Ex-Dividend Date”) plus (B) the fair market value of the securities distributed in respect of each share of Common Stock, which shall equal the number of securities distributed in respect of each share of Common Stock multiplied by the average of the Closing Sale Prices of those distributed securities for the ten (10) Trading Days commencing on and including the fifth Trading Day after the Ex-Dividend Date; and
(ii) the denominator of which shall be the average of the Closing Sale Prices of the Common Stock for the ten (10) Trading Days commencing on and includin
Appears in 2 contracts
Sources: Stock Purchase Agreement (McMoran Exploration Co /De/), Stock Purchase Agreement (Freeport McMoran Copper & Gold Inc)
Conversion Rate Adjustments. The Conversion Rate shall be subject to adjustment adjusted from time to time by the Company as follows:Corporation in accordance with the provisions of this Section 7.
(a) If the Company shall, at any time and from time Corporation shall hereafter pay a dividend or make a distribution to time while any all holders of the Series U Debentures are outstanding, issue dividends or make distributions on the outstanding Common Stock payable in shares of the Common Stock, then the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the such Conversion Rate in effect immediately prior to 9:00 a.m., New York City time (the “Open of Business”) on the Ex-Date for such dividend or distribution by a fraction:,
(i) the numerator of which shall be the sum of the number of shares of Common Stock outstanding at the Close close of Business business on the Business Day immediately preceding the Ex-such Record Date for such dividend or distribution, plus and the total number of shares of Common Stock constituting such dividend or other distribution; and
(ii) the denominator of which shall be the number of shares of Common Stock outstanding at the Close close of Business business on the Business Day immediately preceding such Ex-Record Date. Such increase shall become effective immediately after the Open opening of Business business on the Ex-Date for day following such dividend or distribution. For the purpose of this paragraph (a), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the CompanyRecord Date. If any dividend or distribution of the type described in this Section 3(a7(a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate which that would then be in effect if such dividend or distribution had not been declared. In no event shall the Conversion Rate be decreased pursuant to this Section 3(a).
(b) If the Company shall, at any time Corporation shall issue rights or from time to time while any of the Series U Debentures are outstanding, distribute warrants to all holders of any class of Common Stock rights, options entitling them (for a period expiring within forty-five (45) days after the Record Date) to subscribe for or warrants to purchase shares of Common Stock for (or securities convertible into Common Stock) at a period expiring within 45 days of the record date for such distribution at price per share (or having a conversion price per share) less than the average Closing Sale Price of the Closing Prices a share of Common Stock for on the ten consecutive Trading Days Day immediately preceding the first public announcement of such distributionRecord Date, then the Conversion Rate shall be increased so that the same shall equal the rate determined adjusted by multiplying the Conversion Rate in effect immediately prior to the Open of Business on the Ex-such Record Date for such distribution by a fraction:,
(i) the numerator of which shall be the number of shares of Common Stock outstanding at the Close close of Business business on the Business Day immediately preceding the Ex-such Record Date for such distribution, plus the total number of additional shares of Common Stock so offered for purchasesubscription or purchase (or into which the convertible securities so offered are convertible); and
(ii) the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the Close of Business on the Business Day immediately preceding the Ex-such Record Date for such distribution, plus the number of shares of Common Stock that which the aggregate offering price of the total number of shares of Common Stock so offered for subscription or purchase (or the aggregate conversion price of the convertible securities so offered) would purchase at the Current Market Price (as defined below) of Common Stock on the first public announcement date for such distribution (determined by multiplying such total number of shares of Common Stock so offered by the exercise price of such rights, options or warrants and dividing the product so obtained by such Current Market Closing Sale Price). Such adjustment shall be successively made whenever any such rights, options or warrants are issued, and shall become effective immediately after the Open opening of Business business on the Ex-Date for day following such distributionRecord Date. To the extent that shares of Common Stock (or securities convertible into Common Stock) are not delivered after pursuant to such rights or warrants, upon the expiration or termination of such rights, options rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments adjustment made upon the issuance of such rights, options rights or warrants been made on the basis of delivery of only the number of shares of Common Stock (or securities convertible into Common Stock) actually delivered. If such rights, options rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if the Ex-such Record Date for such distribution had not occurredbeen fixed. In determining whether any rights, options rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than the average of the such Closing Prices of Common Stock for the ten consecutive Trading Days immediately preceding the first public announcement of such distributionSale Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company Corporation for such rights, options rights or warrants and any amount payable on exercise or conversion thereof, the value Fair Market Value of such consideration, if other than cash, to be determined in good faith by the Board of Directors (whose determination Directors. Notwithstanding the foregoing, no adjustment shall be conclusive, and described in a resolution of the Board of Directors). In no event shall made to the Conversion Rate be decreased pursuant to this Section 3(b). If 7(b) for the Company elects to make a distribution described in this Section 3(b) that has a per share rights of holders of Common Stock value equal to more than 15% of participate in the Closing Price of the Common Stock on the day preceding the first public announcement of such distributionCorporation’s rights offering contemplated in its Prospectus Supplement dated May [_____], the Company shall give notice to the Holders at least 50 Business Days prior to the Ex-Date for such distribution2009.
