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5. Notes Payable
Convertible Senior Notes
In January 2010, the Company issued at par value $575.0 million of 0.75% convertible senior notes (the
“Notes”) due January 15, 2015. Interest is payable semi-annually in arrears on January 15 and July 15 of each
year, commencing July 15, 2010.
The Notes are governed by an Indenture dated as of January 19, 2010, between the Company, as issuer, and
U.S. Bank National Association, as trustee. The Notes do not contain any financial covenants or any restrictions
on the payment of dividends, the incurrence of senior debt or other indebtedness, or the issuance or repurchase of
securities by the Company. The Notes are unsecured and rank senior in right of payment to the Company’s future
indebtedness that is expressly subordinated in right of payment to the Notes and rank equal in right of payment to
the Company’s existing and future unsecured indebtedness that is not so subordinated and are effectively
subordinated in right of payment to any of the Company’s cash equal to the principal amount of the Notes, and
secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally
subordinated to all existing and future indebtedness and liabilities incurred by our subsidiaries, including trade
payables.
If converted, holders will receive cash equal to the principal amount of the Notes, and at the Company’s
election, cash and/or shares of the Company’s common stock for any amounts in excess of the principal amounts.
The initial conversion rate is 11.7147 shares of common stock per $1,000 principal amount of Notes, subject
to anti-dilution adjustments. The initial conversion price is $85.36 per share of common stock. Throughout the
term of the Notes, the conversion rate may be adjusted upon the occurrence of certain events, including for any
cash dividends. Holders of the Notes will not receive any cash payment representing accrued and unpaid interest
upon conversion of a Note. Accrued but unpaid interest will be deemed to be paid in full upon conversion rather
than cancelled, extinguished or forfeited. Holders may convert their Notes under the following circumstances:
• during any fiscal quarter, if, for at least 20 trading days during the 30 consecutive trading day period
ending on the last trading day of the immediately preceding fiscal quarter, the last reported sales price
of the Company’s common stock for such trading day is greater than or equal to 130% of the applicable
conversion price on such trading day share of common stock on such last trading day;
• in certain situations, when the trading price of the Notes is less than 98% of the product of the sale
price of the Company’s common stock and the conversion rate;
• upon the occurrence of specified corporate transactions described under the Notes Indenture, such as a
consolidation, merger or binding share exchange; or
• at any time on or after October 15, 2014.
For 20 trading days during the 30 consecutive trading days ended October 31, 2012, the Company’s common
stock traded at a price exceeding 130% of the conversion price of $85.36 per share applicable to the Notes.
Accordingly, the Notes were convertible at the option of the holder for the Company’s common shares as of
January 31, 2013 and were classified as a current liability on the Company’s consolidated balance sheet. For
20 trading days during the 30 consecutive trading days ended January 31, 2013, the Company’s common stock
traded at a price exceeding 130% of the conversion price of $85.36 per share applicable to the Notes. Accordingly,
the Notes will remain convertible at the holders’ option for the quarter ending April 30, 2013 and will remain
classified as a current liability on the Company’s consolidated balance sheet so long as the Notes are convertible.
Holders of the Notes have the right to require the Company to purchase with cash all or a portion of the
Notes upon the occurrence of a fundamental change, such as a change of control, at a purchase price equal to
100% of the principal amount of the Notes plus accrued and unpaid interest. Following certain corporate
transactions that constitute a change of control, the Company will increase the conversion rate for a holder who
elects to convert the Notes in connection with such change of control in certain circumstances.
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