424B5
Table of Contents

Filed Pursuant to 424(b)(5)
Registration No. 333-256180

 

The information in this preliminary prospectus supplement is not complete and may be changed. A registration statement relating to these securities has become effective by rule of the Securities and Exchange Commission. This preliminary prospectus supplement and the accompanying prospectus are not an offer to sell these securities, and we are not soliciting an offer to buy these securities, in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS SUPPLEMENT                     SUBJECT TO COMPLETION, DATED MAY 17, 2021

(To Prospectus Dated May 17, 2021)

 

LOGO

2,000,000 Equity Units

(Initially Consisting of 2,000,000 Corporate Units)

UGI Corporation

 

 

UGI Corporation is offering 2,000,000 Equity Units. Each Equity Unit will have a stated amount of $100 and will initially be a “Corporate Unit” consisting of a purchase contract issued by us and, initially, a 1/10th, or 10%, undivided beneficial ownership in one share of     % Series A Cumulative Perpetual Convertible Preferred Stock, without par value, with a liquidation preference of $1,000 per share, issued by us, which we refer to as the “convertible preferred stock.”

 

 

The purchase contract will obligate you to purchase from us, on June 1, 2024, for a price of $100, a number of newly issued shares of our common stock equal to the settlement rate, which will not exceed              shares (subject to adjustment in certain circumstances), as described in this prospectus supplement. We will pay you quarterly contract adjustment payments at the rate of     % per year on the stated amount of $100 per Equity Unit, subject to our right to defer such contract adjustment payments as described in this prospectus supplement.

 

 

We will pay cumulative dividends on the convertible preferred stock, when, as, and if declared by our board of directors, quarterly in arrears, at a rate of     % per year on the $1,000 liquidation preference per share of convertible preferred stock. The convertible preferred stock will be remarketed as described in this prospectus supplement. In connection with a successful remarketing of the convertible preferred stock, (a) the dividend rate on the convertible preferred stock may be increased, (b) if the closing price on the pricing date for a successful remarketing is less than or equal to the reference price, the conversion rate of the convertible preferred stock may be increased to an amount (rounded to the nearest ten-thousandth of a share) equal to $1,000, divided by     % of the closing price on such date and/or (c) the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025, each as described under “Description of the Convertible Preferred Stock — Terms of the Remarketed Preferred Stock.”

 

 

Any contract adjustment payments on the purchase contracts or any dividends on the convertible preferred stock will be paid in cash, shares of our common stock, or a combination thereof, at our election, subject to certain limitations as described in this prospectus supplement, unless we have previously irrevocably elected a contract adjustment payment method or dividend payment method to apply.

 

 

We may not redeem any shares of convertible preferred stock prior to September 3, 2024. We may redeem for cash all or any portion of the outstanding shares of convertible preferred stock, at our option, on or after September 3, 2024 at a redemption price equal to 100% of the liquidation preference per share of convertible preferred stock to be redeemed, plus any accumulated but unpaid dividends thereon to, but excluding, the redemption date.

 

 

Holders of separate shares of convertible preferred stock that are not a part of Corporate Units may convert their shares at their option prior to June 1, 2024 only upon the occurrence of a fundamental change if such fundamental change occurs prior to a successful remarketing of the convertible preferred stock. On and after June 1, 2024, holders of shares of convertible preferred stock may convert some or all of their shares at their option at any time, all as described in this prospectus supplement.

 

   

The conversion rate will initially be              shares of our common stock per share of convertible preferred stock, equivalent to an initial conversion price of approximately $             per share of our common stock. The conversion rate will be subject to adjustment in certain circumstances.

 

   

Upon conversion, we will deliver to the converting holder in respect of each $1,000 liquidation preference of the convertible preferred stock being converted (i) a share of our     % Series B Preferred Stock (which we refer to as the “Series B preferred stock”) or, solely with respect to conversions in connection with a redemption, up to $1,000 in cash and (ii) shares of our common stock (if any).

 

 

You can create Treasury Units from Corporate Units by substituting Treasury securities for your convertible preferred stock comprising a part of the Corporate Units, and you can recreate Corporate Units by substituting your convertible preferred stock for the Treasury securities comprising a part of the Treasury Units, in each case, subject to certain conditions described in this prospectus supplement.

 

 

Your ownership interest in the convertible preferred stock (or after a successful optional remarketing, a portion of the applicable ownership interest in a Treasury portfolio), Treasury securities or, in certain circumstances described herein, cash, as the case may be, that are components of Equity Units will be pledged to us to secure your obligation under the related purchase contract.

 

 

If there is a successful optional remarketing of the convertible preferred stock, and you hold Corporate Units, a portion of your applicable ownership interest in the Treasury portfolio purchased with the proceeds from the remarketing will be used to satisfy your payment obligations under the purchase contract. If there is a successful final remarketing, as described in this prospectus supplement, and you hold Corporate Units, (i) a portion of the proceeds from the remarketing equal to $1,000 multiplied by the aggregate number of shares of convertible preferred stock underlying Corporate Units that were remarketed will automatically be applied to satisfy in full the Corporate Unit holders’ obligations to purchase our common stock under the related purchase contracts on the purchase contract settlement date, and any remaining net proceeds will be promptly remitted to the holder after the purchase contract settlement date, and (ii) proceeds from the remarketing attributable to holders of separate shares of convertible preferred stock who have elected to participate in the remarketing will be remitted by the remarketing agent for the benefit of such holders on the purchase contract settlement date.

We intend to use the net proceeds from this offering to pay a portion of the purchase price for Mountaineer Gas Company and related fees and expenses and for general corporate purposes. See “Use of Proceeds.”

Our common stock is listed and traded on the New York Stock Exchange under the symbol “UGI.” The reported last sale price of our common stock on the New York Stock Exchange on May 14, 2021 was $45.94 per share. We intend to apply for listing of the Corporate Units on the New York Stock Exchange under the symbol “UGIC.” Prior to this offering, there has been no public market for the Corporate Units.

 

 

Investing in our Equity Units involves risks. See “Risk Factors” beginning on page S-35.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the related prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

       Per Corporate Unit      Total

Initial public offering price

     $                                      $                                

Underwriting discount

     $                                      $                                

Proceeds, before expenses, to UGI Corporation

     $                                      $                                

The public offering price set forth above does not include accrued contract adjustment payments, if any, or accumulated dividends, if any. Contract adjustment payments on the purchase contracts will accrue, and dividends attributable to the convertible preferred stock will accumulate, for purchasers in this offering from May     , 2021.

The underwriters will have the right, exercisable for 30 days from the date of this prospectus supplement, to purchase up to an additional 200,000 Corporate Units at the public offering price less the underwriting discount (plus, if applicable, accrued contract adjustment payments and accumulated dividends), in order to cover over-allotments, if any.

The underwriters expect to deliver the Corporate Units in book-entry form only through the facilities of The Depository Trust Company against payment in New York, New York on or about May     , 2021, which is      business days following the date of pricing of the Corporate Units (such settlement cycle being herein referred to as “T+    ”). You should note that the trading of the Corporate Units on the date of pricing or the next          succeeding business days may be affected by the T+     settlement. See “Underwriting.”

 

 

Active Bookrunners

Wells Fargo Securities   BofA Securities   Credit Suisse
Structuring Agent              
Goldman Sachs & Co. LLC   J.P. Morgan

May     , 2021


Table of Contents

TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT

 

Section

   Page  

About this Prospectus Supplement

     S-ii  

Where You Can Find More Information

     S-iii  

Incorporation of Certain Documents by Reference

     S-iii  

Note About Forward-Looking Information

     S-iv  

Prospectus Summary

     S-1  

Summary of the Offering

     S-3  

The Offering — Explanatory Diagrams

     S-29  

Risk Factors

     S-35  

Use of Proceeds

     S-56  

Accounting Treatment

     S-57  

Description of the Equity Units

     S-58  

Description of the Purchase Contracts

     S-64  

Certain Provisions of the Purchase Contract and Pledge Agreement

     S-90  

Description of the Convertible Preferred Stock

     S-96  

Description of the Series B Preferred Stock

     S-126  

Material United States Federal Income Tax Consequences

     S-140  

Certain ERISA Considerations

     S-158  

Underwriting

     S-160  

Legal Matters

     S-168  

Experts

     S-168  

PROSPECTUS

 

ABOUT THIS PROSPECTUS

     1  

WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE

     2  

THE COMPANY

     4  

RISK FACTORS

     6  

USE OF PROCEEDS

     7  

DESCRIPTION OF CAPITAL STOCK

     8  

DESCRIPTION OF DEBT SECURITIES

     14  

DESCRIPTION OF OTHER SECURITIES

     22  

GLOBAL SECURITIES

     23  

PLAN OF DISTRIBUTION

     27  

LEGAL MATTERS

     28  

EXPERTS

     28  

 

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ABOUT THIS PROSPECTUS SUPPLEMENT

This document consists of two parts. The first part is the prospectus supplement, which describes the specific terms of this offering. The second part is the prospectus, which describes more general information, some of which may not apply to this offering. You should read both this prospectus supplement and the accompanying prospectus, together with additional information described below under the heading “Where You Can Find More Information.”

Unless otherwise indicated or the context otherwise requires, the terms “UGI,” “we,” “our,” “us” and the “Company” refer to UGI Corporation, including all of its subsidiaries and affiliates, collectively. The term “UGI Corporation” or “Parent Company” refers only to UGI Corporation, a publicly held holding company, excluding its subsidiaries and affiliates.

If the information set forth in this prospectus supplement differs in any way from the information set forth in the accompanying prospectus, you should rely on the information set forth in this prospectus supplement.

Currency amounts in this prospectus supplement are stated in U.S. dollars.

We have not, and the underwriters and their affiliates and agents have not, authorized any person to provide any information or represent anything about us other than what is contained or incorporated by reference in this prospectus supplement or the accompanying prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We do not, and the underwriters and their affiliates and agents do not, take any responsibility for, and can provide no assurance as to the reliability of, information that others may provide you. You should assume that information contained in this prospectus supplement, the accompanying prospectus, any related free writing prospectus prepared by us or on our behalf and the documents incorporated by reference herein and therein are accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed since those dates. This prospectus supplement and the accompanying prospectus are not an offer to sell or solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or solicitation is unlawful.

 

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WHERE YOU CAN FIND MORE INFORMATION

We are subject to the information requirements of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). In accordance with the Exchange Act, we file periodic reports, proxy statements and other information with the U.S. Securities and Exchange Commission (the “SEC”). Such periodic reports, proxy statements and other information filed by us are available to the public free of charge on the SEC’s website at www.sec.gov. Copies of certain information filed by us with the SEC are also available on our website at www.ugicorp.com.

This prospectus supplement omits some information contained in the registration statement of which this prospectus forms a part in accordance with SEC rules and regulations. You should review the information and exhibits in the registration statement for further information about us and the securities we are offering. Statements in this prospectus supplement and the accompanying prospectus concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified by reference to these filings. You should review the complete document for complete information and to evaluate these statements.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

SEC rules allow us to “incorporate by reference” into this prospectus supplement much of the information we file with the SEC, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference into this prospectus supplement is an important part of this prospectus supplement. This prospectus supplement incorporates by reference the documents listed below and any future filings we make with the SEC under each of Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act (in each case, other than those documents, the portions of those documents and the exhibits thereto that are deemed to be furnished and not filed in accordance with SEC rules) until the offering of the securities under the registration statement of which this prospectus supplement forms a part is terminated or completed:

 

   

Our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, filed with the SEC on November 20, 2020.

 

   

The information specifically incorporated by reference into our Annual Report on Form 10-K from our Definitive Proxy Statement on Schedule 14A, filed with the SEC on December 18, 2020.

 

   

Our Quarterly Reports on Form 10-Q for the quarters ended December 31, 2020 and March 31, 2021, filed with the SEC on February  4, 2021 and May 6, 2021, respectively.

 

   

Our Current Reports on Form 8-K filed with the SEC on November 24, 2020, February  3, 2021, April  12, 2021, April  23, 2021 and May 7, 2021.

 

   

The description of our common stock contained in our registration statement on Form 8-B, dated March 23, 1992, as amended by Amendment No. 1 to Form 8-B, dated April 10, 1992, and Amendment No. 2 to Form 8-B dated April 17, 1996, and any amendment or report filed with the SEC for the purpose of updating the description.

Because we are incorporating by reference future filings with the SEC, this prospectus supplement is continually updated and later information filed with the SEC may update and supersede some of the information included or incorporated by reference in this prospectus supplement. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus supplement or in any document previously incorporated by reference have been modified or superseded.

 

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We will provide without charge to each person, including any beneficial owners, to whom this prospectus supplement is delivered, upon his or her written or oral request, a copy of any or all documents referred to above which have been or may be incorporated by reference into this prospectus supplement but not delivered with this prospectus supplement, excluding exhibits to those documents unless they are specifically incorporated by reference into those documents. You may request a copy of these documents by writing or telephoning us at the following address:

UGI Corporation

460 North Gulph Road, King of Prussia, PA 19406

(610) 337-1000

NOTE ABOUT FORWARD-LOOKING INFORMATION

Information contained in this document may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. Such statements use forward-looking words such as “believe,” “plan,” “anticipate,” “continue,” “estimate,” “expect,” “may,” or other similar words. These statements discuss plans, strategies, events or developments that we expect or anticipate will or may occur in the future. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. However, we caution you that actual results almost always vary from assumed facts or bases, and the differences between actual results and assumed facts or bases can be material, depending on the circumstances. When considering forward-looking statements, you should keep in mind the risk factors contained in this prospectus supplement under the caption “Risk Factors” beginning on page S-35 and the risk factors described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, filed with the SEC on November 20, 2020, among others, and the following important factors that could affect our future results and could cause those results to differ materially from those expressed in our forward-looking statements: (1) weather conditions, including increasingly uncertain weather patterns due to climate change, resulting in reduced demand and the seasonal nature of our business; (2) cost volatility and availability of propane and other liquefied petroleum gas (“LPG”), electricity, and natural gas, as well as the availability of LPG cylinders and the capacity to transport product to our customers; (3) changes in domestic and foreign laws and regulations, including safety, tax, consumer protection, data privacy, accounting matters, and environmental, including regulatory responses to climate change; (4) inability to timely recover costs through utility rate proceedings; (5) the impact of pending and future legal proceedings; (6) competitive pressures from the same and alternative energy sources; (7) failure to acquire new customers or retain current customers thereby reducing or limiting any increase in revenues; (8) liability for environmental claims; (9) increased customer conservation measures due to high energy prices and improvements in energy efficiency and technology resulting in reduced demand; (10) adverse labor relations; (11) customer, counterparty, supplier, or vendor defaults; (12) liability for uninsured claims and for claims in excess of insurance coverage, including those for personal injury and property damage arising from explosions, terrorism, natural disasters, pandemics and other catastrophic events that may result from operating hazards and risks incidental to generating and distributing electricity and transporting, storing and distributing natural gas in all forms; (13) transmission or distribution system service interruptions; (14) political, regulatory and economic conditions in the United States, Europe and other foreign countries, including the current conflicts in the Middle East and the withdrawal of the United Kingdom from the European Union, and foreign currency exchange rate fluctuations, particularly the euro; (15) capital market conditions, including reduced access to capital markets and interest rate fluctuations; (16) changes in commodity market prices resulting in significantly higher cash collateral requirements; (17) reduced distributions from subsidiaries impacting the ability to pay dividends; (18) changes in Marcellus and Utica Shale gas production; (19) the availability, timing and success of our acquisitions, commercial initiatives and investments to grow our businesses; (20) our ability to successfully integrate acquired businesses and achieve anticipated synergies; (21) the interruption, disruption, failure or malfunction of our information technology systems, including due to cyber attack; (22) the inability to

 

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complete pending or future energy infrastructure projects; (23) our ability to achieve the operational benefits and cost efficiencies expected from the completion of pending and future business transformation initiatives, including the impact of customer service disruptions resulting in potential customer loss due to the transformation activities; (24) uncertainties related to a global pandemic, including the duration and/or impact of the COVID-19 pandemic; and (25) the extent to which we are able to utilize certain tax benefits currently available under the CARES Act and similar tax legislation and whether such benefits will remain available in the future. These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results. We undertake no obligation to update publicly any forward-looking statement whether as a result of new information or future events except as required by the federal securities laws.

 

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PROSPECTUS SUMMARY

The following summary contains certain information about us and the offering of the Equity Units. It does not contain all of the information that may be important to you in making a decision to invest in the Equity Units. We urge you to carefully read the entire prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein, including our financial statements and related notes. You should also read the sections entitled “Note About Forward-Looking Information” and “Risk Factors” in this prospectus supplement, the “Forward-Looking Information” and “Risk Factors” sections our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, filed with the SEC on November 20, 2020, and any subsequently filed Exchange Act reports, for a discussion of important risks that you should consider before investing in the Equity Units.

UGI Corporation

UGI Corporation is a holding company that, through subsidiaries and affiliates, distributes, stores, transports and markets energy products and related services. In the United States, we own and operate (1) a retail propane marketing and distribution business, (2) natural gas and electric distribution utilities, and (3) energy marketing, midstream infrastructure, storage, natural gas gathering and processing, natural gas production, electricity generation and energy services businesses. In Europe, we market and distribute LPG and other energy products and services. Our subsidiaries and affiliates operate principally in the following four business segments:

 

   

AmeriGas Propane

 

   

UGI International

 

   

Midstream & Marketing

 

   

UGI Utilities

The AmeriGas Propane segment consists of the propane distribution business of AmeriGas Partners, L.P., a Delaware limited partnership and an indirect wholly owned subsidiary of UGI (the “Partnership”). In addition to distributing propane, the Partnership also sells, installs, and services propane appliances, including heating systems. The Partnership conducts its propane distribution business through its principal operating subsidiary, AmeriGas Propane, L.P., and is the nation’s largest retail propane distributor. The general partner of AmeriGas Partners is our wholly owned subsidiary, AmeriGas Propane, Inc. Following completion of the merger of AmeriGas Propane Holdings, LLC with and into the Partnership on August 21, 2019, the Partnership is an indirect, wholly owned subsidiary of UGI.

The UGI International segment consists of LPG distribution businesses conducted by our subsidiaries and affiliates in France, Poland, Austria, Hungary, the Czech Republic, Slovakia, Switzerland, Romania, Belgium, the Netherlands, Luxembourg, the United Kingdom, Italy, Finland, Denmark, Norway and Sweden. In addition, UGI International conducts an energy marketing business in France, Belgium, the Netherlands and the United Kingdom. Based on Fiscal 2020 volumes, UGI International believes that it is the largest distributor of LPG in France, Austria, Belgium, Denmark, Luxembourg and Norway and one of the largest distributors of LPG in Poland, Hungary, the Czech Republic, Slovakia, the Netherlands and Sweden.

The Midstream & Marketing segment consists of energy-related businesses conducted by our indirect, wholly owned subsidiary, UGI Energy Services, LLC (“Energy Services”). These businesses (i) conduct energy marketing, including renewable natural gas, in the Mid-Atlantic region of the United States and California, (ii) own and operate natural gas liquefaction, storage and vaporization facilities and propane-air mixing assets, (iii) manage natural gas pipeline and storage contracts, (iv) develop, own and operate pipelines, gathering infrastructure and gas storage facilities in the Marcellus and Utica Shale regions of Pennsylvania, eastern Ohio, and the panhandle of West Virginia, and (v) own electricity generation facilities. Energy Services and its subsidiaries’ storage, liquefied natural gas and portions of its midstream transmission operations are subject to regulation by the Federal Energy Regulatory Commission (“FERC”).



 

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The UGI Utilities segment consists of the regulated natural gas and electric distribution businesses of our wholly owned subsidiary, UGI Utilities, Inc. (“UGI Utilities”). UGI Utilities’ regulated natural gas distribution business (“Gas Utility”) serves approximately 670,000 customers in eastern and central Pennsylvania and more than 500 customers in portions of one Maryland county. UGI Utilities’ regulated electric distribution utility (“Electric Utility”) serves more than 62,500 customers in portions of Luzerne and Wyoming counties in northeastern Pennsylvania. Gas Utility is subject to regulation by the Pennsylvania Public Utility Commission (“PAPUC”) and FERC and, with respect to its customers in Maryland, the Maryland Public Service Commission. Electric Utility is subject to regulation by the PAPUC and FERC.

We filed our original articles of incorporation with the Secretary of the Commonwealth of Pennsylvania on December 20, 1991.

Our principal executive offices are located at 460 North Gulph Road, King of Prussia, PA 19406, and our telephone number is (610) 337-1000.

Recent Developments

On December 29, 2020, we signed a definitive agreement to acquire Mountaineer Gas Company (“Mountaineer”), the largest natural gas distribution company in West Virginia, for a preliminary purchase price of $540 million, which includes the assumption of approximately $140 million of debt (the “Mountaineer Acquisition”). Mountaineer serves nearly 215,000 customers across 50 of the state’s 55 counties. The Mountaineer Acquisition is pending and is subject to customary regulatory and other closing conditions, including approval by the Public Service Commission of West Virginia and federal antitrust clearance, and is expected to close in the second half of calendar year 2021.

On May 4, 2021 (the “Restatement Effective Date”), we amended and restated our senior unsecured facilities agreement, comprising of a $250 million term loan facility maturing on August 1, 2024, a $300 million term loan facility maturing on the four year anniversary of the Restatement Effective Date (the “Term A-2 Loans”), and a $300 million revolving credit facility (including a $10 million sublimit for letters of credit) maturing on August 1, 2024 (the “Senior Credit Facility”). The amendment, among other things, (i) creates a new four-year, $300 million delayed draw term loan facility under the Senior Credit Facility (the “Term A-3 Loans”) in the form of delayed draw commitments subject to be drawn pursuant to certain conditions set forth therein, (ii) extends the Term A-2 Loans’ maturity date to match the Term A-3 Loans’ maturity date, and (iii) amends the financial covenant governing the maximum net leverage ratio to permit a maximum of 4.50x, with a 0.25x step-up during an Acquisition Period (as defined in the Senior Credit Facility), including the applicable period following the Mountaineer Acquisition.

On May 7, 2021, our subsidiary, UGI Utilities, Inc., entered into a Note Purchase Agreement (the “Note Purchase Agreement”) relating to the private placement of $100 million senior notes, series A, priced at 1.59% with a maturity date of June 15, 2026 (the “Series A Notes”) and $75 million senior notes, series B, priced at 1.64% with a maturity date of September 15, 2026 (the “Series B Notes”). Funding of the Series A Notes is expected on or before June 15, 2021, and funding of the Series B Notes is expected on or before September 15, 2021. Proceeds from the Note Purchase Agreement are expected to be used to refinance indebtedness and for general corporate purposes.

Risk Factors

Investing in the Equity Units involves risks. You should carefully consider the information under “Risk Factors” beginning on page S-35 of this prospectus supplement and the risk factors described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, filed with the SEC on November 20, 2020, as well as all other information included in this prospectus supplement and the accompanying prospectus, including the documents incorporated by reference into this prospectus supplement and the accompanying prospectus.



 

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SUMMARY OF THE OFFERING

 

Issuer

UGI Corporation, a Pennsylvania corporation.

 

Securities Offered

2,000,000 Equity Units (or 2,200,000 Equity Units if the underwriters exercise their over-allotment option in full), each with a stated amount of $100, and consisting of Corporate Units, Treasury Units or Cash Settled Units as described below. The Equity Units offered will initially consist of Corporate Units.

 

The Corporate Units

Each Corporate Unit consists of a purchase contract and, initially, a 1/10th, or 10%, undivided beneficial ownership interest in one share of our     % Series A Cumulative Perpetual Convertible Preferred Stock, without par value, with a liquidation preference of $1,000 per share, which we refer to as a share of “convertible preferred stock.” The shares of convertible preferred stock that are components of your Corporate Units will be owned by you, but initially will be pledged to us through the collateral agent to secure your obligation to purchase our common stock under the related purchase contract. They will be released from the pledge arrangement (1) following a successful remarketing of the convertible preferred stock as described under “Remarketing the Convertible Preferred Stock” below, (2) following the creation of Treasury Units as described under “Creating Treasury Units and Recreating Corporate Units” below, (3) following the creation of Cash Settled Units as described under “Cash Settled Units” below, (4) following the early settlement of the purchase contracts as described under “Early Settlement of the Purchase Contracts at Your Option” below or (5) following certain events of our bankruptcy, insolvency or reorganization.

 

  Holders of Corporate Units will be entitled to receive, quarterly in arrears on March 1, June 1, September 1 and December 1 of each year (each, a “payment date”), commencing on September 1, 2021, distributions consisting of:

 

   

dividends on the convertible preferred stock, when, as and if declared by our board of directors out of funds legally available for the payment of dividends (or, if the convertible preferred stock has been replaced by the Treasury portfolio (as defined under the caption “Description of the Purchase Contracts — Purchase of Common Stock — Optional Remarketing”), distributions, if any, from a portion of the Treasury portfolio, as described under “Remarketing the Convertible Preferred Stock” below); and

 

   

contract adjustment payments on the purchase contracts payable by us, subject to our right to defer contract adjustment payments as described below.

 

 

All such distributions by us may be payable in cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election, as described below, unless we have previously irrevocably elected a dividend payment method or contract adjustment payment method to apply as described in



 

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this prospectus supplement. We are not obligated to declare or pay dividends on the convertible preferred stock, except that all accumulated but unpaid dividends (including compounded dividends thereon), including with respect to the June 1, 2024 payment date, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date, whether or not declared, unless payment of dividends on our preferred stock is not permitted under the Pennsylvania Business Corporation Law (a “dividend deficiency event”). If a dividend deficiency event occurs, following the final remarketing (whether successful or failed), we will have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date (or such next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such convertible preferred stock for so long as the convertible preferred stock remains outstanding, and such dividends will be payable to the holders of such convertible preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

The Purchase Contracts

 

Settlement Rate

Each purchase contract that is a component of an Equity Unit obligates you to purchase, and obligates us to sell, on June 1, 2024, which we refer to as the “purchase contract settlement date,” for $100, a number of newly issued shares of our common stock, which we call the “settlement rate.” However, if the purchase contract settlement date is not a business day, then settlement of the purchase contracts will occur on the next business day. The settlement rate, which will not exceed              shares (subject to adjustment in certain circumstances) (the “maximum settlement rate”), will be determined over a 20 consecutive trading day period beginning on and including the 21st scheduled trading day immediately preceding the purchase contract settlement date (such 20 consecutive trading day period, the “market value averaging period”) and will be calculated as follows:

 

   

if the applicable market value of our common stock is less than or equal to the “reference price,” which is initially equal to $             and is subject to adjustment, the settlement rate will be the maximum settlement rate; and



 

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if the applicable market value of our common stock is greater than the reference price, the settlement rate will be a number of shares of our common stock equal to $100 divided by the applicable market value.

 

  The reference price initially equals the closing price of our common stock on the New York Stock Exchange on May     , 2021.

 

  The “applicable market value” of our common stock means the average of the daily VWAPs of our common stock during the market value averaging period.

 

  The “daily VWAP” of our common stock means, for each relevant trading day, the per share volume weighted average price of our common stock as displayed under the heading “Bloomberg VWAP” on Bloomberg page “UGI <EQUITY> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading on the relevant trading day until the scheduled close of trading on the relevant trading day (or if such VWAP is unavailable, the market price of one share of our common stock on such trading day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by us).

 

  A “trading day” means (a) a day (i) on which the New York Stock Exchange, or, if our common stock is not then listed on the New York Stock Exchange, the principal exchange or quotation system on which our common stock is listed or admitted for trading, is scheduled to be open for business and (ii) on which there has not occurred or does not exist a market disruption event, as defined in “Description of the Purchase Contracts — Purchase of Common Stock,” or (b) if our common stock is not so listed or admitted for trading, a “trading day” means a business day.

