Form 8-K |
MINNESOTA | 000-02382 | 41-0908057 |
(STATE OR OTHER JURISDICTION OF INCORPORATION) | (COMMISSION FILE NUMBER) | (I.R.S. EMPLOYER IDENTIFICATION NO.) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Emerging growth company ☐ |
Item 1.01 | Entry into a Material Definitive Agreement |
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits |
10.1 | |
10.2 |
MTS SYSTEMS CORPORATION | |||
(Registrant) | |||
Date: | June 13, 2018 | By: | /s/ Brian T. Ross |
Brian T. Ross | |||
Senior Vice President and Chief Financial Officer |
To: | MTS Systems Corporation |
From: | JPMorgan Chase Bank, National Association, |
Re: | Base Call Option Transaction - Amended and Restated |
Trade Date: | June 9, 2016 |
Effective Date: | June 15, 2016 |
Option Style: | European, as described under “Procedures for Exercise” below. |
Option Type: | Call |
Seller: | Dealer |
Buyer: | Counterparty |
Shares: | The Common Stock of Counterparty, par value USD$0.25 per Share (Ticker Symbol: “MTSC”). |
Number of Options: | 1,438,052. For the avoidance of doubt, the Number of Options outstanding shall be reduced by each exercise of Options hereunder. |
Option Entitlement: | One Share per Option. |
Excluded Adjustment: | Any adjustment to, or determination of, the settlement rate for the Purchase Contracts and/or the “Fixed Settlement Rates” (as defined in the Purchase Contract Agreement), in each case, pursuant to Section 4.06(a), 4.07(a), 4.08(a) and 4.09(c)(ii) of the Purchase Contract Agreement. |
Discretionary Adjustment: | Any adjustment to the “Fixed Settlement Rates” (as defined in the Purchase Contract Agreement) pursuant to Section 5.01(c) of the Purchase Contract Agreement. |
Strike Price: | USD50.40 |
Cap Price: | Immediately prior to the Amendment Date, USD58.80, and thereafter, the Adjusted Cap Price (as defined in Annex A). |
Number of Shares: | As of any date, a number of Shares equal to the product of the Number of Options and the Option Entitlement. |
Premium: | USD4,830,000.00 |
Premium Payment Date: | The Effective Date |
Exchange: | The NASDAQ Global Select Market |
Related Exchange: | All Exchanges |
Expiration Time: | At the close of trading of the regular trading session on the Exchange; provided that if the regular trading session on the Exchange is extended, the Calculation Agent shall determine the Expiration Time in a commercially reasonable manner |
Exercise Date: | The Expiration Date. |
Expiration Date: | The last Trading Day of the Final Averaging Period. |
Expiration Date: | Applicable; and means that the Number of Options for the Transaction will be deemed to be automatically exercised at the Expiration Time on the Expiration Date if at such time such Options are In-the-Money, as determined by the Calculation Agent, unless Buyer notifies Seller (in writing) prior to the Expiration Time on such Expiration Date that it does not wish Automatic Exercise to occur with respect to the Transaction, in which case Automatic Exercise will not apply with respect to the Transaction. “In-the-Money” means, for any Option, that the number of Net Shares that would be deliverable by Dealer with respect to such Option would be greater than zero, were such Option exercised on the relevant Expiration Date. |
Giving Notice: | As specified in Section 6(b) below. |
Settlement Method: | Net Share Settlement |
Net Share Settlement: | Dealer will deliver to Counterparty, on the relevant Settlement Date, a number of Shares equal to the Net Shares in respect of any Option exercised or deemed exercised hereunder. In no event will the Net Shares be less than zero. |
Net Shares: | In respect of any Option exercised or deemed exercised, a number of Shares equal to the sum of the quotients, for each Trading Day during the Final Averaging Period, of (i) (A) the Option Entitlement on such Trading Day, multiplied by (B) (1) the amount by which the Cap Price exceeds the Strike Price, if the Daily VWAP on such Trading Day is equal to or greater than the Cap Price, (2) the amount by which such Daily VWAP exceeds the Strike Price, if such Daily VWAP is greater than the Strike Price but less than the Cap Price or (3) zero, if such Daily VWAP is less than or equal to the Strike Price, divided by (C) such Daily VWAP, divided by (ii) the number of Trading Days in the Final Averaging Period. |
Daily VWAP: | On any Trading Day, the per Share volume-weighted average price as displayed on Bloomberg page “MTSC <Equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on such Trading Day (or if such volume-weighted average price is unavailable at such time, the market value of one Share on such Trading Day, as determined by the Calculation Agent using, if practicable, a volume-weighted average method). The Daily VWAP will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours. |
