Settlement Upon Conversion. (a) Except as provided in Section 11.07(e), upon conversion of any Note, the Company shall pay or deliver, as the case may be, to a converting Holder, in respect of each $1,000 principal amount of Notes being converted, cash (“Cash Settlement”), shares of Common Stock, together with cash, if applicable, in lieu of any fractional share of Common Stock in accordance with Section 11.03(b) (“Physical Settlement”) or a combination of cash and shares of Common Stock, together with cash, if applicable, in lieu of any fractional share of Common Stock in accordance with Section 11.03(b) (“Combination Settlement”), at its election, as set forth in this Section 11.03. (i) All conversions occurring on or after April 15, 2017 shall be settled using the same Settlement Method. (ii) Except for any conversions that occur on or after April 15, 2017, the Company shall use the same Settlement Method for all conversions occurring on the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions that occur on different Trading Days. (iii) If, in respect of any Conversion Date (or any conversion occurring during the period from, and including, April 15, 2017 to, and including, the Business Day immediately preceding the Maturity Date, as the case may be), the Company elects to deliver a notice (the “Settlement Notice”) of the relevant Settlement Method in respect of such Conversion Date (or such period, as the case may be), the Company, through the Trustee, shall deliver such Settlement Notice to converting Holders no later than the close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions occurring on or after April 15, 2017, no later than April 15, 2017). If the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be equal to $1,000. Any Settlement Notice shall specify the relevant Settlement Method and in the case of an election of Combination Settlement, the relevant Settlement Notice shall indicate the Specified Dollar Amount per $1,000 principal amount of Notes. If the Company delivers a Settlement Notice electing Combination Settlement in respect of its Conversion Obligation but does not indicate a Specified Dollar Amount per $1,000 principal amount of Notes in such Settlement Notice, the Specified Dollar Amount per $1,000 principal amount of Notes shall be deemed to be $1,000. Notwithstanding the foregoing or anything to the contrary herein, the Company shall not have the right to elect Physical Settlement in respect of Notes surrendered for conversion on any Conversion Date (or on or after April 15, 2017, as the case may be) if the sum of (x) the aggregate number of shares of the Common Stock to be delivered upon Physical Settlement in satisfaction of the Company’s Conversion Obligation in respect of all Notes surrendered for conversion on such Conversion Date (or that would be delivered upon Physical Settlement if all Notes outstanding as of April 15, 2017 were surrendered for conversion, as the case may be) and (y) the aggregate number of shares of the Common Stock delivered or to be delivered in respect of Notes converted prior to such Conversion Date (or prior to April 15, 2017, as the case may be) is greater than the Maximum Number of Underlying Shares. (iv) The cash, shares of Common Stock or combination of cash and shares of Common Stock due upon any conversion of Notes (the “Settlement Amount”) shall be computed as follows: (A) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall deliver to the converting Holder in respect of each $1,000 principal amount of Notes being converted a number of shares of the Common Stock equal to the Conversion Rate in effect on the Conversion Date; (B) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Cash Settlement, the Company shall pay to the converting Holder in respect of each $1,000 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 35 consecutive VWAP Trading Days during the relevant Observation Period; and (C) subject to Section 11.03(b), if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, to the converting Holder in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount equal to the sum of the Daily Settlement Amounts for each of the 35 consecutive VWAP Trading Days during the relevant Observation Period. (b) Notwithstanding anything herein to the contrary, in respect of any conversion of Notes, regardless of whether the Company has a class of securities listed on The New York Stock Exchange at the time of such conversion, the aggregate number of shares of the Common Stock delivered in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock previously delivered or required to be delivered in respect of all Notes surrendered for conversion prior to such conversion, cannot exceed 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date unless, prior to such conversion, the Company has received approval from its shareholders to permit the issuance upon conversion of the Notes of a number of shares of the Common Stock up to the Maximum Number of Underlying Shares. If the Company receives such shareholder approval on any day, the Company shall so notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) prior to the Close of Business on such day. Prior to the Company obtaining such shareholder approval, in connection with any conversion of Notes for which the Company has elected Combination Settlement, if the number of shares of Common Stock deliverable in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock delivered or required to be delivered in respect of Notes converted prior to such conversion, exceeds 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date, the Company shall pay cash in lieu of delivering any shares of Common Stock otherwise deliverable upon conversion in excess of such limitations based on the Daily VWAP on each VWAP Trading Day of the relevant Observation Period in respect of which, in lieu of delivering shares of Common Stock, the Company pays cash pursuant to this Section 11.03(b). (c) Notwithstanding the foregoing, the Company shall not issue fractional shares of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Daily VWAP on the relevant Conversion Date (in the case of Physical Settlement) or based on the Daily VWAP on the last VWAP Trading Day of the relevant Observation Period (in the case of Combination Settlement). For each Note surrendered for conversion, if the Company has elected Combination Settlement, the full number of shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate Daily Settlement Amounts for the applicable Observation Period and any fractional shares remaining after such computation shall be paid in cash. (d) If a Holder converts a Note, except as set forth in Section 11.02(g), (i) such Holder shall not receive any separate cash payment (in addition to the Conversion Obligation) for accrued and unpaid interest on such Note and (ii) the Company’s payment and/or delivery, as the case may be, to such converting Holder of the amount of cash, the number of shares of Common Stock or a combination thereof, as the case may be, into which such Holder’s Note is convertible shall be deemed to satisfy in full the Company’s obligation to pay to such Holder (i) the principal amount of such converted Note and (ii) accrued and unpaid interest, if any, to, but excluding, the relevant Conversion Date. As a result, subject to Section 11.02(g), accrued and unpaid interest, if any, on a converted Note to but, excluding, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of Notes into a combination of cash and shares of Common Stock, subject to Section 11.02(g), accrued and unpaid interest, if any, shall be deemed to be paid first out of the cash paid upon such conversion. (e) The Daily Settlement Amounts (if applicable) and the Daily Conversion Values (if applicable) shall be determined by the Company promptly following the last Trading Day of the Observation Period. Promptly after such determination of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional share, the Company shall notify the Trustee and the Conversion Agent (if other than the Trustee) of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional shares of Common Stock. The Trustee and the Conversion Agent (if other than the Trustee) shall have no responsibility for any such determination.
Appears in 1 contract
Settlement Upon Conversion. (a) Except The Company shall settle its conversion obligations as provided described in Section 11.07(e11.12(c), upon unless, within the applicable time period specified in Section 11.12(b), the Company elects to settle its conversion obligations as described in Section 11.12(d) or Section 11.12(e). The cash and/or shares of any NoteCommon Stock which the Company is required to deliver in accordance with this Section 11.12 in settlement of its conversion obligations is referred to herein as the “Settlement Amount.”
(b) If the Company desires to settle its conversion obligations as described in Section 11.12(d) or 11.12(e), the Company shall pay notify each converting holder through the Trustee of the method the Company will choose to satisfy its Conversion Obligations no later than the second Trading Day immediately following the Company’s receipt of a Notice of Conversion from such holder, and such notice shall specify the section of this Indenture pursuant to which the Company is electing to satisfy its conversion obligations; provided, however, that the Company shall have the right to irrevocably elect, in its sole discretion and without the consent of the holders of the Notes, by notice to the holders of the Notes through the Trustee, on or deliverprior to December 15, as the case may be2011, to a converting Holder, settle all of its future conversion obligations entirely in respect of each $1,000 principal amount of Notes being converted, cash (“Cash Settlement”), shares of Common Stock, together with cash, if applicable, Stock as described in lieu of any fractional share of Common Stock in accordance with Section 11.03(b11.12(e) (“Physical Settlement”) or which notice shall specifically reference such section); and, provided further, that the Company is required to settle all conversions with a combination of cash and shares of Common Stock, together with cash, if applicable, in lieu of any fractional share of Common Stock in accordance with Section 11.03(b) (“Combination Settlement”), at its election, as set forth in this Section 11.03.
(i) All conversions Conversion Date occurring on or after April December 15, 2017 shall be settled using 2011 in the same Settlement Method.
(ii) Except for any conversions that occur on or after April 15manner, 2017, and the Company shall use notify holders through the same Settlement Method for Trustee of the manner of settlement (including specifying the applicable section of this Indenture that describes such manner of settlement) on or before such date. The Company shall treat all conversions occurring holders converting on the same Conversion DateTrading Day in the same manner; however, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions that occur settle Conversion Obligations arising on different Trading Days.
(iii) IfDays in the same manner, in respect of any except for conversions with a Conversion Date (or any conversion occurring during the period from, and including, April 15, 2017 to, and including, the Business Day immediately preceding the Maturity Date, as the case may be), the Company elects to deliver a notice (the “Settlement Notice”) of the relevant Settlement Method in respect of such Conversion Date (or such period, as the case may be), the Company, through the Trustee, shall deliver such Settlement Notice to converting Holders no later than the close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions occurring on or after April December 15, 20172011, no later than April 15, 2017). which shall all be satisfied in the same manner.
(c) If the Company does not elect a Settlement Method prior elect, within the applicable time periods specified in Section 11.12(b), to the deadline set forth settle its conversion obligations as described in the immediately preceding sentenceSection 11.12(d) or 11.12(e), the Company shall no longer have the right to elect Cash Settlement or Physical Settlement and the Company shall be deemed to have elected Combination Settlement settle its conversion obligations as described in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be equal to $1,000this Section 11.12(c). Any Settlement Notice shall specify the relevant Settlement Method and in the case of an election of Combination Settlement, the relevant Settlement Notice shall indicate the Specified Dollar Amount per $1,000 principal amount of Notes. If the Company delivers a Settlement Notice electing Combination Settlement in respect of its Conversion Obligation but does not indicate a Specified Dollar Amount per $1,000 principal amount of Notes in such Settlement Notice, the Specified Dollar Amount per $1,000 principal amount of Notes shall be deemed to be $1,000. Notwithstanding the foregoing or anything to the contrary herein, the Company shall not have the right to elect Physical Settlement in respect of Notes surrendered for conversion on any Conversion Date (or on or after April 15, 2017, as the case may be) if the sum of (x) the aggregate number of shares of the Common Stock to be delivered upon Physical Settlement in satisfaction of the Company’s Conversion Obligation in respect of all Notes surrendered for conversion on such Conversion Date (or that would be delivered upon Physical Settlement if all Notes outstanding as of April 15, 2017 were surrendered for conversion, as the case may be) and (y) the aggregate number of shares of the Common Stock delivered or to be delivered in respect of Notes converted prior to such Conversion Date (or prior to April 15, 2017, as the case may be) is greater than the Maximum Number of Underlying Shares.
