Holders may convert their Convertible Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2026, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock, as described in each Indenture, as applicable; (4) if the Company calls such notes for redemption; and (5) at any time from, and including August 15, 2030 (in the case of the 2031 Convertible Notes) and May 15, 2032 (in the case of the 2032 Convertible Notes), until the close of business on the second scheduled trading day immediately before the maturity date.
The initial conversion rate for the Convertible Notes will be 11.4683 shares of common stock per $1,000 in principal amount of Convertible Notes, equivalent to a conversion price of approximately $87.20 per share of common stock. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued or unpaid interest.
Subject to certain exceptions, holders may require the Company to repurchase, for cash, all or part of their Convertible Notes upon a “Fundamental Change” (as defined in each Indenture) at a price equal to 100% of the principal amount of the Convertible Notes being repurchased plus, in the case of the 2031 Convertible Notes, any accrued and unpaid special interest and additional interest, if any, and, in the case of the 2032 Convertible Notes, any accrued and unpaid interest, if any, and up to, but excluding, the “Fundamental Change Repurchase Date” (as defined in each Indenture). In addition, upon a “Make-Whole Fundamental Change” (as defined in each Indenture) prior to the maturity date of the Convertible Notes, the Company will, in some cases, increase the conversion rate for a holder that elects to convert its Convertible Notes in connection with such Make-Whole Fundamental Change. The Company may not redeem the Convertible Notes prior to February 20, 2029 (in the case of the 2031 Convertible Notes) and November 20, 2029 (in the case of the 2032 Convertible Notes), and on or before the 30th scheduled trading day immediately before the maturity date.
Each Indenture contains certain events of default after which the Convertible Notes may be due and payable immediately. Such events of default include, without limitation, the following: (1) a default in the payment when due (whether at maturity, upon redemption or repurchase upon fundamental change or otherwise) of the principal of, or the redemption price or fundamental change repurchase price for, any Convertible Note; (2) a default for 30 days in the payment when due of, in the case of the 2031 Convertible Notes, special interest or additional interest, if any of any 2031 Convertible Note, and, in the case of the 2032 Convertible Notes, interest on any 2032 Convertible Note; (3) the Company’s failure to deliver, when required by each Indenture, as applicable, a fundamental change notice or other notices pursuant to such Indenture; (4) a default in the Company’s obligation to convert a Convertible Note in accordance with each Indenture, as applicable, upon the exercise of the conversion right with respect thereto, if such default is not cured within two business days after its occurrence; (5) a default in the Company’s obligations described in each Indenture with respect to consolidation, merger and sale of assets of the Company; (6) a default in any of the Company’s obligations or agreements under each Indenture or the Convertible Notes, as applicable, (other than a default set forth in the preceding (1), (2), (3), (4) or (5)) where such default is not cured or waived within 60 days after notice to the Company by the Trustee, as applicable, or to the Company and the Trustee by holders of at least 25% of the aggregate principal amount of such Convertible Notes then outstanding, which notice must specify such default, demand that it be remedied and state that such notice is a “notice of default”; (7) a default by the Company or any of the Company’s subsidiaries with respect to any one or more mortgages, agreements or other instruments under which there is outstanding, or by which there is secured or evidenced, any indebtedness for money borrowed of at least $50.0 million (or its foreign currency equivalent) in the aggregate of the Company or any of the Company’s subsidiaries, whether such indebtedness exists as of the date the Company first issues the Convertible Notes or is thereafter created, where such default: (x) constitutes a failure to pay the principal of, or premium or interest on, any of such indebtedness when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise, in each case after the expiration of any applicable grace period; or (y) results in such indebtedness becoming or being declared due and payable before its stated maturity, in each case where such default is not cured or waived within 30 days after notice to the Company by the Trustee, as appliable, or to the Company and the Trustee by holders of at least 25% of the aggregate principal amount of such Convertible Notes then outstanding; and (8) certain events of bankruptcy, insolvency and reorganization with respect to the Company or any of the Company’s “significant subsidiaries”, as defined in each Indenture.