 

  An adjusted settlement rate may apply in certain circumstances if you elect to settle your purchase contract early, as described under “Early Settlement of the Purchase Contracts at Your Option” below. In addition, the maximum settlement rate and reference price are subject to adjustment in certain circumstances.

 

Contract Adjustment Payments

Under the purchase contracts, we will be obligated to pay quarterly contract adjustment payments at the rate of     % per year on the stated amount of $100 per purchase contract. Contract adjustment payments will accrue from the date of issuance of the purchase contracts and will be payable quarterly in arrears on each payment date, commencing on September 1, 2021, subject to our right to defer such payments.

 

 

We may elect to pay contract adjustment payments on the purchase contracts in cash, shares of our common stock, or a



 

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combination of cash and shares of our common stock, unless we have previously irrevocably elected a contract adjustment payment method to apply as described in this prospectus supplement. If we elect, or have previously irrevocably elected, to make any contract adjustment payment, or any portion thereof, in shares of our common stock, such shares will be valued for such purpose at the average of the daily VWAPs per share of our common stock over the five consecutive trading day period ending on, and including, the second trading day immediately preceding the applicable payment date (the “five-day average price”), multiplied by 97%.

 

  We have the right to defer the payment of contract adjustment payments until no later than the purchase contract settlement date; provided that upon a fundamental change early settlement or if you elect to settle your purchase contract early, in each case as described in this prospectus supplement, we will pay deferred contract adjustment payments (including compounded contract adjustment payments thereon) on such purchase contract to, but excluding, the fundamental change early settlement date or to, but excluding, the payment date immediately preceding the early settlement date in connection with your election to settle your purchase contract early, as applicable. Any deferred contract adjustment payments will accrue additional contract adjustment payments at the rate of     % per year until paid, compounded quarterly, to, but excluding, the payment date.

 

  If we exercise our option to defer the payment of contract adjustment payments, then until the deferred contract adjustment payments (including compounded contract adjustment payments thereon) have been paid, we will not declare or pay dividends on, make distributions on, or redeem, purchase or acquire, or make a liquidation payment with respect to, any shares of our capital stock (including the convertible preferred stock and our     % Series B Preferred Stock (which we refer to as the “Series B preferred stock”)), subject to the exceptions set forth under “Description of the Purchase Contracts — Contract Adjustment Payments.”

 

  Upon our bankruptcy, insolvency or reorganization, holders of our Equity Units will have no claims against us or our estate for any accrued and unpaid (including any deferred) contract adjustment payments.

 

Treasury Units

A Treasury Unit is a unit created from a Corporate Unit and consists of a purchase contract and a 1/10th undivided beneficial ownership interest in a zero-coupon U.S. Treasury security with a principal amount of $1,000 that matures on or prior to June 1, 2024 (or, if such date is not a business day, the next business day) (e.g., CUSIP No. 9128207H4), which we refer to as a “Treasury security.”


 

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  The ownership interest in the Treasury security that is a component of a Treasury Unit will be owned by you, but will be pledged to us through the collateral agent to secure your obligation to purchase our common stock under the related purchase contract.

 

  Holders of Treasury Units will be entitled to receive quarterly contract adjustment payments payable by us as described above, subject to our right to defer contract adjustment payments. The holders of the Treasury Units will continue to receive the quarterly dividend payments (when, as and if declared by our board of directors) on the shares of convertible preferred stock that were released to them when they created the Treasury Units as long as they continue to hold such shares (subject to any modifications made thereon pursuant to a successful remarketing of the convertible preferred stock).

 

Creating Treasury Units and Recreating Corporate Units

Subject to certain exceptions described in this prospectus supplement, each holder of Corporate Units will have the right, at any time prior to a successful remarketing of the convertible preferred stock and other than during a blackout period (as defined under “Description of the Equity Units — Creating Treasury Units by Substituting a Treasury Security for Convertible Preferred Stock”), to substitute for the related convertible preferred stock held by the collateral agent Treasury securities in an aggregate principal amount at maturity equal to $1,000 multiplied by the number of shares of convertible preferred stock for which substitution is being made. Because the convertible preferred stock is issued with a liquidation preference of $1,000 per share, holders of Corporate Units may make this substitution only in integral multiples of 10 Corporate Units. This substitution will create Treasury Units, and the related shares of convertible preferred stock will be released to the holder and be tradable separately from the Treasury Units. After a successful remarketing of the convertible preferred stock, holders of Corporate Units may not create Treasury Units, and holders of Treasury Units may not recreate Corporate Units.

 

 

In addition, subject to certain exceptions described in this prospectus supplement, each holder of Treasury Units will have the right, at any time prior to a successful remarketing of the convertible preferred stock and other than during a blackout period, to substitute for the related Treasury securities held by the collateral agent a number of shares of convertible preferred stock with a per share $1,000 liquidation preference equal to the aggregate principal amount at maturity of the Treasury securities with respect to which substitution is being made divided by $1,000. Because the convertible preferred stock is issued with a liquidation preference of $1,000 per share, holders of Treasury Units may make this substitution only in integral multiples of 10 Treasury Units. This substitution will recreate



 

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Corporate Units, and the collateral agent will release from the pledge the related Treasury securities. After a successful remarketing of the convertible preferred stock, holders of Treasury Units may not recreate Corporate Units.

 

  No Equity Units may be created or recreated from Series B preferred stock.

 

Cash Settled Units

Subject to certain exceptions described in this prospectus supplement, each holder of Corporate Units will have the right, during a period specified in this prospectus supplement preceding the first day of the final remarketing period, to substitute for the related convertible preferred stock held by the collateral agent cash in an amount equal to $1,000 multiplied by the number of shares of convertible preferred stock for which substitution is being made. Because the convertible preferred stock is issued with a liquidation preference of $1,000 per share, holders of Corporate Units may make this substitution only in integral multiples of 10 Corporate Units. This substitution will create Cash Settled Units, and the share(s) of convertible preferred stock will be released to the holder and be tradable separately from the Corporate Units.

 

  A holder of Treasury Units may not create Cash Settled Units, and a holder of Cash Settled Units may not create Treasury Units or recreate Corporate Units.

 

  No Equity Units may be created or recreated from Series B preferred stock.

 

Early Settlement of the Purchase Contracts at Your Option


You can settle a purchase contract for cash at any time prior to the close of business on the business day immediately preceding the first day of the market value averaging period, subject to certain exceptions and conditions described under “Description of the Purchase Contracts — Early Settlement” in this prospectus supplement. Upon early settlement of any purchase contracts, except following a fundamental change as described below, we will deliver a number of newly issued shares of our common stock determined over a 20 consecutive trading day period beginning on the trading day immediately following the day you exercise this right, which we refer to as the “early settlement averaging period.” The number of shares of our common stock we will deliver will equal 85% of the number of shares of our common stock that would be deliverable for each purchase contract as described in “Settlement Rate” above as if the applicable market value were the average of the daily VWAPs of our common stock during the early settlement averaging period. Holders of Corporate Units and Treasury Units may settle early, other than in connection with a fundamental change as described below, only in integral multiples of 10 Equity Units.


 

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  In addition, upon the occurrence of a “fundamental change” as defined in “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change,” you will have the right, subject to certain exceptions and conditions described in this prospectus supplement, to settle your purchase contracts early at the settlement rate determined as described above under “Settlement Rate” (and not at a reduced rate as described in the immediately preceding paragraph), but over a market value averaging period as described in this prospectus supplement, plus an additional make-whole amount of shares determined as described in this prospectus supplement. See “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change.”

 

  Holders of Corporate Units and Treasury Units may settle early in connection with a fundamental change only in integral multiples of 10 Equity Units.

 

Satisfying Your Payment Obligations under the Purchase Contracts


As a holder of Corporate Units, Treasury Units or Cash Settled Units, you may satisfy your obligation to pay the aggregate purchase price for our common stock under the purchase contracts as follows:

 

   

through the automatic application of the proceeds of a successful remarketing of the convertible preferred stock during a final remarketing period, in the case of Corporate Units, in the manner described in this prospectus supplement;

 

   

through the automatic application of the proceeds of the Treasury securities, in the case of a Treasury Unit; the cash held by the collateral agent, in the case of a Cash Settled Unit; or a portion of the proceeds from the Treasury portfolio if it has replaced the convertible preferred stock underlying the Corporate Units in a successful optional remarketing;

 

   

through early settlement of your purchase contracts in the manner described in this prospectus supplement; or

 

   

through the automatic delivery to us of your convertible preferred stock held as part of Corporate Units as described below if no successful remarketing of the convertible preferred stock has occurred prior to the purchase contract settlement date and none of the above events has taken place (subject to your right to elect to pay the aggregate purchase price in cash as described under “Automatic Settlement Upon Failed Final Remarketing” below).

 

Termination

The purchase contracts and our rights and obligations and the rights and obligations of the holders of the Corporate Units, Treasury Units and Cash Settled Units under the purchase contracts will terminate without any further action upon certain events of bankruptcy, insolvency or reorganization involving us



 

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(and not a bankruptcy, insolvency or reorganization involving only our subsidiaries), which we refer to as “termination events.”

The Convertible Preferred Stock

 

Dividends

Holders of the convertible preferred stock will receive, when, as and if declared by our board of directors, cumulative dividends at the rate of     % per year (the “dividend rate”) on the $1,000 liquidation preference per share. Dividends on the convertible preferred stock will accumulate from the first date of original issuance of the convertible preferred stock and will be payable when, as and if declared by our board of directors, quarterly in arrears on each payment date, beginning on September 1, 2021.

 

  We may elect to pay dividends on the convertible preferred stock in cash, shares of our common stock, or a combination of cash and shares of our common stock, unless we have previously irrevocably elected a dividend payment method to apply as described in this prospectus supplement. If we elect, or have previously irrevocably elected, to make any such payment of a declared dividend, or any portion thereof, in shares of our common stock, such shares will be valued for such purpose at the applicable five-day average price, multiplied by 97%.

 

  In connection with a successful remarketing of the convertible preferred stock, the dividend rate on the convertible preferred stock may be increased as described under “Description of the Convertible Preferred Stock — Terms of the Remarketed Preferred Stock” below.

 

  Cumulative dividends on the convertible preferred stock will only be paid when, as and if declared by our board of directors. Dividends on the convertible preferred stock will accumulate even if any of our agreements prohibit the current payment of dividends, we do not have earnings or funds legally available to pay such dividends or we do not declare the payment of dividends. Any accumulated but unpaid dividends will accumulate additional dividends at the then-applicable dividend rate (as such dividend rate may be adjusted in connection with a remarketing) until paid, compounded quarterly, to, but excluding, the payment date. We may declare and pay accumulated but unpaid dividends (including compounded dividends thereon, if any) on a payment date in cash, shares of our common stock, or a combination thereof, as described above, unless we have previously irrevocably elected a dividend payment method to apply.

 

 

Notwithstanding the foregoing, except in the case of a dividend deficiency event, all accumulated but unpaid dividends (including compounded dividends thereon), including with respect to the June 1, 2024 payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to



 

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the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. If a dividend deficiency event occurs, following the final remarketing (whether successful or failed), we will have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date (or such next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such convertible preferred stock for so long as the convertible preferred stock remains outstanding, and such dividends will be payable to the holders of such convertible preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

 

  So long as any share of convertible preferred stock remains outstanding, unless all accumulated but unpaid dividends (including compounded dividends thereon, if any) for all preceding dividend periods have been declared and paid, or a sufficient sum or number of shares of our common stock has been set apart for the payment of such dividends upon, all outstanding shares of convertible preferred stock, we will not: (i) declare and pay dividends on any capital stock ranking, as to dividends, on parity with or junior to the convertible preferred stock, including the Series B preferred stock (if any); (ii) redeem, purchase or otherwise acquire for any consideration, or make any other distribution of cash or other property, directly or indirectly, on or with respect to, any capital stock ranking, as to dividends or upon liquidation, on parity with or junior to the convertible preferred stock, including the Series B preferred stock (if any); or (iii) redeem, purchase or otherwise acquire for any consideration, or make any other distribution of cash or other property, directly or indirectly, on or with respect to the purchase contracts or make any payments (including any contract adjustment payments) under the purchase contracts or any payment under any agreement similar to that of the purchase contract and pledge agreement, subject to certain exceptions. See “Description of the Convertible Preferred Stock — Dividends.”

 

Maturity

The convertible preferred stock has no maturity date and will remain outstanding unless converted by holders or redeemed by us.


 

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Ranking

The convertible preferred stock will rank, with respect to dividend rights or rights upon our liquidation, winding-up or dissolution:

 

   

senior to all classes or series of our common stock and to any other class or series of our capital stock expressly designated as ranking junior to the convertible preferred stock;

 

   

on parity with any class or series of our capital stock expressly designated as ranking on parity with the convertible preferred stock, including the Series B preferred stock (if any);

 

   

junior to any other class or series of our capital stock expressly designated as ranking senior to the convertible preferred stock; and

 

   

junior to our existing and future indebtedness and other liabilities (including trade payables).

 

  The term “capital stock” does not include convertible or exchangeable debt securities, which, as such, will rank senior in right of payment to the convertible preferred stock.

 

  In the case of our liquidation, dissolution or winding up, holders of the convertible preferred stock will not have the right to receive any payment or distribution unless all of our liabilities are first paid in full and the priority of any senior stock is satisfied.

 

  We currently have no capital stock outstanding that is senior to or on parity with the convertible preferred stock. If and when issued, any Series B preferred stock will rank on parity with the convertible preferred stock. As of March 31, 2021, we had $6,386 million principal amount of outstanding indebtedness, all of which is senior in right of payment to the convertible preferred stock. In addition, the convertible preferred stock will be structurally subordinated to all debt, preferred stock and other liabilities of our subsidiaries, which means that creditors and preferred shareholders of our subsidiaries will be paid from the assets of such subsidiaries before holders of the convertible preferred stock would have any claims to those assets.

 

Liquidation Preference

If we liquidate, dissolve or wind up, holders of shares of convertible preferred stock will have the right to receive $1,000 per share of convertible preferred stock, plus accumulated but unpaid dividends, if any (whether or not authorized or declared) up to, but excluding, the date of payment, before any payment is made to holders of our common stock and any other class or series of capital stock ranking junior to the convertible preferred stock as to liquidation rights, but subject to the prior payment in full of all of our liabilities and the preferences of our senior stock.

 

Limited Voting Rights

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supplement. However, if dividends on any shares of convertible preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive, holders of the outstanding shares of convertible preferred stock, together with holders of any other series of our preferred stock ranking equally with the convertible preferred stock as to payment of dividends and upon which equivalent voting rights have been conferred (including the Series B preferred stock (if any)) and are exercisable, will be entitled to vote for the election of two additional directors to our board, subject to the terms and to the limited extent described under “Description of the Convertible Preferred Stock — Limited Voting Rights — Preferred Stock Directors.” In matters where holders of the convertible preferred stock are entitled to vote, each share of convertible preferred stock will be entitled to one vote.

 

Redemption at Our Option

We do not have the right to redeem the convertible preferred stock prior to September 3, 2024. We may redeem for cash all or part of the convertible preferred stock, at our option, on or after September 3, 2024 at a redemption price equal to 100% of the liquidation preference of the shares of convertible preferred stock to be redeemed, plus any accumulated but unpaid dividends (whether or not declared) to, but excluding, the redemption date. No “sinking fund” is provided for the convertible preferred stock, which means that we are not required to redeem or retire the convertible preferred stock periodically.

 

  We will give notice of any redemption not less than 25 scheduled trading days nor more than 90 calendar days before the redemption date by notice to each applicable holder of convertible preferred stock. In no event will we give any notice of redemption prior to the earlier of a remarketing settlement date and the purchase contract settlement date. See “Description of the Convertible Preferred Stock — Optional Redemption.”

 

  In connection with a successful remarketing of the convertible preferred stock, the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025 as described under “Description of the Purchase Contracts — Remarketing” and “Description of the Convertible Preferred Stock — Remarketing.”

 

  If any shares of convertible preferred stock are called for redemption, we must also call for redemption a proportionate number of outstanding shares of Series B preferred stock, if any, on the same redemption date.

 

Conversion Rights

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converted. Holders of such separate shares of convertible preferred stock that are not a part of Corporate Units may convert their shares at their option prior to June 1, 2024 only upon the occurrence of a fundamental change if such fundamental change occurs prior to a successful remarketing of the convertible preferred stock. In order for a holder of Corporate Units to separate their convertible preferred stock from the purchase contracts to convert the convertible preferred stock in connection with a fundamental change, the holder must either (1) create Treasury Units (at any time other than during a blackout period), (2) settle the related purchase contracts early (at any time other than during a blackout period) or (3) during the period after the date we give notice of a final remarketing, create Cash Settled Units at or prior to the close of business on the second business day immediately preceding the first day of the final remarketing period. If a fundamental change occurs prior to a successful remarketing of the convertible preferred stock, holders of separate shares of convertible preferred stock can convert such shares at any time from or after the effective date of such transaction to, and including, the 35th business day after such effective date, as described in this prospectus supplement. Conversions in connection with such fundamental change will be settled on the second business day following the final trading day of a 20 consecutive trading day period beginning on and including the 21st scheduled trading day immediately preceding the fundamental change conversion deadline (as defined herein under “Description of the Convertible Preferred Stock — Conversion Rights — General”).

 

  On and after June 1, 2024, holders of shares of convertible preferred stock may, at their option, at any time and from time to time, convert their shares, all as described in this prospectus supplement.

 

  The conversion rate is initially              shares of our common stock per share of convertible preferred stock (subject to adjustment in certain circumstances), which is equivalent to an initial conversion price of approximately $             per share of our common stock.

 

 

In connection with a successful remarketing of the convertible preferred stock, (a) the dividend rate on the convertible preferred stock may be increased, (b) if the closing price on the pricing date for a successful remarketing is less than or equal to the reference price on such date, the conversion rate of the convertible preferred stock may be increased to an amount (rounded to the nearest ten-thousandth of a share) equal to $1,000, divided by     % of the closing price on such date and/or (c) the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025, each as described under “Description of the Convertible Preferred Stock — Terms of the Remarketed



 

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Preferred Stock.” The changes to the terms of the convertible preferred stock in connection with a successful remarketing of the convertible preferred stock, if any, will become effective on the settlement date of such remarketing (subject to a limited exception described in this prospectus supplement with respect to any increase to the dividend rate for a dividend period for which we have already declared the related dividend).

 

  Upon surrender of convertible preferred stock for conversion, we will deliver to the converting holder in respect of each $1,000 liquidation preference of the convertible preferred stock being converted (i) a share of Series B preferred stock (or, solely with respect to conversions in connection with a redemption (an “induced conversion”), up to $1,000 in cash plus all accumulated but unpaid dividends (whether or not declared), if any, on such converted convertible preferred stock to, but excluding, the payment date immediately preceding the relevant conversion date) and (ii) shares of our common stock (if any), as described under “Description of the Convertible Preferred Stock — Settlement Upon Conversion.”

 

  A conversion of shares of convertible preferred stock will be deemed for these purposes to be an induced conversion if such shares have been called for redemption and the relevant conversion date occurs from, and including, the date of our notice of redemption to, and including, the second business day immediately preceding the redemption date.

 

  The amount of cash (in the case of an induced conversion) and number of shares of our common stock, if any, due upon conversion will be calculated based on daily conversion values calculated over a 20 trading day observation period, as described under “Description of the Convertible Preferred Stock — Conversion Rights — Settlement Upon Conversion.” In the case of an induced conversion, the converting holder will also receive all accumulated but unpaid dividends (whether or not declared), if any, on such converted convertible preferred stock to, but excluding, the payment date immediately preceding the relevant conversion date.

 

  There will be no make-whole amount of shares or increase to the conversion rate for conversions of the convertible preferred stock in connection with a fundamental change, except for the limited case where the fundamental change occurs prior to a successful remarketing of the convertible preferred stock and the “stock price” (as defined under “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change” below) for such fundamental change is less than $             per share of our common stock (subject to adjustment in certain circumstances), which initially equals the conversion price of the convertible preferred stock.


 

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  We will not make any payments in respect of, or adjust the conversion rate to account for, accumulated but unpaid dividends, if any, on the convertible preferred stock to the conversion date except as described in this prospectus supplement. However, subject to the provisions described in this prospectus supplement, all shares of Series B preferred stock delivered to a converting holder upon conversion will have initial accumulated dividends per share at issuance (the “initial accumulated dividends”) equal to the amount of any accumulated but unpaid dividends per share on the convertible preferred stock (including compounded dividends thereon) to, but excluding, date of issuance of such Series B preferred stock to the converting holder.

 

Remarketing the Convertible Preferred Stock

Unless (i) a termination event has occurred, (ii) there are any accumulated but unpaid dividends on the convertible preferred stock in respect of prior completed dividend periods or (iii) we have not declared a dividend payable on the March 1, 2024 payment date, we may elect, at our option, to remarket the convertible preferred stock during a period (which we refer to as the “optional remarketing window”) beginning on and including March 1, 2024 and ending on and including May 13, 2024. Any remarketing in the optional remarketing window will occur during a five-business day remarketing period (which we refer to as an “optional remarketing period”) consisting of five sequential possible remarketing dates selected by us and will include the shares of convertible preferred stock underlying the Corporate Units and separate shares of convertible preferred stock whose holders have elected to participate in the remarketing as described under “Description of the Convertible Preferred Stock — Remarketing of Shares That Are Not Included in Corporate Units.” We may attempt remarketings during multiple optional remarketing periods in the optional remarketing window so long as we issue a press release and give to the depositary at least 15 calendar days’ notice prior to the first day of any optional remarketing period as described below. We refer to a remarketing that occurs during an optional remarketing period as an “optional remarketing” and the date we price the convertible preferred stock offered in an optional remarketing as the “optional remarketing date.”

 

 

If we elect to conduct an optional remarketing, the remarketing agent will use its reasonable best efforts to obtain, and the optional remarketing will be considered successful if the remarketing agent is able to obtain, a price (i) for shares of convertible preferred stock that are components of Corporate Units that results in aggregate net proceeds equal to at least 100% of the aggregate Treasury portfolio purchase price (as defined in “Description of the Purchase Contracts — Optional Remarketing”) and (ii) for shares of convertible preferred stock



 

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that are not included in Corporate Units, at least equal to the separate convertible preferred stock purchase price (as defined in “Description of the Convertible Preferred Stock — Remarketing of Shares That Are Not Included in Corporate Units”), which will be the same price, on a per share basis, as shares of convertible preferred stock included in Corporate Units. To obtain that price, (a) the dividend rate on the convertible preferred stock may be increased, (b) if the closing price on the pricing date for a successful remarketing is less than or equal to the reference price on such date, the conversion rate of the convertible preferred stock may be increased to an amount (rounded to the nearest ten-thousandth of a share) equal to $1,000, divided by     % of the closing price on such date and/or (c) the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025, each as described under “Description of the Convertible Preferred Stock — Terms of the Remarketed Preferred Stock.” The increased dividend rate and/or increased conversion rate will be a fixed dividend rate and/or conversion rate (subject to adjustment in certain circumstances) determined by, and any other changes to the terms of the convertible preferred stock in connection with a successful remarketing of the convertible preferred stock will be determined by, our board of directors, after consultation with the remarketing agent, as the rate(s) the convertible preferred stock should bear and the terms the convertible preferred stock should include in order for the aggregate net remarketing proceeds to equal at least the sum of (x) 100% of the Treasury portfolio purchase price and (y) the separate convertible preferred stock purchase price for shares of convertible preferred stock that are not included in Corporate Units whose holders have elected to participate in the remarketing. We will not decrease the conversion rate or the dividend rate in connection with a successful remarketing of the convertible preferred stock. We will issue a press release and request that the depositary notify its participants holding Corporate Units, Treasury Units, and separate shares of convertible preferred stock of our election to conduct an optional remarketing no later than 15 calendar days prior to the date we begin such optional remarketing.

 

  If the optional remarketing is successful:

 

   

the modifications, if any, made to the terms of the convertible preferred stock in connection with the optional remarketing as described above will become effective on the settlement date for such optional remarketing (subject to a limited exception described in this prospectus supplement with respect to any increase to the dividend rate for a dividend period for which we have already declared the related dividend);

 

   

dividends will continue to be payable on the convertible preferred stock quarterly at the then-applicable dividend rate (as such dividend rate may be adjusted in connection with



 

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such remarketing), when, as and if declared by our board of directors;

 

   

the portion of the proceeds from the remarketing attributable to shares of convertible preferred stock that were components of Corporate Units that is equal to the Treasury portfolio purchase price will automatically be applied to purchase the Treasury portfolio and any remaining net proceeds attributable to the remarketing of such shares will be promptly remitted to the holders of such Corporate Units after the optional remarketing settlement date; and

 

   

proceeds from the remarketing attributable to holders of separate shares of convertible preferred stock who have elected to participate in the remarketing will be remitted by the remarketing agent for the benefit of such holders on the optional remarketing settlement date.

 

  The Treasury portfolio will be substituted for the shares of convertible preferred stock that are components of the Corporate Units and, solely with respect to the Treasury securities described in clause (i) of the definition of the “Treasury portfolio” (see “— Purchase of Common Stock — Optional Remarketing”), such Treasury securities will be pledged to us through the collateral agent to secure the Corporate Unit holders’ obligations under the purchase contracts. When paid at maturity, an amount of the Treasury portfolio equal to the $1,000 initial liquidation preference of the substituted shares will automatically be applied to satisfy the Corporate Unit holders’ obligations to purchase our common stock under the related 10 purchase contracts on the purchase contract settlement date. See “Description of the Purchase Contracts — Remarketing” in this prospectus supplement.

 

  If we do not elect to conduct an optional remarketing, or no optional remarketing succeeds for any reason, the terms of the convertible preferred stock will not be modified and the shares of convertible preferred stock (other than separate shares of convertible preferred stock) will continue to be components of Corporate Units and the remarketing agent will use its reasonable best efforts to remarket the convertible preferred stock during the final remarketing period as described below.

 

 

If the convertible preferred stock has not been successfully remarketed in the optional remarketing window, a termination event has not previously occurred and you do not create a Cash Settled Unit or a Treasury Unit as described in this prospectus supplement, the convertible preferred stock that is part of your Corporate Units, together with any separate shares of convertible preferred stock that have been submitted for remarketing, will be remarketed during a five-business day remarketing period ending on, and including, May 30, 2024 (the second business day immediately preceding the purchase contract settlement



 

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date) until the remarketing is successful (if at all). We refer to this period as the “final remarketing period,” a remarketing that occurs during this period as a “final remarketing,” and the date we price the convertible preferred stock offered in a final remarketing as the “final remarketing date.”

 

  The remarketing agent will remarket the convertible preferred stock underlying the Corporate Units, and any separate shares of convertible preferred stock whose holders have elected to participate in the remarketing, during each business day of the final remarketing period until the remarketing is successful (if at all).

 

  The remarketing agent will use its reasonable best efforts to obtain, and the final remarketing will be considered successful if the remarketing agent is able to obtain, a price that results in net proceeds of at least $1,000 multiplied by the number of shares of convertible preferred stock being remarketed. To obtain that price, (a) the dividend rate on the convertible preferred stock may be increased, (b) if the closing price on the pricing date for a successful remarketing is less than or equal to the reference price on such date, the conversion rate of the convertible preferred stock may be increased to an amount (rounded to the nearest ten-thousandth of a share) equal to $1,000, divided by     % of the closing price on such date and/or (c) the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025, each as described under “Description of the Convertible Preferred Stock — Terms of the Remarketed Preferred Stock.” The increased dividend rate and/or increased conversion rate will be a fixed dividend rate and/or conversion rate (subject to adjustment in certain circumstances) determined by, and any other changes to the terms of the convertible preferred stock in connection with a successful remarketing of the convertible preferred stock will be determined by, our board of directors, after consultation with the remarketing agent, as the rate(s) the convertible preferred stock should bear and the terms the convertible preferred stock should include in order for the aggregate net remarketing proceeds to equal at least $1,000 multiplied by the number of shares of convertible preferred stock being remarketed. We will not decrease the conversion rate or the dividend rate in connection with a successful remarketing of the convertible preferred stock. We will issue a press release and request that the depositary notify its participants holding Corporate Units, Treasury Units and separate shares of convertible preferred stock of the final remarketing as described in this prospectus supplement.