(iv) The cash, shares of Common Stock or combination of cash and shares of Common Stock due upon any conversion of Notes (the “Settlement Amount”) shall be computed as follows:
(A) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall deliver to the converting Holder in respect of each $1,000 principal amount of Notes being converted a number of shares of the Common Stock equal to the Conversion Rate in effect on the Conversion Date;
(B) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Cash Settlement, the Company shall pay to the converting Holder in respect of each $1,000 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 35 consecutive VWAP Trading Days during the relevant Observation Period; and
(C) subject to Section 11.03(b), if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, to the converting Holder in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount equal to the sum of the Daily Settlement Amounts for each of the 35 40 consecutive VWAP Trading Days during the relevant Observation Cash Settlement Averaging Period.
(b) Notwithstanding anything herein to the contrary, in respect of any conversion of Notes, regardless of whether the Company has a class of securities listed on The New York Stock Exchange at the time of such conversion, the aggregate number of shares of the Common Stock delivered in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock previously delivered or required to be delivered in respect of all Notes surrendered for conversion prior to such conversion, cannot exceed 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date unless, prior to such conversion, the Company has received approval from its shareholders to permit the issuance upon conversion of the Notes of a number of shares of the Common Stock up to the Maximum Number of Underlying Shares. If the Company receives such shareholder approval on any day, the Company shall so notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) prior to the Close of Business on such day. Prior to the Company obtaining such shareholder approval, in connection with any conversion of Notes for which the Company has elected Combination Settlement, if the number of shares of Common Stock deliverable in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock delivered or required to be delivered in respect of Notes converted prior to such conversion, exceeds 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date, the Company shall pay cash in lieu of delivering any shares of Common Stock otherwise deliverable upon conversion in excess of such limitations based on the Daily VWAP on each VWAP third Trading Day of the relevant Observation Period in respect of which, in lieu of delivering shares of Common Stock, the Company pays cash pursuant to this Section 11.03(b).
(c) Notwithstanding the foregoing, the Company shall not issue fractional shares of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Daily VWAP on the relevant Conversion Date (in the case of Physical Settlement) or based on the Daily VWAP on the last VWAP Trading Day of the relevant Observation Period (in the case of Combination Settlement). For each Note surrendered for conversion, if the Company has elected Combination Settlement, the full number of shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate Daily Settlement Amounts for the applicable Observation Period and any fractional shares remaining after such computation shall be paid in cash.
(d) If a Holder converts a Note, except as set forth in Section 11.02(g), (i) such Holder shall not receive any separate cash payment (in addition to the Conversion Obligation) for accrued and unpaid interest on such Note and (ii) the Company’s payment and/or delivery, as the case may be, to such converting Holder of the amount of cash, the number of shares of Common Stock or a combination thereof, as the case may be, into which such Holder’s Note is convertible shall be deemed to satisfy in full the Company’s obligation to pay to such Holder (i) the principal amount of such converted Note and (ii) accrued and unpaid interest, if any, to, but excluding, the relevant Conversion Date. As a result, subject to Section 11.02(g), accrued and unpaid interest, if any, on a converted Note to but, excluding, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of Notes into a combination of cash and shares of Common Stock, subject to Section 11.02(g), accrued and unpaid interest, if any, shall be deemed to be paid first out of the cash paid upon such conversion.
(e) The Daily Settlement Amounts (if applicable) and the Daily Conversion Values (if applicable) shall be determined by the Company promptly immediately following the last Trading Day day of the Observation related Cash Settlement Averaging Period. Promptly after such determination For purposes of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional sharethis Section 11.12(c), the Company shall notify following terms have the Trustee and the Conversion Agent (if other than the Trustee) of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional shares of Common Stock. The Trustee and the Conversion Agent (if other than the Trustee) shall have no responsibility for any such determination.following respective meanings:
Appears in 1 contract
Sources: Indenture (Macerich Co)
Settlement Upon Conversion. In the event that the Company receives a Holder’s notice of conversion upon satisfaction of one or more of the conditions to conversion described in this Section 11.01, the Company will notify the relevant Holders within two Scheduled Trading Days following the Conversion Date whether the Company will satisfy its obligation to convert the Notes through delivery of (ax) Except as shares of Common Stock pursuant to clause (ii) below (plus cash in lieu of fractional shares) or (y) a combination of cash and shares of Common Stock pursuant to clause (i) below. At any time on or before the 13th Scheduled Trading Day prior to the Stated Maturity, the Company may irrevocably waive, in its sole discretion without the consent of the Holders, by notice to the Trustee and to the Holders, its right to satisfy its Conversion Obligation in shares of its Common Stock pursuant to clause (ii) below (plus cash in lieu of any fractional shares); provided that the Company may not elect to satisfy such obligation pursuant to clause (ii) below if the Company has made the election to waive such right to do so. Notwithstanding the foregoing, if the Company elects to redeem the Notes, it will, in Section 11.07(eits notice of redemption, elect whether it will settle any conversions of Notes called for redemption pursuant to clause (i) or (ii) below (unless it has irrevocably elected to waive its right to satisfy its Conversion Obligation pursuant to clause (ii) below), which election shall apply to all Notes converted following the Company’s notice of redemption.
(i) If the Company chooses or has to satisfy its obligation to convert the Notes (the “Conversion Obligation”) by a combination of cash and shares of Common Stock, upon conversion of any Note, the Company shall pay or deliverwill, as the case may be, deliver to a converting HolderHolders, in respect of each $1,000 principal amount of Notes being converted, a “Settlement Amount” equal to (i) cash in an amount equal to the lesser of (“Cash Settlement”a) the Conversion Value and (b) $1,000; (ii) if the Conversion Value is greater than $1,000, an amount in shares equal to the difference between the Conversion Value and $1,000, divided by the Applicable Stock Price for such Notes; and (iii) cash in lieu of any fractional shares as described below in Section 11.01(e), . The Settlement Amount in respect of any Note converted pursuant to this clause (i) will be delivered to converting Holders as soon as practicable following the last day following the determination of the Applicable Stock Price for such Note.
(ii) If the Company elects to satisfy all of its Conversion Obligation with respect to Notes to be converted in shares of Common Stock, together with cash, if applicable, in lieu of any fractional share of Common Stock in accordance with Section 11.03(b) (“Physical Settlement”) or a combination of cash and shares of Common Stock, together with cash, if applicable, in lieu of any fractional share of Common Stock in accordance with Section 11.03(b) (“Combination Settlement”), at its election, as set forth in this Section 11.03.
(i) All conversions occurring on or after April 15, 2017 shall be settled using the same Settlement Method.
(ii) Except for any conversions that occur on or after April 15, 2017, the Company shall use the same Settlement Method for all conversions occurring on the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions that occur on different Trading Days.
(iii) If, in respect of any Conversion Date (or any conversion occurring during the period from, and including, April 15, 2017 to, and including, the Business Day immediately preceding the Maturity Date, as the case may be), the Company elects to deliver a notice (the “Settlement Notice”) of the relevant Settlement Method in respect of such Conversion Date (or such period, as the case may be), the Company, through the Trustee, shall deliver such Settlement Notice to converting Holders no later than the close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions occurring on or after April 15, 2017, no later than April 15, 2017). If the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be equal to $1,000. Any Settlement Notice shall specify the relevant Settlement Method and in the case of an election of Combination Settlement, the relevant Settlement Notice shall indicate the Specified Dollar Amount per $1,000 principal amount of Notes. If the Company delivers a Settlement Notice electing Combination Settlement in respect of its Conversion Obligation but does not indicate a Specified Dollar Amount per $1,000 principal amount of Notes in such Settlement Notice, the Specified Dollar Amount per $1,000 principal amount of Notes shall be deemed to be $1,000. Notwithstanding the foregoing or anything to the contrary herein, the Company shall not have the right to elect Physical Settlement in respect of Notes surrendered for conversion on any Conversion Date (or on or after April 15, 2017, as the case may be) if the sum of (x) the aggregate number of shares of the Common Stock to be delivered upon Physical Settlement in satisfaction of the Company’s Conversion Obligation in respect of all Notes surrendered for conversion on such Conversion Date (or that would be delivered upon Physical Settlement if all Notes outstanding as of April 15, 2017 were surrendered for conversion, as the case may be) and (y) the aggregate number of shares of the Common Stock delivered or to be delivered in respect of Notes converted prior to such Conversion Date (or prior to April 15, 2017, as the case may be) is greater than the Maximum Number of Underlying Shares.
(iv) The cash, shares of Common Stock or combination of cash and shares of Common Stock due upon any conversion of Notes (the “Settlement Amount”) shall be computed as follows:
(A) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall will deliver to the any converting Holder in respect of Holder, for each $1,000 principal amount of Notes being converted the Notes, a number of shares of the Common Stock equal to the Conversion Rate in effect on the Conversion Date;
(B) if the Company elects to satisfy its Conversion Obligation in respect of for such conversion by Cash SettlementNotes, the Company shall pay to the converting Holder in respect of each $1,000 principal amount of Notes being converted plus cash in an amount equal to the sum lieu of the Daily Conversion Values for each any fractional shares determined as described below in Section 11.01(e). The shares of the 35 consecutive VWAP Trading Days during the relevant Observation Period; and
(C) subject to Section 11.03(b), if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, to the converting Holder in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount equal to the sum of the Daily Settlement Amounts for each of the 35 consecutive VWAP Trading Days during the relevant Observation Period.