(c) If the Company shall, at any time or from time to time while any of the Series U Debentures are outstanding, subdivide or reclassify outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, then the Conversion Rate in effect at the Open opening of Business business on the day following the day upon which such subdivision or reclassification becomes effective shall be proportionately increased, and conversely, if in the Company shall, at any time or from time to time while any of the Series U Debentures are outstanding, combine or reclassify event outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, then the Conversion Rate in effect at the Open opening of Business business on the day following the day upon which such combination or reclassification becomes effective shall be proportionately decreased. In each reduced, such case, the Conversion Rate shall be adjusted by multiplying such Conversion Rate by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such subdivision, reclassification or combination and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such subdivision, reclassification or combination. Such increase or reduction (solely in the case of any combination or reclassification of outstanding shares of Common Stock into a smaller number of shares of Common Stock)reduction, as the case may be, shall to become effective immediately after the Open opening of Business business on the day following the day upon which such subdivision, reclassification subdivision or combination becomes effective.
(d) If the Company Corporation shall, at any time by dividend or from time to time while any of the Series U Debentures are outstandingotherwise, distribute to all holders of its Common Stock shares of any class of Capital Stock of the Corporation (other than any dividends or distributions to which Section 7(a) applies) or evidences of its Capital Stock (as defined below), indebtedness or assets (including shares of any subsidiary of the Company or business unit of the Company)securities, or debt securities or rights to purchase securities of the Company (but excluding (i) any dividends rights or distributions described warrants referred to in Section 3(a), 7(b) or (ii) any rights, options dividend or warrants described distribution (x) paid exclusively in cash or (y) referred to in Section 3(b) and (iii) any dividends or distributions described in Section 3(e7(a) or Section 3(f7(g) (such Capital Stock, assets, debt securities or rights to purchase securities any of the Company foregoing hereinafter referred to in this Section 3(d7(d) called as the “Distributed AssetsProperty”)), then then, in each such case, the Conversion Rate shall be increased adjusted so that the same shall be equal to the rate determined by multiplying the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Record Date for with respect to such distribution by a fraction:,
(i) the numerator of which will shall be the Current Market Price of Common Stock on the Business Day immediately preceding the Ex-Date for such distribution, Record Date; and
(ii) the denominator of which will shall be the Current Market Price of Common Stock on the Business Day immediately preceding the Ex-such Record Date for such distribution, minus less the Fair Market Value (as defined below), as determined in good faith by the Board of Directors Directors, whose determination shall be described in a resolution of the Board Resolution, of Directors) on such Record Date of the portion of the Distributed Assets so distributed Property applicable to one share of Common StockStock (determined on the basis of the number of shares of the Common Stock outstanding on such Record Date). Such increase adjustment shall become effective immediately after the Open opening of Business business on the Ex-Date for day following such distributionRecord Date; provided that if “the then Fair Market Value, Value (as so determined by the Board of Directors in a Board Resolution, Directors) of the portion of the Distributed Assets so distributed Property applicable to one share of Common Stock” as set forth above Stock is equal to or greater than “the Current Market Price of Common Stock on the Business Day immediately preceding the Ex-Date for such distribution” as set forth aboveRecord Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder holder of Preferred Stock shall have the right to receive on the date on which the Distributed Assets are distributed to holders of Common Stock, for each $25.00 principal amount of Series U Debentures, upon conversion the amount of Distributed Assets Property such Holder holder would have received had such holder converted each share of its Preferred Stock on the record date for such distribution had such Holder owned a number Record Date. To the extent that any of shares of Common Stock equal the Distributed Property is not distributed, the Conversion Rate shall be readjusted to the Conversion Rate as that would then be in effect had the adjustment made been made on the basis of only the Ex-Date for Distributed Property actually distributed. If 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 that would then be in effect if such dividend or distribution had not been declared. In no event shall the Conversion Rate be decreased pursuant to this Section 3(d). If the Board of Directors determines the Fair Market Value of any distribution for purposes of this Section 3(d7(d) by reference to the actual or when issued trading market for any Distributed Assets comprising all or part of such distributionsecurities, it must in doing so consider the prices in such market over the same period (the “Reference Period”) used in computing the Current Market Price for purposes of clause (i) above, unless on the Board of Directors determines in good faith that determining the Fair Market Value during the Reference Period would not be in the best interest of the Holdersapplicable Record Date. Notwithstanding anything Subject to the contrary in this provisions of Section 3(d)10 hereof, if the Company distributes Capital Stock of, or similar equity interests in, a subsidiary of the Company or other business unit of the Company (a “Spin-Off”), then, in lieu of the adjustment set forth above, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately after the Close of Business on the fifteenth Trading Day immediately following the Ex-Date for such Spin-Off by a fraction:
(i) the numerator of which will be the sum of (A) the average of the Closing Prices of Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the ten consecutive Trading Day period immediately following, and including, the fifth Trading Day after the Ex-Date for the Spin-Off and (B) the average of the Closing Prices of Common Stock over the ten consecutive Trading Day period immediately following, and including, the fifth Trading Day after the Ex-Date for the Spin-Off; and
