Adjustments to the Conversion Rate. The Conversion Rate shall be adjusted from time to time as follows: (a) If the Company issues shares of Common Stock as a dividend or distribution on shares of Common Stock, or if the Company effects a share split or share combination of the Common Stock, then the Conversion Rate will be adjusted based on the following formula: where, CR1 = the Conversion Rate in effect immediately prior to the open of business on the Ex-Date for such dividend or distribution or the effective date of such share split or combination, as the case may be; CR0 = the Conversion Rate in effect at 5:00 p.m., New York City time, on the Trading Day immediately preceding such Ex-Date or effective date, as applicable; OS0 = the number of shares of Common Stock outstanding at 5:00 p.m., New York City time, on the Trading Day immediately preceding such Ex-Date or effective date, as applicable; and OS1 = the number of shares of Common Stock that would be outstanding immediately after, and solely as a result of, such dividend, distribution, share split or share combination. (b) Subject to Section 12.03(i), if the Company distributes to all or substantially all holders of Common Stock any rights or warrants entitling them to purchase, for a period of sixty (60) calendar days following the record date for such distribution, shares of Common Stock at a price per share less than the average Closing Sale Price per share of Common Stock for the ten (10) Trading Days immediately preceding the declaration date for such distribution, then the Conversion Rate will be increased based on the following formula; where, CR1 = the Conversion Rate in effect immediately prior to the open of business on the Ex-Date for such distribution; CR0 = the Conversion Rate in effect at 5:00 p.m., New York City time, on the Trading Day immediately preceding such Ex-Date; OS0 = the number of shares of Common Stock outstanding at 5:00 p.m., New York City time, on the Trading Day immediately preceding such Ex-Date;
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Sources: Eighth Supplemental Indenture (Omnicare Inc), Seventh Supplemental Indenture (Omnicare Inc)
Adjustments to the Conversion Rate. The Conversion Rate shall be adjusted from time to time as follows:
(a) If the Company issues shares of Common Stock as a dividend or distribution on shares of Common Stock, or if the Company effects a share split or share combination of the Common Stock, then the Conversion Rate will be adjusted based on the following formula: where, CR1 = the Conversion Rate in effect immediately prior to the open of business on the Ex-Date for such dividend or distribution or the effective date of such share split or combination, as the case may be; CR0 = the Conversion Rate in effect at 5:00 p.m., New York City time, on the Trading Day immediately preceding such Ex-Date or effective date, as applicable; OS0 = the number of shares of Common Stock outstanding at 5:00 p.m., New York City time, on the Trading Day immediately preceding such Ex-Date or effective date, as applicable; and OS1 = the number of shares of Common Stock that would be outstanding immediately after, and solely as a result of, such dividend, distribution, share split or share combination.
(b) Subject to Section 12.03(i), if the Company distributes to all or substantially all holders of Common Stock any rights or warrants entitling them to purchase, for a period of sixty (60) calendar days following the record date for such distribution, shares of Common Stock at a price per share less than the average Closing Sale Price per share of Common Stock for the ten (10) Trading Days immediately preceding the declaration date for such distribution, then the Conversion Rate will be increased based on the following formula; where, CR1 = the Conversion Rate in effect immediately prior to the open of business on the Ex-Date for such distribution; CR0 = the Conversion Rate in effect at 5:00 p.m., New York City time, on the Trading Day immediately preceding such Ex-Date; OS0 = the number of shares of Common Stock outstanding at 5:00 p.m., New York City time, on the Trading Day immediately preceding such Ex-Date; X = the total number of 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 per share of Common Stock over the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding such Ex-Date. For the purposes of this Section 12.03(b), in determining whether any rights or warrants entitle the holders thereof to subscribe for or purchase shares of Common Stock at less than the average Closing Sale Price per share of Common Stock for the ten (10) Trading Days immediately preceding the declaration date for such distribution, and in determining the aggregate price payable to exercise such rights or warrants, there shall be taken into account any consideration received by the Company for such rights or warrants and any amount payable upon exercise thereof, with the value of such consideration, if other than cash, as shall be determined in good faith by the Board of Directors.