(b) Notwithstanding anything herein to the contrary, Common Stock in respect of any conversion of Notes, regardless of whether the Company has a class of securities listed on The New York Stock Exchange at the time of such conversion, the aggregate number of shares of the Common Stock delivered in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock previously delivered or required to be delivered in respect of all Notes surrendered for conversion prior to such conversion, cannot exceed 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date unless, prior to such conversion, the Company has received approval from its shareholders to permit the issuance upon conversion of the Notes of a number of shares of the Common Stock up to the Maximum Number of Underlying Shares. If the Company receives such shareholder approval on any day, the Company shall so notify Holders, the Trustee Note converted (and the Conversion Agent (if other than the Trustee) prior to the Close of Business on such day. Prior to the Company obtaining such shareholder approval, in connection with any conversion of Notes for which the Company has elected Combination Settlement, if the number of shares of Common Stock deliverable in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock delivered or required to be delivered in respect of Notes converted prior to such conversion, exceeds 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date, the Company shall pay cash in lieu of delivering any shares of Common Stock otherwise deliverable upon conversion in excess of such limitations based on the Daily VWAP on each VWAP Trading Day of the relevant Observation Period in respect of which, in lieu of delivering shares of Common Stock, the Company pays cash fractional shares) pursuant to this Section 11.03(b).
(c) Notwithstanding the foregoing, the Company shall not issue fractional shares of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Daily VWAP on the relevant Conversion Date (in the case of Physical Settlement) or based on the Daily VWAP on the last VWAP Trading Day of the relevant Observation Period (in the case of Combination Settlement). For each Note surrendered for conversion, if the Company has elected Combination Settlement, the full number of shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate Daily Settlement Amounts for the applicable Observation Period and any fractional shares remaining after such computation shall be paid in cash.
(d) If a Holder converts a Note, except as set forth in Section 11.02(g), (i) such Holder shall not receive any separate cash payment (in addition to the Conversion Obligation) for accrued and unpaid interest on such Note and clause (ii) the Company’s payment and/or delivery, as the case may be, to such converting Holder of the amount of cash, the number of shares of Common Stock or a combination thereof, as the case may be, into which such Holder’s Note is convertible shall will be deemed to satisfy in full the Company’s obligation to pay to such Holder (i) the principal amount of such converted Note and (ii) accrued and unpaid interest, if any, to, but excluding, the relevant Conversion Date. As a result, subject to Section 11.02(g), accrued and unpaid interest, if any, on a converted Note to but, excluding, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of Notes into a combination of cash and shares of Common Stock, subject to Section 11.02(g), accrued and unpaid interest, if any, shall be deemed to be paid first out of the cash paid upon such conversion.
(e) The Daily Settlement Amounts (if applicable) and the Daily Conversion Values (if applicable) shall be determined by the Company promptly following the last Trading Day of the Observation Period. Promptly after such determination of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional share, the Company shall notify the Trustee and delivered through the Conversion Agent (if other than the Trustee) of the Daily Settlement Amounts or the Daily Conversion Values, DTC as the case may be, and the amount of cash payable in lieu of the delivery of any fractional shares of Common Stock. The Trustee and soon as practicable following the Conversion Agent (if other than the Trustee) shall have no responsibility Date for any such determinationNote.
Appears in 1 contract
Sources: First Supplemental Indenture (Goodrich Petroleum Corp)
Settlement Upon Conversion. (a) Except as provided in Subject to this Section 11.07(e)14.04, Section 14.07 and Section 14.08, upon conversion of any Note, the Company shall pay or deliver, as the case may be, to a the converting Holder, in respect of each $1,000 principal amount of Notes being converted, cash (“Cash Settlement”), shares of the Common Stock, together with cash, if applicable, in lieu of delivering any fractional share of the Common Stock in accordance with subsection (j) of this Section 11.03(b) 14.04 (“Physical Settlement”) or a combination of cash and shares of the Common Stock, together with cash, if applicable, in lieu of delivering any fractional share of the Common Stock in accordance with subsection (j) of this Section 11.03(b) 14.04 (“Combination Settlement”), at its election, as set forth in this Section 11.0314.04.
(i1) All conversions occurring for which the relevant Conversion Date occurs at any time prior to the Close of Business on the Business Day immediately preceding the Maturity Date, and all conversions for which the relevant Conversion Date occurs on or after April 15the Company’s issuance of a Redemption Notice or an Issuer Conversion Notice with respect to the Notes and prior to the related Redemption Date or Issuer Conversion Date, 2017 as the case may be, shall be settled using the same Settlement Method.
(ii2) Except for any conversions that occur for which the relevant Conversion Date occurs on or after April 15the Company’s issuance of a Redemption Notice or Issuer Conversion Notice and prior to the related Redemption Date or Issuer Conversion Date, 2017as the case may be, the Company shall use the same Settlement Method for all conversions occurring on with the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions that occur on with different Trading DaysConversion Dates.
(iii3) If, in respect of any Conversion Date (or any conversion occurring during one of the period from, and including, April 15, 2017 to, and including, periods described in the Business Day third immediately preceding the Maturity Datesucceeding set of parentheses, as the case may be), the Company elects to deliver a notice (the “Settlement Notice”) of the relevant Settlement Method in respect of such Conversion Date (or such period, as the case may be), the Company, through the Trustee, Company shall deliver such Settlement Notice to converting Holders Holders, the Trustee and the Conversion Agent (if other than the Trustee) no later than the close Close of business Business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions occurring on for which the relevant Conversion Date occurs after the date of issuance of a Redemption Notice or after April 15an Issuer Conversion Notice with respect to the Notes and prior to the related Redemption Date or Issuer Conversion Date, 2017as the case may be, no later than April 15, 2017in the Redemption Notice or Issuer Conversion Notice). If the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be equal to $1,000. Any Such Settlement Notice shall specify the relevant Settlement Method and in the case of an election of Combination Settlement, the relevant Settlement Notice shall indicate the Specified Dollar Amount per $1,000 principal amount of Notes. If the Company delivers a Settlement Notice electing Combination Settlement in respect of its Conversion Obligation but does not indicate a Specified Dollar Amount per $1,000 principal amount of Notes in such Settlement Notice, the Specified Dollar Amount per $1,000 principal amount of Notes shall be deemed to be $1,000. Notwithstanding the foregoing or anything to the contrary herein, the Company shall not have the right to elect Physical Settlement in respect of Notes surrendered for conversion on any Conversion Date (or on or after April 15, 2017, as the case may be) if the sum of (x) the aggregate number of shares of the Common Stock to be delivered upon Physical Settlement in satisfaction of the Company’s Conversion Obligation in respect of all Notes surrendered for conversion on such Conversion Date (or that would be delivered upon Physical Settlement if all Notes outstanding as of April 15, 2017 were surrendered for conversion, as the case may be) and (y) the aggregate number of shares of the Common Stock delivered or to be delivered in respect of Notes converted prior to such Conversion Date (or prior to April 15, 2017, as the case may be) is greater than the Maximum Number of Underlying Shares.
(iv4) The cash, shares of the Common Stock or combination of cash and shares of the Common Stock due upon in respect of any conversion of Notes (the “Settlement Amount”) shall be computed as follows:
(A) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall deliver to the converting Holder in respect of each $1,000 principal amount of Notes being converted a number of shares of the Common Stock equal to the Conversion Rate in effect on the Conversion Date;
(B) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Cash Settlement, the Company shall pay to the converting Holder in respect of each $1,000 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 35 40 consecutive VWAP Trading Days during the relevant related Observation Period; and
(C) subject to Section 11.03(b), if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, to the converting Holder in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount equal to the sum of the Daily Settlement Amounts for each of the 35 40 consecutive VWAP Trading Days during the relevant related Observation Period.
(b5) Notwithstanding anything herein to The Daily Settlement Amounts (if applicable) and the contrary, in respect of any conversion of Notes, regardless of whether Daily Conversion Values (if applicable) shall be determined by the Company has a class promptly following the last day of securities listed on The New York Stock Exchange at the time Observation Period. Promptly after such determination of such conversionthe Daily Settlement Amounts or the Daily Conversion Values, as the aggregate number case may be, and the amount of shares cash payable in lieu of delivering any fractional share of the Common Stock delivered in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock previously delivered or required to be delivered in respect of all Notes surrendered for conversion prior to such conversion, cannot exceed 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date unless, prior to such conversion, the Company has received approval from its shareholders to permit the issuance upon conversion of the Notes of a number of shares of the Common Stock up to the Maximum Number of Underlying Shares. If the Company receives such shareholder approval on any dayStock, the Company shall so notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of delivering fractional shares of the Common Stock. The Trustee and the Conversion Agent (if other than the Trustee) shall have no responsibility for any such determination.
(b) Subject to Section 14.04(e), before any Holder of a Note shall be entitled to convert a Note as set forth above, such Holder shall (i) in the case of a Global Note, comply with the procedures of the Depositary in effect at that time and, if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 14.04(h) and (ii) in the case of a Physical Note (1) complete, manually sign and deliver an irrevocable notice to the Conversion Agent as set forth in the Form of Notice of Conversion (or a facsimile thereof) (a “Notice of Conversion”) at the office of the Conversion Agent and state in writing therein the principal amount of Notes to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of the Common Stock to be delivered upon settlement of the Conversion Obligation to be registered, (2) surrender such Notes, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent, (3) if required, furnish appropriate endorsements and transfer documents and (4) if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 14.04(h). The Trustee (and if different, the Conversion Agent) shall notify the Company of any conversion pursuant to this Article 14 on the Conversion Date for such conversion. No Notice of Conversion with respect to any Notes may be surrendered by a Holder thereof if such Holder has also delivered a Fundamental Change Repurchase Notice to the Company in respect of such Notes and has not validly withdrawn such Fundamental Change Repurchase Notice in accordance with Section 15.03. If more than one Note shall be surrendered for conversion at any one time by the same Holder, the Conversion Obligation with respect to such Notes shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted thereby) so surrendered.
