Settlement Following a Merger Event or Tender Offer - Equity Derivatives Provision

2002 ISDA Equity Derivatives Definitions A Jolly Contrarian owner’s manual™ Resources and navigation Resources About the Equity Derivatives Definitions | (full wikitext) | (nutshell wikitext) 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 ► Synthetic Prime Brokerage Section 12.4 in a Nutshell™ Use at your own risk, campers! 12.4. Settlement Following a Merger Event or Tender Offer. Where, following a Merger Event or Tender Offer and adjustment of: (a) A Cash-settled Transaction: the Calculation Agent will value the Other Consideration as necessry on each Valuation Date or Averaging Date. (b) A Physically-settled Transaction:Where: (i) New Shares are required to be delivered, the deliveror will deliver them per the settlement terms in the Confirmation (though, if it would not have received its New Share entitlement by the Settlement Date, the relevant Settlement Date will be postponed to the first Clearance System Business Day on which it would be able to deliver New Shares to the other party. (ii) Other Consideration is required to be delivered, the deliveror will deliver it to the other party as the other party directs, as soon as reasonably practicable after the later of: (1) the Settlement Date; and (2) the first day on which Shareholder, having received the Other Consideration, would be able to deliver it to the other party. view template Full text of Section 12.4 Section 12.4. Settlement Following a Merger Event or Tender Offer. (a) If Other Consideration is required to be valued in relation to a Cash-settled Transaction that has been adjusted following a Merger Event or Tender Offer, the Other Consideration will be valued by the Calculation Agent on each Valuation Date or Averaging Date, as the case may be. For the avoidance of doubt, the provisions of these Definitions relating to Market Disruption Events will not apply to Other Consideration. (b) If New Shares are required to be delivered in relation to a Physically-settled Transaction that has been adjusted following a Merger Event or Tender Offer, then the deliveror will deliver the relevant New Shares in accordance with the terms of settlement set out in the related Confirmation, provided that if on the relevant Settlement Date a holder of the Shares would not yet have received the New Shares to which it is entitled, the Settlement Date with respect to such New Shares will be postponed to the first Clearance System Business Day falling on or after the first day on which a holder of the relevant Shares, having received the New Shares, would be able to deliver such New Shares to the other party. (c) If Other Consideration is required to be delivered in relation to a Physically-settled Transaction that has been adjusted following a Merger Event or Tender Offer, then the deliveror will deliver the relevant Other Consideration to the other party in a commercially reasonable manner in accordance with the reasonable directions of the other party as soon as reasonably practicable after the later of (i) the relevant Settlement Date and (ii) the first day on which a holder of the relevant Shares, having received the Other Consideration, would be able to deliver such Other Consideration to the other party. view template Comments? Questions? Suggestions? Requests? Insults? We’d love to 📧 hear from you. Sign up for our newsletter.

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Section 12.2. Consequences of Merger Events

12.2(a). “Alternative Obligation (Merger Events)”

12.2(b). “Cancellation and Payment (Merger Events)”

12.2(c). “Options Exchange Adjustment (Merger Events)”

12.2(d). “Calculation Agent Adjustment (Merger Events)”

12.2(e). “Modified Calculation Agent Adjustment (Merger Events)”

12.2(f). “Partial Cancellation and Payment (Merger Events)”

12.2(g). “Component Adjustment (Merger Events)”

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

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Summary

Finally the parallel paths of Merger Events and Tender Offers come together, at the point of settlement. Masterful storytelling by ISDA’s crack drafting squad™.

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General discussion

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See also

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