Valuation Disruption: | The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by (A) deleting the words “at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” and inserting the words “at any time on any Scheduled Trading Day during the Amendment Averaging Period or Final Averaging Period” after the word “material,” in the third line thereof and (B) by replacing the words “or (iii) an Early Closure.” therein with “(iii) an Early Closure, or (iv) a Regulatory Disruption.”. |
Regulatory Disruption: | Any event that Dealer, in its discretion, determines makes it appropriate, with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer), for Dealer to refrain from or decrease any market activity in connection with the Transaction. |
Trading Day: | A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other United States national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a United States national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Trading Day” means a Business Day. |
Settlement Date: | The date one Settlement Cycle immediately following the last Trading Day of the Final Averaging Period. |
Final Averaging Period: | The 60 consecutive Scheduled Trading Day period set forth in Annex B, subject to “Valuation Disruption”, above. |
Other Applicable Provisions: | The provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws that exist as a result of the fact that Counterparty is the issuer of the Shares. |
Restricted Certificated Shares: | Notwithstanding anything to the contrary in the Equity Definitions, Dealer may, in whole or in part, deliver Shares required to be delivered to Counterparty hereunder in certificated form in lieu of delivery through the |
Method of Adjustment: | Notwithstanding Section 11.2 of the Equity Definitions, and except in the circumstances set forth in Section 8(t), upon the occurrence of any event or condition set forth in Section 5.01(a)(i), 5.01(a)(ii), 5.01(a)(iii), 5.01(a)(iv), 5.01(a)(v) or 5.01(e) of the Purchase Contract Agreement, for the avoidance of doubt, regardless of whether any Purchase Contracts remain outstanding (a “Potential Adjustment Event”) that Calculation Agent determines would result in an adjustment under the Purchase Contract Agreement, the Calculation Agent shall, acting in good faith and in a commercially reasonable manner, make a commercially reasonable adjustment in respect of any one or more of the Strike Price, the Number of Options, the Option Entitlement, the nature of the “Shares” and any other term relevant to the exercise, settlement or payment of the Transaction, subject to “Discretionary Adjustments” below. Immediately upon the occurrence of any Potential Adjustment Event, Counterparty shall notify the Calculation Agent of such Potential Adjustment Event; and once the adjustments to be made to the terms of the Purchase Contract Agreement and the Purchase Contracts in respect of such Potential Adjustment Event have been determined, Counterparty shall immediately notify the Calculation Agent in writing of the details of such adjustments. |
Discretionary Adjustments: | Notwithstanding anything to the contrary herein or in the Equity Definitions, the Calculation Agent, acting in good faith and in a commercially reasonable manner, will determine any adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement the nature of the “Shares” and any other variable relevant to the exercise, settlement or payment of or under the Transaction in a commercially reasonable manner and, for the avoidance of doubt, notwithstanding anything herein to the contrary, the Net Shares shall be calculated on the basis of such adjustments by the Calculation Agent, notwithstanding any actual adjustment or determination made by Counterparty under the Purchase Contract Agreement. |
Dividends: | If the Calculation Agent determines that (i) at any time during the period from and including the Trade Date, to but excluding the Expiration Date, an ex-dividend date for a regular quarterly cash dividend occurs with respect to the Shares (an “Ex-Dividend Date”) and that dividend is less than the Regular Dividend on a per Share basis or (ii) no Ex-Dividend Date for a regular quarterly cash dividend occurs with respect to the Shares in any quarterly dividend period of Counterparty, then the Calculation Agent will adjust the Cap Price to account for the economic effect on the Transaction of such dividend or lack thereof, and, for the avoidance of doubt, any such adjustments shall be taken into account in calculating the Net Shares. |
Merger Events: | Notwithstanding Section 12.1(b) of the Equity Definitions, “Merger Event” shall mean any “Reorganization Event” (as defined in the Purchase Contract Agreement, for the avoidance of doubt, regardless of whether any Purchase Contracts remain outstanding), except in the circumstances provided in Section 8(t). |