(c) A Note shall be deemed to have been converted immediately prior to the Close of Business on such daythe Conversion Date. Prior to If the Company obtaining such shareholder approval, in connection elects Physical Settlement with respect to any conversion of Notes for which the Notes, the Company has elected Combination Settlement, if shall deliver the number of shares of Common Stock deliverable consideration due in respect of conversion on the second Business Day immediately following the relevant Conversion Date (provided that, with respect to any conversion following the Regular Record Date immediately preceding the Maturity Date where Physical Settlement is applicable, the Company shall settle any such conversionconversion on the Maturity Date). If the Company elects (or is deemed to have elected) Cash Settlement or Combination Settlement with respect to any conversion of Notes, when aggregated with except as set forth in Section 14.07(b) and Section 14.08(a), the aggregate Company shall pay or deliver, as the case may be, the consideration due in respect of the Conversion Obligation on the second Business Day immediately following the last Trading Day of the Observation Period. If any shares of the Common Stock are due to a converting Holder, the Company shall issue or cause to be issued, and deliver (if applicable) to the Conversion Agent or to such Holder, or such Holder’s nominee or nominees, the full number of shares of the Common Stock delivered to which such Holder shall be entitled, in book-entry format through the Depositary, in satisfaction of the Company’s Conversion Obligation.
(d) In case any Physical Note shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Physical Note so surrendered a new Physical Note or Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Physical Note, without payment of any service charge by the converting Holder but, if required by the Company or Trustee, with payment of a sum sufficient to cover any documentary, stamp or similar issue or transfer tax or similar governmental charge required by law or that may be delivered imposed in respect connection therewith as a result of the name of the Holder of the new Physical Notes converted prior to issued upon such conversion being different from the name of the Holder of the old Physical Notes surrendered for such conversion.
(e) If a Holder submits a Note for conversion, exceeds 19.9% the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of the total number of any shares of the Common Stock outstanding on upon conversion, unless the Issue Datetax is due because the Holder requests such shares to be issued in a name other than the Holder’s name, in which case the Company Holder shall pay cash that tax. The Conversion Agent may refuse to deliver the certificates representing the shares of the Common Stock being issued in lieu of delivering a name other than the Holder’s name until the Trustee receives a sum sufficient to pay any tax that is due by such Holder in accordance with the immediately preceding sentence.
(f) Except as provided in Section 14.05, no adjustment shall be made for dividends on any shares of Common Stock otherwise deliverable issued upon the conversion of any Note as provided in this Article 14.
(g) Upon the conversion of an interest in a Global Note, the Trustee, or the Custodian at the direction of the Trustee, shall make a notation on such Global Note as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversion of Notes effected through any Conversion Agent other than the Trustee.
(h) Upon conversion, other than upon exercise of the Issuer Conversion Option, a Holder shall not receive any separate cash payment for accrued and unpaid interest, if any, except as set forth below. The Company’s settlement of the full Conversion Obligation shall be deemed to satisfy in full its obligation to pay the principal amount of the Note and accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date. As a result, accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date, other than a conversion upon exercise of the Issuer Conversion Option, shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of Notes into a combination of cash and shares of the Common Stock, accrued and unpaid interest will be deemed to be paid first out of the cash paid upon such conversion. Notwithstanding the foregoing, if Notes are converted after the Close of Business on a Regular Record Date, Holders of such Notes as of the Close of Business on such Regular Record Date will receive the full amount of interest payable on such Notes on the corresponding Interest Payment Date notwithstanding the conversion. Notes surrendered for conversion during the period from the Close of Business on any Regular Record Date to the open of business on the immediately following Interest Payment Date, however, must be accompanied by funds equal to the amount of interest payable on the Notes so converted; provided that no such payment shall be required (1) for conversions following the Regular Record Date immediately preceding the Maturity Date; (2) if the Company has specified a Redemption Date or Issuer Conversion Date that is after a Regular Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date; (3) if the Company has specified a Fundamental Change Repurchase Date that is after a Regular Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date; or (4) to the extent of any Defaulted Amounts, if any Defaulted Amounts exists at the time of conversion with respect to such Note. Therefore, for the avoidance of doubt, all Holders of record on the Regular Record Date immediately preceding the Maturity Date shall receive the full interest payment due on the Maturity Date in cash regardless of whether their Notes have been converted following such Regular Record Date.
(i) The Person in whose name the shares of Common Stock shall be issuable upon conversion in excess shall be treated as a stockholder of such limitations based record as of the close of business on the Daily VWAP on each VWAP relevant Conversion Date (if the Company elects to satisfy the related Conversion Obligation by Physical Settlement) or the last Trading Day of the relevant Observation Period in respect of which, in lieu of delivering shares of Common Stock, (if the Company pays cash pursuant elects to this Section 11.03(bsatisfy the related Conversion Obligation by Combination Settlement), as the case may be. Upon a conversion of Notes, such Person shall no longer be a Holder of such Notes surrendered for conversion.
(cj) Notwithstanding the foregoing, the The Company shall not issue any fractional shares share of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Daily VWAP on for the relevant Conversion Date (in the case of Physical Settlement) or based on the Daily VWAP on for the last VWAP Trading Day of the relevant Observation Period (in the case of Combination Settlement). For each Note surrendered for conversion, if the Company has elected Combination Settlement, the full number of shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate Daily Settlement Amounts for the applicable relevant Observation Period and any fractional shares remaining after such computation shall be paid in cash.
(d) If a Holder converts a Note, except as set forth in Section 11.02(g), (i) such Holder shall not receive any separate cash payment (in addition to the Conversion Obligation) for accrued and unpaid interest on such Note and (ii) the Company’s payment and/or delivery, as the case may be, to such converting Holder of the amount of cash, the number of shares of Common Stock or a combination thereof, as the case may be, into which such Holder’s Note is convertible shall be deemed to satisfy in full the Company’s obligation to pay to such Holder (i) the principal amount of such converted Note and (ii) accrued and unpaid interest, if any, to, but excluding, the relevant Conversion Date. As a result, subject to Section 11.02(g), accrued and unpaid interest, if any, on a converted Note to but, excluding, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of Notes into a combination of cash and shares of Common Stock, subject to Section 11.02(g), accrued and unpaid interest, if any, shall be deemed to be paid first out of the cash paid upon such conversion.
(e) The Daily Settlement Amounts (if applicable) and the Daily Conversion Values (if applicable) shall be determined by the Company promptly following the last Trading Day of the Observation Period. Promptly after such determination of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional share, the Company shall notify the Trustee and the Conversion Agent (if other than the Trustee) of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional shares of Common Stock. The Trustee and the Conversion Agent (if other than the Trustee) shall have no responsibility for any such determination.
Appears in 1 contract
Settlement Upon Conversion. (a) Except as provided in Subject to this Section 11.07(e4.03(a), upon any conversion of any Note, the Company shall pay or deliver, as the case may be, deliver to a converting HolderHolders, in respect of each $1,000 principal amount of Notes being converted, cash (“Cash Settlement”)solely cash, solely shares of Common Stock, together with cash, if applicable, in lieu of any fractional share of Common Stock in accordance with Section 11.03(b) (“Physical Settlement”) or a combination of cash and shares of Common Stock, together with cash, if applicable, in lieu of any fractional share of Common Stock in accordance with Section 11.03(b) (the “Combination SettlementSettlement Amount”), at its the Company’s election, as set forth in this Section 11.034.03(a).
(i) All conversions occurring on or after April March 15, 2017 shall 2018 will be settled using the same Settlement Methodsettlement method.
(ii) Prior to March 15, 2018, the Company will elect (or be deemed to have elected) the same settlement method for all conversions occurring on any given Conversion Date. Except for any conversions that occur on or after April March 15, 20172018, the Company shall use need not elect the same Settlement Method for all conversions occurring on the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method settlement method with respect to conversions that occur on different Trading Days.
(iii) If, in respect of any Conversion Date (or any conversion occurring during the period frombeginning on, and including, April March 15, 2017 to2018, and ending on, and including, the Business second Scheduled Trading Day immediately preceding the Maturity DateStated Maturity, as the case may be), the Company elects to deliver a notice (the “Settlement Notice”) of the relevant Settlement Method settlement method in respect of such Conversion Date (or such period, as the case may be), the Company, through the Trustee, shall deliver such Settlement Notice to converting Holders no later than the close of business on the Trading second Business Day immediately following the relevant Conversion Date (or, in the case of any conversions occurring on or after April 15, 2017, no later than April 15, 2017)Date. If the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be equal to $1,000. Any Such Settlement Notice shall specify whether the relevant Settlement Method Company shall satisfy its conversion obligation by (A) delivering solely shares of Common Stock, (B) paying solely cash or (C) paying and in delivering, as the case may be, a combination of cash and shares of Common Stock. In the case of an election to pay and deliver, as the case may be, a combination of Combination Settlementcash and shares of Common Stock, the relevant Settlement Notice shall indicate the Specified Dollar Amount per $1,000 principal amount of NotesAmount. If the Company delivers does not deliver a Settlement Notice electing Combination Settlement Notice, the Company will be deemed to have elected to deliver solely shares of Common Stock in respect of its Conversion Obligation but does not indicate a Specified Dollar Amount per $1,000 principal amount of Notes in such Settlement Notice, the Specified Dollar Amount per $1,000 principal amount of Notes shall be deemed to be $1,000. Notwithstanding the foregoing or anything to the contrary herein, the Company shall not have the right to elect Physical Settlement in respect of Notes surrendered for conversion on any Conversion Date (or on or after April 15, 2017, as the case may be) if the sum of (x) the aggregate number of shares of the Common Stock to be delivered upon Physical Settlement in satisfaction of the Company’s Conversion Obligation in respect of all Notes surrendered for conversion on such Conversion Date (or that would be delivered upon Physical Settlement if all Notes outstanding as of April 15, 2017 were surrendered for conversion, as the case may be) and (y) the aggregate number of shares of the Common Stock delivered or to be delivered in respect of Notes converted prior to such Conversion Date (or prior to April 15, 2017, as the case may be) is greater than the Maximum Number of Underlying Sharesobligation.