(ii) the denominator of which is the average of the Closing Prices of Common Stock over the ten consecutive Trading Day period immediately following, and including, the fifth Trading Day after the Ex-Date for the Spin-Off. In no event shall the Conversion Rate be decreased pursuant to this Section 3(d). If the Company elects to make a distribution described in this Section 3(d) that has a per share of Common Stock value equal to more than 15% of the Closing Price of the Common Stock on the day preceding the first public announcement of such distribution, the Company shall give notice to Holders at least 50 Business Days prior to the Ex-Date for such distribution. Rights rights or warrants (including rights under any Rights Plan) distributed by the Company Corporation to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the CompanyCorporation’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 hereof of this Section 7(d) (and no adjustment to the Conversion Rate under this Section 7(d) will 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 pursuant to the first adjustment formula in under this paragraph (dSection 7(d). If any such right or warrant, including any such existing rights or warrants distributed prior to the date hereofof this Certificate, 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 7(d) was made, (1) in the case of any such rights or warrants that 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 that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such expired or terminated rights and warrants had not been issued. For purposes of paragraphs (athis Section 7(d), (bSection 7(a) and (dSection 7(b), any dividend or distribution to which paragraph (dthis Section 7(d) is applicable that also includes shares of Common Stock, or rights or warrants to subscribe for or purchase shares of Common Stock (or both), shall be deemed instead to be: be (1) a dividend or distribution of the evidences of indebtedness, assets or shares of capital stock Capital Stock other than such shares of Common Stock or rights or warrants (and warrants, as to which any Conversion Rate adjustment required by paragraph (dthis Section 7(d) with respect to such dividend or distribution shall then be made), immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants (and warrants, as to which any further Conversion Rate adjustment required by paragraphs (aSections 7(a) and (b7(b) with respect to such dividend or distribution shall then be made), except any shares of Common Stock included in such dividend or distribution shall not be deemed “outstanding at the Close close of Business business on the Business Day immediately preceding the Ex-Date for such dividend or distributionRecord Date” within the meaning of paragraph (aSections 7(a) and 7(b).
(e) If the Corporation shall, by dividend or otherwise, distribute to all holders of its Common Stock cash, excluding any dividend or distribution in connection with the liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, then, in such case, the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the close of business on such Record Date by a fraction,
(i) the numerator of which shall be the Current Market Price on such Record Date; and
(ii) the denominator of which shall be the Current Market Price on such Record Date less the amount of cash so distributed applicable to one share of Common Stock. Such adjustment shall be effective immediately after the opening of business on the day following the Record Date; provided that if the portion of the cash so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price on the Record Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of Preferred Stock shall have the right to receive upon conversion the amount of cash such holder would have received had such holder converted each share of Preferred Stock on the Record Date. To the extent that such dividend or distribution is not made, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustment made been made on the basis of only the dividend or distribution actually made. If such dividend or distribution is not so paid or 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.
(f) If a tender or exchange offer made by the Corporation or any Subsidiary for all or any portion of the Common Stock shall require the payment to stockholders of consideration per share of Common Stock having a Fair Market Value (as determined in good faith by the Board of Directors, whose determination shall be described in a resolution of the Board of Directors) that, as of the last time (the “Expiration Time”) tenders or exchanges may be made pursuant to such tender or exchange offer, exceeds the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time, the Conversion Rate shall be increased by multiplying the Conversion Rate in effect immediately prior to the Expiration Time by a fraction,
(i) the numerator of which shall be the sum of (x) the Fair Market Value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed so accepted up to any such maximum, being referred to as the “Purchased Shares”) and (y) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) at the Expiration Time and the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time; and
(ii) the denominator of which shall be the number of shares of Common Stock outstanding (including any Purchased Shares) at the Expiration Time multiplied by the Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time. Such adjustment shall become effective immediately after the opening of business on the day following the Expiration Time. In the event that the Corporation or any such Subsidiary, as the case may be, is obligated to purchase shares pursuant to any such tender or exchange offer, but the Corporation or any such Subsidiary, as the case may be, is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made.
(g) If the Corporation pays a dividend or makes a distribution to all or substantially all holders of its Common Stock consisting of Capital Stock of any class or series, or similar equity interests, of or relating to a Subsidiary or other business unit of the Corporation, unless the Corporation distributes such Capital Stock or equity interests to holders of the Preferred Stock in such distribution on the same basis as they would have received had such holders converted their shares of Preferred Stock into shares of Common Stock immediately prior to such distributions, the Conversion Rate shall be increased by multiplying the Conversion Rate in effect on the Record Date with respect to such distribution by a fraction,
(i) the numerator of which shall be the sum of (A) the average of the Closing Sale Prices of the Common Stock for the 10
Appears in 1 contract