 

  If the final remarketing is successful:

 

   

except in the case of a dividend deficiency event, all accumulated but unpaid dividends (including compounded dividends thereon), including with respect to the June 1, 2024



 

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payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date;

 

   

dividends will continue to be payable on the convertible preferred stock quarterly at the then-applicable dividend rate (as such dividend rate may be adjusted in connection with such remarketing), when, as and if declared by our board of directors;

 

   

modifications, if any, made to the terms of the convertible preferred stock in connection with the final remarketing as described above will take effect on the settlement date for the final remarketing;

 

   

a portion of the net proceeds from the remarketing equal to $1,000 multiplied by the aggregate number of shares of convertible preferred stock underlying Corporate Units that were remarketed will automatically be applied to satisfy in full the Corporate Unit holders’ obligations to purchase our common stock under the related purchase contracts on the purchase contract settlement date, and any remaining net proceeds will be promptly remitted to the holders of such Corporate Units after the purchase contract settlement date; and

 

   

proceeds from the remarketing attributable to holders of separate shares of convertible preferred stock who have elected to participate in the remarketing will be remitted by the remarketing agent for the benefit of such holders on the purchase contract settlement date.

 

  If the convertible preferred stock has not been successfully remarketed on or prior to the last day of the final remarketing period, the terms of the convertible preferred stock will not be modified, and all shares of convertible preferred stock held as part of Corporate Units will be automatically delivered to us on the purchase contract settlement date in full satisfaction of the Corporate Unit holders’ obligations to purchase our common stock under the related purchase contracts on the purchase contract settlement date, as described under “Automatic Settlement Upon Failed Final Remarketing” below.

 

 

Notwithstanding the foregoing, except in the case of a dividend deficiency event, all accumulated but unpaid dividends (including compounded dividends thereon, if any), including with respect to the June 1, 2024 payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the



 

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purchase contract settlement date. If a dividend deficiency event occurs, following the final remarketing (whether successful or failed), we will have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date (or such next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such convertible preferred stock for so long as the convertible preferred stock remains outstanding, and such dividends will be payable to the holders of such convertible preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

 

  We refer to each optional remarketing and the final remarketing described above as a “remarketing.”

 

  During the applicable blackout period relating to a remarketing, you may not settle a purchase contract early, you may not create Treasury Units and you may not recreate Corporate Units.

 

Changes in Connection with Remarketing

In connection with a successful remarketing of the convertible preferred stock, (a) the dividend rate on the convertible preferred stock may be increased, (b) if the closing price on the pricing date for a successful remarketing is less than or equal to the reference price on such date, the conversion rate of the convertible preferred stock may be increased to an amount (rounded to the nearest ten-thousandth of a share) equal to $1,000, divided by     % of the closing price on such date and/or (c) the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025, each as described under “Description of the Convertible Preferred Stock — Terms of the Remarketed Preferred Stock.” The changes to the terms of the convertible preferred stock in connection with a successful remarketing of the convertible preferred stock, if any, will become effective on the settlement date of such remarketing, which will be, (i) in the case of an optional remarketing, the second business day following the optional remarketing date (or such other date as we and the remarketing agent agree upon) and (ii) in the case of the final remarketing period, the purchase contract settlement date (or, if such date is not a business day, then next business day); provided, however, that if (i) the dividend rate on the convertible preferred stock is increased in connection with any remarketing; (ii) as of the pricing date of such remarketing, we have declared a dividend on the convertible preferred stock or the Series B



 

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preferred stock in respect of the payment date occurring on the purchase contract settlement date; and (iii) the remarketing settlement date occurs before the purchase contract settlement date, then such increase to the dividend rate instead will become effective from, and including, the purchase contract settlement date. The increased dividend rate and/or increased conversion rate will be a fixed dividend rate and/or conversion rate (subject to adjustment in certain circumstances) determined by, and any other changes to the terms of the convertible preferred stock in connection with a successful remarketing of the convertible preferred stock will be determined by, our board of directors, after consultation with the remarketing agent, as the rate(s) the convertible preferred stock should bear and the terms the convertible preferred stock should include in order for the aggregate net remarketing proceeds to equal (a) in the case of a final remarketing, at least $1,000 multiplied by the number of shares of convertible preferred stock being remarketed and (b) in the case of an optional remarketing, at least the sum of (x) 100% of the Treasury portfolio purchase price and (y) the separate convertible preferred stock purchase price for shares of convertible preferred stock that are not included in Corporate Units whose holders have elected to participate in the remarketing. We will not decrease the conversion rate or the dividend rate in connection with a successful remarketing of the convertible preferred stock.

 

  If the convertible preferred stock is not successfully remarketed, no terms of the convertible preferred stock will be changed.

 

Election Not to Participate in the Remarketing

You may elect not to participate in any remarketing and to retain the convertible preferred stock underlying your Corporate Units by:

 

   

creating Treasury Units or Cash Settled Units as described above; or

 

   

settling purchase contracts early as described above.

 

  Whether or not you participate in the remarketing, upon a successful remarketing of the convertible preferred stock, your shares of convertible preferred stock will become subject to the modified provisions described under “Description of the Purchase Contracts — Remarketing” and “Description of the Convertible Preferred Stock — Remarketing.”

 

Participation in a Remarketing by Holders of Separate Shares of Convertible Preferred Stock


Holders of shares of convertible preferred stock that are not part of the Corporate Units may elect, in the manner described in this prospectus supplement, to have their shares remarketed by the remarketing agent along with the shares included in the Corporate Units. See “Description of the Convertible Preferred



 

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Stock — Remarketing of Shares That Are Not Included in Corporate Units.” Such holders may also participate in any remarketing by recreating Corporate Units from their Treasury Units at any time other than during a blackout period, as described under “Description of the Equity Units — Creating Treasury Units by Substituting a Treasury Security for Convertible Preferred Stock.” Whether or not you participate in the remarketing, upon a successful remarketing of the convertible preferred stock, your shares of convertible preferred stock will become subject to the modified provisions described under “Description of the Purchase Contracts — Remarketing” and “Description of the Convertible Preferred Stock — Remarketing.”

 

Automatic Settlement upon Failed Final Remarketing

If the convertible preferred stock has not been successfully remarketed on or prior to the last day of the final remarketing period, all shares of convertible preferred stock held as part of Corporate Units will be delivered to us on the purchase contract settlement date in full satisfaction of the Corporate Unit holders’ obligations to purchase our common stock under the related purchase contracts on the purchase contract settlement date unless the holder separately cash settles the purchase contracts as described below.

 

  The ownership interest in the convertible preferred stock underlying a Corporate Unit will be automatically delivered to us, thereby satisfying such holder’s obligations to us under the related purchase contracts in full, unless, prior to 5:00 p.m., New York City time, on the second business day immediately prior to the purchase contract settlement date, the holder provides written notice of an intention to settle the related purchase contracts with separate cash and on or prior to the business day immediately preceding the purchase contract settlement date delivers to the securities intermediary $1,000 in cash per 10 purchase contracts. Holders of Corporate Units may settle their purchase contracts with separate such cash only in integral multiples of 10 Corporate Units.

The Series B Preferred Stock

 

Issuance

We may issue an aggregate of up to 200,000 shares of Series B preferred stock, or up to 220,000 shares if the underwriters exercised in full their over-allotment option on the Corporate Units, upon optional conversion of the convertible preferred stock as described under “Description of the Convertible Preferred Stock — Conversion Rights — Settlement Upon Conversion.” The Series B preferred stock will not be pledged to us to secure your obligation under any purchase contract.

 

Dividends

Holders of the Series B preferred stock will receive, when, as and if declared by our board of directors, cumulative dividends at the



 

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dividend rate on the $1,000 liquidation preference per share. The Series B preferred stock delivered to a holder upon conversion will have initial accumulated dividends at issuance. Dividends on the Series B preferred stock will continue to accumulate from the date of original issuance of the Series B preferred stock and will be payable when, as and if declared by our board of directors, quarterly in arrears on each payment date, beginning on the first payment date following the date on which the Series B preferred stock is first issued.

 

  We may elect to pay dividends on the Series B preferred stock in cash, shares of our common stock, or a combination of cash and shares of our common stock, unless we have previously irrevocably elected a dividend payment method to apply as described in this prospectus supplement. If we elect, or have previously irrevocably elected, to make any such payment of a declared dividend, or any portion thereof, in shares of our common stock, such shares will be valued for such purpose at the applicable five-day average price, multiplied by 97%.

 

  The Series B preferred stock will not be subject to remarketing. In connection with a successful remarketing of the convertible preferred stock, the dividend rate on the Series B preferred stock may be increased as described under “Description of the Series B Preferred Stock — Increased Dividend Rate” below.

 

  Dividends on the Series B preferred stock will accumulate even if any of our agreements prohibit the current payment of dividends, we do not have earnings or funds legally available to pay such dividends or we do not declare the payment of dividends. Any accumulated but unpaid dividends will accumulate additional dividends at the then-applicable dividend rate (as such dividend rate may be adjusted in connection with a remarketing) until paid, compounded quarterly, to, but excluding, the payment date. We may declare and pay accumulated but unpaid dividends (including compounded dividends thereon, if any) on a payment date in cash, shares of our common stock, or a combination thereof, as described above, unless we have previously irrevocably elected a dividend payment method to apply.

 

 

Notwithstanding the foregoing, except in the case of a dividend deficiency event, all accumulated but unpaid dividends (including compounded dividends thereon), including with respect to the June 1, 2024 payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the outstanding shares of Series B preferred stock, if any, as of the close of business on the record date immediately preceding the purchase contract settlement date. If a dividend deficiency event occurs, we will have no obligation to pay the then accumulated but unpaid dividends on the outstanding Series B preferred stock (if any) on the purchase contract



 

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settlement date (or such next business day) to the holders of the shares of Series B preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such Series B preferred stock for so long as the Series B preferred stock remains outstanding, and such dividends will be payable to the holders of such Series B preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

 

  So long as any share of Series B preferred stock remains outstanding, unless all accumulated but unpaid dividends (including compounded dividends thereon, if any) for all preceding dividend periods have been declared and paid, or a sufficient sum or number of shares of our common stock has been set apart for the payment of such dividends upon, all outstanding shares of Series B preferred stock, we will not: (i) declare and pay dividends on any capital stock ranking, as to dividends, on parity with or junior to the Series B preferred stock, including the convertible preferred stock; (ii) redeem, purchase or otherwise acquire for any consideration, or make any other distribution of cash or other property, directly or indirectly, on or with respect to, any capital stock ranking, as to dividends or upon liquidation, on parity with or junior to the Series B preferred stock, including the convertible preferred stock; or (iii) redeem, purchase or otherwise acquire for any consideration, or make any other distribution of cash or other property, directly or indirectly, on or with respect to the purchase contracts or make payments (including any contract adjustment payments) under the purchase contracts or any payment under any agreement similar to that of the purchase contract and pledge agreement, subject to certain exceptions. See “Description of the Series B Preferred Stock — Dividends.”

 

Maturity

The Series B preferred stock has no maturity date and will remain outstanding unless redeemed by us.

 

Ranking

The Series B preferred stock will rank, with respect to dividend rights or rights upon our liquidation, winding-up or dissolution:

 

   

senior to all classes or series of our common stock and to any other class or series of our capital stock expressly designated as ranking junior to the Series B preferred stock;

 

   

on parity with any class or series of our capital stock expressly designated as ranking on parity with the Series B preferred stock, including the convertible preferred stock;

 

   

junior to any other class or series of our capital stock expressly designated as ranking senior to the Series B preferred stock; and



 

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junior to our existing and future indebtedness and other liabilities (including trade payables).

 

  The term “capital stock” does not include convertible or exchangeable debt securities, which, as such, will rank senior in right of payment to the Series B preferred stock.

 

  In the case of our liquidation, dissolution or winding up, holders of the Series B preferred stock will not have the right to receive any payment or distribution unless all of our liabilities are first paid in full and the priority of any senior stock is satisfied.

 

  We currently have no capital stock outstanding that is senior to or on parity with the Series B preferred stock. When issued, our convertible preferred stock will rank on parity with the Series B preferred stock. All our indebtedness will rank senior in right of payment to the Series B preferred stock. In addition, the Series B preferred stock will be structurally subordinated to all debt, preferred stock and other liabilities of our subsidiaries, which means that creditors and preferred shareholders of our subsidiaries will be paid from the assets of such subsidiaries before holders of the Series B preferred stock would have any claims to those assets.

 

Liquidation Preference

If we liquidate, dissolve or wind up, holders of shares of Series B preferred stock will have the right to receive $1,000 per share of Series B preferred stock, plus accumulated but unpaid dividends, if any (whether or not authorized or declared) up to, but excluding, the date of payment, before any payment is made to holders of our common stock and any other class or series of capital stock ranking junior to the Series B preferred stock as to liquidation rights, but subject to the prior payment in full of all of our liabilities and the preferences of our senior stock.

 

Limited Voting Rights

Holders of shares of Series B preferred stock will generally have no voting rights, except as set forth in this prospectus supplement. However, if dividends on any shares of Series B preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive, holders of the outstanding shares of Series B preferred stock, together with holders of any other series of our preferred stock ranking equally with the Series B preferred stock as to payment of dividends and upon which equivalent voting rights have been conferred (including the convertible preferred stock) and are exercisable, will be entitled to vote for the election of two additional directors to our board, subject to the terms and to the limited extent described under “Description of the Series B Preferred Stock — Limited Voting Rights — Preferred Stock Directors.” In matters where holders of the Series B preferred stock are entitled to vote, each share of Series B preferred stock will be entitled to one vote.

 

Redemption at Our Option

We do not have the right to redeem the Series B preferred stock prior to September 3, 2024. We may redeem for cash all or part



 

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of the Series B preferred stock, at our option, on or after September 3, 2024 at a redemption price equal to 100% of the liquidation preference of the shares of Series B preferred stock to be redeemed, plus any accumulated but unpaid dividends (whether or not declared) to, but excluding, the redemption date. No “sinking fund” is provided for the Series B preferred stock, which means that we are not required to redeem or retire the Series B preferred stock periodically.

 

  We will give notice of any redemption not less than 25 scheduled trading days nor more than 90 calendar days before the redemption date by notice to each applicable holder of Series B preferred stock. In no event will we give any notice of redemption prior to the earlier of a remarketing settlement date and the purchase contract settlement date. See “Description of the Series B Preferred Stock — Optional Redemption.”

 

  In connection with a successful remarketing of the convertible preferred stock, the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025 as described under “Description of the Purchase Contracts — Remarketing” and “Description of the Convertible Preferred Stock — Remarketing.” In that case, the earliest redemption date for the Series B preferred stock will be changed to such later date.

 

  If any shares of Series B preferred stock are called for redemption, we must also call for redemption a proportionate number of outstanding shares of convertible preferred stock, if any, on the same redemption date.

 

Increased Dividend Rate

In connection with a successful remarketing of the convertible preferred stock, the dividend rate on the convertible preferred stock may be increased as described under “Description of the Purchase Contracts — Remarketing” and “Description of the Convertible Preferred Stock — Remarketing.” In that case, the dividend rate on the Series B preferred stock will be increased to be equal to such increased dividend rate on the convertible preferred stock.

Miscellaneous

 

Listing of the Units

We intend to apply for listing of the Corporate Units on the New York Stock Exchange under the symbol “UGIC.”

 

U.S. Federal Income Tax Considerations

For a summary of United States federal income tax consequences relating to an investment in the Equity Units, see “Material United States Federal Income Tax Consequences.”

 

Form and Book-Entry System

The Corporate Units, Treasury Units and Cash Settled Units will be issued in certificated form and registered in the name of Cede & Co., the nominee of The Depository Trust Company, and



 

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evidenced by one or more global securities held in certificated form. Except under limited circumstances, a beneficial owner will not be entitled to receive physical delivery of securities certificates.

 

Risk Factors

You should consider carefully all the information set forth and incorporated by reference in this prospectus supplement and the accompanying prospectus and, in particular, you should evaluate the specific factors set forth under “Risk Factors” beginning on page S-35, of this prospectus supplement before deciding whether to invest in the Equity Units.

 

Use of Proceeds

We expect to receive net proceeds from this offering of approximately $             million (or approximately $             million if the underwriters exercise their over-allotment option in full), after deducting the offering expenses and the underwriting discount. We intend to use the net proceeds from this offering to pay a portion of the purchase price of the Mountaineer Acquisition and related fees and expenses and for general corporate purposes. See “Use of Proceeds.”


 

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The Offering — Explanatory Diagrams

The following diagrams illustrate some of the key features of the Corporate Units and Treasury Units as well as the transformation of Corporate Units into Treasury Units and separate shares of convertible preferred stock. No Equity Units may be created or recreated from Series B preferred stock.

The following diagrams assume that the convertible preferred stock is successfully remarketed during the final remarketing period.

Corporate Units

A Corporate Unit initially consists of two components as described below:

 

Purchase Contract    1/10th Ownership Interest in a
Share of Convertible Preferred
Stock(1)

(Owed to Holder)

Our Common Stock at Purchase

Contract Settlement Date

(June 1, 2024) or, if such date is not a business day, the next business day

+

Contract Adjustment Payments

% per annum paid

quarterly(2)

  

(Owed to Holder)

Dividends     % per annum paid

quarterly(3)

(following a successful remarketing of

the convertible preferred stock,

dividends may be payable at an

increased rate)

   

(Owed to Us)

$100 at

Purchase Contract Settlement

Date

(June 1, 2024) or, if such date is not a business day, the next business day

  

(Owed to Holder)

No fixed redemption or maturity date(4)

 

•  $100 plus accumulated but unpaid dividends upon our optional redemption, or

 

•  upon earlier conversion, 1/10th ownership interest in a Series B preferred share (or, in connection with an induced conversion, up to $100 in cash plus all accumulated but unpaid dividends (whether or not declared), if any, on such converted convertible preferred stock to, but excluding, the payment date immediately preceding the relevant conversion date) and shares of our common stock, if any, based on 1/10th of the conversion rate calculated over an observation period as described herein

 

(1)

The holder of a Corporate Unit owns the 1/10th undivided beneficial ownership interest in the share of convertible preferred stock that forms a part of the Corporate Unit but will pledge it to us through the collateral agent to secure its obligation under the related purchase contract. If the Treasury portfolio has replaced the convertible preferred stock as a result of a successful optional remarketing prior to the final remarketing period, the applicable ownership interests in the Treasury portfolio will replace the interest in the convertible preferred stock as a component of the Corporate Unit. Unless the purchase contract is terminated as a result of our bankruptcy, insolvency or reorganization, the proceeds from a portion of the applicable ownership interest in the Treasury portfolio will be used to satisfy the holder’s obligation under the related purchase contract.



 

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(2)

Contract adjustment payments may be deferred as described in this prospectus supplement, and may be paid in cash, shares of our common stock, or a combination thereof, unless we have previously irrevocably elected a contract adjustment payment method to apply.

(3)

Dividends will only be paid when, as and if declared by our board of directors, are cumulative, and may be paid, at our election, in cash, shares of our common stock, or a combination thereof. Except in the case of a dividend deficiency event, all accumulated but unpaid dividends (including compounded dividends thereon), including with respect to the June 1, 2024 payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date.

(4)

The convertible preferred stock has no scheduled redemption date or maturity date, and will remain outstanding unless converted by holders or redeemed by us.

Treasury Units

A Treasury Unit consists of two components as described below:(1)

 

Purchase Contract

  

1/10th Ownership Interest in
Treasury Security(2)

(Owed to Holder)

Our Common Stock at Purchase

Contract Settlement Date

(June 1, 2024) or, if such date is not a business day, the next business day

+

Contract Adjustment Payments

% per annum paid

quarterly(3)

    
   

(Owed to Us)

$100 at

Purchase Contract Settlement

Date

(June 1, 2024) or, if such date is not a business day, the next business day

  

(Owed to Holder)

$100 at Maturity(2)

(on or prior to June 1, 2024 or, if such date is not a business day, the next business day)

 

(1)

Treasury Units may only be created with integral multiples of 10 Corporate Units. As a result, the creation of 10 Treasury Units will result in the release of one share of convertible preferred stock held by the collateral agent. After a successful remarketing of the convertible preferred stock, holders of Corporate Units may not create Treasury Units, and holders of Treasury Units may not recreate Corporate Units.

(2)

The holder of a Treasury Unit owns a 1/10th undivided beneficial ownership interest in the Treasury security that forms a part of the Treasury Unit but will pledge it to us through the collateral agent to secure its obligation under the related purchase contract. Unless the purchase contract is terminated as a result of our bankruptcy, insolvency or reorganization or the holder recreates a Corporate Unit, the proceeds from the Treasury securities will be used to satisfy the holder’s obligation under the related purchase contract.

(3)

Contract adjustment payments may be deferred as described in this prospectus supplement, and may be paid in cash, shares of our common stock, or a combination thereof, unless we have previously irrevocably elected a contract adjustment payment method to apply.



 

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Transforming Corporate Units into Treasury Units and Separate Shares of Convertible Preferred Stock

Because the convertible preferred stock is issued with a liquidation preference of $1,000 per share, holders of Corporate Units may only create Treasury Units in integral multiples of 10 Corporate Units.

 

   

To create 10 Treasury Units, a holder must separate 10 Corporate Units into their two components (10 purchase contracts and one share of convertible preferred stock) and combine the purchase contracts with a Treasury security having a principal amount at maturity of $1,000 that matures on or prior to June 1, 2024 (or, if such date is not a business day, the next business day).

 

   

The share of convertible preferred stock, which is no longer a component of a Corporate Unit, will be released to the holder and be tradable as a separate security.

 

   

A holder will own the Treasury security that forms a part of the 10 Treasury Units, but will pledge it to us through the collateral agent to secure its obligation under the related purchase contracts.

 

   

The Treasury security together with the 10 purchase contracts will constitute 10 Treasury Units.

 

   

During a blackout period (as described under “Description of the Equity Units — Creating Treasury Units by Substituting a Treasury Security for Convertible Preferred Stock”) or following a successful remarketing of the convertible preferred stock, a holder may not create Treasury Units or recreate Corporate Units.

 

   

Unless a blackout period is occurring or a successful remarketing of the convertible preferred stock has occurred, the holder may also transform 10 Treasury Units and one share of convertible preferred stock into 10 Corporate Units. Following that transformation, the Treasury security, which will no longer be a component of the Treasury Unit, will be released from the pledge under the purchase contract and pledge agreement and delivered to the holder, and will be tradable as a separate security.

The following illustration depicts the transformation of 10 Corporate Units into 10 Treasury Units and one separate share of convertible preferred.

 

10 Purchase
Contracts
      Ownership
Interest in One
Share of
Convertible
Preferred
Stock Pledged to
Us(1)(2)
      10 Purchase
Contracts
      Ownership
Interest in
Treasury
Security Pledged to
Us
      Ownership
Interest in One
Share of
Convertible
Preferred
Stock Released to
Holder(1)(2)

(Owed to Holder) Our Common Stock at Purchase Contract Settlement Date

+

Contract Adjustment Payments     %

per annum paid quarterly(3)

 

 

+

 

(Owed to Holder)

Dividends     % per annum paid quarterly(4) (following a successful remarketing of the convertible preferred stock,

dividends may be payable at an increased rate)

 

 

®

 

(Owed to Holder) Our Common Stock at Purchase Contract Settlement Date

+

Contract Adjustment Payments     % per annum paid quarterly(3)

 

 

+

     

 

+

  (Owed to Holder) Dividends      % per annum paid quarterly(4) (following a successful remarketing, dividends may be payable at an increased rate)
         
(Owed to Us) $1,000 at Purchase Contract Settlement Date (June 1, 2024) or, if such date is not a business day, the next business day    

(Owed to Holder) No fixed redemption or maturity date

 

•  $1,000 plus accumulated and unpaid dividends upon our optional redemption, or

    (Owed to Us) $1,000 at Purchase Contract Settlement Date (June 1, 2024) or, if such date is not a business day, the next business day     (Owed to Holder) $1,000 at Maturity (on or prior to June 1, 2024 or, if such date is not a business day, the next business day)(5)    

(Owed to Holder) No fixed redemption or maturity date

 

•  $1,000 plus accumulated and unpaid dividends upon our optional redemption, or



 

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10 Purchase
Contracts
      Ownership
Interest in One
Share of
Convertible
Preferred
Stock Pledged to
Us(1)(2)
      10 Purchase
Contracts
      Ownership
Interest in
Treasury
Security Pledged to
Us
      Ownership
Interest in One
Share of
Convertible
Preferred
Stock Released to
Holder(1)(2)
       

•  upon earlier conversion, (i) a share of Series B preferred stock(6) (other than for induced conversions, in which case a holder will instead receive up to $1,000 in cash plus all accumulated but unpaid dividends (whether or not declared), if any, on such converted convertible preferred stock to, but excluding, the payment date immediately preceding the relevant conversion date) and (ii) shares of our common stock (if any) based on the conversion rate per share of convertible preferred stock (following a successful remarketing of the convertible preferred stock, the conversion rate may be increased) calculated over an observation period as described herein

                 

•  upon earlier conversion, (i) a share of Series B preferred stock(6) (other than for induced conversions, in which case a holder will instead receive up to $1,000 in cash plus all accumulated but unpaid dividends (whether or not declared), if any, on such converted convertible preferred stock to, but excluding, the payment date immediately preceding the relevant conversion date) and (ii) shares of our common stock (if any) based on the conversion rate per share of convertible preferred stock (following a successful remarketing of the convertible preferred stock, the conversion rate may be increased) calculated over an observation period as described herein

10 Corporate Units       10 Treasury Units     Separate Share of Convertible Preferred Stock

 

(1)

Each share of convertible preferred stock will be issued with a liquidation preference of $1,000 per share. Each holder of a Corporate Unit will own a 1/10th, or 10%, undivided beneficial ownership interest in one share of convertible preferred stock.

(2)

The convertible preferred stock will be issued with a liquidation preference of $1,000 per share.

(3)

Contract adjustment payments may be deferred as described in this prospectus supplement, and may be paid in cash, shares of our common stock, or a combination thereof, unless we have previously irrevocably elected a contract adjustment payment method to apply.

(4)

Dividends will only be paid when, as and if declared by our board of directors, are cumulative, and may be paid, at our election, in cash, shares of our common stock, or a combination thereof, unless we have previously irrevocably elected a dividend payment method to apply.

(5)

The holder of a Treasury Unit owns a 1/10th undivided beneficial ownership interest the Treasury security that forms a part of the Treasury Unit but will pledge it to us through the collateral agent to secure its obligation under the related purchase contract. Unless the purchase contract is terminated as a result of our bankruptcy, insolvency or reorganization or the holder recreates a Corporate Unit, the proceeds from the Treasury securities will be used to satisfy the holder’s obligation under the related purchase contract.

(6)

The Series B preferred stock will be issued with a liquidation preference of $1,000 per share.



 

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Illustrative Remarketing Timeline

Optional Remarketing

The following timeline is for illustrative purposes only and is not definitive.

 

Date    Event
At least T-15 calendar days    We will issue a press release and request that the depositary notify its participants holding Corporate Units, Treasury Units and separate shares of convertible preferred stock as to the dates of and procedures to be followed in the optional remarketing.
   
T-2 business days (2 business days prior to the first day of the optional remarketing period)   

•  Last day prior to the optional remarketing period to create Treasury Units from Corporate Units and recreate Corporate Units from Treasury Units (holders may once again be able to create and recreate units if the optional remarketing is not successful as of the last day of the optional remarketing period).