Tender Offers: | Not Applicable, except in the circumstances provided in Section 8(t). |
Consequences of Merger Events: | Notwithstanding Section 12.2 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make a commercially reasonable adjustment to the terms relevant to the exercise, settlement or payment of the Transaction (other than the Regular Dividend, it being understood that the Regular Dividend remains subject to adjustment under “Dividends” above), subject to “Discretionary Adjustments” above; provided that such adjustment shall be made without regard to any adjustment to the settlement rate for the Purchase Contracts and/or the “Fixed Settlement Rates” (as defined in the Purchase Contract Agreement), in each case, pursuant to an Excluded Adjustment or a Discretionary Adjustment; provided further that if, with respect to a Merger Event, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or limited liability company that is treated as a corporation for U.S. federal income tax purposes, organized and existing under the laws of the United States of America, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction, following such Merger Event, will not be a corporation or limited liability company that is treated as a corporation for U.S. federal income tax purposes, organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, in each case, Dealer may elect in its sole discretion that Cancellation and Payment (Calculation Agent Determination) shall apply. |
Consequences: | Upon the occurrence of a Merger Event, Counterparty shall reasonably promptly (but in any event prior to the relevant merger date) notify the Calculation Agent of (i) in the case of a Merger Event that causes the Shares to be converted into the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), the weighted average of the types and amounts of consideration to be received by the holders of Shares that affirmatively make such an election (or of all holders of Shares if none makes an election), and (ii) the details of the adjustment to be made under the Purchase Contract Agreement in respect of such Merger Event. |
Events: | Modified Calculation Agent Adjustment as set forth in Section 12.3(d) of the Equity Definitions; provided that, in respect of an Announcement Event, (x) references to “Tender Offer” shall be replaced by references to “Announcement Event” and references to “Tender Offer Date” shall be replaced by references to “date of such Announcement Event”, (y) the word “shall” in the second line shall be replaced with “may”, the phrase “exercise, settlement, payment or any other terms of the Transaction (including, |
Announcement Event: | (i) The public announcement by any entity of (x) any transaction or event that, if completed, would constitute a Merger Event or Tender Offer, (y) any potential acquisition by Issuer and/or its subsidiaries where the aggregate consideration exceeds 15% of the market capitalization of Issuer or its affiliates as of the date of such announcement (an “Acquisition Transaction”) or (z) the intention to enter into a Merger Event or Tender Offer or an Acquisition Transaction, (ii) the public announcement by Issuer of an intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, a Merger Event or Tender Offer or an Acquisition Transaction or (iii) any subsequent public announcement by any entity of a change to a transaction or intention that is the subject of an announcement of the type described in clause (i) or (ii) of this sentence (including, without limitation, a new announcement, whether or not by the same party, relating to such a transaction or intention or the announcement of a withdrawal from, or the abandonment or discontinuation of, such a transaction or intention), as determined by the Calculation Agent. For the avoidance of doubt, the occurrence of an Announcement Event with respect to any transaction or intention shall not preclude the occurrence of a later Announcement Event with respect to such transaction or intention. For purposes of this definition of “Announcement Event,” (A) “Merger Event” shall mean such term as defined under Section 12.1(b) of the Equity Definitions (but, for the avoidance of doubt, the remainder of the definition of “Merger Event” in Section 12.1(b) of the Equity Definitions following the definition of “Reverse Merger” therein shall be disregarded) and (B) “Tender Offer” shall mean such term as defined under Section 12.1(d) of the Equity Definitions. |
or Delisting: | Cancellation and Payment (Calculation Agent Determination); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Shares are not immediately re-listed, re-traded or requoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or requoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange. |
