The following events are considered events of default with respect to the notes,
which may result in the acceleration of the maturity of the notes:
(1) the Company defaults in the payment of interest on
any of the notes when due and payable, and the default continues for a period of 30 days;
(2) the Company defaults in the
payment of principal of any of the notes when due and payable at maturity or upon optional redemption, upon any required repurchase, upon declaration of acceleration or otherwise;
(3) failure by the Company to comply with its obligation to convert the notes in accordance with the Indenture upon exercise of
a holders conversion right, and such failure continues for three business days;
(4) failure by the Company to give a
fundamental change notice or notice of a make-whole fundamental change or specified corporate event when due with respect to the notes, in each case, when due;
(5) failure by the Company to comply with any of its obligations under the Indenture with respect to consolidation, merger and
sale of assets of the Company;
(6) failure by the Company to comply with any of its other agreements contained in the
notes or the Indenture for a period of 60 days after written notice from the Trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding has been received;
(7) failure by the Company or any of its Significant Subsidiaries (as defined in the Indenture) to pay when due the principal
of, or acceleration of, any indebtedness for money borrowed by the Company or any of its Significant Subsidiaries in excess of $50.0 million principal amount, if such indebtedness is not discharged, or such acceleration is not annulled, for a
period of 30 days after written notice to the Company by the Trustee or to the Company and the Trustee by holders of 25% or more in aggregate principal amount of the notes then outstanding in accordance with the Indenture; and
(8) certain events of bankruptcy, insolvency or reorganization of the Company or any of its Significant Subsidiaries.
If such an event of default, other than an event of default described in clause (8) above with respect to the Company, occurs and is
continuing, the Trustee by written notice to the Company, or the holders of at least 25% in aggregate principal amount of the outstanding notes by notice to the Company and the Trustee, may, and the Trustee at the request of such holders shall,
declare 100% of the principal of and accrued and unpaid interest, if any, on all the notes then outstanding to be due and payable. If an event of default described in clause (8) above occurs, 100% of the principal of and accrued and unpaid
interest on the notes then outstanding will automatically become due and payable.
The foregoing description is qualified in its entirety
by reference to the text of the Indenture and the Form of 0.125% Convertible Senior Notes due 2025, which are attached as Exhibits 4.1 and 4.2, respectively, to this Current Report
on Form 8-K and are incorporated herein by reference.
Capped Call Transactions
On September 15, 2020, concurrently with the offering of the notes, and on September 16, 2020, concurrently with the Initial
Purchasers exercise of their option to purchase additional notes, the Company also entered into capped call transactions (the Capped Calls) with Bank of America, N.A., Barclays Bank PLC, through its agent Barclays Capital Inc.,
Citibank, N.A., Royal Bank of Canada, through its agent, RBC Capital Markets, LLC, and Wells Fargo Bank, National Association (collectively, the Counterparties). The Capped Calls each have an initial strike price of approximately $39.35
per share, subject to certain adjustments, which corresponds to the initial conversion price of the notes. The Capped Calls have initial cap prices of approximately $58.30 per share, subject to certain adjustments. The Capped Calls cover, subject to
anti-dilution adjustments, approximately 14.6 million shares of the Companys common stock, par value $0.001 (Common Stock). The Capped Calls are generally intended to reduce or offset the potential dilution to the Common Stock
upon any conversion of the notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. The Company expects to pay $61.87 million from the net proceeds from the issuance and sale of the notes to purchase the
Capped Calls. The Capped Calls settle in components with the last component scheduled to expire on September 11, 2025. The Capped Calls are subject to either adjustment or termination upon the occurrence of specified extraordinary events
affecting the Company, including a merger event; a tender offer; and a nationalization, insolvency or delisting involving the Company. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to
terminations of the Capped Calls, including changes in law; failures to deliver; insolvency filings; and hedging disruptions.
The summary
of the foregoing transactions is qualified in its entirety by reference to the text of the Capped Calls, a form of which is attached as Exhibit 10.2 to this Current Report on Form 8-K and is
incorporated herein by reference.
Certain Initial Purchasers under the Purchase Agreement and Counterparties under the confirmations
entered into in connection with the Capped Calls, or their affiliates, have engaged in, and may in the future engage in, other commercial dealings with the Company or its affiliates in the ordinary course of business. They have received, or may in
the future receive, customary fees and commissions for those transactions.
Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
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The information set forth under Item 1.01 is
incorporated herein by reference.
Item 3.02
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Unregistered Sales of Equity Securities.
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The information set forth under Item 1.01 is incorporated herein by reference.