 

•  Last day for holders of Corporate Units or Treasury Units to settle the related purchase contract early (holders may once again be able to settle the related purchase contract early if the optional remarketing is not successful as of the last day of the optional remarketing period) and to pay the purchase price in connection therewith.

 

•  Last day for holders of separate shares of convertible preferred stock to give notice of their election to participate in the remarketing.

   
T    First business day of the optional remarketing period.
   
T to T+4 business days (5 business days beginning on, and including, the first day of the optional remarketing period)   

Five business day optional remarketing period:

 

•  If no successful remarketing of the convertible preferred stock occurs as of the last day of the optional remarketing period, we will cause a notice of the failed remarketing of convertible preferred stock to be published before 9:00 a.m., New York City time, on the business day following the last of the five business days comprising the optional remarketing period.

 

•  If a successful remarketing of the convertible preferred stock occurs, (i) we will cause a notice of the successful remarketing of the convertible preferred stock to be published before 9:00 a.m., New York City time, on the business day immediately following the pricing date of such successful remarketing, (ii) the remarketing agent will purchase the Treasury portfolio and (iii) we will issue a press release disclosing the modified terms established for the convertible preferred stock during the optional remarketing on the business day following the pricing date on which the convertible preferred stock was successfully remarketed. The increased dividend rate, increased conversion rate and/or modified earliest redemption date will (subject to a limited exception described in this prospectus supplement) become effective on the settlement date of the remarketing, which will be the second business day following the

 

 



 

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Date    Event
    

pricing date on which the convertible preferred stock was successfully remarketed (or such other date as we and the marketing agent may agree).

 

•  We have the right to postpone any optional remarketing that has not concluded in our absolute discretion on any day of the relevant optional remarketing period.

   
T+5 (5 business days after the first day of the optional remarketing)    First business day following a failed optional remarketing that we may give notice of another optional remarketing period.

Final Remarketing

The following timeline is for illustrative purposes only and is not definitive. For purposes of this timeline, we have assumed that there was no termination event with respect to the purchase contracts or a successful optional remarketing. The dates in this timeline are based on the time periods set forth in the purchase contract and pledge agreement.

 

Date    Event
No later than May 8, 2024   

•  We will issue a press release and request that the depositary notify its participants holding Corporate Units, Treasury Units and separate shares of convertible preferred stock of the final remarketing period beginning on, and including, May 23, 2024 and ending on, and including, May 30, 2024. We will give notice to holders of Corporate Units, Treasury Units and separate shares of convertible preferred stock of the procedures to be followed in the final remarketing.

 

•  First day of the period during which holders of Corporate Units may create Cash Settled Units.

   
May 21, 2024 (2 business days prior to the first day of the final remarketing period)   

•  Last day to create Treasury Units from Corporate Units, create Cash Settled Units from Corporate Units and recreate Corporate Units from Treasury Units.

 

•  Last day for holders of Corporate Units or Treasury Units to settle the related purchase contract early and to pay the purchase price in connection therewith.

 

•  Last day for holders of separate shares of convertible preferred stock to give notice of their election to participate in the remarketing.

   
May 23, 2024 through May 30, 2024 (final remarketing period)    We will attempt a remarketing during the final remarketing period. We may elect to postpone the final remarketing on any day other than the last business day of the final remarketing period. If a successful remarketing of the convertible preferred stock has not occurred on or prior to the last day of the final remarketing period, we will cause a notice of the failed remarketing of the convertible preferred stock to be published before 9:00 a.m., New York City time, on the business day immediately following the last date of the final remarketing period.
   
June 1, 2024 or, if such date is not a business day, the next business day    Purchase contract settlement date (or, if such date is not a business day, the next business day) and settlement date for any successful final remarketing of the convertible preferred stock.


 

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RISK FACTORS

Investing in the Equity Units involves a high degree of risk. You should carefully consider the risks discussed below, together with the financial and other information contained in or incorporated by reference into this prospectus supplement and the accompanying prospectus, before deciding whether to invest in the Equity Units. In addition to the risk factors discussed below, please read “Risk Factors” in our Annual Report and in any subsequent Quarterly Reports, which are incorporated herein by reference, and “Note About Forward-Looking Information” herein, for more information about important risks that you should consider before investing in the Equity Units. The Equity Units are not an appropriate investment for you if you are unsophisticated with respect to the complex terms of the Equity Units or financial matters.

Risk Factors Relating to the Equity Units

Holders of Corporate Units must first separate their shares of convertible preferred stock from the related purchase contracts to convert their convertible preferred stock in connection with a fundamental change that occurs prior to a successful remarketing of the convertible preferred stock, which will require holders to bear related costs and is subject to certain conditions.

Upon the occurrence of a fundamental change that occurs prior to a successful remarketing of the convertible preferred stock (and only upon the occurrence of a fundamental change that occurs prior to a successful remarketing of the convertible preferred stock), the convertible preferred stock will become convertible before the purchase contract settlement date. If a holder of a Corporate Unit desires to convert the convertible preferred stock that is a part of a Corporate Unit, the holder must first separate the convertible preferred stock, which would require the holder to (1) create Treasury Units (at any time other than during a blackout period), (2) settle the related purchase contracts early (at any time other than during a blackout period) or (3) during the period after the date we give notice of a final remarketing, create Cash Settled Units at or prior to the close of business on the second business day immediately preceding the first day of the final remarketing period. We will not compensate you for the cost of the Treasury security to create a Treasury Unit, the amount of cash to create a Cash Settled Unit or for any financing cost you may bear in making the required cash payment in connection with creation of Cash Settled Units or an early settlement of the purchase contracts upon a fundamental change. In addition, we cannot guarantee that you will be able to purchase the specified Treasury security necessary to create the Treasury Unit, obtain the necessary financing to create a Treasury Unit or Cash Settled Unit or early settle the related purchase contract upon a fundamental change. If you cannot obtain that financing, you will not be able to separate the convertible preferred stock from the purchase contracts and, accordingly, you will not be able to convert the convertible preferred stock. There will be no make-whole amount of shares or increase to the conversion rate for conversions of the convertible preferred stock in connection with a fundamental change, except for the limited case where (x) the “stock price” (as defined under “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change” below) for such fundamental change is less than the conversion price of the convertible preferred stock, which is initially equal to $             per share of our common stock and is subject to adjustment in certain circumstances (the “conversion price”) and (y) such fundamental change occurs prior to a successful remarketing of the convertible preferred stock.

Further, the ability to separate the convertible preferred stock from the purchase contract by creating Treasury Units or settling early is subject to certain conditions. Holders of Corporate Units may create Treasury Units or Cash Settled Units only in integral multiples of 10 Corporate Units. After a successful remarketing of the convertible preferred stock, holders of Corporate Units may not create Treasury Units, and holders of Treasury Units may not recreate Corporate Units. The ability to create Treasury Units is also subject to certain exceptions and additional blackout periods described in this prospectus supplement. Cash Settled Units may only be created during the period after the date we give notice of a final remarketing and at or prior to the close of business on the second business day immediately preceding the first day of the final remarketing period. Also, the ability to exercise a fundamental change early settlement

 

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right with respect to a holder’s purchase contracts will not be available if a registration statement is required to be effective in connection with the exercise of such right but it is not then effective or a blackout period is continuing, all as described more fully under “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change.” See also “The delivery of make-whole shares upon a fundamental change early settlement of the purchase contracts may not adequately compensate you” and “— You may not be able to exercise your right to settle a purchase contract prior to the purchase contract settlement date unless a registration statement under the Securities Act is in effect and a prospectus is available covering the shares of our common stock and other securities, if any, deliverable upon early settlement of a purchase contract” for further restrictions on your ability to exercise a fundamental change early settlement of purchase contracts. Any of the foregoing limitations could prohibit you from separating the convertible preferred stock from the purchase contracts, which would prevent you from being able to convert the convertible preferred stock.

If you do not settle your related purchase contracts with separate cash following a failed final remarketing, you may lose any conversion value of the convertible preferred stock in excess of its liquidation preference and the ability to continue to hold your convertible preferred stock.

If a final remarketing fails for any reason, all ownership interests in the convertible preferred stock held as part of Corporate Units will be delivered to us on the purchase contract settlement date in full satisfaction of the Corporate Unit holders’ obligations to purchase our common stock under the related purchase contracts on the purchase contract settlement date, except as described below. The ownership interest in convertible preferred stock underlying a Corporate Unit will be automatically delivered to us, thereby satisfying such holder’s obligations to us under the related purchase contracts in full, unless, prior to 5:00 p.m., New York City time, on the second business day immediately prior to the purchase contract settlement date, the holder provides written notice of an intention to settle the related purchase contracts with separate cash and on or prior to the business day immediately preceding the purchase contract settlement date delivers to the securities intermediary $1,000 in cash per 10 purchase contracts. Holders of Corporate Units may settle their purchase contracts with separate cash only in integral multiples of 10 Corporate Units. A holder of Corporate Units that has not so elected to settle with separate cash will lose any value of the convertible preferred stock in excess of the liquidation preference thereof, and will not be able to continue to hold the convertible preferred stock and receive dividends or convert the convertible preferred stock at a future date.

If you participate in a remarketing that is ultimately successful, you will no longer hold the remarketed convertible preferred stock and the proceeds from the remarketing may not adequately compensate you.

We will remarket the convertible preferred stock as described under “Description of the Purchase Contracts — Remarketing,” “— Optional Remarketing” and “— Final Remarketing” below. If a remarketing is successful, a portion of the proceeds from the remarketing will be applied, in the case of the Corporate Units, to purchase the Treasury portfolio (in the case of an optional remarketing) or against a holder’s obligation to pay the purchase price upon settlement of the related purchase contracts (in the case of a final remarketing). Any remaining net proceeds from the remarketing will be remitted to the benefit of the relevant holders. In order to elect not to participate in any remarketing and retain the undivided beneficial ownership interests in shares of convertible preferred stock underlying the convertible preferred stock comprising part of your Corporate Units, you must (1) create Treasury Units (at any time other than during a blackout period), (2) settle the related purchase contracts early (at any time other than during a blackout period) or (3) during the period after the date we give notice of a final remarketing, create Cash Settled Units at or prior to the close of business on the second business day immediately preceding the first day of the final remarketing period. If you do not do one of the foregoing, the shares of convertible preferred stock underlying the undivided beneficial ownership interests in convertible preferred stock comprising part of your Corporate Units will be remarketed, and, if successful, you will no longer have any rights with respect to such convertible preferred stock other than to receive the proceeds of such remarketing in excess of the

 

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Treasury portfolio purchase price (in the case of an optional remarketing) or in excess of $100 (in the case of a final remarketing), in each case, per Corporate Unit, as described herein. As a result, you will only receive the proceeds obtained in such remarketing (or, in the case where your convertible preferred stock was held as a part of Corporate Units, the excess thereof over the Treasury portfolio purchase price (in the case of an optional remarketing) or in excess of $100 (in the case of a final remarketing), in each case, per Corporate Unit), which may not adequately compensate you for the conversion value of the convertible preferred stock or the lost option time value of your convertible preferred stock or the loss of future dividends, and you will not be able to continue to hold the convertible preferred stock, or sell or convert the convertible preferred stock at a future date.

The trading prices for the Corporate Units, Treasury Units, convertible preferred stock and Series B preferred stock are expected to be affected by, among other things, the trading prices of our common stock, the general level of interest rates and our credit quality.

The trading prices of Corporate Units, which we intend to apply to list on the New York Stock Exchange, and Treasury Units, convertible preferred stock and Series B preferred stock in the secondary market are expected to be affected by, among other things, the trading prices of our common stock, the general level of interest rates and our credit quality. It is impossible to predict whether the price of our common stock or interest rates will rise or fall. The price of our common stock could be subject to wide fluctuations in the future in response to many events or factors, including those discussed in the risk factors herein and in our Annual Report and any subsequent Quarterly Reports that are incorporated by reference into this prospectus supplement, as may be supplemented by subsequently filed reports, and the factors listed in “Note About Forward-Looking Information” in this prospectus supplement, many of which events and factors are beyond our control. Fluctuations in interest rates may give rise to arbitrage opportunities based upon changes in the relative value of the common stock underlying the purchase contracts and of the other components of the Equity Units. Any such arbitrage could, in turn, affect the trading prices of the Corporate Units, Treasury Units, convertible preferred stock, Series B preferred stock and our common stock.

Holding Corporate Units, Treasury Units or Cash Settled Units will not confer rights with respect to our common stock or Series B preferred stock, but you will be subject to any changes made with respect to our common stock or (in the case of Corporate Units) Series B preferred stock.

Holding Corporate Units, Treasury Units or Cash Settled Units will not, in itself, entitled you to any rights with respect to our common stock or Series B preferred stock, such as voting rights and rights to receive dividends or other distributions thereon. However, you will be subject to any changes affecting our common stock and (in the case of the Corporate Units) also to any changes affecting Series B preferred stock. With respect to the purchase contracts that form a part of the Equity Units, you will only be entitled to rights with respect to the underlying common stock if and when we deliver shares of our common stock in settlement of such purchase contracts on the purchase contract settlement date, or on the settlement date for any early settlement, as the case may be, and you will only be entitled to exercise those rights or receive the relevant dividends or distributions if you are a holder of such common stock on the applicable record date.

With respect to any shares of our common stock (if any) or Series B preferred stock (if any) you receive in connection with a conversion of any share of convertible preferred stock (whether a part of Corporate Units or held separately), you will not be entitled to any rights with respect to our common stock or Series B preferred stock prior to the last trading day of the observation period. For example, if an amendment is proposed to our amended and restated articles of incorporation, as amended, or our amended and restated bylaws requiring common shareholder approval and the record date for determining the common shareholders of record entitled to vote on the amendment occurs prior to the last trading day of the observation period, the converting holder will not be entitled to vote on the amendment, although such holder will nevertheless be subject to any changes affecting our common stock.

 

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The Equity Units and convertible preferred stock provide limited anti-dilution adjustments, and an event could occur that adversely affects the value of the Equity Units, the convertible preferred stock or our common stock but that does not result in an anti-dilution adjustment.

The maximum settlement rate and reference price of the purchase contracts and the conversion rate of the convertible preferred stock are subject to adjustment in certain circumstances arising from stock splits and combinations, stock dividends, certain cash dividends and certain other events. We will not adjust the maximum settlement rate, the reference price or the conversion rate for other events, including without limitation third party tender or exchange offers for our common stock, issuances and purchases of our common stock in connection with dividend reinvestment plans, employee stock option grants, ordinary dividends below a specified threshold, offerings of common stock by us for cash or in connection with an acquisition, and share issuances pursuant to options and other convertible securities outstanding on the date we issue the Equity Units. See “Description of the Purchase Contracts — Anti-dilution Adjustments” and “Description of the Convertible Preferred Stock — Conversion Rate Adjustments.” There can be no assurance that an event that adversely affects the value of the Equity Units, the convertible preferred stock or our common stock, but does not result in an adjustment to the maximum settlement rate, the reference price or the conversion rate, will not occur. Further, other than as described under “Underwriting,” we are not restricted from issuing additional common stock during the term of the stock purchase contracts and have no obligation to consider your interests for any reason. If we issue additional shares of our common stock, those issuances may materially and adversely affect the price of our common stock, the convertible preferred stock and, because of the relationship of the number of shares holders are to receive on the purchase contract settlement date to the price of our common stock, those issuances may adversely affect the trading prices of the Equity Units.

Some significant restructuring transactions may not constitute a fundamental change, in which case you would not have the right to any make-whole shares upon an early settlement of the purchase contracts or to convert your convertible preferred stock prior to a successful remarketing of the convertible preferred stock.

Upon the occurrence of a fundamental change, you have the right to (i) exercise your fundamental change early settlement right with respect to your purchase contracts, entitling you to receive additional value in respect of make-whole shares for such purchase contracts in certain circumstances and (ii) if the fundamental change occurs prior to a successful remarketing of the convertible preferred stock, convert your separate shares of convertible preferred stock (although there will be no make-whole amount of shares or increase to the conversion rate for any such conversions except for the limited case where the stock price for such fundamental change is less than the conversion price). However, the fundamental change provisions will not compensate holders of Equity Units (or allow for conversions of shares of convertible preferred stock) in the event of other transactions that could result in lost option time value. For example, transactions such as leveraged recapitalizations, refinancings, restructurings, or acquisitions initiated by us may not constitute a fundamental change. In the event of any such transaction, holders of Equity Units do not have a fundamental change early settlement right with respect to their purchase contracts and holders of convertible preferred stock do not have a right to convert such shares, even though each of these transactions could increase the amount of our indebtedness, or otherwise adversely affect our capital structure or any credit ratings, thereby adversely affecting the holders of Equity Units and convertible preferred stock.

Your rights to the pledged assets underlying the Equity Units will be subject to our security interest and may be affected by a bankruptcy proceeding.

As a holder of Equity Units, you will own the interests in the convertible preferred stock, Treasury portfolio, Treasury securities or cash, as applicable, that are a component of the Equity Units. However, those interests will be pledged to us through the collateral agent to secure your obligations under the related purchase contracts. As a result, your rights to the pledged assets will be subject to our security

 

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interest. In addition, notwithstanding the automatic termination of the purchase contracts, in the event that we become the subject of a case under the U.S. Bankruptcy Code, the delivery of the pledged assets to you may be delayed by the imposition of the automatic stay under Section 362 of the Bankruptcy Code, or other relief sought by the collateral agent, the purchase contract agent or another party asserting an interest in the pledged assets. Moreover, claims arising out of the convertible preferred stock will be subject to the equitable jurisdiction and powers of the bankruptcy court.

The purchase contract and pledge agreement will not be qualified under the Trust Indenture Act, and the obligations of the purchase contract agent are limited.

The purchase contract and pledge agreement among us, the purchase contract agent and the collateral agent will not be qualified as an indenture under the Trust Indenture Act of 1939, or the Trust Indenture Act, and the purchase contract agent and collateral agent will not be required to qualify as a trustee under the Trust Indenture Act. Thus, you will not have the benefit of the protection of the Trust Indenture Act with respect to the purchase contract and pledge agreement or the purchase contract agent.

The secondary market for the Equity Units, the convertible preferred stock and the Series B preferred stock may be illiquid.

We are unable to predict how the Equity Units, the convertible preferred stock or the Series B preferred stock will trade in the secondary market or whether that market will be liquid or illiquid. There is currently no secondary market for the Equity Units, the convertible preferred stock or the Series B preferred stock. We intend to apply for listing of the Corporate Units on the New York Stock Exchange, although there is no guarantee that the Corporate Units will be approved for listing. We have no obligation or current intention to apply for any separate listing of the Treasury Units, the Cash Settled Units, the convertible preferred stock or the Series B preferred stock on any stock exchange. We have been advised by the representative that the underwriters presently intend to make a market for the Equity Units, the convertible preferred stock and (if and when issued) the Series B preferred stock. However, they are not obligated to do so, and any market making may be discontinued at any time without notice. There can be no assurance as to the liquidity of any market that may develop for the Corporate Units, Treasury Units, Cash Settled Units, convertible preferred stock or Series B preferred stock, your ability to sell such securities or whether a trading market, if it develops, will continue. For example, if only a small number of shares of convertible preferred stock is converted other than in connection with a redemption, the Series B preferred stock will be illiquid. In addition, in the event that sufficient numbers of Corporate Units are converted to Treasury Units or Cash Settled Units, the liquidity of Corporate Units could be adversely affected. We cannot provide assurance that the Corporate Units will be accepted by the New York Stock Exchange for listing, that the Corporate Units will not be delisted from the New York Stock Exchange if listed, or that trading in the Corporate Units will not be suspended as a result of elections to create Treasury Units or Cash Settled Units, or recreate Corporate Units through the substitution of collateral that causes the number of these securities to fall below the applicable requirements for listing securities on the New York Stock Exchange.

We may defer contract adjustment payments under the purchase contracts that are a part of the Equity Units, and this may have an adverse effect on the trading prices of the Equity Units.

We may, at our option, defer the payment of all or part of the contract adjustment payments under the purchase contracts through the purchase contract settlement date, as described under “Description of the Purchase Contracts — Contract Adjustment Payments.” If we exercise our right to defer contract adjustment payments, the market price of the Equity Units is likely to be adversely affected. As a result of the existence of our deferral rights, the market price of the Equity Units may be more volatile than the market prices of other securities that are not subject to these optional deferrals. Although we do have the ability to elect to pay all or part of contract adjustment payments in shares of our common stock (unless we have previously elected a different contract payment adjustment method), you will be subject to the risk that we may not be able to pay such deferred contract adjustment payments (including compounded contract adjustment

 

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payments thereon) in the future. You will have no claim to any accrued and unpaid contract adjustment payments (including any accrued and unpaid deferred contract adjustment payments and compounded contract adjustment payments thereon) in the event of our bankruptcy or insolvency. Unlike holders of convertible preferred stock and Series B preferred stock who have a right to vote for the election of two additional directors to our board under the circumstances described under “Description of the Convertible Preferred Stock — Limited Voting Rights — Preferred Stock Directors” and “Description of the Series B Preferred Stock — Limited Voting Rights — Preferred Stock Directors,” holders of the Equity Units do not have similar rights in connection with the deferral of contract adjustment payments. In addition, if we make such a deferral, and you use the accrual method of accounting for tax purposes, you may be required to continue to recognize income for U.S. federal income tax purposes in respect of the purchase contracts in advance of your receipt of any corresponding cash payments.

The trading price of the Corporate Units or any separate shares of convertible preferred stock or Series B preferred stock may not fully reflect the value of their accumulated but unpaid dividends.

The Corporate Units and any separate shares of convertible preferred stock or Series B preferred stock may trade at a price that does not fully reflect the value of accumulated but unpaid dividends on the convertible preferred stock or Series B preferred stock. However, such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) for so long as such convertible preferred stock or Series B preferred stock remains outstanding, and such dividends will be payable to the holders of such convertible preferred stock or Series B preferred stock, as applicable, as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

We are both an operating company and a holding company and may require cash from our subsidiaries to make current payments on the Equity Units or dividends on the convertible preferred stock or Series B preferred stock.

If you own Equity Units in the form of Corporate Units, you are entitled to receive periodic payments representing dividends on the convertible preferred stock (to the extent declared by our board of directors) and contract adjustment payments on the purchase contracts, subject to our right to defer the contract adjustment payments. The convertible preferred stock, Series B preferred stock and contract adjustment payments are solely the obligations of ours, and no other entity will have any obligation, contingent or otherwise, to make payments in respect of the purchase contracts, the convertible preferred stock or the Series B preferred stock. We are a holding company for several direct and indirect subsidiaries. Our subsidiaries will have no obligation to make the contract adjustment payments or pay any amount in respect of the convertible preferred stock or Series B preferred stock. Accordingly, we may depend, in part, on dividends and other distributions from our subsidiaries to generate the funds necessary to meet our contract adjustment payment obligations or to pay amounts in respect of the convertible preferred stock or Series B preferred stock. As an equity holder of our subsidiaries, our ability to participate in any distribution of assets of any subsidiary is structurally subordinate to the claims of the creditors of that subsidiary. If we are unable to obtain cash from our subsidiaries, we may be unable to fund required contract adjustment payments or to pay amounts in respect of the convertible preferred stock or Series B preferred stock.

Recent and future regulatory actions and other events may adversely affect the trading price and liquidity of the Equity Units and the convertible preferred stock.

We expect that many investors in, and potential purchasers of, the Equity Units and shares of convertible preferred stock will employ, or seek to employ, an arbitrage strategy with respect to the Equity Units and/or the convertible preferred stock. Investors that employ an arbitrage strategy with respect to equity-linked instruments typically implement that strategy by selling short the common stock underlying the equity-linked instrument and dynamically adjusting their short position while they hold such equity-linked instrument. Investors may also implement this hedging strategy by entering into swaps on our common stock in lieu of or in addition to short selling our common stock.

 

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The SEC and other regulatory and self-regulatory authorities have implemented various rules and taken certain actions, and may adopt additional rules in the future and take other actions, that may affect those engaging in short selling activity involving equity securities (including our common stock). Such rules and actions include Rule 201 of SEC regulation SHO, the adoption by the Financial Industry Regulatory Authority, Inc. and the national securities exchanges of a “Limit Up-Limit Down” program, the imposition of market-wide circuit breaker systems that halt trading of securities for certain periods following specific market declines, and the implementation of certain regulatory reforms stemming from the enactment and implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Past regulatory actions, including emergency actions or regulations, have had a significant effect on the trading prices and liquidity of equity-linked instruments. Any governmental or regulatory action that similarly restricts the ability of investors in, or potential purchasers of, the Equity Units or convertible preferred stock to effect short sales of our common stock, borrow our common stock or enter into swaps on our common stock could similarly adversely affect the trading price and the liquidity of the Equity Units and the convertible preferred stock.

Volatility in the market price and trading volume of our common stock could adversely affect the trading price of the Equity Units and the convertible preferred stock.

The stock market in recent years has experienced significant price and volume fluctuations that have often been unrelated to the operating performance of companies. The market price of our common stock could fluctuate significantly for many reasons, including in response to the risks described in this section, elsewhere in this prospectus supplement or the documents we have incorporated by reference in this prospectus supplement or for reasons unrelated to our operations, such as reports by industry analysts, investor perceptions or negative announcements by our customers, competitors or counterparties regarding their own performance, the ongoing COVID-19 pandemic, as well as industry conditions and general financial, economic and political instability. A decrease in the market price of our common stock would likely adversely affect the trading price of the Equity Units and the convertible preferred stock. The market price of our common stock could also be affected by possible sales of our common stock by investors who view the Equity Units or convertible preferred stock as a more attractive means of equity participation in us and by hedging or arbitrage trading activity that we expect to develop involving our common stock. This trading activity could, in turn, affect the trading prices of the Equity Units and the convertible preferred stock.

Our Equity Units and convertible preferred stock may adversely affect the market price of our common stock.

The market price of our common stock is likely to be influenced by our Equity Units and our convertible preferred stock. For example, the market price of our common stock could become more volatile and could be depressed by:

 

   

investors’ anticipation of the sale into the market of a substantial number of additional shares of our common stock issued upon settlement of the purchase contracts or conversion of our convertible preferred stock;

 

   

possible sales of our common stock by investors who view our Equity Units or convertible preferred stock as a more attractive means of equity participation in us than owning shares of our common stock; and

 

   

hedging or arbitrage trading activity that we expect to develop involving our Equity Units or convertible preferred stock and our common stock.

 

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Upon early settlement of the purchase contracts or conversion of the convertible preferred stock, you may receive less valuable consideration than expected because the value of our common stock may decline after you exercise your early settlement right or conversion right but before we settle our related obligation and because the Series B preferred stock may trade at less than its $1,000 liquidation preference.

A holder of Equity Units that elects to settle its purchase contract early and a holder of separate shares of convertible preferred stock that elects to convert such shares, in each case, will be exposed to fluctuations in the value of our common stock and, upon optional conversion of the convertible preferred stock, in the value of the Series B preferred stock during the period from the date such holder exercises such right until the date we settle our related obligation.

Upon exercise of an early settlement right with respect to any purchase contracts, the amount of consideration you receive upon such settlement will be determined (other than upon the occurrence of certain fundamental changes as described herein) by reference to the volume-weighted average price of our common stock for each trading day in a 20 trading day averaging period. Similarly, upon conversion of the convertible preferred stock, the amount of consideration that you will receive upon conversion of your convertible preferred stock will be determined by reference to the volume-weighted average price of our common stock for each trading day in a 20 trading day observation period. If the price of our common stock decreases during any such period, the amount and/or value of consideration you receive will be adversely affected. In addition, if the market price of our common stock at the end of such period is below the average volume-weighted average price of our common stock during such period, the value of any shares of our common stock that you will receive in satisfaction of our obligation in respect of your purchase contracts or convertible preferred stock, as the case may be, will be less than the value used to determine the number of shares that you will receive.