Additional Termination Event(s): | Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with the Transaction (or the cancelled or terminated portion thereof) being the Affected Transaction and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction. |
(a) Change in Law: | Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) by adding the phrase “and/or Hedge Position” after the word “Shares” in clause (X) thereof and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”; and provided further that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the parenthetical beginning after the word “regulation” in the second line thereof the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)” and (ii) adding the words “, or holding, acquiring or disposing of Shares or any Hedge Positions relating to,” after the words “obligations under” in clause (Y) thereof. |
(b) Failure to Deliver: | Applicable |
(c) Insolvency Filing: | Applicable |
(d) Hedging Disruption: | Applicable; provided that: |
(e) Increased Cost of Hedging: | Applicable |
Hedging Party: | Dealer |
Determining Party: | Dealer |
Non-Reliance: | Applicable |
Regarding Hedging Activities: | Applicable |
Additional Acknowledgments: | Applicable |
3. | Calculation Agent: Dealer. Notwithstanding anything to the contrary in this Confirmation, all determinations by Dealer shall be made in good faith and in a commercially reasonable manner in order to produce a commercially reasonable result. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent will promptly and timely, provide to Counterparty by e-mail, to the e-mail address provided by Counterparty in such written request, a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such determination or calculation (including any quotations, market data or information from internal sources used in making such determination or calculation, as applicable, but without disclosing the Calculation Agent’s proprietary or confidential models or other information that may be proprietary or confidential). |
To: | MTS Systems Corporation |
Attn: | Mardy Hartstack, Director of Tax and Treasury |
Telephone: | (952) 937-4922 |
Email: | mardy.hartstack@mts.com |
Email: | edg_notices@jpmorgan.com |
Facsimile No: | 1-866-886-4506 |
Attention: | Santosh Sreenivasan |
Title: | Managing Director |
Telephone No: | (212) 622-5604 |
Email: | santosh.sreenivasan@jpmorgan.com |
Share Termination Alternative: | If applicable, means that Dealer shall deliver to Counterparty the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 6(d)(ii) of the Agreement or such later date or dates as Dealer may commercially reasonably determine (the “Share Termination Payment Date”) taking into account commercially reasonable hedging or hedge unwind activity, in satisfaction of the Payment Obligation. |
Property: | A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of the aggregate amount of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price. |
Share Termination Unit Price: | The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. |
Share Termination Delivery Unit: | In the case of a Termination Event (other than on account of an Insolvency, Nationalization or Merger Event), Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable. If such Insolvency, Nationalization or Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash. |
Other Applicable Provisions: | If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery Units”; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Counterparty is the issuer of any Share Termination Delivery Units (or any part thereof). |
(A) | With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 8(e) or any obligations under Section 8(d) or the provisions opposite the caption “Notice of Merger Consideration and Consequences” in this Confirmation; |
(B) | Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the Internal Revenue Code of 1986, as amended); |
(C) | Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer; |
(D) | Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment; |
(E) | An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment; |
(F) | Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and |
(G) | Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment. |
Final Averaging Period Day Number | Scheduled Trading Day |
1 | 5/29/2019 |
2 | 5/30/2019 |
3 | 5/31/2019 |
4 | 6/3/2019 |
5 | 6/4/2019 |
6 | 6/5/2019 |
7 | 6/6/2019 |
8 | 6/7/2019 |
9 | 6/10/2019 |
10 | 6/11/2019 |
11 | 6/12/2019 |
12 | 6/13/2019 |
13 | 6/14/2019 |
14 | 6/17/2019 |
15 | 6/18/2019 |
16 | 6/19/2019 |
17 | 6/20/2019 |
18 | 6/21/2019 |
19 | 6/24/2019 |
20 | 6/25/2019 |
21 | 6/26/2019 |
22 | 6/27/2019 |
23 | 6/28/2019 |
24 | 7/1/2019 |
