Full Press Release Details
[JPMorgan Chase Bank, National
[Bank of America, N.A.
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
Telephone: 646-855-0711
Attention: Chief Financial Officer
The purpose of this letter agreement (this Confirmation ) is to confirm the terms and conditions of the call option
transaction entered into between [JPMorgan Chase Bank, National Association, London Branch][Bank of America, N.A.] ( Dealer ) and DexCom, Inc. ( Counterparty ) as of the Trade Date specified below (the
Transaction ). This letter agreement constitutes a Confirmation as referred to in the ISDA Master Agreement specified below. Each party further agrees that this Confirmation together with the Agreement evidence a
binding agreement between Counterparty and Dealer as to the subject matter and terms of the Transaction to which this Confirmation relates, and shall supersede all prior written or oral communications with respect thereto.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the Equity Definitions ), as
published by the International Swaps and Derivatives Association, Inc. ( ISDA ) are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall
govern. Certain defined terms used herein are based on terms that are defined in the Offering Memorandum dated November 27, 2018 (the Offering Memorandum ) relating to the [ ]% Convertible Senior
Notes due 2023 (as originally issued by Counterparty, the Convertible Notes and each USD 1,000 principal amount of Convertible Notes, a Convertible Note ) issued by Counterparty in an aggregate initial principal
amount of USD [ ] (as increased by [up to]1 an aggregate principal amount of USD
[ ] [if and to the extent that]2[pursuant to the exercise by]3
the Initial Purchasers (as defined herein) [exercises]4[of]5 their option to purchase additional Convertible Notes pursuant to the Purchase
Agreement (as defined herein)) pursuant to an Indenture [to be]6 dated November 30, 2018 between Counterparty and U.S. Bank National Association, as trustee (the
Indenture ). In the event of any inconsistency between the terms defined in the Offering Memorandum, the Indenture and this Confirmation, this Confirmation shall govern. The parties acknowledge that this Confirmation is entered
into on the date hereof with the understanding that (i) definitions set forth in the Indenture which are also defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred to herein, in each
case, will conform to the descriptions thereof in the Offering Memorandum. If any such definitions in the Indenture or any such sections of the Indenture differ from the descriptions thereof in
the Offering Memorandum, the descriptions thereof in the Offering Memorandum will govern for purposes of this Confirmation. The parties further acknowledge that the Indenture section numbers used herein are based on the [draft of the Indenture last
reviewed by Dealer as of the date of this Confirmation, and if any such section numbers are changed in the Indenture as executed, the parties will amend this Confirmation in good faith to preserve the intent of the parties]7[ Indenture as executed]8. Subject to the foregoing, references to the Indenture herein are references to the Indenture as in effect on the date of
its execution, and if the Indenture is amended or supplemented following such date (other than any amendment or supplement (x) pursuant to Section 10.01(k) of the Indenture that, as determined by the Calculation Agent, conforms the
Indenture to the description of Convertible Notes in the Offering Memorandum or (y) pursuant to Section 4.07 of the Indenture, subject, in the case of this clause (y), to the second paragraph under Method of Adjustment in
Section 3), any such amendment or supplement will be disregarded for purposes of this Confirmation (other than as provided in Section 9(j)(ii) below) unless the parties agree otherwise in writing.
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in,
substantial financial transactions and has taken other material actions in reliance upon the parties entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
1. This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the
Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the Agreement ) as if Dealer and Counterparty had
executed an agreement in such form (but without any Schedule except for the election of the laws of the State of New York as the governing law (without reference to choice of law doctrine)) on the Trade Date. In the event of any inconsistency
between provisions of the Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no transaction other than the Transaction to which this
Confirmation relates shall be governed by the Agreement.