Additionally, you may receive less valuable consideration than expected upon optional conversion of the convertible preferred stock because the Series B preferred stock may trade at prices below its $1,000 liquidation preference per share. See “— Risk Factors Relating to the Series B Preferred Stock — The trading price of the Series B preferred stock issued upon conversion of the convertible preferred stock may be less than its $1,000 liquidation preference per share.”

Non-U.S. holders may be subject to U.S. federal income tax, including withholding tax, in connection with the sale or other disposition of an Equity Unit, our convertible preferred stock, our Series B preferred stock, our common stock or a purchase contract.

Under the “FIRPTA” tax rules, a non-U.S. holder (as defined in “Material United States Federal Income Tax Consequences”) who sells or otherwise disposes of a Corporate Unit, our common stock, our convertible preferred stock, our Series B preferred stock or, possibly, a purchase contract, may be subject to U.S. federal income tax, and withholding at a 15% rate on the amount realized, with respect to the sale or other disposition if we are a United States real property holding corporation at any time within the five-year period preceding the sale or other disposition (or the non-U.S. holder’s holding period, if shorter). We have not determined whether or not we are currently a United States real property holding corporation. Even if we are not currently a United States real property holding corporation, we may become a United States real property holding corporation in the future. Accordingly, if you acquire Equity Units, there can be no assurance that we will not be a United States real property holding corporation during your ownership of the Equity Units or shares of our convertible preferred stock, common stock, Series B preferred stock or purchase contracts.

Although certain exceptions to the FIRPTA tax rules may apply if our common stock is regularly traded on an established securities market, these exceptions do not apply to large holdings. In particular, if you hold more than 5% of our outstanding common stock (or, if it is regularly traded on an established securities market, our outstanding convertible preferred stock) at any time during the five-year period ending on the date of a redemption or other disposition of the relevant stock, you likely will be subject to

 

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U.S. federal income tax upon the disposition and may in some circumstances be subject to withholding at a 15% rate on the amount realized.

The rules applicable to interests in United States real property holding corporations are complex, and there is significant uncertainty about the application of these rules to the Equity Units, convertible preferred stock, Series B preferred stock and purchase contracts. Accordingly, in some circumstances, even if you are eligible for an exemption from such withholding, unless you can demonstrate your eligibility for such an exemption to the satisfaction of the applicable withholding agent you may be subject to withholding and be required to file a U.S. tax return in order to obtain a refund. See “Material United States Federal Income Tax Consequences — Tax Consequences to Non-U.S. Holders — Sale, Exchange, or Other Taxable Disposition of the Equity Units, Common Stock or Series B Preferred Stock.”

In certain circumstances, you may be treated as receiving a taxable distribution or be required to recognize income without a corresponding receipt of cash.

We may, at our option, pay dividends on the convertible preferred stock and the Series B preferred stock wholly or partly in our common stock, as described under “Description of the Convertible Preferred Stock — Dividends,” and “Description of the Series B Preferred Stock — Dividends.” Any such dividends will nonetheless be treated as distributions taxable in the same manner as cash distributions. Likewise, you may be required to recognize ordinary income without a corresponding receipt of cash with respect to any contract adjustment payments paid wholly or partly in our common stock and any contract adjustment payments that are deferred, each as described under “Description of the Purchase Contracts — Contract Adjustment Payments.”

You may also be treated as receiving a dividend from us without a corresponding receipt of cash upon a conversion of convertible preferred stock into common stock and Series B preferred stock as discussed in “Material United States Federal Income Tax Consequences — Tax Consequences to U.S. Holders — Convertible Preferred Stock — Conversion of Convertible Preferred Stock into Common Stock and Series B Preferred Stock.”

In addition, for U.S. federal income tax purposes, you may be treated as receiving a constructive distribution from us with respect to the convertible preferred stock without a corresponding receipt of cash if (1) the conversion rate of the convertible preferred stock is adjusted (or fails to be adjusted) and, as a result of the adjustment (or failure to adjust), your proportionate interest in our assets or earnings and profits is increased, and (2) the adjustment (or failure to adjust) is not made pursuant to a bona fide, reasonable anti-dilution formula. For example, if the conversion rate is adjusted as a result of a distribution that is taxable to the holders of our common stock, such as an increase in our quarterly cash dividends, you will be deemed to have received a “constructive distribution” for U.S. federal income tax purposes. See “Material United States Federal Income Tax Consequences — Tax Consequences to U.S. Holders — Convertible Preferred Stock — Constructive Distributions.”

Similarly, certain adjustments to the number of shares of common stock that you are entitled to receive on a purchase contract settlement date, or as a result of early settlement of a purchase contract, to account for certain events such as stock splits and combinations, stock dividends, certain cash dividends and certain other actions by us that modify our capital structure, as discussed under “Description of the Purchase Contracts — Anti-dilution Adjustments,” may result in a deemed distribution to you for U.S. federal income tax purposes even though you will not receive any cash payment. For example, if the settlement rate is adjusted as a result of a distribution that is taxable to our common shareholders, such as an increase in our quarterly cash dividends, you might be required to include an amount in income for U.S. federal income tax purposes, notwithstanding the fact that you will not actually receive any distribution. See “Material United States Federal Income Tax Consequences — Tax Consequences to U.S. Holders — Purchase Contracts — Constructive Distributions.”

If you are a non-U.S. holder (as defined in “Material United States Federal Income Tax Consequences”), any dividends and constructive dividends will generally be subject to U.S. federal

 

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withholding tax at a rate of 30% or such lower rate as may be specified by an applicable treaty. Because there would be no cash from which to withhold the tax, the withholding agent may withhold from other payments made to you on the Equity Units. See “Material United States Federal Income Tax Consequences — Tax Consequences to Non-U.S. Holders — U.S. Federal Income and Withholding Tax.”

Risk Factors Relating to the Convertible Preferred Stock

The convertible preferred stock ranks junior to all of our indebtedness and other liabilities.

In the event of our bankruptcy, liquidation, reorganization or other winding-up, our assets will be available to pay the liquidation preference of the convertible preferred stock only after all of our indebtedness and other liabilities have been paid. In addition, we are a holding company for several direct and indirect subsidiaries, and the convertible preferred stock will be structurally junior to all existing and future indebtedness and other liabilities (including trade payables) of our subsidiaries and any capital stock of our subsidiaries not held by us. The holders of the convertible preferred stock have no right to participate in the distribution of assets of our subsidiaries (except to the extent that we have satisfied all of our liabilities and have recognized claims or interests in the assets of such subsidiaries). Consequently, if we are forced to liquidate our assets to pay our creditors, we may not have sufficient assets remaining to pay the liquidation preference of any or all of the convertible preferred stock then outstanding. We and our subsidiaries may incur substantial amounts of additional debt and other obligations.

We currently have no capital stock outstanding that is senior to or on parity with the convertible preferred stock. If and when issued, any Series B preferred stock will rank on parity with the convertible preferred stock. As of March 31, 2021, we had $6,386 million principal amount of outstanding indebtedness, all of which is senior in right of payment to the convertible preferred stock. In addition, the convertible preferred stock will be structurally subordinated to all debt, preferred stock and other liabilities of our subsidiaries, which means that creditors and preferred shareholders of our subsidiaries will be paid from the assets of such subsidiaries before holders of the convertible preferred stock would have any claims to those assets.

Your ability to convert the convertible preferred stock, and therefore your ability to participate in an increase in the price of our common stock, is limited.

Holders of convertible preferred stock that are not a part of Corporate Units may participate in any appreciation of our stock price above the conversion price, which is initially $             per share of common stock, if they convert their convertible preferred stock as described in this prospectus supplement. You cannot convert any convertible preferred stock forming part of any Corporate Units unless you first separate the shares of convertible preferred stock from the related purchase contacts, which will cost you money and is subject to limitations. In addition, even if the convertible preferred stock has been separated from the related purchase contract, the ability to convert is limited only to conversions (i) in connection with a fundamental change that occurs prior to a successful remarketing of the convertible preferred stock and (ii) on or after June 1, 2024. Holders do not have the right to convert the convertible preferred stock other than in these circumstances, which will limit the ability to participate in any appreciation of our common stock that could be captured through a conversion.

Dividends on the convertible preferred stock are only payable if declared by our board of directors and permitted by the Pennsylvania Business Corporation Law, and such dividends may be restricted by the terms of agreements governing our indebtedness.

Quarterly dividends on the convertible preferred stock will be paid only if declared by our board of directors. The board of directors is not legally obligated or required to declare quarterly dividends on the convertible preferred stock even if we have funds available for such purposes. In addition, even if our board of directors declares a dividend, we can only make payments of cash in respect of dividends from legally available funds under the Pennsylvania Business Corporation Law, as determined by our board of directors,

 

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and such funds may not be available to pay cash dividends on the convertible preferred stock. If we do not declare and pay dividends on the convertible preferred stock, the market price of the convertible preferred stock is likely to be adversely affected. As a result of our ability to elect not to pay dividends on the convertible preferred stock, the market price of the convertible preferred stock may be more volatile than the market prices of other securities that are not subject to such a feature.

In addition, the agreements governing any indebtedness of ours may further limit our ability to pay cash dividends on our capital stock, including the convertible preferred stock. In the event that the agreements governing any such indebtedness restrict our ability to pay dividends in cash on the convertible preferred stock, we may be unable to pay dividends in cash on the convertible preferred stock unless we can refinance the amounts outstanding under such agreements or obtain a consent or amendment under such agreements.

If there are accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date, and a dividend deficiency event occurs, we will have no obligation to pay such accumulated but unpaid dividends on the purchase contract settlement date.

As described above, dividends on the convertible preferred stock will be paid only if declared by our board of directors. Notwithstanding the foregoing, except in the case of a dividend deficiency event, all accumulated but unpaid dividends (including compounded dividends thereon), including with respect to the June 1, 2024 payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. If a dividend deficiency event occurs, following the final remarketing (whether successful or failed), we will have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date (or such next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such convertible preferred stock for so long as the convertible preferred stock remains outstanding, and such dividends will be payable to the holders of such convertible preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

As a result, if you participate in a final remarketing that is successful, and a dividend deficiency event occurs, you will not receive any of the accumulated but unpaid dividends on the convertible preferred stock, and will no longer hold the convertible preferred stock or have any right to receive any such dividends. If there is a failed final remarketing, all ownership interests in shares of convertible preferred stock held as part of Corporate Units will be delivered to us on the purchase contract settlement date (other than any shares for which the holder thereof has made a timely election to not have such shares so delivered, as described in “Description of the Convertible Preferred Stock — Automatic Settlement Upon Failed Final Remarketing”). If a dividend deficiency event occurs in this case, we will have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date (or such next business day) to the holders of the shares of convertible preferred stock as of the record date immediately preceding the purchase contract settlement date. You therefore risk losing any accumulated but unpaid dividends (which may be substantial) in connection with any final remarketing where a dividend deficiency event occurs.

If, on the purchase contract settlement date, because of the occurrence of a dividend deficiency event, there are accumulated but unpaid dividends (including compounded dividends thereon) on the convertible preferred stock, following the final remarketing (whether failed or successful), such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such convertible preferred stock for so long as the convertible preferred stock remains outstanding, and such dividends will be payable to the holders of

 

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such convertible preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

We may issue additional series of preferred stock that rank equally to the convertible preferred stock as to liquidation preference.

Neither our amended and restated articles of incorporation, as amended, nor the statement with respect to shares establishing the designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions of the convertible preferred stock prohibits us from issuing additional series of preferred stock that would rank on parity with the convertible preferred stock as to liquidation preference, including the Series B preferred stock. Our amended and restated articles of incorporation, as amended, provides that we have the authority to issue 5,000,000 shares of preferred stock, including the 200,000 shares (or 220,000 shares if the underwriters’ over-allotment option is exercised in full) of convertible preferred stock that are a part of the Corporate Units being offered for sale pursuant to this prospectus supplement and the Series B preferred stock into which the convertible preferred stock may convert. The issuances of other series of preferred stock could have the effect of reducing the amounts available to the holders of the convertible preferred stock in the event of our liquidation, dissolution or winding-up.

Upon a successful remarketing of the convertible preferred stock, the terms of your shares of convertible preferred stock may be modified even if you elect not to participate in the remarketing.

When we attempt to remarket the convertible preferred stock, the remarketing agent will agree to use its reasonable best efforts to sell the convertible preferred stock included in the remarketing. In connection with the remarketing, we and the remarketing agent may remarket the convertible preferred stock with different terms prior to the remarketing, including (a) the dividend rate on the convertible preferred stock may be increased, (b) if the closing price on the pricing date for a successful remarketing is less than or equal to the reference price, the conversion rate of the convertible preferred stock may be increased to an amount (rounded to the nearest ten-thousandth of a share) equal to $1,000, divided by     % of the closing price on such date and/or (c) the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025, each as described under “Description of the Convertible Preferred Stock — Terms of the Remarketed Preferred Stock.” If the remarketing is successful, the modified terms will apply to all the shares of convertible preferred stock, including those shares that were not included in the remarketing. However, holders of shares of convertible preferred stock must elect to participate in the remarketing before knowing what the modified terms of the shares will be. Whenever we remarket the convertible preferred stock, we will notify holders of Corporate Units and separate shares of convertible preferred stock of such remarketing. You may determine that the revised terms are not as favorable to you as you would deem appropriate. However, we will not decrease the conversion rate or the dividend rate in connection with a successful remarketing of the convertible preferred stock.

The convertible preferred stock has no maturity or mandatory redemption date.

The convertible preferred stock is a perpetual equity security. The convertible preferred stock has no maturity or mandatory redemption date and is not redeemable at the option of investors. Accordingly, the convertible preferred stock will remain outstanding indefinitely unless a holder of shares of convertible preferred stock decides to convert it or, subject to the conditions described herein, we elect to redeem it.

The convertible preferred stock can only be converted in limited situations.

Prior to the purchase contract settlement date, which is June 1, 2024, the convertible preferred stock can only be converted if the shares of convertible preferred stock have been separated from the related purchase contract, as described herein, and only upon the occurrence of a fundamental change if such fundamental change occurs prior to a successful remarketing of the convertible preferred stock. This may adversely affect the value of the convertible preferred stock. On and after June 1, 2024, holders of shares of

 

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convertible preferred stock, at their option, may, at any time and from time to time, convert some or all of their outstanding shares of convertible preferred stock. If the specific conditions for conversion are not met, you will not be able to convert your convertible preferred stock, and you may not be able to receive the value of the Series B preferred stock (or, in the case of induced conversions, cash) and common stock (if any) into which the convertible preferred stock would otherwise be convertible.

On or after September 3, 2024, we may redeem any or all of the convertible preferred stock, and upon any redemption of your convertible preferred stock or any conversion of your convertible preferred stock in connection with a redemption, you will not receive any make-whole cash or shares or other compensation for future dividends or lost time value of your convertible preferred stock.

On or after September 3, 2024 (or such later date that is on or prior to August 29, 2025 as is determined in connection with a successful remarketing of the convertible preferred stock), we may redeem any or all of the shares of convertible preferred stock. If any shares of convertible preferred stock are called for redemption, we must also call for redemption a proportionate number of outstanding shares of Series B preferred stock, if any, on the same redemption date. The redemption price of the convertible preferred stock will equal 100% of the liquidation preference of the shares of convertible preferred stock to be redeemed, plus any accumulated but unpaid dividends (whether or not declared) to, but excluding, the redemption date. If we call any convertible preferred stock for redemption, you may convert your shares of convertible preferred stock at any time until the close of business on the second business day preceding the redemption date. Upon any such conversion or redemption, we will not be required to pay any make-whole cash or shares or otherwise compensate you in any way for any future dividend payments, if any, that you would have otherwise received or any lost time value of your convertible preferred stock. In addition, unless the earliest redemption date for the convertible preferred stock is changed to a later date that is on or prior to August 29, 2025, the convertible preferred stock that is purchased in a final remarketing could be redeemed by us as soon as September 3, 2024, which is three months after such purchase, meaning purchasers in a remarketing may not have any assurance that the call option embedded in the convertible preferred stock has any meaningful time value, or mechanism for compensation for the loss thereof, or rights to future dividends. Because of these features, it is possible that the remarketing price for the convertible preferred stock in any successful remarketing of the convertible preferred stock is less than that which could be obtained for a convertible security without these features, or that there may not be a successful remarketing of the convertible preferred stock at all.

You will have no right to vote for directors until and unless dividends on any shares of convertible preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive.

Until and unless dividends on any shares of convertible preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive, you will have no voting rights with respect to the election of directors. If dividends on any shares of convertible preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive, the holders of our convertible preferred stock, voting as a single class with all of our other classes or series of preferred stock upon which equivalent voting rights have been conferred (including the Series B preferred stock (if any)) and are exercisable, will have the right to elect two additional directors to our board of directors, as described under “Description of the Convertible Preferred Stock — Limited Voting Rights” in this prospectus supplement. These voting rights and the terms of the directors so elected will only continue until all dividends on the convertible preferred stock have been paid in full, or declared and a sum or number of shares of our common stock sufficient for such payment is set aside for payment.

 

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There will be no make-whole amount of shares or increase to the conversion rate for conversions of the convertible preferred stock in connection with a fundamental change prior to a successful remarketing of the convertible preferred stock, except in limited circumstances.

There will be no make-whole amount of shares or increase to the conversion rate for conversions of the convertible preferred stock in connection with a fundamental change, except in the limited case where the fundamental change occurs prior to a successful remarketing of the convertible preferred stock and the stock price for such fundamental change is less than the conversion price. Upon any such conversion, we will pay or deliver, as applicable, shares of Series B preferred Stock (or, in the case of induced conversions, cash) and shares of our common stock (if any), based solely on the then-applicable conversion rate.

The conversion rights with respect to the convertible preferred stock triggered under certain circumstances by a fundamental change could discourage a potential acquiror.

If a fundamental change occurs prior to a successful remarketing of the convertible preferred stock, a holder may elect to convert separate shares of convertible preferred stock in connection with such fundamental change. If the stock price (as defined in “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change — Calculation of Make-Whole Shares”) is less than the conversion price, the conversion rate for such conversion may be increased. The conversion rights of the holders of the convertible preferred stock could make it more difficult or more expensive for a third party to acquire us, including potential third parties that seek a transaction with us that would be attractive to you. See “Description of the Convertible Preferred Stock — Conversion Rights.”

Our future credit facilities may limit our ability to pay any cash amount upon the conversion of the convertible preferred stock.

Our future credit facilities may prohibit or otherwise limit us from making any cash payments on the conversion of any shares of convertible preferred stock, including if there is a default under any such facility or, after giving effect to such conversion (and any additional indebtedness incurred in connection with such conversion), we would not be in pro forma compliance with our financial covenants under that facility. Any new credit facility that we may enter into may have similar restrictions.

Risk Factors Relating to the Purchase Contracts

The purchase contract gives you the entire risk of a decline in the price of our common stock without any participation in an increase in the price of our common stock.

The number of shares of our common stock that you will receive upon the settlement of a purchase contract is not fixed but instead will depend on the average of the daily VWAPs per share of our common stock during a 20 consecutive trading day market value averaging period, which we refer to as the applicable market value. The market value per share of our common stock you receive on the purchase contract settlement date will be no greater than the reference price, which is initially $             (the closing price of our common stock on the New York Stock Exchange on May     , 2021, the date the Corporate Units are priced) and is subject to adjustment. If the applicable market value of our common stock is less than the reference price, you will receive a number of shares of our common stock with a value (based on the applicable market value) of less than $100. Accordingly, you assume the risk that the market value of our common stock may decline, and that the decline could be substantial. If the applicable market value of the common stock is greater than the reference price, you will receive a number of shares of our common stock with a value equal to only $100 (based on the applicable market value). As a result, under the purchase contract, you will never receive shares with a value (based on the applicable market value) in excess of $100, which means you will never participate in any appreciation of our stock price above the reference price.

In addition, because the number of shares delivered to you on the purchase contract settlement date will be based upon the applicable market value, which is in turn calculated on the basis of the average of the

 

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daily VWAPs per share of our common stock during the market value averaging period, the shares of our common stock you receive on the purchase contract settlement date may be worth less than the shares of our common stock you would have received had the applicable market value been equal to the daily VWAP per share of our common stock on the purchase contract settlement date or the average of the daily VWAPs per share of our common stock over a different period of days.

If you elect to settle your purchase contracts early (other than in connection with a fundamental change), you will receive a number of shares of our common stock per purchase contract equal to 85% of the settlement rate calculated as described above but based on the applicable market value of our common stock for a 20 consecutive trading day averaging period following your election to early settle. In this case, even if the applicable market value of the common stock is greater than the reference price, you will receive a number of shares of our common stock with a value equal to only $85 (based on the applicable market value).

You may not be able to exercise your right to settle a purchase contract prior to the purchase contract settlement date unless a registration statement under the Securities Act is in effect and a prospectus is available covering the shares of our common stock and other securities, if any, deliverable upon early settlement of a purchase contract.

The early settlement right and the fundamental change early settlement right under the purchase contracts are subject to the condition that, if we determine in our reasonable judgment that it is required under the U.S. federal securities laws, we have a registration statement under the Securities Act in effect and an available prospectus covering the issuance of the shares of our common stock and other securities, if any, deliverable upon settlement of a purchase contract. Although we have agreed to use our commercially reasonable efforts to have such a registration statement in effect and to provide a prospectus if we determine in our reasonable judgment that the same is so required under the U.S. federal securities laws, any failure or inability to maintain an effective registration statement or to have available a prospectus covering the issuance of the shares of our common stock and other securities, if any, deliverable upon early settlement of a purchase contract, including as a result of pending corporate events or announcements that prevent the delivery of a current prospectus, may prevent or delay an early settlement, however, you will not be entitled to any compensation on the account of such occurrence.

The delivery of make-whole shares upon a fundamental change early settlement of the purchase contracts may not adequately compensate you.

If a fundamental change (as defined below under “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change”) occurs prior to the purchase contract settlement date and you exercise your fundamental change early settlement right with respect to your purchase contracts, you will not be entitled to receive additional value in respect of make-whole shares for such purchase contracts if the stock price (as defined under “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change” below) is in excess of $             per share (subject to adjustment in certain circumstances). A description of how the number of make-whole shares will be determined is set forth under “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change — Calculation of Make-Whole Shares.” There is no make-whole amount of shares or increase to the conversion rate for conversions of the convertible preferred stock in connection with a fundamental change, except for the limited case where the fundamental change occurs prior to a successful remarketing of the convertible preferred stock and the stock price for such fundamental change is less than the conversion price, all as described under “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change” below. Moreover, in no event will the conversion rate per share of convertible preferred stock as a result of this adjustment exceed             shares of our common stock, subject to adjustment in certain circumstances in the same manner as the conversion rate for the convertible preferred stock as set forth under “Description of the Convertible Preferred Stock — Conversion Rate Adjustments.” The make-whole shares in respect of the purchase contracts may not adequately compensate you for any lost value of your Equity Units and/or convertible preferred stock as a result of such transaction.

 

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In addition, in the event that a holder seeks to exercise its fundamental change early settlement right in respect of its purchase contracts and a registration statement is required to be effective in connection with the exercise of such right but no such registration statement is then effective or a blackout period is continuing, the holder’s exercise of such right will be void unless and until the registration statement is effective. For so long as there is a material business transaction or development that has not yet been publicly disclosed, we will not be required to file such registration statement or provide such a prospectus, and the fundamental change early settlement right will not be available, until we have publicly disclosed such transaction or development, provided that we will use commercially reasonable efforts to make such disclosure as soon as it is commercially reasonable to do so.

Our obligation to pay or deliver the make-whole shares upon exercise of your fundamental change early settlement right with respect to your purchase contracts could be considered a penalty, in which case the enforceability thereof would be subject to general principles of equity.

The fundamental change early settlement rights triggered under certain circumstances by a fundamental change could discourage a potential acquiror.

If a fundamental change occurs prior to the purchase contract settlement date, then, following the fundamental change, each holder of a purchase contract, subject to certain conditions, will have the right to settle the purchase contract early on the fundamental change early settlement date at, in some circumstances, an increased settlement rate, as described under “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change.” The fundamental change early settlement right with respect to the purchase contracts and the increased settlement rate triggered under certain circumstances by a fundamental change could discourage a potential acquiror, including potential acquirors that otherwise seek a transaction with us that would be attractive to you.

Contract adjustment payments may be treated as ordinary income and, if paid to non-U.S. holders, subject to 30% withholding tax.

The U.S. federal income tax treatment of contract adjustment payments is unclear. These payments may constitute taxable ordinary income to a U.S. holder (as defined in “Material United States Federal Income Tax Consequences”) when received or accrued, in accordance with the U.S. holder’s regular method of tax accounting and, if paid to a non-U.S. holder (as defined in “Material United States Federal Income Tax Consequences”), as amounts generally subject to withholding tax at a 30% rate, unless certain conditions are satisfied. See “Material United States Federal Income Tax Consequences — Tax Consequences to U.S. Holders — Purchase Contracts — Contract Adjustment Payments” and “Material United States Federal Income Tax Consequences — Tax Consequences to Non-U.S. Holders — U.S. Federal Income and Withholding Tax.” You should consult your tax advisor concerning the tax treatment of contract adjustment payments.

Risk Factors Relating to the Series B Preferred Stock

The Series B preferred stock ranks junior to all of our indebtedness and other liabilities.

In the event of our bankruptcy, liquidation, reorganization or other winding-up, our assets will be available to pay the liquidation preference of the Series B preferred stock only after all of our indebtedness and other liabilities have been paid. In addition, we are a holding company for several direct and indirect subsidiaries and the Series B preferred stock will be structurally junior to all existing and future indebtedness and other liabilities (including trade payables) of our subsidiaries and any capital stock of our subsidiaries not held by us. The holders of the Series B preferred stock have no right to participate in the distribution of assets of our subsidiaries (except to the extent that we have satisfied all of our liabilities and have recognized claims or interests in the assets of such subsidiaries). Consequently, if we are forced to liquidate our assets to pay our creditors, we may not have sufficient assets remaining to pay the liquidation preference of any or all of the Series B preferred stock then outstanding. We and our subsidiaries may incur substantial amounts of additional debt and other obligations.

 

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We currently have no capital stock outstanding that is senior to or on parity with the Series B preferred stock. When issued, our convertible preferred stock will rank on parity with the Series B preferred stock. As of March 31, 2021, we had $6,386 million principal amount of outstanding indebtedness, all of which is senior in right of payment to the Series B preferred stock. In addition, the Series B preferred stock will be structurally subordinated to all debt, preferred stock and other liabilities of our subsidiaries, which means that creditors and preferred shareholders of our subsidiaries will be paid from the assets of such subsidiaries before holders of the Series B preferred stock would have any claims to those assets.

Dividends on the Series B preferred stock are only payable if declared by our board of directors and permitted by the Pennsylvania Business Corporation Law, and such dividends may be restricted by the terms of agreements governing our indebtedness.

Quarterly dividends on the Series B preferred stock will be paid only if declared by our board of directors. The board of directors is not legally obligated or required to declare quarterly dividends on the Series B preferred stock even if we have funds available for such purposes. In addition, even if our board of directors declares a dividend, we can only make payments of cash in respect of dividends from legally available funds under the Pennsylvania Business Corporation Law, as determined by our board of directors, and such funds may not be available to pay cash dividends on the Series B preferred stock. If we do not declare and pay dividends on the Series B preferred stock, the market price of the Series B preferred stock is likely to be adversely affected. As a result of our ability to elect not to pay dividends on the Series B preferred stock, the market price of the Series B preferred stock may be more volatile than the market prices of other securities that are not subject to such a feature.