25 | 7/2/2019 |
26 | 7/5/2019 |
27 | 7/8/2019 |
28 | 7/9/2019 |
29 | 7/10/2019 |
30 | 7/11/2019 |
31 | 7/12/2019 |
32 | 7/15/2019 |
33 | 7/16/2019 |
34 | 7/17/2019 |
35 | 7/18/2019 |
36 | 7/19/2019 |
37 | 7/22/2019 |
38 | 7/23/2019 |
39 | 7/24/2019 |
40 | 7/25/2019 |
41 | 7/26/2019 |
42 | 7/29/2019 |
43 | 7/30/2019 |
44 | 7/31/2019 |
45 | 8/1/2019 |
46 | 8/2/2019 |
47 | 8/5/2019 |
48 | 8/6/2019 |
49 | 8/7/2019 |
50 | 8/8/2019 |
51 | 8/9/2019 |
52 | 8/12/2019 |
53 | 8/13/2019 |
54 | 8/14/2019 |
55 | 8/15/2019 |
56 | 8/16/2019 |
57 | 8/19/2019 |
58 | 8/20/2019 |
59 | 8/21/2019 |
60 | 8/22/2019 |
To: | MTS Systems Corporation |
From: | Wells Fargo Bank, National Association |
Re: | Base Call Option Transaction - Amended and Restated |
Date: | June 13, 2018 |
Trade Date: | June 9, 2016 |
Effective Date: | June 15, 2016 |
Option Style: | European, as described under “Procedures for Exercise” below. |
Option Type: | Call |
Seller: | Dealer |
Buyer: | Counterparty |
Shares: | The Common Stock of Counterparty, par value USD$0.25 per Share (Ticker Symbol: “MTSC”). |
Number of Options: | 616,308. For the avoidance of doubt, the Number of Options outstanding |
Option Entitlement: | One Share per Option. |
Excluded Adjustment: | Any adjustment to, or determination of, the settlement rate for the Purchase Contracts and/or the “Fixed Settlement Rates” (as defined in the Purchase Contract Agreement), in each case, pursuant to Section 4.06(a), 4.07(a), 4.08(a) and 4.09(c)(ii) of the Purchase Contract Agreement. |
Discretionary Adjustment: | Any adjustment to the “Fixed Settlement Rates” (as defined in the Purchase Contract Agreement) pursuant to Section 5.01(c) of the Purchase Contract Agreement. |
Strike Price: | USD50.40 |
Cap Price: | Immediately prior to the Amendment Date, USD58.80, and thereafter, the Adjusted Cap Price (as defined in Annex A). |
Number of Shares: | As of any date, a number of Shares equal to the product of the Number of Options and the Option Entitlement. |
Premium: | USD2,070,000.00 |
Premium Payment Date: | The Effective Date |
Exchange: | The NASDAQ Global Select Market |
Related Exchange: | All Exchanges |
Expiration Time: | At the close of trading of the regular trading session on the Exchange; provided that if the regular trading session on the Exchange is extended, the Calculation Agent shall determine the Expiration Time in a commercially reasonable manner |
Exercise Date: | The Expiration Date. |
Expiration Date: | The last Trading Day of the Final Averaging Period. |
Expiration Date: | Applicable; and means that the Number of Options for the Transaction will be deemed to be automatically exercised at the Expiration Time on the Expiration Date if at such time such Options are In-the-Money, as determined by the Calculation Agent, unless Buyer notifies Seller (in writing) prior to the Expiration Time on such Expiration Date that it does not wish Automatic Exercise to occur with respect to the Transaction, in which case Automatic Exercise will not apply with respect to the Transaction. “In-the-Money” means, for any Option, that the number of Net Shares that would be deliverable by Dealer with respect to such Option would be greater than zero, were such Option exercised on the relevant Expiration Date. |
Giving Notice: | As specified in Section 6(b) below. |
Settlement Method: | Net Share Settlement |
Net Share Settlement: | Dealer will deliver to Counterparty, on the relevant Settlement Date, a number of Shares equal to the Net Shares in respect of any Option exercised or deemed exercised hereunder. In no event will the Net Shares be less than zero. |
Net Shares: | In respect of any Option exercised or deemed exercised, a number of Shares equal to the sum of the quotients, for each Trading Day during the Final |
Daily VWAP: | On any Trading Day, the per Share volume-weighted average price as displayed on Bloomberg page “MTSC <Equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on such Trading Day (or if such volume-weighted average price is unavailable at such time, the market value of one Share on such Trading Day, as determined by the Calculation Agent using, if practicable, a volume-weighted average method). The Daily VWAP will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours. |
Valuation Disruption: | The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by (A) deleting the words “at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” and inserting the words “at any time on any Scheduled Trading Day during the Amendment Averaging Period or Final Averaging Period” after the word “material,” in the third line thereof and (B) by replacing the words “or (iii) an Early Closure.” therein with “(iii) an Early Closure, or (iv) a Regulatory Disruption.”. |
