Calculation Agent Adjustment (Tender Offers) - Equity Derivatives Provision

2002 ISDA Equity Derivatives Definitions
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Resources About the Equity Derivatives Definitions \| (full wikitext) \| (nutshell wikitext) \| Equity v credit derivatives showdown Hot topics Synthetic Prime Brokerage Anatomy \| The Triple Cocktail \| Cancellation and Payment \| Calculation Agent Resources About the Equity Derivatives Definitions \| (full wikitext) \| (nutshell wikitext) \| Equity v credit derivatives showdown Hot topics Synthetic Prime Brokerage Anatomy \| The Triple Cocktail \| Cancellation and Payment \| Calculation Agent TOC \| 1 General Definitions \| 2 Option Transactions \| 3 Exercise of Options \| 4 Forward Transactions \| 5 Equity Swap Transactions \| 6 Valuation \| 7 Settlement \| 8 Cash Settlement \| 9 Physical Settlement \| 10 Dividends \| 11 Adjustments and Modifications \| 12 Extraordinary Events · 12.8 Cancellation Amount · 12.9 Additional Disruption Events · 12.9 List of ADEs · 12.9(b) Consequences of ADEs \| 13 Miscellaneous Index: Click ᐅ to expand: Equity Derivatives - Premium Synthetic Prime Brokerage

Section 12.3(c) in a Nutshell™

Use at your own risk, campers!

12.3(c) “Calculation Agent Adjustment”, then, following the Tender Offer Date the Issuer and the Shares will not change, but the Calculation Agent shall either: (i) adjust the Transaction to account for the economic effect of the Tender Offer on the Transaction (but not solely for changes in volatility, expected dividends, stock loan rate or liquidity on the Shares), which it may do by reference to corresponding adjustments made by an options exchange to options on the Shares and determine the effective date of that adjustment, or (ii) if it determines that no adjustment under (i) would produce a commercially reasonable result, notify the parties that the Transaction will terminate and “Cancellation and Payment” will apply and will be calculated under Section 12.7 (for Option Transactions as if “Calculation Agent Determination” applied; view template

Full text of Section 12.3(c)

12.3(c) “Calculation Agent Adjustment”, then, on or after the relevant Tender Offer Date the Issuer and the Shares will not change, but the Calculation Agent shall either (i) (A) make such adjustment to the exercise, settlement, payment or any other terms of the Transaction as the Calculation Agent determines appropriate to account for the economic effect on the Transaction of such Tender Offer (provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relevant to the Shares or to the Transaction), which may, but need not, be determined by reference to the adjustment(s) made in respect of such Tender Offer by an options exchange to options on the relevant Shares traded on such options exchange and (B) determine the effective date of that adjustment, or (ii) if the Calculation Agent determines that no adjustment that it could make under (i) will produce a commercially reasonable result, notify the parties that the relevant consequence shall be the termination of the Transaction, in which case “Cancellation and Payment” will be deemed to apply and any payment to be made by one party to the other shall be calculated in accordance with Section 12.7, and in respect of an Option Transaction, the Calculation Agent shall determine the amount of such payment as if “Calculation Agent Determination” applied to the Option Transaction; view template

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Content and comparisons

As this comparison shows, the differences between Calculation Agent Adjustment for Merger Events (12.2(d)) and Tender Offers (12.3(c)) are basically the same.