(iv) The cash, shares Settlement Amount in respect of Common Stock or combination of cash and shares of Common Stock due upon any conversion of Notes (the “Settlement Amount”) shall be computed as follows:
(A) if the Company elects to satisfy its Conversion Obligation conversion obligation in respect of such conversion by Physical Settlementdelivering solely Common Stock, the Company shall will deliver to the converting Holder in respect of each $1,000 principal amount of Notes being converted a number of shares of the Common Stock equal to (1)(i) the aggregate principal amount of Notes to be converted, divided by (ii) $1,000, multiplied by (2) the then-applicable Conversion Rate in effect on the Conversion Date;
(B) if the Company elects to satisfy its Conversion Obligation conversion obligation in respect of such conversion by Cash Settlementpaying solely cash, the Company shall pay to the converting Holder cash in respect of each an amount per $1,000 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 35 thirty consecutive VWAP Trading Days during the relevant Observation related Cash Settlement Averaging Period; and
(C) subject to Section 11.03(b), if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation conversion obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliverpaying and delivering, as the case may be, a combination of cash and shares of Common Stock, if any, the Company shall pay and deliver to the converting Holder Holder, as the case may be, in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount equal to the sum of the Daily Settlement Amounts for each of the 35 thirty consecutive VWAP Trading Days during the relevant Observation related Cash Settlement Averaging Period.
(b) Notwithstanding anything herein The “Daily Settlement Amount,” for each of the 30 consecutive Trading Days during the Cash Settlement Averaging Period, shall consist of:
(i) cash equal to the contrarylesser of (i) the Daily Measurement Value for such Trading Day and (ii) the Daily Conversion Value for such Trading Day, in respect of any conversion of Notes, regardless of whether the Company has a class of securities listed on The New York Stock Exchange at the time of such conversion, the aggregate number of shares of the Common Stock delivered in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock previously delivered or required to be delivered in respect of all Notes surrendered for conversion prior to such conversion, cannot exceed 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date unless, prior to such conversion, the Company has received approval from its shareholders to permit the issuance upon conversion of the Notes of a number of shares of the Common Stock up and
(ii) to the Maximum Number of Underlying Shares. If extent the Company receives Daily Conversion Value for such shareholder approval on any dayTrading Day exceeds the Daily Measurement Value for such Trading Day, the Company shall so notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) prior to the Close of Business on such day. Prior to the Company obtaining such shareholder approval, in connection with any conversion of Notes for which the Company has elected Combination Settlement, if the a number of shares of Common Stock deliverable in respect of such conversionequal to (x) the difference between the Daily Conversion Value and the Daily Measurement Value, when aggregated with divided by (y) the aggregate number of shares Daily VWAP of the Common Stock delivered or required to be delivered in respect of Notes converted prior to for such conversion, exceeds 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date, the Company shall pay cash in lieu of delivering any shares of Common Stock otherwise deliverable upon conversion in excess of such limitations based on the Daily VWAP on each VWAP Trading Day of the relevant Observation Period in respect of which, in lieu of delivering shares of Common Stock, the Company pays cash pursuant to this Section 11.03(b)Day.
(c) Notwithstanding the foregoingSubject to Section 4.03(d), the Company shall not issue fractional shares of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Daily VWAP on the relevant Conversion Date (in the case of Physical Settlement) or based on the Daily VWAP on the last VWAP Trading Day of the relevant Observation Period (in the case of Combination Settlement). For each Note surrendered for conversion, if the Company has elected Combination Settlement, the full number of shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate Daily Settlement Amounts for the applicable Observation Period and any fractional shares remaining after such computation shall be paid in cash.
(d) If a Holder converts a Note, except as set forth in Section 11.02(g), (i) such Holder Holders shall not receive any separate cash payment (in addition to the Conversion Obligation) for accrued and unpaid interest or Additional Interest, if any, unless such conversion occurs between a Regular Record Date and the Interest Payment Date to which it relates, in which case such interest shall be paid on such Note Interest Payment Date to the Holders of record on such Regular Record Date.
(d) Upon the conversion of any Notes, the Holder shall not be entitled to receive any additional cash payment for accrued and (ii) unpaid interest or Additional Interest, if any, except to the extent specified below. The Company’s payment and/or delivery, as delivery to the case may be, to such converting Holder of the amount of cashcash and, the number of shares if applicable, Common Stock, together with any cash payment for any fractional share of Common Stock or a combination thereof, as the case may beStock, into which such Holder’s a Note is convertible shall be deemed to satisfy in full the Company’s obligation to pay to such Holder (i) the principal amount of such the Notes so converted Note and (ii) accrued and unpaid interestinterest and Additional Interest, if any, to, but excludingnot including, the relevant Conversion Date. As a result, subject to Section 11.02(g), accrued and unpaid interestinterest and Additional Interest, if any, on a converted Note to butto, excludingbut not including, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon Notwithstanding the foregoing, if Notes are converted between close of business on a conversion Regular Record Date for the payment of interest and the open of business on the next Interest Payment Date, Holders of such Notes into a combination at the close of cash business on such Regular Record Date shall receive the interest and shares of Common Stock, subject to Section 11.02(g), accrued and unpaid interestAdditional Interest, if any, shall payable on such Notes on the corresponding Interest Payment Date notwithstanding the conversion. Notes surrendered for conversion during the period from the close of business on any Regular Record Date to the open of business on the immediately following Interest Payment Date must be deemed accompanied by funds equal to the amount of interest and Additional Interest, if any, payable on the next Interest Payment Date on the Notes so converted; provided that no such payment need be paid first out made (i) for conversions following the Regular Record Date immediately preceding June 15, 2018, (ii) if the Company has specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the corresponding Interest Payment Date, or (iii) to the extent of any overdue interest, if any overdue interest exists at the cash paid upon time of conversion with respect to such conversionNote.
(e) The Company shall not issue fractional shares of Common Stock upon conversion of Notes. If multiple Notes shall be surrendered for conversion at one time by the same Holder, the number of full shares which shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted hereby) so surrendered. If any fractional share of stock would be issuable upon the conversion of any Notes, the Company shall make payment therefor in cash in lieu of fractional shares of Common Stock based on the Daily Settlement Amounts VWAP of its Common Stock on the relevant Conversion Date (if applicablethe Company elects to satisfy its conversion obligation solely in shares of Common Stock) and based on the Daily Conversion Values VWAP of the Common Stock on the last Trading Day of the relevant Cash Settlement Averaging Period (if applicablein the case of any other settlement method).
(f) shall be determined The Company shall, subject to the exceptions set forth in this Section 4.03(f), deliver the Settlement Amount in respect of any Notes that a Holder converts by the Company promptly third Trading Day immediately following the last Trading Day of the Observation Cash Settlement Averaging Period. Promptly after such determination However, (i) if the Company elects to satisfy its conversion obligation solely in shares of Common Stock or (ii) if prior to the Daily Settlement Amounts or Conversion Date for any converted Notes, the Daily Conversion Values, as the case may be, and the amount Common Stock has been replaced by Reference Property consisting solely of cash payable (pursuant to the provisions set forth in lieu of the delivery of any fractional shareSection 4.04), the Company shall notify deliver the Trustee and Settlement Amount due in respect of conversion on the tenth Business Day immediately following the relevant Conversion Date. Notwithstanding the foregoing, if any information required in order to calculate the Settlement Amount deliverable shall not be available as of the applicable settlement date, the Company shall deliver the additional shares of Common Stock resulting from that adjustment on the third Trading Day after the earliest Trading Day on which such calculation can be made.
(g) The last full paragraph of Section 4.7 of the Original Indenture shall be deemed to apply to the Conversion Agent (if other than the Trustee) of the Daily Settlement Amounts with references to “money” being deemed references to “money, securities or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional shares of Common Stock. The Trustee and the Conversion Agent (if other than the Trustee) shall have no responsibility for any such determinationa combination thereof.”
Appears in 1 contract
Sources: Supplemental Indenture (Brookdale Senior Living Inc.)
Settlement Upon Conversion. In the event that the Company receives a Holder’s notice of conversion upon satisfaction of one or more of the conditions to conversion described in this Section 9.01, the Company will notify the relevant Holders within two Scheduled Trading Days following the Conversion Date whether the Company will satisfy its obligation to convert the Securities through delivery of (ax) Except shares of Common Stock pursuant to clause (ii) below (plus cash in lieu of fractional shares) or (y) a combination of cash and shares of Common Stock, if any, (such method of settlement, a “Net-Share Settlement”) pursuant to clause (i) below; provided that the Company may not elect to satisfy such obligation pursuant to clause (ii) below if the Company has made the election to waive such right to do so as provided set forth in Section 11.07(ethe immediately succeeding sentence or if the Conversion Period for the applicable Securities would not commence on or after the Scheduled Trading Day after the Company’s notice of settlement. At any time on or before the third Scheduled Trading Day prior to the applicable Conversion Period for a Net-Share Settlement, the Company may irrevocably waive, in its sole discretion without the consent of the Holders, by notice to the Trustee and to the Holders, its right to satisfy its Conversion Obligation in shares of its Common Stock pursuant to clause (ii) below (plus cash in lieu of any fractional shares). Notwithstanding the foregoing, if the Company elects to redeem the Securities, it will, in its notice of redemption, elect whether it will settle any conversions of Securities called for redemption pursuant to clause (i) or (ii) below (unless it has irrevocably elected to waive its right to satisfy its Conversion Obligation pursuant to clause (ii) below), which election shall apply to all Securities converted following the Company’s notice of redemption.