(c) Subject to Section 12.03(i), if the Company distributes shares of the Company’s Capital Stock, evidences of the Company’s indebtedness, or other assets or property of the Company to all or substantially all holders of Common Stock, excluding:
(i) dividends or distributions as to which adjustment is required to be effected pursuant to Section 12.03(a) or Section 12.03(b);
(ii) the initial distribution of rights issued pursuant to a stockholder rights plan, provided that such rights plan provides for the issuance of such rights with respect to Common Stock issued upon conversion of the Notes;
(iii) dividends or distributions paid exclusively in cash; and
(iv) spin-offs described below in the third paragraph of this Section 12.03(c), then the Conversion Rate will be adjusted based on the following formula: where, CR1 = the Conversion Rate in effect immediately prior to the open of business on the Ex-Date for such distribution; CR0 = the Conversion Rate in effect at 5:00 p.m., New York City time, on the Trading Day immediately preceding such Ex-Date; SP0 = the average of the Last Reported Sale Prices per share of Common Stock over the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding such Ex-Date; and FMV = the fair market value (as determined by the Board of Directors) of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Stock as of the open of business on such Ex-Date. If the Board of Directors determines FMV by reference to the actual or when-issued trading market for any securities, then, in doing so, it must consider the prices in such market over the same period used in computing SP0. Notwithstanding the foregoing, if FMV is equal to or greater than SP0, then, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder shall receive, on the date on which such Capital Stock, evidences of Indebtedness, assets or property are distributed to holders of Common Stock, for each $1,000 principal amount of Notes, the amount of such Capital Stock, evidences of Indebtedness, assets or property that a person who was a holder of record, on the record date for such distribution, of a number of shares of Common Stock equal to the Conversion Rate in effect on such Ex-Date would have been entitled to receive pursuant to such distribution. With respect to an adjustment pursuant to this Section 12.03(c) where there has been a payment of a dividend or other distribution on Common Stock in shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary, or other business unit, of the Company, which shares or equity interest are listed on a national or regional securities exchange (a “Spin-Off”), the Conversion Rate will be increased based on the following formula: where, CR1 = the Conversion Rate in effect immediately prior to the open of business on the Ex-Date for such Spin-Off; CR0 = the Conversion Rate in effect at 5:00 p.m., New York City time, on the Trading Day immediately preceding such Ex-Date; FMV0 = the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one (1) share of Common Stock over the first ten (10) consecutive Trading Day period immediately following, and including, the third (3rd) Trading Day after such Ex-Date (such period, the “Valuation Period”); and MP0 = the average of the Last Reported Sale Prices per share of Common Stock over the Valuation Period. The adjustment to the Conversion Rate pursuant to the immediately preceding formula will be made immediately after the open of business on the day after the last day of the applicable Valuation Period, but will be given effect immediately prior to the open of business on the Ex-Date for the applicable Spin-Off. Notwithstanding anything to the contrary in the Indenture or the Notes, if the final Trading Day of the Cash Settlement Averaging Period applicable to the conversion of any Note occurs on or after the Ex-Date for the Spin-Off and on or before the last Trading Day of the applicable Valuation Period, then the Company shall deliver the Conversion Consideration for such conversion on the third (3rd) Business Day immediately following the last Trading Day of such Valuation Period.