Regulatory Disruption: | Any event that Dealer, in its discretion, determines makes it appropriate, with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer), for Dealer to refrain from or decrease any market activity in connection with the Transaction. |
Trading Day: | A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other United States national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a United States national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Trading Day” means a Business Day. |
Settlement Date: | The date one Settlement Cycle immediately following the last Trading Day of the Final Averaging Period. |
Final Averaging Period: | The 60 consecutive Scheduled Trading Day period set forth in Annex B, subject to “Valuation Disruption”, above. |
Other Applicable Provisions: | The provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws that exist as a result of the fact that Counterparty is the issuer of the Shares. |
Restricted Certificated Shares: | Notwithstanding anything to the contrary in the Equity Definitions, Dealer may, in whole or in part, deliver Shares required to be delivered to Counterparty hereunder in certificated form in lieu of delivery through the Clearance System. With respect to such certificated Shares, the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by deleting the remainder of the provision after the word “encumbrance” in the fourth line thereof. |
Method of Adjustment: | Notwithstanding Section 11.2 of the Equity Definitions, and except in the circumstances set forth in Section 8(t), upon the occurrence of any event or condition set forth in Section 5.01(a)(i), 5.01(a)(ii), 5.01(a)(iii), 5.01(a)(iv), 5.01(a)(v) or 5.01(e) of the Purchase Contract Agreement, for the avoidance |
Discretionary Adjustments: | Notwithstanding anything to the contrary herein or in the Equity Definitions, the Calculation Agent, acting in good faith and in a commercially reasonable manner, will determine any adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement the nature of the “Shares” and any other variable relevant to the exercise, settlement or payment of or under the Transaction in a commercially reasonable manner and, for the avoidance of doubt, notwithstanding anything herein to the contrary, the Net Shares shall be calculated on the basis of such adjustments by the Calculation Agent, notwithstanding any actual adjustment or determination made by Counterparty under the Purchase Contract Agreement. |
Dividends: | If the Calculation Agent determines that (i) at any time during the period from and including the Trade Date, to but excluding the Expiration Date, an ex-dividend date for a regular quarterly cash dividend occurs with respect to the Shares (an “Ex-Dividend Date”) and that dividend is less than the Regular Dividend on a per Share basis or (ii) no Ex-Dividend Date for a regular quarterly cash dividend occurs with respect to the Shares in any quarterly dividend period of Counterparty, then the Calculation Agent will adjust the Cap Price to account for the economic effect on the Transaction of such dividend or lack thereof, and, for the avoidance of doubt, any such adjustments shall be taken into account in calculating the Net Shares. “Regular Dividend” shall mean USD0.30 per Share. Upon the occurrence of any event that the Calculation Agent determines would result in an adjustment to the “Initial Dividend Threshold” (as defined in the Purchase Contract Agreement) for the Purchase Contracts pursuant to the Purchase Contract Agreement, the Calculation Agent will make a commercially reasonable adjustment to the Regular Dividend for the Transaction, for the avoidance of doubt, regardless of whether any Purchase Contracts remain outstanding. |
Merger Events: | Notwithstanding Section 12.1(b) of the Equity Definitions, “Merger Event” shall mean any “Reorganization Event” (as defined in the Purchase Contract Agreement, for the avoidance of doubt, regardless of whether any Purchase Contracts remain outstanding), except in the circumstances provided in Section 8(t). |
Tender Offers: | Not Applicable, except in the circumstances provided in Section 8(t). |
