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2002 ISDA Equity Derivatives Definitions
A Jolly Contrarian owner’s manual™
12.5 in a Nutshell™
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12.5 in all its glory
Section 12.5. Composition of Combined Consideration. In respect of any Share-for-Combined Merger Event or Tender Offer:
- (a) If “Composition of Combined Consideration” is specified as applicable in the related Confirmation, then:
- (i) to the extent that the composition of the Combined Consideration could be determined by a holder of Shares equal to the relevant Option Entitlement or Number of Shares, and a holder could receive New Shares as part of the Combined Consideration, the Combined Consideration shall be deemed to be New Shares to the maximum value permitted; and
- (ii) if a holder could make any other election with respect to the composition of Combined Consideration other than New Shares, the composition of the Combined Consideration shall be determined as follows: (A) the deliveree or payee may determine the composition if notice is given to the deliveror or payor at least two Scheduled Trading Days before the last time when an election of the Combined Consideration by such holder could be timely made; and (B) otherwise the deliveror or payor will, in its sole discretion, determine the composition.
- (b) If “Composition of Combined Consideration” is not specified as applicable in the related Confirmation, then:
- (i) to the extent that the composition of the Combined Consideration could be determined by a holder of Shares equal to the relevant Option Entitlement or Number of Shares and a holder of Shares could receive New Shares as part of the Combined Consideration, the Combined Consideration shall be deemed to be New Shares to the maximum value permitted; and
- (ii) if a holder could make any other election with respect to the composition of Combined Consideration other than New Shares, the Calculation Agent will, in its sole discretion, determine the composition.
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Resources and Navigation
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Overview
Section 12.3. Consequences of Tender Offers
- 12.3(a) Cancellation and Payment (Tender Offers)
- 12.3(b) Options Exchange Adjustment (Tender Offers)
- 12.3(c) Calculation Agent Adjustment (Tender Offers)
- 12.3(d) Modified Calculation Agent Adjustment (Tender Offers)
- 12.3(e) Partial Cancellation and Payment (Tender Offers)
- 12.3(f) Component Adjustment (Tender Offers)
Section 12.4. Settlement Following a Merger Event or Tender Offer
Section 12.5. Composition of Combined Consideration
Section 12.6. Nationalization, Insolvency and Delisting
Summary
The pedantrous may ask to remove references to the Calculation Agent’s sole discretion. Get your kicks — it’s doubtful that makes any difference: making a determination without specifically saying how you should do it implies you’ll make it up on the fly. What is your counter argument, when the calculation makes a determination you don’t like, meant to be.
“Oh! you used your discretion! you were supposed to ask me!”
“No I wasn’t.”
“Oh, yes you were!”
“Where does it say that?”
Here follows a large pause, wherein negotiator realises that removing the words “, in its sole discretion,” doesn’t achieve anything.
“... Well it doesn't say you weren’t meant to ask me ...”
You know where this is heading, don’t you. Come on: let's go there, for old time’s sake.
“Where?” did I hear you say? I can scarce believe it.
Oh come on, “where?” indeed. You know where.
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See also
References