(i) If the Company chooses or has to satisfy its obligation to convert the Securities (the ‘‘Conversion Obligation’’) by Net-Share Settlement (or if the Company has irrevocably elected to waive its right to satisfy its Conversion Obligation pursuant to clause (ii) below), upon conversion of any Note, the Company shall pay or deliverwill deliver to converting Holders cash and Common Stock, as the case may be, to a converting Holderif any, in respect of each $1,000 principal amount of Notes Securities being converted, cash (“Cash Settlement”), shares of Common Stock, together with cash, if applicable, in lieu of any fractional share of Common Stock in accordance with Section 11.03(b) (“Physical Settlement”) or a combination of cash and shares of Common Stock, together with cash, if applicable, in lieu of any fractional share of Common Stock in accordance with Section 11.03(b) (“Combination Settlement”), at its election, as set forth in this Section 11.03.
(i) All conversions occurring on or after April 15, 2017 shall be settled using the same Settlement Method.
(ii) Except for any conversions that occur on or after April 15, 2017, the Company shall use the same Settlement Method for all conversions occurring on the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions that occur on different Trading Days.
(iii) If, in respect of any Conversion Date (or any conversion occurring during the period from, and including, April 15, 2017 to, and including, the Business Day immediately preceding the Maturity Date, as the case may be), the Company elects to deliver a notice (the “Settlement Notice”) of the relevant Settlement Method in respect of such Conversion Date (or such period, as the case may be), the Company, through the Trustee, shall deliver such Settlement Notice to converting Holders no later than the close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions occurring on or after April 15, 2017, no later than April 15, 2017). If the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be equal to $1,000. Any Settlement Notice shall specify the relevant Settlement Method and in the case of an election of Combination Settlement, the relevant Settlement Notice shall indicate the Specified Dollar Amount per $1,000 principal amount of Notes. If the Company delivers a Settlement Notice electing Combination Settlement in respect of its Conversion Obligation but does not indicate a Specified Dollar Amount per $1,000 principal amount of Notes in such Settlement Notice, the Specified Dollar Amount per $1,000 principal amount of Notes shall be deemed to be $1,000. Notwithstanding the foregoing or anything to the contrary herein, the Company shall not have the right to elect Physical Settlement in respect of Notes surrendered for conversion on any Conversion Date (or on or after April 15, 2017, as the case may be) if the sum of (x) the aggregate number of shares of the Common Stock to be delivered upon Physical Settlement in satisfaction of the Company’s Conversion Obligation in respect of all Notes surrendered for conversion on such Conversion Date (or that would be delivered upon Physical Settlement if all Notes outstanding as of April 15, 2017 were surrendered for conversion, as the case may be) and (y) the aggregate number of shares of the Common Stock delivered or to be delivered in respect of Notes converted prior to such Conversion Date (or prior to April 15, 2017, as the case may be) is greater than the Maximum Number of Underlying Shares.
(iv) The cash, shares of Common Stock or combination of cash and shares of Common Stock due upon any conversion of Notes (the “Settlement Amount”) shall be computed as follows:
(A) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall deliver to the converting Holder in respect of each $1,000 principal amount of Notes being converted a number of shares of the Common Stock equal to the Conversion Rate in effect on the Conversion Date;
(B) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Cash Settlement, the Company shall pay to the converting Holder in respect of each $1,000 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 35 consecutive VWAP Trading Days during the relevant Observation Period; and
(C) subject to Section 11.03(b), if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, to the converting Holder in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount equal to the sum of the aggregate Daily Settlement Amounts for each of the 35 consecutive 20 VWAP Trading Days during the relevant Observation related Conversion Period.
(b) Notwithstanding anything herein to the contrary, in respect of any conversion of Notes, regardless of whether the Company has a class of securities listed on The New York Stock Exchange at the time of such conversion, the aggregate number of shares of the Common Stock delivered in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock previously delivered or required to be delivered in respect of all Notes surrendered for conversion prior to such conversion, cannot exceed 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date unless, prior to such conversion, the Company has received approval from its shareholders to permit the issuance upon conversion of the Notes of a number of shares of the Common Stock up to the Maximum Number of Underlying Shares. If the Company receives such shareholder approval on any day, ; provided that the Company shall so notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) prior to the Close of Business on such day. Prior to the Company obtaining such shareholder approval, in connection with any conversion of Notes for which the Company has elected Combination Settlement, if the number of shares of Common Stock deliverable in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock delivered or required to be delivered in respect of Notes converted prior to such conversion, exceeds 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date, the Company shall pay deliver cash in lieu of delivering any shares of Common Stock otherwise deliverable upon conversion in excess of such limitations based on the Daily VWAP on each VWAP Trading Day of the relevant Observation Period in respect of which, in lieu of delivering shares of Common Stock, the Company pays cash pursuant to this Section 11.03(b).
(c) Notwithstanding the foregoing, the Company shall not issue fractional shares of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Daily VWAP on the relevant Conversion Date (in the case of Physical Settlement) or based on the Daily VWAP on the last VWAP Trading Day of the relevant Observation Period (in the case of Combination Settlement). For each Note surrendered for conversion, if the Company has elected Combination Settlement, the full number of shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate Daily Settlement Amounts for the applicable Observation Period and any fractional shares remaining after such computation shall be paid in cash.
(d) If a Holder converts a Note, except as set forth described below in Section 11.02(g9.01(e), (i) such Holder shall not receive any separate cash payment (in addition to the Conversion Obligation) for accrued and unpaid interest on such Note and (ii) the Company’s payment and/or delivery, as the case may be, to such converting Holder of the amount of cash, the number of shares of Common Stock or a combination thereof, as the case may be, into which such Holder’s Note is convertible shall be deemed to satisfy in full the Company’s obligation to pay to such Holder (i) the principal amount of such converted Note and (ii) accrued and unpaid interest, if any, to, but excluding, the relevant Conversion Date. As a result, subject to Section 11.02(g), accrued and unpaid interest, if any, on a converted Note to but, excluding, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of Notes into a combination of cash and shares of Common Stock, subject to Section 11.02(g), accrued and unpaid interest, if any, shall be deemed to be paid first out of the cash paid upon such conversion.
(e) The Daily Settlement Amounts (if applicable) and the Daily Conversion Values (if applicable) shall be determined by the Company promptly following the last VWAP Trading Day of the Observation Conversion Period. Promptly The amount of cash and Common Stock, if any, delivered in respect of any Security converted pursuant to this clause (i) will be delivered to converting Holders as soon as practicable following the last VWAP Trading Day of the applicable Conversion Period.
(ii) If the Company elects to satisfy all of its Conversion Obligation with respect to Securities to be converted in shares of Common Stock, the Company will deliver to any converting Holder, for each $1,000 principal amount of the Securities, a number of shares of Common Stock equal to the Conversion Rate for such Securities, plus cash in lieu of any fractional shares determined as described below in Section 9.01(e). The shares of Common Stock in respect of any Security converted (and cash in lieu of any fractional shares) pursuant to this clause (ii) will be delivered through the Conversion Agent or DTC as soon as practicable following the applicable Conversion Date for such Security.
(iii) With respect to a conversion of a Security pursuant to clause (ii) above, at and after the close of business on the Conversion Date, the Person in whose name any certificate representing any shares of Common Stock issuable upon such determination conversion is registered shall be treated as a stockholder of record of the Company to the extent permitted by law. With respect to a conversion of a Security pursuant to clause (i) above by Net Share Settlement, on each VWAP Trading Day during the related Conversion Period, the Person in whose name any certificate representing any shares of Common Stock constituting the Daily Settlement Amounts Amount for such VWAP Trading Day is registered shall be treated as a stockholder of record of the Company of such number of shares to the extent permitted by law on and after the close of business on such VWAP Trading Day. On and after the Conversion Date with respect to a conversion of a Security pursuant hereto, all rights of the Holder of such Security shall terminate, other than the right to receive the consideration deliverable upon conversion of such Security as provided herein. A Holder of a Security is not entitled, as such, to any rights of a holder of Common Stock until, if such Holder converts such Security and is entitled pursuant hereto to receive shares of Common Stock in respect of such conversion, the close of business on the Conversion Date or the Daily Conversion Valuesrespective VWAP Trading Days, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional share, the Company shall notify the Trustee and the Conversion Agent (if other than the Trustee) of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional shares of Common Stock. The Trustee and the Conversion Agent (if other than the Trustee) shall have no responsibility for any with respect to such determinationconversion.
Appears in 1 contract
Sources: First Supplemental Indenture (Flotek Industries Inc/Cn/)
Settlement Upon Conversion. In the event that the Company receives a Holder’s notice of conversion upon satisfaction of one or more of the conditions to conversion described in this Section 9.01, the Company will notify the relevant Holders within two Scheduled Trading Days following the Conversion Date whether the Company will satisfy its obligation to convert the Securities through delivery of (ax) Except shares of Common Stock pursuant to clause (ii) below (plus cash in lieu of fractional shares) or (y) a combination of cash and shares of Common Stock, if any (such method of settlement, a “Net-Share Settlement”) pursuant to clause (i) below; provided that the Company may not elect to satisfy such obligation pursuant to clause (ii) below if the Company has made the election to waive such right to do so as provided set forth in Section 11.07(ethe immediately succeeding sentence or if the Conversion Period for the applicable Securities would not commence on or after the Scheduled Trading Day after the Company’s notice of settlement. At any time on or before the third Scheduled Trading Day prior to the applicable Conversion Period for a Net-Share Settlement, the Company may irrevocably waive, in its sole discretion without the consent of the Holders, by notice to the Trustee and to the Holders, its right to satisfy its Conversion Obligation in shares of its Common Stock pursuant to clause (ii) below (plus cash in lieu of any fractional shares). Notwithstanding the foregoing, if the Company elects to redeem the Securities, it will, in its notice of redemption, elect whether it will settle any conversions of Securities called for redemption pursuant to clause (i) or (ii) below (unless it has irrevocably elected to waive its right to satisfy its Conversion Obligation pursuant to clause (ii) below), which election shall apply to all Securities converted following the Company’s notice of redemption.