Consequences of Merger Events: | Notwithstanding Section 12.2 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make a commercially reasonable adjustment to the terms relevant to the exercise, settlement or payment of the Transaction (other than the Regular Dividend, it being understood that the Regular Dividend remains subject to adjustment under “Dividends” above), subject to “Discretionary Adjustments” above; provided that such adjustment shall be made without regard to any adjustment to the settlement rate for the Purchase Contracts and/or the “Fixed Settlement Rates” (as defined in the Purchase Contract Agreement), in each case, pursuant to an Excluded Adjustment or a Discretionary Adjustment; provided further that if, with respect to a Merger Event, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or limited liability company that is treated as a corporation for U.S. federal income tax purposes, organized and existing under the laws of the United States of America, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction, following such Merger Event, will not be a corporation or limited liability company that is treated as a corporation for U.S. federal income tax purposes, organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, in each case, Dealer may elect in its sole discretion that Cancellation and Payment (Calculation Agent Determination) shall apply. |
Consequences: | Upon the occurrence of a Merger Event, Counterparty shall reasonably promptly (but in any event prior to the relevant merger date) notify the Calculation Agent of (i) in the case of a Merger Event that causes the Shares to be converted into the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), the weighted average of the types and amounts of consideration to be received by the holders of Shares that affirmatively make such an election (or of all holders of Shares if none makes an election), and (ii) the details of the adjustment to be made under the Purchase Contract Agreement in respect of such Merger Event. |
Events: | Modified Calculation Agent Adjustment as set forth in Section 12.3(d) of the Equity Definitions; provided that, in respect of an Announcement Event, (x) references to “Tender Offer” shall be replaced by references to “Announcement Event” and references to “Tender Offer Date” shall be replaced by references to “date of such Announcement Event”, (y) the word “shall” in the second line shall be replaced with “may”, the phrase “exercise, settlement, payment or any other terms of the Transaction (including, without limitation, the spread)” shall be replaced with the phrase “Cap Price (provided that in no event shall the Cap Price be less than the Strike Price)”, and (z) for the avoidance of doubt, the Calculation Agent may determine whether the relevant Announcement Event has had an economic effect on the Transaction (and, if so, may adjust the Cap Price accordingly) on one or more occasions on or after the date of the Announcement Event up to, and including, the Expiration Date, any Early Termination Date and/or any other date of cancellation, it being understood that any adjustment in respect of an Announcement Event shall take into account any earlier adjustment |
Announcement Event: | (i) The public announcement by any entity of (x) any transaction or event that, if completed, would constitute a Merger Event or Tender Offer, (y) any potential acquisition by Issuer and/or its subsidiaries where the aggregate consideration exceeds 15% of the market capitalization of Issuer or its affiliates as of the date of such announcement (an “Acquisition Transaction”) or (z) the intention to enter into a Merger Event or Tender Offer or an Acquisition Transaction, (ii) the public announcement by Issuer of an intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, a Merger Event or Tender Offer or an Acquisition Transaction or (iii) any subsequent public announcement by any entity of a change to a transaction or intention that is the subject of an announcement of the type described in clause (i) or (ii) of this sentence (including, without limitation, a new announcement, whether or not by the same party, relating to such a transaction or intention or the announcement of a withdrawal from, or the abandonment or discontinuation of, such a transaction or intention), as determined by the Calculation Agent. For the avoidance of doubt, the occurrence of an Announcement Event with respect to any transaction or intention shall not preclude the occurrence of a later Announcement Event with respect to such transaction or intention. For purposes of this definition of “Announcement Event,” (A) “Merger Event” shall mean such term as defined under Section 12.1(b) of the Equity Definitions (but, for the avoidance of doubt, the remainder of the definition of “Merger Event” in Section 12.1(b) of the Equity Definitions following the definition of “Reverse Merger” therein shall be disregarded) and (B) “Tender Offer” shall mean such term as defined under Section 12.1(d) of the Equity Definitions. |
or Delisting: | Cancellation and Payment (Calculation Agent Determination); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Shares are not immediately re-listed, re-traded or requoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or requoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange. |