2. The terms of the particular Transaction to which this
Confirmation relates are as follows:
| General Terms . | ||
| Trade Date: | [ ], 2018 | |
| Effective Date: | The second Exchange Business Day immediately prior to the Premium Payment Date | |
| Option Style: | Modified American , as described under Procedures for Exercise below | |
| Option Type: | Call | |
| Buyer: | Counterparty | |
| Seller: | Dealer | |
| Shares: | The common stock of Counterparty, par value USD 0.001 per share (Exchange symbol DXCM ). | |
| Number of Options: | [ ] 9 . For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by |
| Counterparty. In no event will the Number of Options be less than zero. | ||
| Applicable Percentage: | [ ]% | |
| Option Entitlement: | A number equal to the product of the Applicable Percentage and [ ] 10 . | |
| Strike Price: | USD [ ] | |
| Premium: | USD [ ] | |
| Premium Payment Date: | [ ], 2018 | |
| Exchange: | The Nasdaq Global Select Market | |
| Related Exchange(s): | All Exchanges | |
| Excluded Provisions: | Section 4.05(h) and Section 4.04 of the Indenture. | |
| Procedures for Exercise . | ||
| Conversion Date: | With respect to any conversion of a Convertible Note, the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Section 4.02(b) of the Indenture; provided that if Counterparty has not delivered to Dealer a related Notice of Exercise when required as described under Notice of Exercise , then in no event shall a Conversion Date be deemed to occur hereunder (and no Option shall be exercised or deemed to be exercised hereunder) with respect to any surrender of a Convertible Note for conversion in respect of which Counterparty has elected to designate a financial institution for exchange in lieu of conversion of such Convertible Note pursuant to Section 4.11 of the Indenture. | |
| Free Convertibility Date: | September 1, 2023 | |
| Expiration Time: | The Valuation Time | |
| Expiration Date: | December 1, 2023, subject to earlier exercise. | |
| Multiple Exercise: | Applicable, as described under Automatic Exercise below. | |
| Automatic Exercise: | Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date in respect of which a Conversion Notice that is effective as to Counterparty has been delivered by the relevant converting Holder, a number of Options equal to [(i)] the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion Date has occurred [ minus (ii) the number of Options that are or are deemed to be automatically exercised on such Conversion Date under the Base Call |
| Option Transaction Confirmation letter agreement dated November 27, 2018 between Dealer and Counterparty (the Base Call Option Confirmation ),] 11 shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed exercised only if Counterparty or the Trustee (or other agent authorized by Counterparty and previously identified to Dealer by Counterparty in writing) on behalf of Counterparty (each, an Authorized Agent ) has provided a Notice of Exercise to Dealer in accordance with Notice of Exercise below. If an Authorized Agent provides any Notice of Exercise to Dealer, Dealer shall be entitled to rely on the accuracy of such Notice of Exercise without any independent investigation, and the contents of such notice shall be binding on Counterparty. | ||
| Notwithstanding the foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options. | ||
| Notice of Exercise: | Notwithstanding anything to the contrary in the Equity Definitions or under Automatic Exercise above, in order to exercise any Options on any Conversion Date, Counterparty or an Authorized Agent on behalf of Counterparty must notify Dealer in writing before 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the scheduled first day of the Settlement Averaging Period for the Options being exercised (the Notice Deadline ) of (i) the number of such Options, (ii) the scheduled first day of the Settlement Averaging Period and the scheduled Settlement Date, (iii) the Relevant Settlement Method for such Options (if the Relevant Settlement Method is other than Net Share Settlement), and (iv) if the settlement method for the related Convertible Notes is not Settlement in Shares or Settlement in Cash (each as defined below), the fixed amount of cash per Convertible Note that Counterparty has elected to deliver to Holders (as such term is defined in the Indenture) of the related Convertible Notes (the Specified Cash Amount ); provided that in respect of any Options for which the relevant Settlement Averaging Period would be set forth in clause (iii) of such definition, (A) such notice may be given on or prior to the second Scheduled Valid Day immediately preceding the Expiration Date and need only specify the information required in clause (i) above, and (B) if the Relevant Settlement Method for such Options is (x) Net Share Settlement and the Specified Cash Amount is not USD 1,000, (y) Cash Settlement or (z) Combination Settlement, Dealer shall have received a separate notice (the Notice of Final Settlement Method ) in respect of all such Convertible Notes before 5:00 p.m. (New York City time) on the Free Convertibility Date specifying the information required in clauses (iii) and (iv) above. Counterparty acknowledges its responsibilities under applicable |
| securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act (as defined below) and the rules and regulations thereunder, in respect of any election of a settlement method with respect to the Convertible Notes. | ||
| Notwithstanding the foregoing, any Notice of Exercise or Notice of Final Settlement Method and the related automatic exercise of the related Options shall be effective if given after the Notice Deadline but prior to 5:00 p.m. (New York City time) on the fifth Scheduled Valid Day following such Notice Deadline and, in respect of any Options in respect of which such notice is delivered after the relevant Notice Deadline pursuant to this sentence, the Calculation Agent shall have the right (i) to postpone the Settlement Date and (ii) to adjust the number of Shares and/or amount of cash deliverable by Dealer with respect to such Options in a commercially reasonable manner as appropriate to reflect the additional costs (including, but not limited to, commercially reasonable hedging mismatches and market losses and gains) and commercially reasonable expenses incurred by Dealer in connection with commercially reasonable hedging activities (including the unwinding of any commercially reasonable hedge position) as a result of Dealer not having received such notice on or prior to such Notice Deadline. | ||
| Valuation Time: | At the close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended past the close of trading for the regular trading session for the Exchange, the Calculation Agent shall determine the Valuation Time in its commercially reasonable discretion. | |
| Market Disruption Event: | Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following: | |
| Market Disruption Event means, in respect of a Share, (i) a failure by the primary United States national or regional securities exchange or market on which the Shares are listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m. (New York City time) on any Scheduled Valid Day for the Shares for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Shares or in any options contracts or futures contracts relating to the Shares. |
| Settlement Terms . | ||
| Settlement Method: | For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement Method, but only if Counterparty shall have notified Dealer of the Relevant Settlement Method in the Notice of Exercise or Notice of Final Settlement Method, as applicable, for such Option. | |
| Relevant Settlement Method: | In respect of any Option: | |
| (i) if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Notes (A) entirely in Shares pursuant to Section 4.02(a)(ii)(A) of the Indenture (together with cash in lieu of fractional Shares) (such settlement method, Settlement in Shares ), (B) in a combination of cash and Shares pursuant to Section 4.02(a)(ii)(C) of the Indenture with a Specified Cash Amount less than USD 1,000 (such settlement method, Low Cash Combination Settlement ) or (C) in a combination of cash and Shares pursuant to Section 4.02(a)(ii)(C) of the Indenture with a Specified Cash Amount equal to USD 1,000, then, in each case, the Relevant Settlement Method for such Option shall be Net Share Settlement; | ||
| (ii) if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Notes in a combination of cash and Shares pursuant to Section 4.02(a)(ii)(C) of the Indenture with a Specified Cash Amount greater than USD 1,000, then the Relevant Settlement Method for such Option shall be Combination Settlement; and | ||
| (iii) if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Notes entirely in cash pursuant to Section 4.02(a)(ii)(B) of the Indenture (such settlement method, Settlement in Cash ), then the Relevant Settlement Method for such Option shall be Cash Settlement. | ||
| Net Share Settlement: | If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the Net Share Settlement Amount ) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) (a) the Daily Option Value for such Valid Day, divided by (b) the Relevant Price on such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period; provided that in no event shall the Net Share Settlement Amount for any Option exceed a number of Shares equal to the Applicable Limit for such Option divided by the Applicable Limit Price on the Settlement Date for such Option. |
| Dealer will pay cash in lieu of delivering any fractional Shares to be delivered with respect to any Net Share Settlement Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
| Combination Settlement: | If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option: | |
| (i) cash (the Combination Settlement Cash Amount ) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (A) an amount (the Daily Combination Settlement Cash Amount ) equal to the lesser of (1) the product of (x) the Applicable Percentage and (y) the Specified Cash Amount minus USD 1,000 and (2) the Daily Option Value, divided by (B) the number of Valid Days in the Settlement Averaging Period; provided that if the calculation in clause (A) above results in zero or a negative number for any Valid Day, the Daily Combination Settlement Cash Amount for such Valid Day shall be deemed to be zero; and | ||