In addition, the agreements governing any indebtedness of ours may further limit our ability to pay cash dividends on our capital stock, including the Series B preferred stock, if any. In the event that the agreements governing any such indebtedness restrict our ability to pay dividends in cash on the Series B preferred stock, we may be unable to pay dividends in cash on the Series B preferred stock unless we can refinance the amounts outstanding under such agreements or obtain a consent or amendment under such agreements.

If there are accumulated but unpaid dividends on the Series B preferred stock on the purchase contract settlement date, and a dividend deficiency event occurs, we will have no obligation to pay such accumulated but unpaid dividends on the purchase contract settlement date.

As described above, dividends on the Series B preferred stock will be paid only if declared by our board of directors. Notwithstanding the foregoing, except in the case of a dividend deficiency event, all accumulated but unpaid dividends on the Series B preferred stock (including compounded dividends), including with respect to the June 1, 2024 payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the Series B preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. If a dividend deficiency event occurs, we will have no obligation to pay the then accumulated but unpaid dividends on the Series B preferred stock on the purchase contract settlement date (or such next business day) to the holders of the shares of Series B preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such Series B preferred stock for so long as the Series B preferred stock remains outstanding, and such dividends will be payable to the holders of such Series B preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

As a result, if a dividend deficiency event occurs, you will not receive any of the accumulated but unpaid dividends on the Series B preferred stock on the purchase contract settlement date. You therefore risk losing any accumulated but unpaid dividends (which may be substantial) where a dividend deficiency event occurs.

 

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If, on the purchase contract settlement date, because of the occurrence of a dividend deficiency event, there are accumulated but unpaid dividends (including compounded dividends thereon) on the Series B preferred stock, such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such Series B preferred stock for so long as the Series B preferred stock remains outstanding, and such dividends will be payable to the holders of such Series B preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

We may issue additional series of preferred stock that rank equally to the Series B preferred stock as to liquidation preference.

Neither our amended and restated articles of incorporation, as amended, nor the statement with respect to shares establishing the designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions of the Series B preferred stock prohibits us from issuing additional series of preferred stock that would rank on parity with the Series B preferred stock as to liquidation preference, including the convertible preferred stock. Our amended and restated articles of incorporation, as amended, provides that we have the authority to issue 5,000,000 shares of preferred stock, including the 200,000 shares (or 220,000 shares if the underwriters’ over-allotment option is exercised in full) of Series B preferred stock that are issuable upon optional conversion of the convertible preferred stock as described under “Description of the Convertible Preferred Stock — Conversion Rights — Settlement Upon Conversion.” The issuances of other series of preferred stock could have the effect of reducing the amounts available to the holders of the Series B preferred stock in the event of our liquidation, dissolution or winding-up.

The Series B preferred stock has no maturity or mandatory redemption date.

The Series B preferred stock is a perpetual equity security. The Series B preferred stock has no maturity or mandatory redemption date and is not redeemable at the option of investors. Accordingly, the Series B preferred stock will remain outstanding indefinitely unless we elect to redeem it.

On or after September 3, 2024, we may redeem any or all of the Series B preferred stock, and upon any redemption of your Series B preferred stock, you will not receive any make-whole cash or shares or other compensation for future dividends or lost time value of your Series B preferred stock.

On or after September 3, 2024 (or such later date that is on or prior to August 29, 2025 as is determined in connection with a successful remarketing of the convertible preferred stock), we may redeem any or all of the shares of Series B preferred stock. If any shares of Series B preferred stock are called for redemption, we must also call for redemption a proportionate number of outstanding shares of convertible preferred stock, if any, on the same redemption date. The redemption price of the Series B preferred stock will equal 100% of the liquidation preference of the shares of Series B preferred stock to be redeemed, plus any accumulated but unpaid dividends (whether or not declared) to, but excluding, the redemption date. Upon any such redemption, we will not be required to pay any make-whole cash or shares or otherwise compensate you in any way, including for any future dividend payments that you would have otherwise received.

You will have no right to vote for directors until and unless dividends on any shares of Series B preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive.

Until and unless dividends on any shares of Series B preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive, you will have no voting rights with respect to the election of directors. If dividends on any shares of Series B preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive, the holders of our Series B preferred stock, voting as a single class with all of our other classes or series of preferred stock

 

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upon which equivalent voting rights have been conferred (including the convertible preferred stock) and are exercisable, will have the right to elect two additional directors to our board of directors, as described under “Description of the Series B Preferred Stock — Limited Voting Rights” in this prospectus supplement. These voting rights and the terms of the directors so elected will only continue until all dividends on the Series B preferred stock have been paid in full, or declared and a sum or number of shares of our common stock sufficient for such payment is set aside for payment.

The trading price of the Series B preferred stock issued upon conversion of the convertible preferred stock may be less than its $1,000 liquidation preference per share.

The dividend rate and other terms of the Series B preferred stock may not be the same as the terms of similar securities issued at the time. In addition, there will be no protections in connection with fundamental changes or similar corporate transactions. As a result, the Series B preferred stock may trade at prices below its $1,000 liquidation preference per share. There also may be no liquid market for the Series B preferred stock, especially if holders convert their convertible preferred stock into Series B preferred stock and common stock (if any) at a time when few shares of convertible preferred stock have been or are being converted. In addition, the Series B preferred stock will trade separately from the convertible preferred stock, and it is likely that the Series B preferred stock will trade at a discount to the convertible preferred stock.

The Series B preferred stock will not contain provisions to afford protection to holders of the Series B preferred stock in the event of a fundamental corporate transactions involving us.

The Series B preferred stock will not contain provisions to afford protection to holders of the Series B preferred stock in the event of a fundamental corporate transactions involving us except to the extent described under “Description of the Series B Preferred Stock — Limited Voting Rights — When a Supermajority Vote is Required.” For example, there may be no protection afforded to holders with respect to transactions such as leveraged recapitalizations, refinancings, restructurings, or other acquisitions initiated by us. In the event of any such transaction, we, our capital structure or our credit ratings may be adversely affected.

If Series B preferred stock is issued in connection with a conversion of convertible preferred stock, you may be treated as participating in a “listed transaction” for U.S. federal income tax purposes.

If the Series B preferred stock received upon conversion of convertible preferred stock is issued (i) with dividends and (ii) (x) with a fair market value in excess of the amount for which it may be redeemed by a de minimis amount or more or (y) in between dividend payment dates such that the first dividend payment on the Series B preferred stock represents a disproportionately large yield per period as compared to later dividend payments, then, under a technical reading of applicable Treasury regulations, the Series B preferred stock may be presumed to be “fast-pay stock.” If the Series B preferred stock constitutes fast-pay stock, then the issuance of the Series B preferred stock will qualify as a “listed transaction” under applicable Treasury regulations, and persons who are then beneficial owners of the Series B preferred stock that are required to file a U.S. federal income tax return will be required to file a disclosure statement on Internal Revenue Service (“IRS”) Form 8886 (or successor form) with their U.S. federal income tax returns identifying their participation in a “reportable transaction” and to mail a copy of the form to the IRS Office of Tax Shelter Analysis. Failure to comply with these disclosure requirements may result in onerous penalties. If, at the time the Series B preferred stock is issued or at such other times as required by the applicable rules, we believe that the Series B preferred stock could be treated as described in the fast-pay stock regulations, we intend to file a protective disclosure statement on IRS Form 8886 with respect to the Series B preferred stock. See “Material United States Federal Income Tax Consequences — Tax Consequences to U.S. Holders — Series B Preferred Stock Acquired Upon Conversion — Potential Treatment as Fast-Pay Stock.”

 

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If the Series B preferred stock is treated as “nonqualified preferred stock,” upon conversion of the convertible preferred stock into common stock and Series B preferred stock, you may be treated as recognizing gain or as receiving a taxable dividend even though you do not receive any cash upon conversion.

We expect to treat the Series B preferred stock you receive upon conversion of the convertible preferred stock as “nonqualified preferred stock” within the meaning of Section 351(g) of the Code. Under this treatment, the fair market value of the Series B preferred stock you receive would be treated in the same way as cash and, depending on your particular circumstances, you might either recognize gain (if any) or be treated as receiving a dividend for U.S. federal income tax purposes, as discussed in “Material United States Federal Income Tax Consequences — Tax Consequences to U.S. Holders — Convertible Preferred Stock — Conversion into Common Stock and Series B Preferred Stock.” If you are a non-U.S. holder (as defined in “Material United States Federal Income Tax Consequences”) and you recognize gain upon receipt of the Series B preferred stock in a conversion of your convertible preferred stock, you may be subject to U.S. federal income tax and withholding at a 15% rate on the amount realized, if we are a United States real property holding corporation at any time within the five-year period preceding the conversion (or during your holding period, if shorter), as described in “Material United States Federal Income Tax Consequences — Non-U.S. Holders — Sale, Exchange, Conversion or Other Taxable Disposition of the Equity Units, Convertible Preferred Stock, Common Stock or Series B Preferred Stock.” If you are a non-U.S. holder and you are treated as receiving a dividend, you will generally be subject to U.S. federal withholding tax at a rate of 30% (or such lower rate as the applicable tax treaty may provide) on the dividend amount. See “Material United States Federal Income Tax Consequences — Tax Consequences to Non-U.S. Holders — U.S. Federal Income and Withholding Tax.”

Risk Factors Relating to our Common Stock

The price of our common stock may fluctuate significantly, which could negatively affect us and holders of our common stock.

The purchase contracts are settled for shares of our common stock and the convertible preferred stock is convertible into cash (or Series B preferred stock) and, if applicable, our common stock based on the market price of our common stock. The market price of our common stock may fluctuate significantly in response to many factors, including:

 

   

investors’ perceptions of our prospects;

 

   

investors’ perceptions of the prospects of the commodities markets and more broadly, the energy markets;

 

   

differences between our actual financial and operating results and those expected by investors and analysts;

 

   

changes in analyst reports, recommendations or earnings estimates regarding us, other comparable companies or the industry generally, and our ability to meet those estimates;

 

   

actual or anticipated fluctuations in quarterly financial operating results;

 

   

sales, or anticipated sales, of large blocks of our stock;

 

   

the realization of any of the other risk factors included in, or incorporated by reference to, this prospectus supplement;

 

   

the ongoing COVID-19 pandemic; and

 

   

general market and economic conditions.

Holders who receive our common stock upon settlement of their purchase contracts or conversion of their convertible preferred stock will be subject to the risk of volatile and depressed market prices of our

 

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common stock. In addition, many of the factors listed above are beyond our control. These factors may cause the market price of our common stock to decline, regardless of the financial condition, results of operations, business or prospects of us and our subsidiaries. It is impossible to assure holders of Equity Units and the convertible preferred stock that the market price of our common stock will not fall in the future.

Future sales of our shares could depress the market price of our common stock.

We are not restricted from selling common stock in the future, including securities that are convertible into or exchangeable for, or that represent the right to receive, common stock. The market price of our common stock could decline as a result of sales of shares of our common stock made after this offering or the perception that such sales could occur, and these sales, or the possibility that these sales may occur, could make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. In the future, we may issue our common stock in connection with investments or acquisitions. The amount of such common stock issued could constitute a material portion of our then outstanding common stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If few securities or industry analysts cover our company, the trading price for our common shares would be negatively impacted. If one or more of the analysts who covers us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our share price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease, which could cause our share price and trading volume to decline.

 

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USE OF PROCEEDS

We expect to receive net proceeds from this offering of approximately $             million (or approximately $             million if the underwriters exercise in full their over-allotment option to purchase additional Equity Units), after underwriting commissions and expenses. We intend to use the net proceeds of the offering to pay a portion of the purchase price of the Mountaineer Acquisition and related fees and expenses and for general corporate purposes. We have not determined the specific portion of any net proceeds to be used for these purposes, and the net proceeds from the Equity Units have not been accounted for in our normal budgeting process. The amounts actually expended for these purposes may vary significantly and will depend on a number of factors, including the amount of cash we generate from future operations, the actual expenses of operating our business and opportunities that may be or become available to us.

 

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ACCOUNTING TREATMENT

The proceeds from the sale of the Corporate Units will be allocated between the purchase contracts and the convertible preferred stock based on the fair value of each at the date of the offering. It is expected that the aggregate liquidation preference of the convertible preferred stock will be recorded as equity at inception. The present value of the Corporate Unit contract adjustment payments will be initially charged to shareholders’ equity, with an offsetting credit to liabilities. This liability is accreted over three years by interest charges based on a constant rate calculation. Subsequent contract adjustment payments reduce this liability.

The purchase contracts are forward transactions in our common stock. Upon settlement of each purchase contract, we will receive $100 on the purchase contract and will issue the requisite number of shares of our common stock. The $100 that we receive will be credited to shareholders’ equity.

Before the issuance of our common stock upon settlement of the purchase contracts, the purchase contracts will be reflected in our diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of our common stock used in calculating diluted earnings per share (based on the settlement formula applied at the end of the reporting period) is deemed to be increased by the excess, if any, of the number of shares that would be issued upon settlement of the purchase contracts over the number of shares that could be purchased by us in the market (at the average market price during the period) using the proceeds receivable upon settlement. Consequently we anticipate there will be no dilutive effect on our earnings per share from the purchase contracts prior to settlement.

Convertible securities factor into the earnings per share calculation using either the “if-converted method” or the “treasury stock method” as appropriate, if dilutive. Such securities are assumed to be converted at the beginning of the period, with the resulting common shares included in the denominator of the diluted earnings per share calculation for the entire period being presented. Diluted earnings per share also includes certain shares that are contingently issuable. Contingent shares are included if such shares would be issuable as of the end of the reporting period assuming the end of the reporting period was the end of the contingency period.

A convertible security (such as convertible preferred stock) that requires the liquidation preference to be settled in another class of nonconvertible preferred stock (or cash in certain circumstances) would apply the treasury stock method of accounting in computing diluted earnings per share. This computation would reflect the dilutive impact of issuing common stock to the extent that the conversion value of the convertible preferred stock exceeds its liquidation preference. The contingent shares issuable for the excess would be included in the denominator of diluted earnings per share during such times if dilutive.

Before the settlement of the convertible preferred stock, the applicable conversion value feature will be accounted for using the treasury stock method previously described. As a result, we anticipate there will be no dilutive effect on our earnings per share except during periods when the average market price of our common stock is above the conversion price, which is initially equal to $                 per share.

On August 5, 2020, the Financial Accounting Standards Board issued Accounting Standard Update 2020-06, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. We will apply the new standard beginning in January 2022 but does not expect any significant impacts from the implementation of the new standard with respect to the accounting for this transaction.

 

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DESCRIPTION OF THE EQUITY UNITS

The following is a summary of some of the terms of the Equity Units. This summary, together with the summary of the terms of the purchase contracts, the purchase contract and pledge agreement, the convertible preferred stock, the Series B preferred stock and our common stock set forth under the captions “Description of the Purchase Contracts,” “Certain Provisions of the Purchase Contract and Pledge Agreement,” “Description of the Convertible Preferred Stock” and “Description of the Series B Preferred Stock” and “Description of Common Stock” is a description of the material terms of the Equity Units but does not purport to be complete, and we refer you to the agreements which will govern your rights as holders of the Equity Units and which have been or will be filed or incorporated by reference as exhibits to the registration statement of which this prospectus supplement is a part.

As used in this Description of the Equity Units, “we,” “us,” “our” or “the Company” refer only to UGI Corporation and any successor obligor, and not to any of its subsidiaries.

General

We will issue the Equity Units under the purchase contract and pledge agreement between us and U.S. Bank National Association, as purchase contract agent (in such capacity, the “purchase contract agent”), as collateral agent, custodial agent and securities intermediary (in such capacities, the “collateral agent”). The Equity Units may be Corporate Units, Treasury Units or Cash Settled Units. The Equity Units will initially consist of 2,000,000 Corporate Units (or 2,200,000 Corporate Units if the underwriters exercise their over-allotment option in full), each with a stated amount of $100. Each Corporate Unit offered by us will consist of:

 

  (1)

a purchase contract under which:

 

   

on June 1, 2024, which we refer to as the “purchase contract settlement date” (or, if such date is not a business day, the next business day), the holder will purchase from us and we will sell to the holder, unless the purchase contract terminates prior to that date as described under “Description of the Purchase Contracts — Termination” or is settled early as described under “Description of the Purchase Contracts — Early Settlement” or “— Early Settlement Upon a Fundamental Change” below, for $100, a number of shares of our common stock equal to the settlement rate described under “Description of the Purchase Contracts — Purchase of Common Stock,” “— Early Settlement” or “— Early Settlement Upon a Fundamental Change,” as the case may be, plus, in the case of an early settlement upon a fundamental change, an additional make-whole amount of shares as described under “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change — Calculation of Make-Whole Shares”; and

 

   

we will pay to the holder quarterly contract adjustment payments at the rate of     % of the stated amount of $100 per year, subject to our right to defer such contract adjustment payments, payable in cash, shares of our common stock or a combination thereof, at our election, unless we have previously irrevocably elected a contract adjustment payment method to apply; and

 

  (2)

either:

 

   

a 1/10th, or 10%, undivided beneficial ownership in one share of     % Series A Cumulative Perpetual Convertible Preferred Stock, without par value, with a liquidation preference of $1,000 per share (the “convertible preferred stock”), issued by us; or

 

   

following a successful optional remarketing, the applicable ownership interest in the “Treasury portfolio” (as defined under the caption “— Purchase of Common Stock — Optional Remarketing”).

“Applicable ownership interest” means, with respect to a Corporate Unit and the U.S. Treasury securities in the Treasury portfolio, (1) a 1/10th, or 10%, undivided beneficial ownership interest in $1,000 face amount of U.S. Treasury securities (or principal or interest strips thereof) included in the Treasury portfolio that mature on or prior to the purchase contract settlement date and (2) a    % undivided beneficial

 

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ownership interest in $1,000 face amount of U.S. Treasury securities (or principal or interest strips thereof) included in the Treasury portfolio that mature on or prior to the purchase contract settlement date, which results in an amount equal to the dividend payment that would have been due in respect of the convertible preferred stock that would have been a component of the Corporate Units on such date (without giving effect to any increase of the dividend rate following a successful remarketing of the convertible preferred stock, and whether or not such dividend is authorized or declared).

The fair market value of the Corporate Units we issue will be recorded in our financial statements based on an allocation between the purchase contracts and the convertible preferred stock in proportion to their respective fair market values at the time of issuance. Under the purchase contract and pledge agreement, you will be deemed to have agreed to allocate the entire purchase price to your convertible preferred stock as described under “Material United States Federal Income Tax Consequences — Tax Consequences to U.S. Holders — Equity Units — Allocation of Purchase Price.”

As long as a unit is in the form of a Corporate Unit, any ownership interest in a share of convertible preferred stock or, solely with respect to the Treasury securities described in clause (1) of the definition of applicable ownership interest, any applicable ownership interest in the Treasury portfolio forming a part of the Corporate Unit will be pledged to us through the collateral agent to secure your obligation to purchase our common stock under the related purchase contract.

Creating Treasury Units by Substituting a Treasury Security for Convertible Preferred Stock

Each holder of 10 Corporate Units may create, at any time other than (i) if we elect an optional remarketing, during the period from 5:00 p.m., New York City time, on the second business day immediately preceding the first day of any optional remarketing period until the settlement date of such remarketing or the date we announce that no successful optional remarketing has occurred during the optional remarketing period, (ii) following any successful remarketing of the convertible preferred stock and (iii) after 5:00 p.m., New York City time, on the second business day immediately preceding the first day of the final remarketing period (we refer to each such period as a “blackout period”), 10 Treasury Units by substituting for the share of convertible preferred stock that is a component of such 10 Corporate Units a zero-coupon U.S. Treasury security with a principal amount of $1,000 that matures on or prior to June 1, 2024 (or, if such date is not a business day, the next business day) (e.g., CUSIP No. 9128207H4), which we refer to as a “Treasury security.” This substitution would create 10 Treasury Units, and the related share of convertible preferred stock would be released to the holder and would be separately tradable from the Treasury Units. Because the convertible preferred stock is issued with a liquidation preference of $1,000 per share, holders of Corporate Units may make this substitution only in integral multiples of 10 Corporate Units.

Each Treasury Unit will consist of:

 

  (1)

a purchase contract under which:

 

   

the holder will agree to purchase from us on the purchase contract settlement date, unless the purchase contract terminates prior to that date as described under “Description of the Purchase Contracts — Termination” or is settled early as described under “Description of the Purchase Contracts — Early Settlement” or “— Early Settlement Upon a Fundamental Change” below, for $100, a number of shares of our common stock equal to the settlement rate, plus, in the case of an early settlement upon a fundamental change, an additional make-whole amount of shares; and

 

   

we will pay to the holder quarterly contract adjustment payments at the rate of     % of the stated amount of $100 per year, subject to our right to defer such contract adjustment payments, payable in cash, shares of our common stock or a combination thereof, at our election, unless we have previously irrevocably elected a contract adjustment payment method to apply; and

 

  (2)

a 1/10th undivided beneficial ownership interest in a Treasury security.

 

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The term “business day” means any day other than a Saturday or a Sunday or any other day on which banking institutions and trust companies in New York City, New York are authorized or required by law or executive order to remain closed.

To create 10 Treasury Units, a holder is required to:

 

   

deposit with the collateral agent a Treasury security, which must be purchased in the open market at the expense of the Corporate Unit holder, unless otherwise owned by the holder; and

 

   

transfer to the purchase contract agent 10 Corporate Units, accompanied by a notice stating that the holder of the Corporate Units has deposited the Treasury security with the collateral agent, and requesting in writing that the purchase contract agent instruct the collateral agent in writing to release the related share of convertible preferred stock.

Promptly following receipt of written instructions from the purchase contract agent and receipt of the Treasury security, the collateral agent will release the related share of convertible preferred stock from the pledge and deliver it to the purchase contract agent on behalf of the holder, free and clear of our security interest. The purchase contract agent then will:

 

   

cancel the 10 Corporate Units;

 

   

transfer the related share of convertible preferred stock to the holder; and

 

   

deliver 10 Treasury Units to the holder.

The Treasury Unit holder’s beneficial ownership interest in the Treasury security will be pledged to us through the collateral agent to secure the holder’s obligation to purchase our common stock under the related purchase contracts. The share of convertible preferred stock thereafter will trade and be transferable separately from the Treasury Units.

Holders who create Treasury Units, as discussed above, will be responsible for any fees or expenses (including reasonable fees and expenses of counsel) payable to the collateral agent in connection with substitutions of collateral. See “Certain Provisions of the Purchase Contract and Pledge Agreement — Miscellaneous.”

Recreating Corporate Units from Treasury Units

Each holder of 10 Treasury Units will have the right, at any time other than during a blackout period, to substitute for the related Treasury security held by the collateral agent one share of convertible preferred stock for each such 10 Treasury Units. This substitution would recreate Corporate Units and the applicable Treasury security would be released to the holder. Because the convertible preferred stock is issued with a liquidation preference of $1,000 per share, holders of Treasury Units may make the substitution only in integral multiples of 10 Treasury Units.

To recreate 10 Corporate Units, a holder is required to:

 

   

deposit with the collateral agent one share of convertible preferred stock, which must be purchased in the open market at the expense of the Treasury Unit holder, unless otherwise owned by the holder; and

 

   

transfer to the purchase contract agent 10 Treasury Units, accompanied by a notice stating that the holder of the Treasury Units has deposited one share of convertible preferred stock with the collateral agent, and requesting in writing that the purchase contract agent instruct the collateral agent in writing to release the related Treasury security.

Promptly following receipt of written instructions from the purchase contract agent and receipt of the share of convertible preferred stock, the collateral agent will release the related Treasury security from the pledge and promptly instruct the securities intermediary to transfer such Treasury security to the purchase

 

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contract agent on behalf of the holder, free and clear of our security interest. The purchase contract agent then will:

 

   

cancel the 10 Treasury Units;

 

   

transfer the related Treasury security to the holder; and

 

   

deliver 10 Corporate Units to the holder.

The share of convertible preferred stock will be substituted for the Treasury security and will be pledged to us through the collateral agent to secure the holder’s obligation to purchase shares of our common stock under the related purchase contracts. The Treasury security thereafter will trade and be transferable separately from the Corporate Units.

No Equity Units may be created or recreated from Series B preferred stock.

Holders who recreate Corporate Units, as discussed above, will be responsible for any fees or expenses (including reasonable fees and expenses of counsel) payable to the collateral agent in connection with substitutions of collateral. See “Certain Provisions of the Purchase Contract and Pledge Agreement — Miscellaneous.”

Creating Cash Settled Units from Corporate Units

Each holder of 10 Corporate Units may create, only during the period after the date we give notice of the final remarketing period and at or prior to 5:00 p.m., New York City time, on the second business day immediately preceding the first day of the final remarketing period, Cash Settled Units by substituting for a share of convertible preferred stock that is a component of such 10 Corporate Units $1,000 in cash. This substitution would create 10 Cash Settled Units, and the related share of convertible preferred stock would be released to the holder and would be separately tradable from the Cash Settled Units. Because the convertible preferred stock is issued with a liquidation preference of $1,000 per share, holders of Corporate Units may make this substitution only in integral multiples of 10 Corporate Units. Holders of Cash Settled Units do not have the right to recreate Corporate Units or create Treasury Units.

Each Cash Settled Unit will consist of:

 

  (1)

a purchase contract under which:

 

   

the holder will agree to purchase from us on the purchase contract settlement date, unless the purchase contract terminates prior to that date as described under “Description of the Purchase Contracts — Termination” or is settled early as described under “— Early Settlement Upon a Fundamental Change” below, for $100, a number of shares of our common stock equal to the settlement rate, plus, in the case of an early settlement upon a fundamental change, an additional make-whole amount of shares; and

 

   

we will pay to the holder the final quarterly contract adjustment payment due on the purchase contract settlement date (including any accrued and unpaid deferred contract adjustment payments and compounded contract adjustment payments thereon), payable in cash, shares of our common stock or a combination thereof, at our election, unless we have previously irrevocably elected a contract adjustment payment method to apply; and

 

  (2)

$100 in cash.

To create 10 Cash Settled Units, a holder is required to:

 

   

deposit with the collateral agent $1,000 in cash; and

 

   

transfer to the purchase contract agent 10 Corporate Units, accompanied by a notice stating that the holder of the Corporate Units has deposited $1,000 in cash with the collateral agent, and requesting in writing that the purchase contract agent instruct the collateral agent in writing to release the related share of convertible preferred stock.

 

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Promptly following receipt of written instructions from the purchase contract agent and receipt of cash, the collateral agent will release the related share of convertible preferred stock from the pledge and deliver it to the purchase contract agent on behalf of the holder, free and clear of our security interest. The purchase contract agent then will:

 

   

cancel the 10 Corporate Units;

 

   

transfer the related share of convertible preferred stock to the holder; and

 

   

deliver 10 Cash Settled Units to the holder.

The cash will be substituted for the share of convertible preferred stock and will be pledged to us through the collateral agent to secure the holder’s obligation to purchase shares of our common stock under the related purchase contract. Cash held as a component of the Cash Settled Unit will be held in a non-interest bearing account as set forth in the purchase contract and pledge agreement. The share of convertible preferred stock thereafter will trade separately from the Cash Settled Units.

Holders who create Cash Settled Units, as discussed above, will be responsible for any fees or expenses payable to the collateral agent (including reasonable fees and expenses of counsel) in connection with substitutions of collateral. See “Certain Provisions of the Purchase Contract and Pledge Agreement — Miscellaneous.”

No Equity Units may be created or recreated from Series B preferred stock.