(d) If the Company pays any cash dividends or distributions paid exclusively in cash to all or substantially all holders of Common Stock (other than dividends or distributions made in connection with the Company’s liquidation, dissolution or winding-up or upon a Conversion Right Adjustment Event), then the Conversion Rate will be increased based on the following formula: where, CR1 = the Conversion Rate in effect immediately prior to the open of business on the Ex-Date for such dividend or distribution; CR0 = the Conversion Rate in effect at 5:00 p.m., New York City time, on the Trading Day immediately preceding such Ex-Date; SP0 = the average of the Last Reported Sale Prices per share of Common Stock over the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding such Ex-Date; DTA = the Dividend Threshold Amount; and C = the amount in cash per share the Company distributes to holders of Common Stock pursuant to such dividend or distribution; provided, however, that if C is equal to or greater than SP0, then, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder shall have the right to receive, on the date on which such cash dividend or distribution is distributed to holders of Common Stock and upon the same terms as such holders, for each $1,000 principal amount of Notes, the amount of cash a Person who was a holder of record on the record date for such dividend or distribution of a number of shares of Common Stock equal to the Conversion Rate in effect on such Ex-Date would have been entitled to receive pursuant to such dividend or distribution.
(e) If the Company or any of its Subsidiaries makes a payment in respect of a tender offer or exchange offer for the Common Stock, where the cash and value (as determined by the Board of Directors) of any other consideration included in the payment per share of Common Stock pursuant to such tender offer or exchange offer exceeds the Closing Sale Price per share of Common Stock on the Trading Day next succeeding the last date (such last date, the “Expiration Date”) on which tenders or exchanges may be made pursuant to such tender offer or exchange offer, then the Conversion Rate will be increased based on the following formula: where, CR1 = the Conversion Rate in effect immediately prior to the open of business on the Trading Day immediately following the Expiration Date; CR0 = the conversion rate in effect at 5:00 p.m., New York City time, on the Expiration Date; AC = the aggregate of the cash and value of all other consideration (as determined by the Board of Directors) paid or payable for all shares of Common Stock purchased in such tender offer or exchange offer; SP1 = the average of the Last Reported Sale Prices per share of Common Stock over the ten (10) consecutive Trading Day period (the “Averaging Period”) commencing on, and including, the Trading Day next succeeding the Expiration Date; OS1 = the number of shares of Common Stock outstanding immediately after the close of business on the Expiration Date (excluding shares validly tendered and accepted for payment pursuant to such tender offer or exchange offer); and OS0 = the number of shares of Common Stock outstanding immediately prior to the Expiration Date (prior to giving effect to such tender offer or exchange offer). The adjustment to the Conversion Rate pursuant to the immediately preceding formula will be made immediately prior to the open of business on the day after the last day of the applicable Averaging Period, but will be given effect immediately prior to the open of business on the Trading Day immediately following the Expiration Date. Notwithstanding anything to the contrary in the Indenture or the Notes, (i) if the final Trading Day of the Cash Settlement Averaging Period applicable to the conversion of any Note occurs on or after the Trading Day immediately following the Expiration Date and on or before the last Trading Day of the applicable Averaging Period, then the Company shall deliver the Conversion Consideration for such conversion on the third (3rd) Business Day immediately following the last Trading Day of such Averaging Period; (ii) if the Company, or any of its Subsidiaries, is obligated to purchase Common Stock pursuant to any such tender offer or exchange offer but is permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, then the Conversion Rate shall be readjusted to be the Conversion Rate that would be in effect if such tender offer or exchange offer had not been made; and (iii) in no event shall an adjustment be made pursuant to this Section 12.03(e) if such adjustment would result in a reduction to the Conversion Rate.
(f) If a Non-Stock Change of Control occurs and the Conversion Agent receives a conversion notice to convert a Note (whether physically or, if such Note is held in the form of a Global Security, through the Depositary’s conversion program) during the period (the “Non-Stock Change of Control Period”) after the effective date of such Non-Stock Change of Control and before 5:00 p.m., New York City time, on the Business Day immediately preceding the Fundamental Change Repurchase Date for such Non-Stock Change of Control (in such case, such Note will be deemed to have been converted “in connection with” such Non-Stock Change of Control), then the Conversion Rate applicable to such conversion shall be increased to an amount equal to the Conversion Rate that would, but for this Section 12.03(f), otherwise apply to such Note pursuant to this Article XII, plus an amount equal to the Applicable Increase.
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