| (ii) Shares (the Combination Settlement Share Amount ) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of a number of Shares for such Valid Day (the Daily Combination Settlement Share Amount ) equal to (A) (1) the Daily Option Value on such Valid Day minus the Daily Combination Settlement Cash Amount for such Valid Day, divided by (2) the Relevant Price on such Valid Day, divided by (B) the number of Valid Days in the Settlement Averaging Period; provided that if the calculation in sub-clause (A)(1) above results in zero or a negative number for any Valid Day, the Daily Combination Settlement Share Amount for such Valid Day shall be deemed to be zero; | ||
| provided that in no event shall the sum of (x) the Combination Settlement Cash Amount for any Option and (y) the Combination Settlement Share Amount for such Option multiplied by the Applicable Limit Price on the Settlement Date for such Option, exceed the Applicable Limit for such Option. | ||
| Dealer will pay cash in lieu of delivering any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
| Cash Settlement: | If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an |
| amount of cash (the Cash Settlement Amount ) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period. | ||
| Daily Option Value: | For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) the Relevant Price on such Valid Day less the Strike Price on such Valid Day; provided that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero. | |
| Applicable Limit: | For any Option, an amount of cash equal to the Applicable Percentage multiplied by the excess of (i) the aggregate of (A) the amount of cash, if any, paid or payable to the Holder of the related Convertible Note upon conversion of such Convertible Note determined pursuant to Section 4.02(a) of the Indenture and (B) the number of Shares, if any, delivered or deliverable to the Holder of the related Convertible Note upon conversion of such Convertible Note determined pursuant to Section 4.02(a) of the Indenture multiplied by the Applicable Limit Price on the Settlement Date for such Option, over (ii) USD 1,000. | |
| Applicable Limit Price: | On any day, the opening price as displayed under the heading Op on Bloomberg page DXCM <equity> (or any successor thereto). | |
| Valid Day: | A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other United States national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a United States national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, Valid Day means a Business Day. | |
| Scheduled Valid Day: | A day that is scheduled to be a Valid Day on the principal United States national or regional securities exchange or market on which the Shares are listed or admitted for trading. If the Shares are not so listed or admitted for trading, Scheduled Valid Day means a Business Day. | |
| Business Day: | Any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed. | |
| Relevant Price: | On any Valid Day, the per Share volume-weighted average price as displayed under the heading Bloomberg VWAP on Bloomberg page DXCM <equity> AQR (or |
| any successor thereto) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time of the Exchange on such Valid Day (or if such volume-weighted average price is unavailable at such time, the market value of one Share on such Valid Day, as determined by the Calculation Agent in good faith and in a commercially reasonable manner using, if practicable, a volume-weighted average method). The Relevant Price will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours. | ||
| Settlement Averaging Period: | For any Option and regardless of the Settlement Method applicable to such Option: | |
| (i) subject to clause (ii), if the related Conversion Date occurs prior to the Free Convertibility Date, the 30 consecutive Valid Days commencing on, and including, the second Valid Day following such Conversion Date; | ||
| (ii) if the related Conversion Date occurs on or following the delivery of the relevant redemption notice to holders of the Convertible Notes under the Indenture, the 30 consecutive Valid Days commencing on, and including, the 31 st Scheduled Valid Day immediately prior to the redemption date; or | ||
| (iii) subject to clause (ii), if the related Conversion Date occurs on or following the Free Convertibility Date, the 30 consecutive Valid Days commencing on, and including, the 31 st Scheduled Valid Day immediately prior to the Expiration Date. | ||
| Settlement Date: | For any Option, the second Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option. | |
| Settlement Currency: | USD | |
| Other Applicable Provisions: | To the extent Dealer is obligated to deliver Shares hereunder, the provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable, except that all references in such provisions to Physically-settled shall be read as references to Share Settled . Share Settled in relation to any Option means that Net Share Settlement or Combination Settlement is applicable to that Option. | |
