Sunbeam 2012 Annual Report Download - page 52

50 Jarden Corporation Annual Report 2012
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2012 (Dollars in millions, except per share data and unless otherwise indicated)
Upon closing, the Company used approximately $100 of the net proceeds to repurchase the Company’s common stock in privately
negotiated transactions pursuant to its stock repurchase program (see Note 10). The remainder of the net proceeds will be used
for general corporate purposes. The conversion rate is approximately 14.115 shares of the Company’s common stock (subject to
customary adjustments, including in connection with a fundamental change transaction) per $1 thousand principal amount of the
Convertible Notes, which is equivalent to a conversion price of approximately $70.85 per share. The Convertible Notes are not
subject to redemption at the Company’s option prior to the maturity date. If the Company undergoes a fundamental change (as
defined in the indenture governing the Convertible Notes) prior to maturity, holders of the Convertible Notes will have the right, at
their option, to require the Company to repurchase for cash some or all of their Convertible Notes at a repurchase price equal to
100% of the principal amount of the Convertible Notes being repurchased, plus accrued and unpaid interest.
The Convertible Notes will be convertible only under the following circumstances:
• prior to June 1, 2018, on any date during any calendar quarter (and only during such calendar quarter) if the closing sale
price of the Company’s common stock was more than 130% of the then current conversion price for at least 20 trading days
(whether or not consecutive) in the period of the 30 consecutive trading days ending on the last trading day of the previous
calendar quarter;
• prior to June 1, 2018, if the Company distributes to all or substantially all holders of its common stock rights, options or
warrants entitling them to purchase, for a period of 60 calendar days or less from the declaration date for such distribution,
shares of its common stock at a price per share less than the average closing sale price of its common stock for the ten
consecutive trading days immediately preceding, but excluding, the declaration date for such distribution;
• prior to June 1, 2018, if the Company distributes to all or substantially all holders of its common stock cash, other assets,
securities or rights to purchase its securities, which distribution has a per share value exceeding 10% of the closing sale price
of its common stock on the trading day immediately preceding the declaration date for such distribution, or if the Company
engages in certain other corporate transactions as described herein;
• prior to June 1, 2018, during the five consecutive business-day period following any ten consecutive trading-day period in
which the trading price per $1 thousand principal amount of Convertible Notes for each trading day during such ten trading-
day period was less than 98% of the closing sale price of its common stock for each trading day during such ten trading-day
period multiplied by the then current conversion rate; or
• on or after June 1, 2018, and on or prior to the close of business on the second scheduled trading day immediately
preceding the maturity date, without regard to the foregoing conditions.
Upon conversion, holders will receive, at the Company’s discretion, cash, shares of the Company’s common stock or a combination
thereof. It is the Company’s intent to settle the principal amount and accrued interest on the Convertible Notes with cash. At the date
of issuance, the estimated fair value of the liability and equity components of the Convertible Notes was approximately $418 and
$82, respectively, resulting in an effective annual interest rate, considering debt issuance costs, of approximately 5.5%. The amount
allocated to the equity component is recorded as a discount to the original aggregate principal amount of the Convertible Notes.
Securitization Facility
The Company maintains a $400 receivables purchase agreement (the “Securitization Facility”) that matures in February 2015 and
bears interest at a margin over the commercial paper rate. Under the Securitization Facility, substantially all of the Company’s
Outdoor Solutions, Consumer Solutions and Branded Consumables domestic accounts receivable are sold to a special purpose
entity, Jarden Receivables, LLC (“JRLLC”), which is a wholly-owned consolidated subsidiary of the Company. JRLLC funds these
purchases with borrowings under a loan agreement, which are secured by the accounts receivable. There is no recourse to the
Company for the unpaid portion of any loans under this loan agreement. To the extent there is availability, the Securitization Facility
will be drawn upon and repaid as needed to fund general corporate purposes. At December 31, 2012, the borrowing rate margin
and the unused line fee on the Securitization Facility were 0.90% and 0.45% per annum, respectively.
Non-U.S. Borrowings
The Company’s non-U.S. borrowings are comprised of amounts borrowed under various foreign credit lines and facilities. Certain of
these foreign credit lines are secured by certain non-U.S. subsidiaries’ inventory and/or accounts receivable.
Debt Covenants and Other
The Senior Notes and Senior Subordinated Notes are subject to a number of restrictive covenants that, in part, limit the ability of
the Company and certain of its subsidiaries, subject to certain exceptions and qualifications, to incur additional indebtedness, to
incur liens, engage in mergers and consolidations, enter into transactions with affiliates, make certain investments, transfer or sell
assets, pay dividends to third parties or distributions on or repurchase the Company’s common stock, prepay debt subordinate to
the Senior Notes or dispose of assets.
The Facility contains certain restrictions, subject to certain exceptions and qualifications, on the conduct of the Company and
certain of its subsidiaries, including, among other restrictions: incurring debt, disposing of certain assets, making investments,