Additional Termination Event(s): | Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with the Transaction (or the cancelled or terminated portion thereof) being the Affected Transaction and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction. |
(a) Change in Law: | Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) by adding the phrase “and/or Hedge Position” after the word “Shares” in clause (X) thereof and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”; and provided further that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the parenthetical beginning after the |
(b) Failure to Deliver: | Applicable |
(c) Insolvency Filing: | Applicable |
(d) Hedging Disruption: | Applicable; provided that: |
(e) Increased Cost of Hedging: | Applicable |
Hedging Party: | Dealer |
Determining Party: | Dealer |
Non-Reliance: | Applicable |
Regarding Hedging Activities: | Applicable |
Additional Acknowledgments: | Applicable |
3. | Calculation Agent: Dealer. Notwithstanding anything to the contrary in this Confirmation, all determinations by Dealer shall be made in good faith and in a commercially reasonable manner in order to produce a commercially reasonable result. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent will promptly and timely, provide to Counterparty by e-mail, to the e-mail address provided by Counterparty in such written request, a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such determination or calculation (including any quotations, market data or information from internal sources used in making such determination or calculation, as applicable, but without disclosing the Calculation Agent’s proprietary or confidential models or other information that may be proprietary or confidential). |
To: | MTS Systems Corporation |
Attn: | Mardy Hartstack, Director of Tax and Treasury |
Telephone: | (952) 937-4922 |
Email: | mardy.hartstack@mts.com |
Share Termination Alternative: | If applicable, means that Dealer shall deliver to Counterparty the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 6(d)(ii) of the Agreement or such later date or dates as Dealer may commercially reasonably determine (the “Share Termination Payment Date”) taking into account commercially reasonable hedging or hedge unwind activity, in satisfaction of the Payment Obligation. |
Property: | A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of the aggregate amount of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price. |
Share Termination Unit Price: | The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent and notified by the |
Share Termination Delivery Unit: | In the case of a Termination Event (other than on account of an Insolvency, Nationalization or Merger Event), Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or Merger Event, as applicable. If such Insolvency, Nationalization or Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash. |
Other Applicable Provisions: | If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery Units”; provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Counterparty is the issuer of any Share Termination Delivery Units (or any part thereof). |
(A) | With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 8(e) or any obligations under Section 8(d) or the provisions opposite the caption “Notice of Merger Consideration and Consequences” in this Confirmation; |
(B) | Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the Internal Revenue Code of 1986, as amended); |
(C) | Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer; |
(D) | Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment; |
(E) | An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment; |
(F) | Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and |
(G) | Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment. |
Final Averaging Period Day Number | Scheduled Trading Day |
1 | 5/29/2019 |
2 | 5/30/2019 |
3 | 5/31/2019 |
4 | 6/3/2019 |
5 | 6/4/2019 |
6 | 6/5/2019 |
7 | 6/6/2019 |
8 | 6/7/2019 |
9 | 6/10/2019 |
10 | 6/11/2019 |
11 | 6/12/2019 |
12 | 6/13/2019 |
13 | 6/14/2019 |
14 | 6/17/2019 |
15 | 6/18/2019 |
16 | 6/19/2019 |
17 | 6/20/2019 |
18 | 6/21/2019 |
19 | 6/24/2019 |
20 | 6/25/2019 |
21 | 6/26/2019 |
22 | 6/27/2019 |
23 | 6/28/2019 |
24 | 7/1/2019 |
25 | 7/2/2019 |
26 | 7/5/2019 |
27 | 7/8/2019 |
28 | 7/9/2019 |
29 | 7/10/2019 |
30 | 7/11/2019 |
31 | 7/12/2019 |
32 | 7/15/2019 |
33 | 7/16/2019 |
34 | 7/17/2019 |
35 | 7/18/2019 |
36 | 7/19/2019 |
37 | 7/22/2019 |
38 | 7/23/2019 |
39 | 7/24/2019 |
40 | 7/25/2019 |
41 | 7/26/2019 |
42 | 7/29/2019 |
43 | 7/30/2019 |
44 | 7/31/2019 |
45 | 8/1/2019 |
46 | 8/2/2019 |
47 | 8/5/2019 |
48 | 8/6/2019 |
49 | 8/7/2019 |
50 | 8/8/2019 |
51 | 8/9/2019 |
52 | 8/12/2019 |
53 | 8/13/2019 |
54 | 8/14/2019 |
55 | 8/15/2019 |
56 | 8/16/2019 |
57 | 8/19/2019 |
58 | 8/20/2019 |
59 | 8/21/2019 |
60 | 8/22/2019 |