| Representation and Agreement: | Notwithstanding anything to the contrary in the Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty shall be, upon delivery, subject to restrictions and limitations arising from Counterparty s status as issuer of the Shares under applicable securities |
| laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be restricted securities (as defined in Rule 144 under the Securities Act of 1933, as amended (the Securities Act )). | ||
| 3. Additional Terms applicable to the Transaction . | ||
| Adjustments applicable to the Transaction: | ||
| Potential Adjustment Events: | Notwithstanding Section 11.2(e) of the Equity Definitions, a Potential Adjustment Event means an occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would result in an adjustment pursuant to the Indenture to the Conversion Rate or the composition of a unit of Reference Property or to any Last Reported Sale Price , Daily VWAP, Daily Conversion Value or Daily Settlement Amount (each as defined in the Indenture). For the avoidance of doubt, Dealer shall not have any delivery or payment obligation hereunder, and no adjustment shall be made to the terms of the Transaction, on account of (x) any distribution of cash, property or securities by Counterparty to holders of the Convertible Notes (upon conversion or otherwise) or (y) any other transaction in which holders of the Convertible Notes are entitled to participate, in each case, in lieu of an adjustment under the Indenture of the type referred to in the immediately preceding sentence (including, without limitation, pursuant to the third sentence of the second paragraph of Section 4.05(c) of the Indenture or the third sentence of the second paragraph of Section 4.05(d) of the Indenture). | |
| Method of Adjustment: | Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent, acting in good faith and in a commercially reasonable manner, shall make a corresponding and equivalent adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction as determined by reference to the Dilution Adjustment Provisions, to the extent an adjustment is required pursuant to the Indenture. | |
| Notwithstanding the foregoing and Consequences of Merger Events / Tender Offers below: | ||
| (i) if the Calculation Agent, acting in reasonable good faith and in a commercially reasonable manner disagrees with any adjustment pursuant to the terms of the Indenture that is the basis of any adjustment hereunder and that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant to Section 4.06 of the Indenture, other assets), then in each such case, the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable |
| Section 4.07 of the Indenture or any supplemental indenture entered into thereunder or in connection with any proportional adjustment or the determination of the fair value of any securities, property, rights or relevant to the exercise, settlement or payment for the Transaction in a commercially reasonable manner; provided that, notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant Holder (as such term is defined in the Indenture) was deemed to be a record owner of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make a commercially reasonable adjustment, as determined by it, to the terms hereof in order to account for such Potential Adjustment Event; | ||
| (ii) in connection with any Potential Adjustment Event as a result of an event or condition set forth in Section 4.05(b) of the Indenture or Section 4.05(c) of the Indenture where, in either case, the period for determining Y (as such term is used in Section 4.05(b) of the Indenture) or SP0 (as such term is used in Section 4.05(c) of the Indenture), as the case may be, begins before Counterparty has publicly announced the event or condition giving rise to such Potential Adjustment Event, then the Calculation Agent shall have the right to adjust any variable relevant to the exercise, settlement or payment for the Transaction as appropriate to reflect the commercially reasonable costs (including, but not limited to, hedging mismatches and market losses) and reasonable expenses incurred by Dealer in connection with commercially reasonable hedging activities customary for transactions of this type (subject to the requirements set forth under Hedging Adjustments below) as a result of such event or condition not having been publicly announced prior to the beginning of such period; and | ||
| (iii) if any Potential Adjustment Event is declared and (a) the event or condition giving rise to such Potential Adjustment Event is subsequently amended, modified, cancelled or abandoned, (b) the Conversion Rate (as defined in the Indenture) is otherwise not adjusted at the time or in the manner contemplated by the relevant |