(i) If the Company chooses or has to satisfy its obligation to convert the Securities (the “Conversion Obligation”) by Net-Share Settlement (or if the Company has irrevocably elected to waive its right to satisfy its Conversion Obligation pursuant to clause (ii) below), upon conversion of any Note, the Company shall pay or deliverwill deliver to converting Holders cash and Common Stock, as the case may be, to a converting Holderif any, in respect of each $1,000 principal amount of Notes Securities being converted, cash (“Cash Settlement”), shares of Common Stock, together with cash, if applicable, in lieu of any fractional share of Common Stock in accordance with Section 11.03(b) (“Physical Settlement”) or a combination of cash and shares of Common Stock, together with cash, if applicable, in lieu of any fractional share of Common Stock in accordance with Section 11.03(b) (“Combination Settlement”), at its election, as set forth in this Section 11.03.
(i) All conversions occurring on or after April 15, 2017 shall be settled using the same Settlement Method.
(ii) Except for any conversions that occur on or after April 15, 2017, the Company shall use the same Settlement Method for all conversions occurring on the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions that occur on different Trading Days.
(iii) If, in respect of any Conversion Date (or any conversion occurring during the period from, and including, April 15, 2017 to, and including, the Business Day immediately preceding the Maturity Date, as the case may be), the Company elects to deliver a notice (the “Settlement Notice”) of the relevant Settlement Method in respect of such Conversion Date (or such period, as the case may be), the Company, through the Trustee, shall deliver such Settlement Notice to converting Holders no later than the close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions occurring on or after April 15, 2017, no later than April 15, 2017). If the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be equal to $1,000. Any Settlement Notice shall specify the relevant Settlement Method and in the case of an election of Combination Settlement, the relevant Settlement Notice shall indicate the Specified Dollar Amount per $1,000 principal amount of Notes. If the Company delivers a Settlement Notice electing Combination Settlement in respect of its Conversion Obligation but does not indicate a Specified Dollar Amount per $1,000 principal amount of Notes in such Settlement Notice, the Specified Dollar Amount per $1,000 principal amount of Notes shall be deemed to be $1,000. Notwithstanding the foregoing or anything to the contrary herein, the Company shall not have the right to elect Physical Settlement in respect of Notes surrendered for conversion on any Conversion Date (or on or after April 15, 2017, as the case may be) if the sum of (x) the aggregate number of shares of the Common Stock to be delivered upon Physical Settlement in satisfaction of the Company’s Conversion Obligation in respect of all Notes surrendered for conversion on such Conversion Date (or that would be delivered upon Physical Settlement if all Notes outstanding as of April 15, 2017 were surrendered for conversion, as the case may be) and (y) the aggregate number of shares of the Common Stock delivered or to be delivered in respect of Notes converted prior to such Conversion Date (or prior to April 15, 2017, as the case may be) is greater than the Maximum Number of Underlying Shares.
(iv) The cash, shares of Common Stock or combination of cash and shares of Common Stock due upon any conversion of Notes (the “Settlement Amount”) shall be computed as follows:
(A) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall deliver to the converting Holder in respect of each $1,000 principal amount of Notes being converted a number of shares of the Common Stock equal to the Conversion Rate in effect on the Conversion Date;
(B) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Cash Settlement, the Company shall pay to the converting Holder in respect of each $1,000 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 35 consecutive VWAP Trading Days during the relevant Observation Period; and
(C) subject to Section 11.03(b), if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, to the converting Holder in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount equal to the sum of the aggregate Daily Settlement Amounts for each of the 35 consecutive 20 VWAP Trading Days during the relevant Observation related Conversion Period.
(b) Notwithstanding anything herein to the contrary, in respect of any conversion of Notes, regardless of whether the Company has a class of securities listed on The New York Stock Exchange at the time of such conversion, the aggregate number of shares of the Common Stock delivered in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock previously delivered or required to be delivered in respect of all Notes surrendered for conversion prior to such conversion, cannot exceed 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date unless, prior to such conversion, the Company has received approval from its shareholders to permit the issuance upon conversion of the Notes of a number of shares of the Common Stock up to the Maximum Number of Underlying Shares. If the Company receives such shareholder approval on any day, ; provided that the Company shall so notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) prior to the Close of Business on such day. Prior to the Company obtaining such shareholder approval, in connection with any conversion of Notes for which the Company has elected Combination Settlement, if the number of shares of Common Stock deliverable in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock delivered or required to be delivered in respect of Notes converted prior to such conversion, exceeds 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date, the Company shall pay deliver cash in lieu of delivering any shares of Common Stock otherwise deliverable upon conversion in excess of such limitations based on the Daily VWAP on each VWAP Trading Day of the relevant Observation Period in respect of which, in lieu of delivering shares of Common Stock, the Company pays cash pursuant to this Section 11.03(b).
(c) Notwithstanding the foregoing, the Company shall not issue fractional shares of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Daily VWAP on the relevant Conversion Date (in the case of Physical Settlement) or based on the Daily VWAP on the last VWAP Trading Day of the relevant Observation Period (in the case of Combination Settlement). For each Note surrendered for conversion, if the Company has elected Combination Settlement, the full number of shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate Daily Settlement Amounts for the applicable Observation Period and any fractional shares remaining after such computation shall be paid in cash.
(d) If a Holder converts a Note, except as set forth described below in Section 11.02(g9.01(e), (i) such Holder shall not receive any separate cash payment (in addition to the Conversion Obligation) for accrued and unpaid interest on such Note and (ii) the Company’s payment and/or delivery, as the case may be, to such converting Holder of the amount of cash, the number of shares of Common Stock or a combination thereof, as the case may be, into which such Holder’s Note is convertible shall be deemed to satisfy in full the Company’s obligation to pay to such Holder (i) the principal amount of such converted Note and (ii) accrued and unpaid interest, if any, to, but excluding, the relevant Conversion Date. As a result, subject to Section 11.02(g), accrued and unpaid interest, if any, on a converted Note to but, excluding, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of Notes into a combination of cash and shares of Common Stock, subject to Section 11.02(g), accrued and unpaid interest, if any, shall be deemed to be paid first out of the cash paid upon such conversion.
(e) The Daily Settlement Amounts (if applicable) and the Daily Conversion Values (if applicable) shall be determined by the Company promptly following the last VWAP Trading Day of the Observation Conversion Period. Promptly The amount of cash and Common Stock, if any, delivered in respect of any Security converted pursuant to this clause (i) will be delivered to converting Holders as soon as practicable following the last VWAP Trading Day of the applicable Conversion Period.
(ii) If the Company elects to satisfy all of its Conversion Obligation with respect to Securities to be converted in shares of Common Stock, the Company will deliver to any converting Holder, for each $1,000 principal amount of the Securities, a number of shares of Common Stock equal to the Conversion Rate for such Securities, plus cash in lieu of any fractional shares determined as described below in Section 9.01(e). The shares of Common Stock in respect of any Security converted (and cash in lieu of any fractional shares) pursuant to this clause (ii) will be delivered through the Conversion Agent as soon as practicable following the applicable Conversion Date for such Security.
(iii) With respect to a conversion of a Security pursuant to clause (ii) above, at and after the close of business on the Conversion Date, the Person in whose name any certificate representing any shares of Common Stock issuable upon such determination conversion is registered shall be treated as a stockholder of record of the Company to the extent permitted by law. With respect to a conversion of a Security pursuant to clause (i) above by Net Share Settlement, on each VWAP Trading Day during the related Conversion Period, the Person in whose name any certificate representing any shares of Common Stock constituting the Daily Settlement Amounts Amount for such VWAP Trading Day is registered shall be treated as a stockholder of record of the Company of such number of shares to the extent permitted by law on and after the close of business on such VWAP Trading Day. On and after the Conversion Date with respect to a conversion of a Security pursuant hereto, all rights of the Holder of such Security shall terminate, other than the right to receive the consideration deliverable upon conversion of such Security as provided herein. A Holder of a Security is not entitled, as such, to any rights of a holder of Common Stock until, if such Holder converts such Security and is entitled pursuant hereto to receive shares of Common Stock in respect of such conversion, the close of business on the Conversion Date or the Daily Conversion Valuesrespective VWAP Trading Days, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional share, the Company shall notify the Trustee and the Conversion Agent (if other than the Trustee) of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional shares of Common Stock. The Trustee and the Conversion Agent (if other than the Trustee) shall have no responsibility for any with respect to such determinationconversion.
Appears in 1 contract
Sources: First Supplemental Indenture (Flotek Industries Inc/Cn/)
Settlement Upon Conversion. (ai) Except as provided in Section 11.07(e), upon conversion The Company may elect at any time to settle its Conversion Obligation with respect to all future conversions solely by the delivery of any Note, the Company shall pay or deliver, as the case may be, to a converting Holder, in respect of each $1,000 principal amount of Notes being converted, cash (“Cash Settlement”), shares of Common Stock, together solely by the delivery of cash or on a “net share settlement basis” as described in Section 12.01(c)(iv) below by giving notice to the Trustee and Holders in conformity with cashthe requirements of Section 12.06; provided, if applicablehowever, in lieu that the Company will settle all conversions occurring before the Restriction Release Date by paying cash and accordingly no irrevocable election to settle conversion by the delivery of any fractional share shares of Common Stock in accordance with Section 11.03(b) (or on a “Physical Settlement”) or a combination net share settlement basis” may be made until after the Restriction Release Date; and provided, further, that no irrevocable election to settle conversions by the delivery of cash and shares of Common Stock, together with cash, if applicable, in lieu of Stock or on a “net share settlement basis” may be made at any fractional share time when the Company may be prevented from delivering shares of Common Stock in accordance with Section 11.03(b) (“Combination Settlement”), at its election, as by the covenant set forth in this Section 11.03.