Current Payments

Holders of Corporate Units and Treasury Units will receive (subject to our deferral right described below) quarterly contract adjustment payments payable by us at the rate of     % per year on the stated amount of $100 per Equity Unit until the earliest of the purchase contract settlement date, the fundamental change early settlement date (in the case of a fundamental change where the holder has elected to settle its purchase contracts early in connection with such fundamental change as described in “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change”) and the most recent payment date on or before an early settlement as described in “Description of the Purchase Contracts — Early Settlement.” Holders of Cash Settled Units will receive the final quarterly contract adjustment payment payable by us in respect of the June 1, 2024 payment date. In addition, holders of Corporate Units will receive, when, as and if declared by our board of directors, quarterly cash distributions consisting of dividends on the convertible preferred stock attributable to such Corporate Units (and, if applicable, distributions on the applicable ownership interest in the Treasury portfolio described in clause (2) of the definition of applicable ownership interest, to the extent convertible preferred stock attributable to such Corporate Units has been replaced by the Treasury portfolio), equivalent to     % per annum on the liquidation preference of the convertible preferred stock. Any contract adjustment payments and distributions in respect of dividends on the convertible preferred stock may be paid in cash, shares of our common stock or a combination thereof, at our election, as described herein, unless we have previously irrevocably elected a dividend payment method or contract adjustment payment method to apply. There will be no distributions in respect of the Treasury securities that are a component of the Treasury Units or the cash that is a component of the Cash Settled Units, but to the extent that such holders of Treasury Units or Cash Settled Units, as the case may be, continue to hold the shares of convertible preferred stock that were released to them when such Treasury Units or Cash Settled Units were created, such holders will continue to receive, when, as and if declared by our board of directors, quarterly dividend payments on their separate shares of convertible preferred stock for as long as they continue to hold such shares.

Subject to our right to defer contract adjustment payments, we will make all contract adjustment payments quarterly in arrears on each payment date (except where such date is not a business day, in which case contract adjustment payments will be payable as of the next subsequent business day, without adjustment), commencing on September 1, 2021.

 

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We have the right to defer payment of quarterly contract adjustment payments as described under “Description of the Purchase Contracts — Contract Adjustment Payments.” We are not obligated to declare or pay dividends on the convertible preferred stock, as described under “Description of the Convertible Preferred Stock — Dividends,” except that all accumulated but unpaid dividends on the convertible preferred stock (including compounded dividends thereon, if any), including with respect to the June 1, 2024 payment date, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date, whether or not declared, unless such payment is not permitted under the Pennsylvania Business Corporation Law (a “dividend deficiency event”). If a dividend deficiency event occurs, following the final remarketing (whether successful or failed), we will have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date (or such next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such convertible preferred stock for so long as the convertible preferred stock remains outstanding, and such dividends will be payable to the holders of such convertible preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

“Close of business” means 5:00 p.m., New York City time. “Open of business” means 9:00 a.m., New York City time.

Listing

We intend to apply for listing of the Corporate Units on the New York Stock Exchange under the symbol “UGIC.” Unless and until substitution has been made as described above, none of the convertible preferred stock component of a Corporate Unit, the Treasury security component of a Treasury Unit or the cash component of a Cash Settled Unit will trade separately from Corporate Units, Treasury Units or Cash Settled Units. The convertible preferred stock component will trade as a unit with the purchase contract component of the Corporate Units, the Treasury security component will trade as a unit with the purchase contract component of the Treasury Units and the cash component will trade as a unit with the purchase contract component of the Cash Settled Units. In addition, if Treasury Units, Cash Settled Units, shares of convertible preferred stock or shares of Series B preferred stock issued upon conversion of the convertible preferred stock are separately traded to a sufficient extent that the applicable exchange listing requirements are met, we may, but have no obligation to, cause the Treasury Units, Cash Settled Units, convertible preferred stock or Series B preferred stock to be listed on the exchange on which the Corporate Units are then listed, including, if applicable, the New York Stock Exchange.

Voting and Certain Other Rights

Holders of purchase contracts forming part of the Corporate Units, Treasury Units, or Cash Settled Units, in their capacities as such holders, will have no voting or other rights in respect of our common stock. Holders of shares of convertible preferred stock, whether or not part of a Corporate Unit, and holders of shares of Series B preferred stock will have only the limited voting rights described in “Description of the Convertible Preferred Stock — Limited Voting Rights” and “Description of the Series B Preferred Stock — Limited Voting Rights,” respectively.

 

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DESCRIPTION OF THE PURCHASE CONTRACTS

The following is a summary of certain provisions of the purchase contracts, which will be issued pursuant to the purchase contract and pledge agreement among us, the purchase contract agent and the collateral agent, the custodial agent and the securities intermediary. The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the purchase contracts, including the definitions in the purchase contracts of certain terms. Wherever particular sections or defined terms of the purchase contracts are referred to, such sections or defined terms are incorporated into this prospectus supplement by reference.

As used in this Description of the Purchase Contracts, “we,” “us,” “our” or “the Company” refer only to UGI Corporation and any successor obligor, and not to any of its subsidiaries.

Purchase of Common Stock

Each purchase contract that is a part of a Corporate Unit, a Treasury Unit or a Cash Settled Unit will obligate its holder to purchase, and us to sell, on the purchase contract settlement date (unless the purchase contract terminates prior to that date as described under “— Termination” or is settled early at the holder’s option as described under “— Early Settlement” or “— Early Settlement Upon a Fundamental Change”), for $100 in cash, a number of shares of our common stock equal to the settlement rate (together with cash, if applicable, in lieu of any fractional shares of common stock in the manner described below). The number of shares of our common stock issuable upon settlement of each purchase contract on the purchase contract settlement date (which we call the “settlement rate”) will be rounded to the nearest ten-thousandth of a share and determined as follows:

(1)    If the “applicable market value” (as defined below) of our common stock is less than or equal to the “reference price,” which is initially equal to $                 and is subject to adjustment as described below under the caption “— Anti-dilution Adjustments,” the settlement rate will be the “maximum settlement rate,” which is initially equal to                  shares of our common stock and is subject to adjustment as described below under the caption “— Anti-dilution Adjustments.”

Accordingly, if the market price for our common stock decreases from the date of this prospectus supplement and during the “market value averaging period” (as defined below), the aggregate market value of the shares of our common stock issued upon settlement of each purchase contract will be less than the stated amount of $100, assuming that the market price on the purchase contract settlement date is the same as the applicable market value of the common stock.

(2)    If the applicable market value of our common stock is greater than the reference price, the settlement rate will be a number of shares of our common stock equal to $100 divided by that applicable market value.

Accordingly, if the market price for the common stock increases from the date of this prospectus supplement and during the market value averaging period, the aggregate market value of the shares of our common stock issued upon settlement of each purchase contract will be equal to the stated amount of $100, assuming that the market price of the common stock on the purchase contract settlement date is the same as the applicable market value of the common stock.

The reference price initially equals the closing price of our common stock on the New York Stock Exchange on May     , 2021. The reference price used to determine which of clause (1) or (2) above apply will be the reference price as of the last trading day of the market value averaging period.

Whenever in this prospectus supplement we refer to the maximum settlement rate or the reference price as of a particular date without setting forth a particular time on such date, such reference will be deemed to be to the maximum settlement rate or the reference price, as applicable, immediately after the close of business on such date.

If you elect to settle your purchase contract early in the manner described under “— Early Settlement,” the number of shares of our common stock issuable upon settlement of such purchase contract will be equal

 

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to 85% of the settlement rate determined in the manner set forth above but assuming the market value averaging period consists of the 20 consecutive trading day period beginning on the trading day immediately following the day you exercise your early settlement right, which we refer to as the “early settlement averaging period.” If you elect to settle your purchase contract early upon a fundamental change, the number of shares of our common stock issuable upon settlement will be determined as described under “— Early Settlement Upon a Fundamental Change.”

The “applicable market value” of our common stock means the average of the “daily VWAPs” (as defined below) of our common stock during the market value averaging period.

The “market value averaging period” means the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately preceding the purchase contract settlement date.

The “daily VWAP” of our common stock means, for each relevant trading day, the per share volume weighted average price of our common stock as displayed under the heading Bloomberg VWAP on Bloomberg page “UGI <EQUITY> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading on the relevant trading day until the scheduled close of trading on the relevant trading day (or if such VWAP is unavailable, the market price of one share of our common stock on such trading day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by us).

A “trading day” means (a) a day (i) on which the New York Stock Exchange, or, if our common stock is not then listed on the New York Stock Exchange, the principal exchange or quotation system on which our common stock is listed or admitted for trading, is scheduled to be open for business and (ii) on which there has not occurred or does not exist a market disruption event, or (b) if our common stock is not so listed or admitted for trading, a “trading day” means a business day.

A “market disruption event” means (i) a failure by the primary U.S. national or regional securities exchange or market on which our common stock is listed or admitted for trading, or, if our common stock is not then listed on a U.S. national or regional securities exchange or market, the principal other market on which our common stock is then traded, to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any scheduled trading day for our common stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in our common stock or in any options contracts or futures contracts relating to our common stock.

Upon the request of any investor, we will confirm whether a market disruption event has occurred on any scheduled trading day during the market value averaging period or any early settlement averaging period. In addition, if a market disruption event occurs on any scheduled trading day during the market value averaging period or any early settlement averaging period, and such market disruption event is not as a result of a suspension or limitation of trading generally on the primary U.S. national or regional securities exchange or market on which our common stock is listed or admitted for trading, then we will use our commercially reasonable efforts to notify holders of such market disruption event (including, for these purposes, by notice on our website, by issuing a press release, by disclosure in a report that is filed with or furnished to the SEC or, in the case of any purchase contracts in global form, by notice through the facilities of DTC) no later than the open of business on the next business day.

If 20 trading days for our common stock have not occurred during the period from, and including, the first day of the market value averaging period to, and including, the second scheduled trading day immediately prior to the purchase contract settlement date, all remaining trading days in the market value averaging period will be deemed to occur on that second scheduled trading day immediately prior to the purchase contract settlement date, and the daily VWAP of our common stock for each of those remaining trading days will be the daily VWAP of our common stock on that second scheduled trading day or, if such day is not a trading day, the closing price as of such day (or, if no closing price exists for such day pursuant to the definition of such term, the closing price as of the immediately preceding trading day).

 

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We will not issue any fractional shares of our common stock upon settlement of a purchase contract. Instead of a fractional share, the holder will receive an amount of cash equal to the percentage of a whole share represented by such fractional share multiplied by the daily VWAP for the last trading day of the market value averaging period or early settlement averaging period, as applicable (or, in the case of a fundamental change early settlement, the “stock price” (as defined under “— Early Settlement Upon a Fundamental Change” below) of the related fundamental change). If, however, a holder surrenders for settlement more than one purchase contract on the same date, then the number of shares of our common stock issuable pursuant to such purchase contracts will be computed based upon the aggregate number of purchase contracts surrendered on such date or, if the Equity Units are held in global book-entry form, based on such other aggregate number of purchase contracts being surrendered by the holder on the same date as DTC may otherwise request.

If the purchase contract settlement date is not a business day, then settlement of the purchase contracts scheduled to be settled on such date will be made on the next business day.

The “closing price” per share of our common stock means, on any date of determination, the closing sale price (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) per share of our common stock on that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which our common stock is traded. If our common stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the “closing price” will be the last quoted bid price per share of our common stock in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If our common stock is not so quoted, the “closing price” will be the average of the mid-point of the last bid and ask prices per share of our common stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by us for this purpose.

Unless:

 

   

a holder has settled the related purchase contracts early by delivery of cash to the purchase contract agent in the manner described under “— Early Settlement” or “— Early Settlement Upon a Fundamental Change”; or

 

   

a “termination event” as defined under “— Termination” has occurred,

then, on the purchase contract settlement date (or, if such date is not business day, the next business day),

 

   

in the case of Corporate Units where there has been a successful remarketing, a portion of the proceeds from the final remarketing, or the proceeds at maturity of the portion of the Treasury portfolio described in clause (i) of the definition of “Treasury portfolio” from an earlier successful optional remarketing, as applicable, equal to $1,000 multiplied by the number of shares of convertible preferred stock underlying the Corporate Units that were remarketed will automatically be applied to satisfy in full the holders’ obligations to purchase our common stock under the related purchase contracts and any excess proceeds will be delivered to the purchase contract agent for the benefit of the holders whose shares of convertible preferred stock were remarketed;

 

   

in the case of Corporate Units where there has not been a successful remarketing of the convertible preferred stock (i) except in the case of a dividend deficiency event, all accumulated but unpaid dividends (including compounded dividends, if any, thereon), including with respect to the June 1, 2024 payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) as described under “— Final Remarketing” and (ii) immediately following such payment, each holder will be deemed to have automatically delivered to us on the purchase contract settlement date the ownership interests in the shares of convertible preferred stock that are a part of such Corporate Units (unless such holder has elected to settle the related purchase contracts in cash as described under “— Final Remarketing”) to satisfy in full the holder’s obligations to purchase our common stock under the related purchase contracts;

 

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in the case of Treasury Units, the cash proceeds of the related Treasury securities, when paid at maturity, will automatically be applied to satisfy in full the holder’s obligation to purchase our common stock under the related purchase contracts and any excess proceeds will be delivered to the purchase contract agent for the benefit of the holders of the Treasury Units; and

 

   

in the case of Cash Settled Units, the cash component of such units will automatically be applied to satisfy in full the holder’s obligation to purchase our common stock under the related purchase contracts.

Our common stock will then be issued and delivered to the holder or the holder’s designee, promptly following presentation and surrender of the certificate evidencing the Corporate Units, the Treasury Units or the Cash Settled Units, if in certificated form, and payment by the holder of any transfer or similar taxes payable in connection with the issuance of our common stock to any person other than the holder.

Prior to the settlement of a purchase contract, the shares of our common stock underlying each purchase contract will not be outstanding, and the holder of a purchase contract will not have any voting rights, rights to dividends or other distributions or other rights of a holder of our common stock by virtue of holding such purchase contract. The person in whose name any share of common stock is issuable upon settlement of any purchase contract will be deemed to become the holder of record of that share as of the close of business on the date of such settlement.

By purchasing a Corporate Unit, a Treasury Unit or a Cash Settled Unit, a holder will be deemed to have, among other things:

 

   

irrevocably appointed the purchase contract agent as its attorney-in-fact to enter into and perform the purchase contract and the related purchase contract and pledge agreement in the name of and on behalf of such holder; and

 

   

agreed to be bound by the terms and provisions of the Corporate Units, Treasury Units and Cash Settled Units and perform its obligations under the related purchase contract and the purchase contract and pledge agreement.

In addition, each beneficial owner of an Equity Unit, by acceptance of the beneficial interest therein, will be deemed to have agreed to treat itself as the owner of the related convertible preferred stock, applicable interest in the Treasury portfolio, Treasury securities or cash, as the case may be.

Remarketing

We will enter into a remarketing agreement with a nationally recognized investment banking firm, as remarketing agent. Pursuant to the remarketing agreement, remarketing of the convertible preferred stock underlying the Corporate Units and any separate shares of convertible preferred stock whose holders have elected to participate in the remarketing will be attempted as described below. We refer to each of an “optional remarketing” and the “final remarketing” (each as defined below) as a “remarketing.” No remarketing will occur if a termination event has occurred or, in the case of an optional remarketing, certain other events have occurred as described below.

As described under “Description of the Convertible Preferred Stock — Remarketing,” in connection with a successful remarketing of the convertible preferred stock, (a) the dividend rate on the convertible preferred stock may be increased, (b) if the closing price on the pricing date for a successful remarketing is less than or equal to the reference price on such date, the conversion rate of the convertible preferred stock may be increased to an amount (rounded to the nearest ten-thousandth of a share) equal to $1,000, divided by     % of the closing price on such date and/or (c) the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025, each as described under “Description of the Convertible Preferred Stock — Terms of the Remarketed Preferred Stock.” Dividends will continue to be payable quarterly at the then-applicable dividend rate (as such dividend rate may be adjusted in connection with such remarketing), when, as and if declared by our board of directors.

 

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During any blackout period you do not have the right to:

 

   

settle a purchase contract early;

 

   

create Treasury Units; or

 

   

recreate Corporate Units from Treasury Units.

We will use commercially reasonable efforts to ensure that a registration statement with regard to the full amount of the convertible preferred stock to be remarketed will be effective in a form that may be used by the remarketing agent in connection with the remarketing process (unless such registration statement is not required under the applicable laws and regulations that are in effect at that time or unless we conduct any remarketing in accordance with an exemption under the securities laws).

Optional Remarketing

Unless (i) a termination event has occurred, (ii) there are any accumulated but unpaid dividends on the convertible preferred stock in respect of prior completed dividend periods or (iii) we have not declared a dividend payable on the March 1, 2024 payment date, we may elect, at our option, to, on one or more occasions as specified herein, remarket the convertible preferred stock during a period (which we call the “optional remarketing window”) beginning on and including March 1, 2024 and ending on and including May 13, 2024. Any remarketing in the optional remarketing window will occur during a five-business day remarketing period (which we call an “optional remarketing period”) consisting of five sequential possible “optional remarketing dates” (as defined below) selected by us and will include shares of convertible preferred stock underlying Corporate Units and other shares of convertible preferred stock of holders that have elected to include those shares in the remarketing as described under “Description of the Convertible Preferred Stock — Remarketing of Shares That Are Not Included in Corporate Units.” We may attempt remarketings during multiple optional remarketing periods in the optional remarketing window so long as we issue a press release and give to the depositary at least 15 calendar days’ notice prior to the first day of any optional remarketing period as described below. We refer to a remarketing that occurs during the optional remarketing window as an “optional remarketing” and the date we price the convertible preferred stock offered in an optional remarketing as the “optional remarketing date.”

If we elect to conduct an optional remarketing, the remarketing agent will use its reasonable best efforts to obtain a price (i) for shares of convertible preferred stock that are components of Corporate Units, that results in aggregate net proceeds of at least 100% of the “Treasury portfolio purchase price” (as defined below) and (ii) for shares of convertible preferred stock that are not part of Corporate Units, at least equal to the separate convertible preferred stock purchase price (as defined in “Description of the Convertible Preferred Stock — Remarketing of Shares That Are Not Included in Corporate Units”), which will be the same price, on a per share basis, as the shares of convertible preferred stock included as components of Corporate Units. To obtain that price, (a) the dividend rate on the convertible preferred stock may be increased, (b) if the closing price on the pricing date for a successful remarketing is less than or equal to the reference price on such date, the conversion rate of the convertible preferred stock may be increased to an amount (rounded to the nearest ten-thousandth of a share) equal to $1,000, divided by     % of the closing price on such date and/or (c) the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025, each as described under “Description of the Convertible Preferred Stock — Terms of the Remarketed Preferred Stock.” The increased dividend rate and/or increased conversion rate will be a fixed dividend rate and/or conversion rate (subject to adjustment in certain circumstances) determined by, and any other changes to the terms of the convertible preferred stock in connection with a successful remarketing of the convertible preferred stock will be determined by our board of directors, after consultation with the remarketing agent, as the rate(s) the convertible preferred stock should bear and the terms the convertible preferred stock should include in order for the aggregate net remarketing proceeds to equal at least the sum of (x) 100% of the Treasury portfolio purchase price and (y) the separate convertible preferred stock purchase price for shares of convertible preferred stock that are not included in Corporate Units whose holders have elected to participate in the remarketing. We will not

 

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decrease the conversion rate or the dividend rate in connection with a successful optional remarketing of the convertible preferred stock.

For purposes of the description of the optional remarketing and final remarketing provisions relating to the convertible preferred stock in this prospectus supplement, “net proceeds” and “net remarketing proceeds” mean the gross proceeds of the applicable remarketing, less any discounts or commissions payable to broker-dealers in connection with such remarketing.

We will issue a press release and request that the depositary notify its participants holding Corporate Units, Treasury Units, and separate shares of convertible preferred stock as to the dates and procedures to be followed in the optional remarketing no later than 15 calendar days prior to the date we begin the optional remarketing.

Following a successful optional remarketing of the convertible preferred stock, the remarketing agent will purchase the Treasury portfolio at the Treasury portfolio purchase price, and deduct such price from the proceeds of the optional remarketing. Any remaining net proceeds will be promptly remitted after the optional remarketing settlement date by the remarketing agent for the benefit of the holders whose shares of convertible preferred stock were remarketed.

We have the right to elect not to attempt an optional remarketing, or to elect to postpone any optional remarketing that has not concluded, in our absolute discretion on any day of the relevant optional remarketing period.

If we elect to conduct an optional remarketing and such remarketing is successful:

 

   

settlement of the remarketed convertible preferred stock will occur on the second business day following the optional remarketing date, or such other date we and the remarketing agent agree to (we refer to such settlement date as the “optional remarketing settlement date”);

 

   

the dividend rate and/or conversion rate of all outstanding shares of convertible preferred stock (whether or not the holders of such shares elected to participate in the remarketing) will be increased, if applicable, on the optional remarketing settlement date;

 

   

if applicable, the earliest redemption date for the convertible preferred stock will be changed to a later date that is on or prior to August 29, 2025, effective on the optional remarketing settlement date;

 

   

any terms of the remarketed convertible preferred stock modified by us in accordance with the statement with respect to shares establishing the designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions of the convertible preferred stock (the “statement with respect to shares”) will (subject to a limited exception described in this prospectus supplement) become effective on the optional remarketing settlement date, if applicable;

 

   

dividends will continue to be payable on the convertible preferred stock quarterly at the then-applicable dividend rate (as such dividend rate may be adjusted in connection with such remarketing), when, as and if declared by our board of directors;

 

   

your Corporate Units will consist of a purchase contract and the applicable ownership interest in the Treasury portfolio, as described above; and

 

   

you may no longer create Treasury Units or Cash Settled Units or recreate Corporate Units from Treasury Units.

If we do not elect to conduct an optional remarketing in the optional remarketing window, or no optional remarketing succeeds for any reason, the terms of the convertible preferred stock will not be modified and the shares of convertible preferred stock (other than separate shares of convertible preferred stock) will continue to be components of the Corporate Units and the remarketing agent will use its reasonable best efforts to remarket the convertible preferred stock during the final remarketing period as described below.

 

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For the purposes of a successful optional remarketing, and subject to the provisions described in the second following paragraph, “Treasury portfolio purchase price” means the lowest aggregate ask-side price quoted by a primary U.S. government securities dealer to the quotation agent selected by us between 9:00 a.m. and 4:00 p.m., New York City time, on the optional remarketing date for the purchase of the Treasury portfolio for settlement on the optional remarketing settlement date.

Following a successful optional remarketing, the remarketing agent will purchase, at the Treasury portfolio purchase price, the Treasury portfolio, except as described in the following paragraph.

The “Treasury portfolio” is a portfolio of U.S. Treasury securities consisting of (i) U.S. Treasury securities (or principal or interest strips thereof) that mature on or prior to the purchase contract settlement date (or, if such date is not a business day, the next business day) in an aggregate amount at maturity equal to $1,000 multiplied by the number of shares of convertible preferred stock included in the Corporate Units on the optional remarketing date and (ii) U.S. Treasury securities (or principal or interest strips thereof) that mature on or prior to the purchase contract settlement date (or, if such date is not a business day, the next business day) in an aggregate amount equal to the aggregate dividend payment that would have been due on such date (without giving effect to any increase of the dividend rate following a successful remarketing of the convertible preferred stock, and whether or not such dividend is authorized or declared) on all shares of convertible preferred stock included in the Corporate Units on the optional remarketing date. However, if the U.S. Treasury securities (or principal or interest strips thereof) that would be included in the Treasury portfolio in accordance with the preceding definition in connection with a successful optional remarketing have a yield that is less than zero, then (i) the Treasury portfolio will instead consist of an amount in cash equal to the aggregate principal amount at maturity of the U.S. Treasury securities that would be included in the Treasury portfolio in accordance with the preceding definition; (ii) the Treasury portfolio purchase price will be deemed to be such aggregate principal amount referred to in preceding clause (i); and (iii) references in this prospectus supplement to a “Treasury security” and “U.S. Treasury securities (or principal or interest strips thereof)” in connection with the Treasury portfolio will, thereafter, be deemed to be references to such amount in cash. Neither we, the purchase contract agent, the collateral agent nor anyone else will invest that cash.

The applicable ownership interests in the Treasury portfolio will be substituted for the shares of convertible preferred stock that are components of the Corporate Units and, solely with respect to the Treasury securities described in clause (1) of the definition of applicable ownership interest, such applicable ownership interests will be pledged to us through the collateral agent to secure the Corporate Unit holders’ obligations under the purchase contracts. On the purchase contract settlement date (or, if such date is not a business day, the next business day), a portion of the proceeds from the Treasury portfolio equal to $1,000 multiplied by the number of shares of convertible preferred stock that are components of the Corporate Units on the optional remarketing date will automatically be applied to satisfy the Corporate Unit holders’ obligations to purchase our common stock under the purchase contracts forming part of such Corporate Units. In addition, proceeds from the Treasury portfolio equal to the dividend payment that would have been due in respect of the shares of convertible preferred stock that were components of the Corporate Units on the optional remarketing date (without giving effect to any increase of the dividend rate following such successful remarketing of the convertible preferred stock, and whether or not such dividend is authorized or declared) will be paid, on the purchase contract settlement date (or, if such date is not a business day, the next business day), to holders of the Corporate Units as of the close of business on the preceding record date (which payment will, for the avoidance of doubt, not affect our obligation to pay any dividend that has been declared on the outstanding convertible preferred stock in respect of the payment date occurring on the purchase contract settlement date). Any failure to apply proceeds as described above solely as a result of a failure by the U.S. government to pay the principal amount of or any interest on any Treasury security in the Treasury portfolio will not constitute an event of default under a purchase contract. If, as a result of any such failure, there are insufficient proceeds from the Treasury portfolio to satisfy the Corporate Unit holders’ obligations to purchase common stock under the purchase contracts, we will delay settlement of the purchase contracts until such time as such proceeds are available.

 

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Unless we agree otherwise with the remarketing agent, the remarketing settlement date for a successful optional remarketing will be on or before the record date immediately preceding the purchase contract settlement date. Accordingly, holders of Corporate Units are not expected to receive any dividend on the convertible preferred stock that we declare in respect of the payment date occurring on the purchase contract settlement date, except to the extent of any separate convertible preferred stock that they own not as part of any Corporate Units.

If we elect to remarket the convertible preferred stock during an optional remarketing period and a successful remarketing of the convertible preferred stock has not occurred on or prior to the last day of the optional remarketing period, we will cause a notice of the failed remarketing of the convertible preferred stock to be published before 9:00 a.m., New York City time, on the business day immediately following the last date of the optional remarketing period. This notice will be published by making a timely release to any appropriate news agency, including, without limitation, Bloomberg Business News and the Dow Jones News Service. We will similarly cause a notice of a successful remarketing of the convertible preferred stock to be published before 9:00 a.m., New York City time, on the business day immediately following the relevant optional remarketing date and we will issue a press release disclosing the modified terms established for the convertible preferred stock during the optional remarketing on the business day following the optional remarketing date.

Final Remarketing

Unless (i) a termination event has occurred or (ii) the Treasury portfolio has replaced the convertible preferred stock as a component of the Corporate Units as a result of a successful optional remarketing, the remarketing agent will remarket the shares of convertible preferred stock that are components of the Corporate Units and any separate shares of convertible preferred stock whose holders have elected to participate in the remarketing as described under “Description of the Convertible Preferred Stock — Remarketing of Shares That Are Not Included in Corporate Units,” during each day of the five business day period ending on, and including, May 30, 2024 (the second business day immediately preceding the purchase contract settlement date) until the remarketing is successful. We refer to such period as the “final remarketing period,” the remarketing during this period as the “final remarketing” and the date we price the convertible preferred stock offered in the final marketing as the “final remarketing date.”