| Dilution Adjustment Provision based on such declaration or (c) the Conversion Rate (as defined in the Indenture) is adjusted as a result of such Potential Adjustment Event and subsequently re-adjusted (each of clauses (a), (b) and (c), a Potential Adjustment Event Change ) then, in each case, the Calculation Agent shall have the right to adjust any variable relevant to the exercise, settlement or payment for the Transaction as appropriate to reflect the commercially reasonable costs (including, but not limited to, hedging mismatches and market losses) and commercially reasonable expenses incurred by Dealer in connection with commercially reasonable hedging activities customary for transactions of this type (subject to the requirements set forth under Hedging Adjustments below) as a result of such Potential Adjustment Event Change. | ||
| Dilution Adjustment Provisions: | Sections 4.05(a), (b), (c), (d) and (e) and Section 4.06 of the Indenture. | |
| Extraordinary Events applicable to the Transaction: | ||
| Merger Events: | Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, a Merger Event means the occurrence of any event or condition set forth in the definition of Merger Event in Section 4.07(a) of the Indenture. | |
| Tender Offers: | Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a Tender Offer means the occurrence of any event or condition set forth in Section 4.05(e) of the Indenture. | |
| Consequences of Merger Events / | ||
| Tender Offers: | Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding and equivalent adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction, subject to the second paragraph under Method of Adjustment ; provided , however , that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction |
| following such Merger Event or Tender Offer will not be a corporation organized under the laws of the United States, any State thereof or the District of Columbia, then, in either case, Cancellation and Payment (Calculation Agent Determination) may apply at Dealer s sole election. | ||
| Nationalization, Insolvency or Delisting: | Cancellation and Payment (Calculation Agent Determination); provided that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |
| Additional Disruption Events: | ||
| Change in Law: | Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase the interpretation in the third line thereof with the phrase , or public announcement of, the formal or informal interpretation , (ii) replacing the word Shares where it appears in clause (X) thereof with the words Hedge Position and (iii) replacing the parenthetical beginning after the word regulation in the second line thereof the words (including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption, effectiveness or promulgation of new regulations authorized or mandated by existing statute) . | |
| Failure to Deliver: | Applicable | |
| Hedging Disruption: | Applicable; provided that: | |
| (i) Section 12.9(a)(v) of the Equity Definitions is hereby amended by (a) inserting the following words at the end of clause (A) thereof: in the manner contemplated by the Hedging Party on the Trade Date and (b) inserting the following two phrases at the end of such Section: | ||
| For the avoidance of doubt, the term equity price risk shall be deemed to include, but shall not be limited to, stock price and volatility risk. And, for the further avoidance of doubt, any such transactions or assets referred to in phrases (A) or (B) above must be available on commercially reasonable pricing terms. ; and | ||
| (ii) Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line |
| thereof, after the words to terminate the Transaction , the words or a portion of the Transaction affected by such Hedging Disruption . | ||
| Increased Cost of Hedging: | Applicable | |
| Hedging Party: | For all applicable Additional Disruption Events, Dealer. | |
| Determining Party: | For all applicable Extraordinary Events, Dealer. All calculations by Determining Party shall be made in good faith and in a commercially reasonable manner. Following any calculation by Determining Party hereunder, upon written request by Counterparty, Determining Party will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation; provided , however , that in no event will Determining Party be obligated to share with Counterparty any proprietary or confidential data or information or any proprietary or confidential models used by it. | |
| Non-Reliance: | Applicable | |
| Agreements and Acknowledgments Regarding Hedging Activities: | Applicable | |
| Hedging Adjustments: | For the avoidance of doubt, whenever the Determining Party or the Calculation Agent is permitted to make an adjustment pursuant to the terms of this Confirmation or the Equity Definitions to take into account the effect of an event (other than, for the avoidance of doubt, any adjustment that is required to be made by reference to the Indenture), the Determining Party or the Calculation Agent, as the case may be, shall make such adjustment by reference to the effect of such event on Dealer assuming that Dealer maintains a commercially reasonable hedge position. | |
| Additional Acknowledgments: | Applicable | |