(i) All conversions occurring on or after April 15, 2017 shall be settled using the same Settlement Method12.01(c)(vi).
(ii) Except for any conversions that occur on or after April 15, 2017Unless the Company has irrevocably elected a form of settlement pursuant to Section 12.01(c)(i), the Company shall use inform the same Holders through the Trustee of the method it will choose to satisfy its Conversion Obligations at any time on or before the date that is two Trading Days following the applicable Conversion Date (such period, the “Settlement Method for Notice Period”). If the Company fails to provide notice within the Settlement Notice Period, the Company shall satisfy its Conversion Obligations only in shares of Common Stock (and cash in lieu of fractional shares), unless the Company has irrevocably elected a form of settlement pursuant to Section 12.01(c)(i). If the Company chooses to satisfy any portion of its Conversion Obligations in cash, it will specify the amount to be satisfied in cash as a percentage of the Conversion Obligations or a fixed dollar amount. The Company shall treat all conversions occurring Holders converting on the same Conversion DateTrading Day in the same manner; however, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions that occur settle Conversion Obligations arising on different Trading DaysDays in the same manner.
(iii) IfIf the Company elects to satisfy any portion of its Conversion Obligations in cash (other than cash in lieu of fractional shares), in respect a Holder may retract its Notice of Conversion at any time during the two Trading Day period beginning on the Trading Day after the Company has notified the Trustee of its method of settlement (the “Conversion Retraction Period”), provided that no such retraction can be made (and a Notice of Conversion shall be irrevocable) if: (i) the Company has irrevocably elected to pay solely cash or net share settlement upon conversion of the Securities prior to a Holder’s delivery of a Conversion Notice, (ii) a Holder is converting its Securities prior to the Restriction Release Date or (or any conversion occurring iii) a Holder is converting its Securities during the period from, beginning 25 Trading Days immediately preceding the Stated Maturity and including, April 15, 2017 to, and including, the Business ending one Trading Day immediately preceding the Maturity DateStated Maturity, as the case may be), even if the Company elects has not otherwise notified the Holder prior to deliver the Conversion Date of its settlement method election. The Company may, in lieu of sending individual notices of its election, send one notice to all Holders of the method the Company chooses to satisfy its Conversion Obligation for conversions following delivery of a notice (relating to the “Settlement Notice”) occurrence of specified events triggering conversion rights or on or following the relevant Settlement Method in respect of such Conversion Date (or such period, as the case may be), the Company, through the Trustee, shall deliver such Settlement Notice to converting Holders no later than the close of business on the 25th Trading Day immediately following preceding the relevant Conversion Date (or, in the case of any conversions occurring on or after April 15, 2017, no later than April 15, 2017). If the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be equal to $1,000. Any Settlement Notice shall specify the relevant Settlement Method and in the case of an election of Combination Settlement, the relevant Settlement Notice shall indicate the Specified Dollar Amount per $1,000 principal amount of Notes. If the Company delivers a Settlement Notice electing Combination Settlement in respect of its Conversion Obligation but does not indicate a Specified Dollar Amount per $1,000 principal amount of Notes in such Settlement Notice, the Specified Dollar Amount per $1,000 principal amount of Notes shall be deemed to be $1,000. Notwithstanding the foregoing or anything to the contrary herein, the Company shall not have the right to elect Physical Settlement in respect of Notes surrendered for conversion on any Conversion Date (or on or after April 15, 2017, as the case may be) if the sum of (x) the aggregate number of shares of the Common Stock to be delivered upon Physical Settlement in satisfaction of the Company’s Conversion Obligation in respect of all Notes surrendered for conversion on such Conversion Date (or that would be delivered upon Physical Settlement if all Notes outstanding as of April 15, 2017 were surrendered for conversion, as the case may be) and (y) the aggregate number of shares of the Common Stock delivered or to be delivered in respect of Notes converted prior to such Conversion Date (or prior to April 15, 2017, as the case may be) is greater than the Maximum Number of Underlying SharesStated Maturity.
(iv) The With respect to any Notice of Conversion received by the Company, the consideration to be distributed (“Conversion Settlement Distribution”) for any Security subject to such Notice of Conversion shall consist of cash, shares of Common Stock or a combination of cash thereof (as selected by the Company) as set forth in this clause (iv) and shares of Common Stock due upon any conversion of Notes clause (the “Settlement Amount”v) shall be computed as followsbelow:
(A) if the Company elects to satisfy its the entire Conversion Obligation in respect shares of such conversion by Physical SettlementCommon Stock, the Company Conversion Settlement Distribution shall deliver to the converting Holder in respect of each $1,000 principal amount of Notes being converted be a number of shares of the Common Stock equal to the product of: (A) the aggregate principal amount of the Securities to be converted divided by $1,000, multiplied by (B) the then applicable Conversion Rate in effect on the Conversion DateRate, plus cash for any fractional shares pursuant to Section 12.01(d);
(B) if the Company elects to satisfy its the entire Conversion Obligation in cash, the Conversion Settlement Distribution shall be cash in an amount equal to the product of: (A) a number equal to the product of (x) the aggregate principal amount of Securities to be converted divided by $1,000 multiplied by (y) the then applicable Conversion Rate, and (B) the average Daily VWAP of the Common Stock during the Observation Period.
(C) if the Company elects “net share settlement” with respect of such conversion by Cash Settlementto the Conversion Obligation, the Company shall pay will deliver to the converting Holder Holders, in respect of each $1,000 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 35 consecutive VWAP Trading Days during the relevant Observation Period; and
(C) subject to Section 11.03(b), if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, to the converting Holder in respect of each $1,000 principal amount of Notes Securities being converted, a “Settlement Amount Amount” of cash and shares of Common Stock, if any, equal to the sum of the Daily Settlement Amounts for each of the 35 consecutive VWAP 25 Trading Days during the Observation Period for such Security.
(v) Settlement by the Company of the Conversion Obligation when the Company has elected to settle entirely by the delivery of shares of Common Stock will occur as soon as practicable after the Company is required to notify the Holder that is has chosen this method of settlement but in no event more than four Trading Days after the relevant Conversion Date. Settlement by the Company of the Conversion Obligation when the Company must settle entirely in cash or that the Company has elected to satisfy entirely in cash will occur on the third Trading Day following the final Trading Day of the relevant Observation Period, unless the Securities have become exchangeable solely for a fixed amount of cash following the occurrence of a Fundamental Change transaction in which event settlement will occur in cash on the third Trading Date following the relevant Conversion Date. Settlement by the Company of the Conversion Obligation when the Company has elected “net share settlement” will occur on the third Business Day immediately following the final Trading Day of the related Observation Period.
(bvi) Notwithstanding anything herein to the contrary, in respect no event will the Company issue shares of Common Stock beyond the maximum level permitted by the continued listing standards of The Nasdaq Stock Market. In accordance with such listing standards, the restriction set forth in this paragraph will apply at any conversion of Notestime when the Securities are outstanding, regardless of whether the Company then has a class of securities listed quoted on The New York Nasdaq Stock Exchange at the time of such conversion, the aggregate number of shares of the Common Stock delivered in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock previously delivered or required to be delivered in respect of all Notes surrendered for conversion prior to such conversion, cannot exceed 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date unless, prior to such conversion, the Company has received approval from its shareholders to permit the issuance upon conversion of the Notes of a number of shares of the Common Stock up to the Maximum Number of Underlying Shares. If the Company receives such shareholder approval on any day, the Company shall so notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) prior to the Close of Business on such day. Prior to the Company obtaining such shareholder approval, in connection with any conversion of Notes for which the Company has elected Combination Settlement, if the number of shares of Common Stock deliverable in respect of such conversion, when aggregated with the aggregate number of shares of the Common Stock delivered or required to be delivered in respect of Notes converted prior to such conversion, exceeds 19.9% of the total number of shares of the Common Stock outstanding on the Issue Date, the Company shall pay cash in lieu of delivering any shares of Common Stock otherwise deliverable upon conversion in excess of such limitations based on the Daily VWAP on each VWAP Trading Day of the relevant Observation Period in respect of which, in lieu of delivering shares of Common Stock, the Company pays cash pursuant to this Section 11.03(b)Market.
(c) Notwithstanding the foregoing, the Company shall not issue fractional shares of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Daily VWAP on the relevant Conversion Date (in the case of Physical Settlement) or based on the Daily VWAP on the last VWAP Trading Day of the relevant Observation Period (in the case of Combination Settlement). For each Note surrendered for conversion, if the Company has elected Combination Settlement, the full number of shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate Daily Settlement Amounts for the applicable Observation Period and any fractional shares remaining after such computation shall be paid in cash.
(d) If a Holder converts a Note, except as set forth in Section 11.02(g), (i) such Holder shall not receive any separate cash payment (in addition to the Conversion Obligation) for accrued and unpaid interest on such Note and (ii) the Company’s payment and/or delivery, as the case may be, to such converting Holder of the amount of cash, the number of shares of Common Stock or a combination thereof, as the case may be, into which such Holder’s Note is convertible shall be deemed to satisfy in full the Company’s obligation to pay to such Holder (i) the principal amount of such converted Note and (ii) accrued and unpaid interest, if any, to, but excluding, the relevant Conversion Date. As a result, subject to Section 11.02(g), accrued and unpaid interest, if any, on a converted Note to but, excluding, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of Notes into a combination of cash and shares of Common Stock, subject to Section 11.02(g), accrued and unpaid interest, if any, shall be deemed to be paid first out of the cash paid upon such conversion.
(e) The Daily Settlement Amounts (if applicable) and the Daily Conversion Values (if applicable) shall be determined by the Company promptly following the last Trading Day of the Observation Period. Promptly after such determination of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional share, the Company shall notify the Trustee and the Conversion Agent (if other than the Trustee) of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of the delivery of any fractional shares of Common Stock. The Trustee and the Conversion Agent (if other than the Trustee) shall have no responsibility for any such determination.
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