Citrix 2014 Annual Report Download - page 102

CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-34
12. CONVERTIBLE SENIOR NOTES
Convertible Notes Offering
On April 30, 2014, the Company completed a private placement of $1.25 billion principal amount of 0.500% Convertible
Senior Notes due 2019 (the "Convertible Notes"). The net proceeds from this offering were approximately $1.23 billion, after
deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by the Company. The
Company used approximately $71.8 million of the net proceeds to pay the cost of the Initial Bond Hedges described below
(after such cost was partially offset by the proceeds to the Company from the Initial Warrant Transactions described below).
The Company used the remainder of the net proceeds from the offering and a portion of its existing cash and investments to
purchase an aggregate of approximately $1.5 billion of its common stock, as authorized under its share repurchase program.
The Company used approximately $101.0 million to purchase shares of common stock from certain purchasers of the
Convertible Notes in privately negotiated transactions concurrently with the closing of the offering, and the remaining $1.4
billion to purchase additional shares of common stock under the ASR Agreement.
On May 6, 2014, the Company issued an additional $187.5 million principal amount of Convertible Notes (such
additional Convertible Notes, the “Additional Notes”) pursuant to the full exercise of the over-allotment option granted to the
initial purchasers in the offering (the “Over-Allotment Option”). The net proceeds from the sale of the Additional Notes were
approximately $184.9 million, after deducting the initial purchasers’ discounts and commissions payable by us. The Company
used approximately $10.8 million of the net proceeds from the exercise of the Over-Allotment Option to pay the cost of
Additional Bond Hedges (after such cost was partially offset by the proceeds to the Company from Additional Warrant
Transactions), as defined below. The Company intends to use the remainder of the net proceeds for working capital and general
corporate purposes.
The Convertible Notes are governed by the terms of an indenture, dated as of April 30, 2014 (the “Indenture”), between
the Company and Wilmington Trust, National Association, as trustee (the “Trustee”). The Convertible Notes are the senior
unsecured obligations of the Company and bear interest at a rate of 0.500% per annum, payable semi-annually in arrears on
April 15 and October 15 of each year, commencing October 15, 2014. The Convertible Notes will mature on April 15, 2019,
unless earlier repurchased or converted. At any time prior to the close of business on the business day immediately preceding
October 15, 2018, holders may convert their Convertible Notes at their option only under the following circumstances:
(1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2014 (and only during such
calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive)
during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is
greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period
after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal
amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last
reported sale price of the common stock and the conversion rate on each such trading day; or (3) upon the occurrence of
specified corporate events. On or after October 15, 2018 until the close of business on the second scheduled trading day
immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing
circumstances.
Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be
converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of
common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess
of the aggregate principal amount of the Convertible Notes being converted. Holders will not receive any additional cash
payment or additional shares of the Company's common stock representing accrued and unpaid interest, if any, upon conversion
of a Convertible Note, except in limited circumstances. Instead, interest will be deemed to be paid by the cash and shares, if
any, of the Company’s common stock paid or delivered, as the case may be, to such holder upon conversion of a Convertible
Note.
The conversion rate for the Convertible Notes will initially be 11.1111 shares of common stock per $1,000 principal
amount of Convertible Notes, which corresponds to an initial conversion price of approximately $90.00 per share of common
stock. The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not
limited to, the issuance of certain stock dividends on common stock, the issuance of certain rights or warrants, subdivisions,
combinations, distributions of capital stock, indebtedness, or assets, the payment of cash dividends and certain issuer tender or
exchange offers.
The Company may not redeem the Convertible Notes prior to the maturity date and no “sinking fund” is provided for the
Convertible Notes, which means that the Company is not required to periodically redeem or retire the Convertible Notes. Upon
the occurrence of certain fundamental changes involving the Company, holders of the Convertible Notes may require the
Company to repurchase for cash all or part of their Convertible Notes in principal amounts of $1,000 or an integral multiple