| 4. Calculation Agent . | Dealer; provided that following the occurrence and during the continuance of an Event of Default of the type described in Section 5(a)(vii) of the Agreement with respect to which Dealer is the sole Defaulting Party, if the Calculation Agent fails to timely make any calculation, adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligation of the Calculation Agent hereunder and such failure continues for five Exchange Business Days following notice to the Calculation Agent by Counterparty of such failure, Counterparty shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the first date the Calculation |
| Agent fails to timely make such calculation, adjustment or determination or to perform such obligation, as the case may be, and ending on the earlier of the Early Termination Date with respect to such Event of Default and the date on which such Event of Default is no longer continuing, as the Calculation Agent and the parties shall work in reasonable good faith to execute any appropriate documentation required by such replacement Calculation Agent. | ||
| All calculations and determinations by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Calculation Agent hereunder, upon written request by Counterparty, the Calculation Agent will promptly (and in any event within five Scheduled Trading Days) provide to Counterparty by email to the email address provided by Counterparty in such written request a written summary and a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation (including any quotations, market data or information from internal or external sources, and any assumptions, used in making such determination or calculation); provided, however, that in no event will the Calculation Agent be obligated to share with Counterparty any proprietary or confidential data or information or any proprietary or confidential models used by it. |
| Bank: | [ ] | |
| ABA#: | [ ] | |
| Acct No.: | [ ] | |
| Beneficiary: | [ ] | |
| Ref: | [ ] | |
| [ ] |
Account for delivery of Shares to Counterparty:
| [Bank: | JPMorgan Chase Bank, N.A. | |
| ABA#: | 021000021 | |
| Acct No.: | 099997979 | |
| Beneficiary: | JPMorgan Chase Bank, N.A. New York | |
| Ref: | Derivatives |
Account for delivery of Shares from Dealer:
[Bank of America, N.A.
Bank Routing: 026-009-593
Account Name: Bank of America
Account No. : 0012334-61892
Account for delivery of Shares from BofA:
[JPMorgan Chase Bank, National Association
c/o Merrill Lynch, Pierce Fenner & Smith Incorporated
Attention: Chief Financial Officer
[JPMorgan Chase Bank, National Association
EDG Marketing Support
Facsimile No: 1-866-886-4506
Title: Managing Director, Head of
West Coast Equity-Linked Capital Markets
[Bank of America, N.A.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Telephone: 646-855-0711
Facsimile: 646-822-5618]
Each of the representations and warranties of Counterparty set forth in Section 3 of the Purchase Agreement (the Purchase
Agreement ) dated as of November 27, 2018, between Counterparty and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the Initial Purchasers party thereto (the
Initial Purchasers ), are true and correct as of the date hereof and on the Premium Payment Date and are hereby deemed to be repeated to Dealer as if set forth herein. Counterparty hereby further represents and warrants to Dealer
on the date hereof and on and as of the Premium Payment Date that:
| Payment Obligation in the manner reasonably requested by Counterparty free of payment. | ||||
| Share Termination Delivery Property: | A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price. | |||
| Share Termination Unit Price: | The value of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property. | |||
| Share Termination Delivery Unit: | One Share or, if the Shares have changed into cash or any other property or the right to receive cash or any other property as the result of a Nationalization, Insolvency or Merger Event (any such cash or other property, the Exchange Property ), a unit consisting of the type and amount of such Exchange Property per Share received by holders of all or substantially all Shares (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency or Merger Event, as determined by the Calculation Agent. | |||
| Failure to Deliver: | Applicable | |||
| Other applicable provisions: | If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption Representation and Agreement in Section 2 will be applicable, except that all references in such provisions to Physically-settled shall be read as references to Share Termination Settled and all references to Shares shall be read as references to Share Termination Delivery Units . Share Termination Settled in relation to the Transaction means that Share Termination Alternative is applicable to the Transaction. |
[Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to J.P.
Morgan Securities LLC, 383 Madison Ave, New York, NY 10179, and by email to EDG_Notices@jpmorgan.com and edg.us.flow.corporates.mo@jpmorgan.com.]
[Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be
promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty with respect to the Transaction, by manually signing
this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Dealer.]
| Authorized Signatory | ||
| Name: |
Accepted and confirmed
| Authorized Signatory | ||
| Name: |