The remarketing agent will use its reasonable best efforts to obtain, and the remarketing will be considered successful if the remarketing agent is able to obtain, a price that results in aggregate net proceeds of at least $1,000 multiplied by the number of shares of convertible preferred stock being remarketed. To obtain that price, (a) the dividend rate on the convertible preferred stock may be increased, (b) if the closing price on the pricing date for a successful remarketing is less than or equal to the reference price on such date, the conversion rate of the convertible preferred stock may be increased to an amount (rounded to the nearest ten-thousandth of a share) equal to $1,000, divided by     % of the closing price on such date and/or (c) the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025, each as described under “Description of the Convertible Preferred Stock — Terms of the Remarketed Preferred Stock.” The increased dividend rate and/or increased conversion rate will be a fixed dividend rate and/or conversion rate (subject to adjustment in certain circumstances) determined by, and any other changes to the terms of the convertible preferred stock in connection with a successful remarketing of the convertible preferred stock will be determined by, our board of directors, after consultation with the remarketing agent, as the rate(s) the convertible preferred stock should bear and the terms the convertible preferred stock should include in order for the aggregate net remarketing proceeds to equal at least $1,000 multiplied by the number of shares of convertible preferred stock being remarketed. We will not decrease the conversion rate or the dividend rate in connection with a successful remarketing of the convertible preferred stock. We will issue a press release and request that the depositary notify its participants holding Corporate Units, Treasury Units and separate shares of convertible preferred stock of the final remarketing no later than May 8, 2024. In our notice of a final remarketing, we will set forth the dates of the final remarketing period, applicable procedures for

 

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holders of separate shares of convertible preferred stock to participate in the final remarketing, the applicable procedures for holders of Corporate Units to create Treasury Units or Cash Settled Units, if applicable, the applicable procedures for holders of Corporate Units to settle their purchase contracts early and the procedures that must be followed by a holder of an ownership interest in a share of convertible preferred stock that is a part of a Corporate Unit in the case of a failed final remarketing not to have its ownership interests in shares of convertible preferred stock automatically delivered to us as described in this prospectus supplement in satisfaction of its obligation under the related purchase contracts.

We have the right to postpone the final remarketing in our absolute discretion on any day prior to the last business day of the final remarketing period.

If the final remarketing is successful:

 

   

settlement of the remarketed convertible preferred stock will occur on the purchase contract settlement date;

 

   

except in the case of a dividend deficiency event, all accumulated but unpaid dividends (including compounded dividends thereon, if any), including with respect to the June 1, 2024 payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date;

 

   

the dividend rate and/or conversion rate of all outstanding shares of convertible preferred stock (whether or not the holder of such shares elected to participate in the remarketing) will be increased, if applicable, effective on the purchase contract settlement date;

 

   

if applicable, the earliest redemption date for the convertible preferred stock will be changed to a later date that is on or prior to August 29, 2025, effective on the purchase contract settlement date;

 

   

dividends will continue to be payable on the convertible preferred stock quarterly at the then-applicable dividend rate (as such dividend rate may be adjusted in connection with such remarketing), when, as and if declared by our board of directors;

 

   

a portion of the net proceeds from the remarketing equal to $1,000 multiplied by the number of shares of convertible preferred stock underlying Corporate Units that were remarketed will automatically be applied to satisfy in full the Corporate Unit holders’ obligations to purchase our common stock under the related purchase contracts on the purchase contract settlement date, and any remaining net proceeds, other than proceeds from the remarketing attributable to holders of separate shares of convertible preferred stock, will be promptly remitted to such holders on the purchase contract settlement date pro rata in accordance with their respective interests in such Corporate Units; and

 

   

net proceeds from the remarketing attributable to holders of separate shares of convertible preferred stock who have elected to participate in the remarketing will be remitted by the remarketing agent to the custodial agent for remittance pro rata to such holders on the purchase contract settlement date.

If (1) despite using its reasonable best efforts, the remarketing agent cannot remarket the related convertible preferred stock on or prior to the last day of the final remarketing period, at a price equal to or greater than $1,000 multiplied by the aggregate number of shares of convertible preferred stock to be remarketed or (2) the final remarketing has not occurred on or prior to the last day of the final remarketing period because a condition precedent to the remarketing has not been fulfilled, in each case resulting in a failed remarketing, the ownership interests in the shares of convertible preferred stock held as a part of Corporate Units will be automatically delivered to us, on the purchase contract settlement date, in full satisfaction of the Corporate Unit holder’s obligation to purchase our common stock under the related purchase contract, unless the holder has elected otherwise, as set forth under “Description of the Convertible Preferred Stock — Automatic Settlement Upon Failed Final Remarketing.”

 

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Notwithstanding the foregoing, except in the case of a dividend deficiency event, all accumulated but unpaid dividends (including compounded dividends thereon, if any), including with respect to the June 1, 2024 payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. If a dividend deficiency event occurs, following the final remarketing (whether successful or failed), we will have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date (or such next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon, if any) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such convertible preferred stock for so long as the convertible preferred stock remains outstanding, and such dividends will be payable to the holders of such convertible preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

If a successful remarketing of the convertible preferred stock has not occurred on or prior to the last day of the final remarketing period, we will cause a notice of the failed remarketing of the convertible preferred stock to be published before 9:00 a.m., New York City time, on the business day immediately following the last date of the final remarketing period. This notice will be published by making a timely release to any appropriate news agency, including, without limitation, Bloomberg Business News and the Dow Jones News Service.

Early Settlement

Subject to the conditions described below, a holder of Corporate Units or Treasury Units may elect to settle the related purchase contracts at any time prior to the close of business on the business day immediately preceding the first day of the market value averaging period, other than during a blackout period. In the case of Corporate Units and Treasury Units, such early settlement may only be made in integral multiples of 10 purchase contracts.

In order to settle purchase contracts early, a holder of Equity Units must deliver to the purchase contract agent (1) a completed “Election to Settle Early” form, along with the Corporate Unit or Treasury Unit certificate, if they are in certificated form, and (2) a cash payment in immediately available funds in an amount equal to:

 

   

$100 multiplied by the number of purchase contracts being settled; plus

 

   

if the “early settlement date” (as defined below) for any purchase contract occurs after a record date and before the related payment date, a cash amount equal to the contract adjustment payments payable in respect of such payment date on the purchase contracts being settled (assuming the same is payable solely in cash), unless we have elected to defer the contract adjustment payments payable in respect of such payment date.

So long as you hold Equity Units as a beneficial interest in a global security certificate deposited with the depositary, procedures for early settlement will also be governed by standing arrangements between the depositary and the purchase contract agent.

The early settlement right is also subject to the condition that, if we determine in our reasonable judgment that it is required under U.S. federal securities laws, we have a registration statement under the Securities Act in effect and an available prospectus covering the issuance of the shares of our common stock and other securities, if any, deliverable upon settlement of a purchase contract. We have agreed that, if we determine in our reasonable judgment that it is required under U.S. federal securities laws, we will use our commercially reasonable efforts to (1) have a registration statement in effect covering the issuance of those shares of our common stock and other securities, if any, to be delivered in respect of the purchase

 

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contracts being settled and (2) provide a prospectus in connection therewith, in each case in a form that may be used in connection with the early settlement right (it being understood that if there is a material business transaction or development that has not yet been publicly disclosed, we will not be required to file such registration statement or provide such a prospectus, and the early settlement right will not be available, until we have publicly disclosed such transaction or development, provided that we will use our commercially reasonable efforts to make such disclosure as soon as it is commercially reasonable to do so).

Upon early settlement, except as described below in “— Early Settlement Upon a Fundamental Change,” we will issue, for each purchase contract being settled, 85% of the number of shares of our common stock that would be deliverable for each purchase contract as described in “— Purchase of Common Stock” above as if the “applicable market value” were the average of the daily VWAPs of our common stock during the early settlement averaging period.

We will cause the related shares of convertible preferred stock or applicable ownership interests in the Treasury portfolio or Treasury securities, as the case may be, underlying the Equity Units and (if applicable) securing such purchase contract to be released from the pledge under the purchase contract and pledge agreement, and delivered within two business days following the early settlement date, to the purchase contract agent on behalf of the holder, free and clear of our security interest. In addition, we will issue the number of shares of our common stock to be issued upon settlement of the purchase contract within two business days following the last day of the early settlement averaging period, to the purchase contract agent for delivery to the holder. Upon early settlement, the holder will be entitled to receive any accrued and unpaid contract adjustment payments (including any accrued and unpaid deferred contract adjustment payments and compounded contract adjustment payments thereon, if any) to, but excluding, the payment date immediately preceding the early settlement date. The holder’s right to receive future contract adjustment payments will terminate (except for contract adjustment payments payable to the holders of record on the applicable record date), and no adjustment will be made to or for the holder on account of any amounts accrued in respect of contract adjustment payments since the most recent payment date.

If the purchase contract agent receives a completed “Election to Settle Early” form, along with the Corporate Unit or Treasury Unit certificate, if they are in certificated form, and payment of $100 for each purchase contract being settled prior to 5:00 p.m., New York City time, on any business day and all conditions to early settlement have been satisfied, then that day will be considered the “early settlement date.” If the purchase contract agent receives the foregoing, and all conditions to early settlement have been satisfied, on or after 5:00 p.m., New York City time, on any business day or at any time on a day that is not a business day, then the next business day will be considered the “early settlement date.”

Early Settlement Upon a Fundamental Change

If a fundamental change (as defined below) occurs prior to the purchase contract settlement date, then, following the fundamental change, each holder of a purchase contract, subject to certain conditions described in this prospectus supplement, will have the right to settle the purchase contract early on the fundamental change early settlement date (as defined below) at the settlement rate determined as if the applicable market value equaled the stock price (as defined below under “— Calculation of Make-Whole Shares”), plus an additional number of shares determined as set forth below (such additional number referred to as the “make-whole shares”). We refer to this right as the “fundamental change early settlement right.”

A “fundamental change” will be deemed to have occurred at the time after the Equity Units are originally issued if any of the following occurs:

(i)    any transaction or event (whether by means of a share exchange or tender offer applicable to our common stock, a liquidation, consolidation, recapitalization, reclassification, combination or merger of us or a sale, lease or other transfer of all or substantially all of our consolidated assets) or a series of related transactions or events occurs, in each case, pursuant to which 50% or more of our outstanding common

 

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stock is exchanged for, converted into or constitutes solely the right to receive cash, securities or other property, more than 10% of which consists of cash, securities or other property that is not, or will not be upon consummation of such transaction or event or series of transactions or events, listed on a U.S. national or regional securities exchange; or

(ii)    our common stock ceases to be listed or quoted on a U.S. national or regional securities exchange for 30 or more consecutive trading days.

The fundamental change early settlement right is subject to the condition that at such time, if we determine in our reasonable judgment that it is required under U.S. federal securities laws, there is in effect a registration statement and an available prospectus covering the issuance of the shares of our common stock and other securities, if any, to be delivered pursuant to the purchase contracts being settled. We have agreed that, if we determine in our reasonable judgment that it is required under U.S. federal securities laws, we will use our commercially reasonable efforts to (1) have a registration statement in effect covering the issuance of our common stock and other securities, if any, to be delivered in respect of the purchase contracts being settled and (2) provide a prospectus in connection therewith, in each case in a form that may be used in connection with the early settlement upon a fundamental change (it being understood that if there is a material business transaction or development that has not yet been publicly disclosed, we will not be required to file such registration statement or provide such a prospectus, and the fundamental change early settlement right will not be available, until we have publicly disclosed such transaction or development, provided that we will use our commercially reasonable efforts to make such disclosure as soon as it is commercially reasonable to do so). The fundamental change early settlement date will be postponed by the number of days during the period on which no such registration statement is effective (if we determine that the same is required at such time), except that the fundamental change early settlement date will not be postponed beyond the purchase contract settlement date. If, but for the exception contained in the immediately preceding sentence, the fundamental change early settlement date would occur on or after the purchase contract settlement date, we will deliver to any holder of purchase contracts on the purchase contract settlement date the applicable number of make-whole shares in addition to a number of shares equal to the settlement rate, determined as if the applicable market value were equal to the stock price (as defined below under “— Calculation of Make-Whole Shares”) in such fundamental change.

We will provide each holder of Equity Units with a notice of a fundamental change within five business days after the effective date of the fundamental change. The notice will specify:

(1)    the date on which the fundamental change early settlement will occur (the “fundamental change early settlement date”), which will be at least 10 business days after the effective date of such fundamental change but, subject to the foregoing, no later than the earlier of (x) 20 business days after the effective date of such fundamental change and (y) one business day prior to (i) the first day of the commencement of an optional remarketing period, or (ii) if we have not specified an optional remarketing period or the optional remarketing is not successful, the first day of the commencement of the final remarketing period or, if the final remarketing is not successful, the purchase contract settlement date;

(2)    the date by which holders must exercise the fundamental change early settlement right;

(3)    the settlement rate and number of make-whole shares;

(4)    if not shares of our common stock, the amount and kind (per purchase contract) of the cash, securities and other consideration receivable by the holder upon settlement; and

(5)    the amount of accrued and unpaid contract adjustment payments (including any deferred contract adjustment payments and compounded contract adjustment payments thereon), if any, that will be paid upon settlement to holders exercising the fundamental change early settlement right.

Notwithstanding the foregoing, if the final remarketing period begins less than 10 business days following the occurrence of a fundamental change, the notice will specify the purchase contract settlement date as the fundamental change early settlement date.

 

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To exercise the fundamental change early settlement right, a holder must, no later than the second business day prior to the fundamental change early settlement date:

 

   

deliver to the purchase contract agent a completed “Election to Settle Early Following a Fundamental Change” form;

 

   

deliver to the purchase contract agent the certificate evidencing the holder’s Corporate Units or Treasury Units, if in certificated form; and

 

   

deliver to the purchase contract agent cash in immediately available funds equal to $100 multiplied by the number of purchase contracts being settled.

So long as you hold Equity Units as a beneficial interest in a global security certificate deposited with the depositary, procedures for fundamental change early settlement will also be governed by standing arrangements between the depositary and the purchase contract agent.

If you exercise the fundamental change early settlement right, we will deliver to you on the fundamental change early settlement date for each purchase contract with respect to which you have elected fundamental change early settlement, a number of shares of our common stock (or exchange property units as defined under “— Reorganization Events,” if applicable) equal to the settlement rate described above plus the additional make-whole shares, together with accrued and unpaid contract adjustment payments to, but excluding, the fundamental change early settlement date, unless the fundamental change early settlement date falls after a record date and on or prior to the corresponding payment date, in which case (x) we will pay the full amount of accrued and unpaid contract adjustment payments, if any, due in respect of such payment date to the holder of record at the close of business on the corresponding record date and (y) such accrued and unpaid contract adjustment payments will not be paid as part of the consideration to settle such fundamental change early settlement.

The holder will also receive on the fundamental change early settlement date the shares of convertible preferred stock or the applicable ownership interest in the Treasury portfolio or Treasury securities underlying the Corporate Units or Treasury Units, as the case may be, with respect to which such holder is effecting a fundamental change early settlement, which, in each case, if applicable, will have been released from the pledge under the purchase contract and pledge agreement and delivered to the purchase contract agent, on behalf of the holder, free and clear of our security interest. If a holder does not elect to exercise the fundamental change early settlement right, its Corporate Units or Treasury Units will remain outstanding and subject to normal settlement on the purchase contract settlement date.

Holders of Corporate Units and Treasury Units may exercise the fundamental change early settlement right only in integral multiples of 10 purchase contracts.

The terms of the convertible preferred stock provide that if a fundamental change occurs on or after a successful remarketing of the convertible preferred stock, there will be no fundamental change conversion right. See “Description of the Convertible Preferred Stock — Conversion Rights — Adjusted Conversion Rate Upon a Fundamental Change.”

Calculation of Make-Whole Shares

The number of make-whole shares per purchase contract applicable to a fundamental change early settlement will be determined by reference to the table below, based on the date on which the fundamental change occurs or becomes effective (the “effective date”) and the “stock price” in the fundamental change, which will be:

 

   

in the case of a fundamental change described in clause (i) of the definition of fundamental change above where all holders of our common stock receive only cash for their shares of common stock in the fundamental change, the cash amount paid per share of our common stock; and

 

   

in all other cases, the average of the closing prices of our common stock for the 10 consecutive trading days immediately prior to but not including the effective date.

 

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For purposes of this “Description of the Purchase Contracts” section, the stock prices set forth in the first row of the table (i.e., the column headers) will be adjusted upon the occurrence of any event requiring an adjustment to the maximum settlement rate pursuant to paragraphs (1) through (5), inclusive, below under “— Anti-dilution Adjustments” in a manner inversely proportional to the adjustment to the maximum settlement rate. Each of the make-whole share amounts in the table will be adjusted in the same manner and at the same time as the maximum settlement rate is adjusted pursuant to paragraphs (1) through (5), inclusive, below under “— Anti-dilution Adjustments.”

Stock Price

 

Effective Date

  $     $     $     $     $     $     $     $     $     $     $     $     $     $     $     $     $  

May    , 2021

                                                                                                                                                                                                                                                              

June 1, 2022

                                 

June 1, 2023

                                 

June 1, 2024

                                 

The actual stock price and effective date may not be set forth on the table, in which case:

 

   

if the actual stock price is between two stock prices on the table or the actual effective date is between two effective dates on the table, the amount of make-whole shares will be determined by a straight-line interpolation between the make-whole share amounts set forth for the two stock prices and the two effective dates on the table based on a 365- or 366-day year, as applicable;

 

   

if the stock price exceeds $                 per share, subject to adjustment in the same manner as the stock prices in the table above, then the make-whole share amount will be zero; and

 

   

if the stock price is less than $                 per share, subject to adjustment in the same manner as the stock prices in the table above (the “minimum stock price”), then the make-whole share amount will be determined as if the stock price equaled the minimum stock price.

Contract Adjustment Payments

Contract adjustment payments in respect of Corporate Units, Treasury Units and Cash Settled Units will be payable in cash, shares of our common stock or a combination thereof, unless we have previously irrevocably elected a contract adjustment payment method to apply, at a rate per year of     % of the stated amount of $100 per purchase contract. Contract adjustment payments payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. Contract adjustment payments will accrue from (and including) the date of original issuance of the Corporate Units to (but excluding) the earliest occurrence of a termination event, the purchase contract settlement date, the fundamental change early settlement date (if applicable) and the most recent payment date on or before any early settlement of the related purchase contracts (if applicable), and will be payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, commencing on September 1, 2021 (each, a “payment date”).

Contract adjustment payments will be payable to the holders of purchase contracts as they appear on the books and records of the purchase contract agent at the close of business on the relevant record dates, which will be the February 15, May 15, August 15 or November 15 (in each case, whether or not a business day), as applicable, immediately preceding the relevant payment date or, if the Equity Units are held in global book-entry form, the record date will be the business day immediately preceding the applicable payment date. Contract adjustment payments will be payable to such record holders notwithstanding the occurrence of any early settlement date or fundamental change early settlement date following a record date and prior to the related payment date, except that holders will be required to pay us, in connection with any early settlement (other than in connection with a fundamental change), an equivalent payment as described under “— Early Settlement” above. These distributions will be paid through the purchase contract agent, who will distribute amounts received in respect of the contract adjustment payments for the benefit of the holders of the purchase contracts relating to the Corporate Units, Treasury Units and Cash Settled Units.

 

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If any date on which contract adjustment payments are to be made is not a business day, then payment of the contract adjustment payments payable on that date will be made on the next succeeding day that is a business day and no interest or payment will be paid in respect of the delay, if any.

Our obligations with respect to contract adjustment payments will be subordinated and junior in right of payment to our existing and future indebtedness. Upon certain events of our bankruptcy, insolvency or reorganization, holders of our Equity Units will have no claims against us or our estate for any accrued and unpaid (including any deferred) contract adjustment payments.

We may, at our option and upon prior written notice to the holders of the Equity Units and the purchase contract agent, defer the payment of contract adjustment payments on the related purchase contracts forming a part of the Equity Units until the purchase contract settlement date; provided, however, that upon (x) an early settlement upon a fundamental change, we will pay deferred contract adjustment payments (including compounded contract adjustment payments thereon as described below) to, but excluding, the fundamental change early settlement date and (y) an early settlement other than upon a fundamental change, we will pay deferred contract adjustment payments (including compounded contract adjustment payments thereon as described below) to, but excluding, the payment date immediately preceding the early settlement date.

Deferred contract adjustment payments will accrue additional contract adjustment payments at the rate of    % per year until paid, compounded quarterly, which is equal to the initial rate of total distributions on the Corporate Units (compounding on each succeeding payment date), to, but excluding, the date such deferred contract adjustment payments are made in full. We refer to these additional contract adjustment payments that accrue on deferred contract adjustment payments as “compounded contract adjustment payments.” We may pay any such deferred contract adjustment payments (including compounded contract adjustment payments thereon) on any scheduled payment date (or, if such payment date is not a business day, the next business day). If the purchase contracts are terminated (upon the occurrence of certain events of bankruptcy, insolvency or reorganization with respect to us), the right to receive contract adjustment payments and deferred contract adjustment payments (including compounded contract adjustment payments thereon) will also terminate.

If we exercise our option to defer the payment of contract adjustment payments, then, until the deferred contract adjustment payments (including compounded contract adjustment payments thereon) have been paid, we will not declare or pay any dividends or make any distributions on, or redeem, purchase or acquire, or make a liquidation payment with respect to, any shares of our capital stock (including the convertible preferred stock and Series B preferred stock).

The restrictions listed above do not apply to:

 

   

purchases, redemptions or other acquisitions of our capital stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of current or former employees, officers, directors, agents or consultants (including, for the avoidance of doubt, the forfeiture of unvested shares of restricted stock, or any withholdings (including withholdings effected by a repurchase or similar transaction), or other surrender, of capital stock that would otherwise be deliverable upon exercise, delivery or vesting of equity awards under any such contract, plan or arrangement, in each case whether for payment of applicable taxes or the exercise price, or otherwise) or a stock purchase or dividend reinvestment plan, or the satisfaction of our obligations pursuant to any contract or security outstanding on the date that the contract adjustment payment is deferred requiring us to purchase, redeem or acquire our capital stock;

 

   

any exchange, redemption or conversion of any class or series of our capital stock, or the capital stock of one of our subsidiaries, for any other class or series of our capital stock;

 

   

any purchase of, or payment of cash in lieu of, fractional interests in shares of our capital stock pursuant to the conversion or exchange provisions of such capital stock or the securities being converted or exchanged or pursuant to the exercise of any other right to acquire our capital stock;

 

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any dividend or distribution in the form of stock (or payment of cash in lieu of any fractional interests in shares of such stock), warrants, options or other rights where the dividend stock or stock issuable upon exercise of such warrants, options or other rights is the same class of stock as that on which the dividend is being paid or ranks equally with or junior to such class of stock (including, for the avoidance of doubt, the declaration and payment of any dividends on the convertible preferred stock or the Series B preferred stock in shares of our common stock together with cash in lieu of any fractional share of our common stock);

 

   

redemptions, exchanges or repurchases of, or with respect to, any rights outstanding under a shareholder rights plan outstanding on the date that the contract adjustment payment is deferred or the declaration or payment thereunder of a dividend or distribution of or with respect to rights in the future;

 

   

payments on any trust preferred securities, subordinated debentures, junior subordinated debentures or junior subordinated notes, or any guarantees of any of the foregoing, in each case, that rank equal in right of payment to the contract adjustment payments, so long as the amount of payments made on account of such securities or guarantees and the purchase contracts is paid on all such securities and guarantees and the purchase contracts then outstanding on a pro rata basis in proportion to the full payment to which each series of such securities, guarantees or purchase contracts is then entitled if paid in full;

 

   

delivery of Series B preferred stock and (if applicable) our common stock, and/or payment of cash in lieu of any fractional share of our common stock, in each case, upon conversion of the convertible preferred stock;

 

   

the settlement of any convertible note hedge transactions or capped call transactions entered into in connection with the issuance, by us or any of our subsidiaries, of any debt securities that are convertible into, or exchangeable for, our common stock (or into or for any combination of cash and our common stock based on the value of our common stock), provided such convertible note hedge transactions or capped call transactions, as applicable, are on customary terms and were entered into before the date that the relevant contract adjustment payment is deferred;

 

   

payments on the convertible preferred stock or the Series B preferred stock (if any), in each case so long as the amount of payments made on account of such convertible preferred stock or Series B preferred stock (if any) and the purchase contracts is paid on all such convertible preferred stock or Series B preferred stock (if any) and the purchase contracts then outstanding on a pro rata basis in proportion to the full payment to which each such convertible preferred stock, Series B preferred stock or purchase contract is then entitled if paid in full; and

 

   

any payment of deferred interest or principal on, or repayment, redemption or repurchase of, parity or junior securities that, if not made, would cause us to breach the terms of the instrument governing such parity or junior securities.

Method of Payment of Contract Adjustment Payments

Subject to the limitations described below, we may elect to pay any contract adjustment payment (or any portion of any contract adjustment payment) on the Equity Units (whether or not for a current quarterly period or any prior quarterly period), determined in our sole discretion:

 

   

in cash;

 

   

by delivery of shares of our common stock; or

 

   

through any combination of cash and shares of our common stock.

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we do not elect to defer such payment, and unless we have previously irrevocably elected a contract adjustment payment method, we will give the holders of the Equity Units notice of any election with respect to any particular contract adjustment payment and the portion of such payment that will be made in cash and the portion that will be made in common stock no later than eight scheduled trading days prior to the payment date for such contract adjustment payment. However, for purposes of any contract adjustment payment payable in connection with the early settlement of any holder’s purchase contract pursuant to the provisions described above under the caption “— Early Settlement” or “— Early Settlement Upon a Fundamental Change,” (i) we will instead provide such notice (x) to such holder no later than eight scheduled trading days prior to the settlement date for such early settlement (in the case of an early settlement pursuant to the provisions described above under the caption “— Early Settlement”); or (y) in the related fundamental change notice (in the case of an early settlement pursuant to the provisions described above under the caption “— Early Settlement Upon a Fundamental Change”); and (ii) solely for purposes of the provisions described in this section, the settlement date for such early settlement will be deemed to be a “payment date.”

If we elect, or have previously irrevocably elected, to make any such contract adjustment payment, or any portion thereof, in shares of our common stock, such shares will be valued for such purpose at the average of the daily VWAPs per share of our common stock over the five consecutive trading day period ending on, and including, the second trading day immediately preceding the applicable payment date (the “five-day average price”), multiplied by 97%. However, the number of shares of common stock that we will deliver as payment for any contract adjustment payment due (and not duly deferred at our election) in respect of any payment date will be limited to a maximum number equal to the total dollar amount of such contract adjustment payment (including any portion thereof that we have not elected to pay in shares of our common stock) divided by the floor price (as defined below) in effect on the second trading day immediately preceding such payment date. If the dollar amount of the contract adjustment payment per purchase contract that we have duly elected to pay in shares of common stock exceeds the product of (x) 97% of the applicable five-day average price and (y) the number of shares of common stock deliverable (without regard to our obligation to pay cash in lieu of delivering any fractional share of our common stock) per purchase contract in respect of such contract adjustment payment, then we will pay such excess amount in cash. We refer to the provision described in the two preceding sentences as the “share limitation provision.” Notwithstanding anything to the contrary, we will have the right, exercisable at our sole election by notice sent to the holders of the purchase contracts, to irrevocably eliminate the share limitation provision. If we have made such an irrevocable election, then we will state so in each subsequent notice, if any, that we send electing to pay any portion of a contract adjustment payment in shares of common stock. For the avoidance of doubt, such an irrevocable election, if made, will be effective without the need to amend the purchase contract and pledge agreement, including pursuant to the provision described in the fifth bullet point of the first paragraph under the caption “— Certain Provisions of the Purchase Contract and Pledge Agreement — Modification.” However, we may nonetheless choose to execute such an amendment at our option. In addition, such irrevocable election, if made, will not affect any prior election that we have made or prior notice that we have sent with respect to the payment of any portion of a contract adjustment payment in shares of common stock.

“Floor price” means, as of any trading day, an amount (rounded to the nearest cent) equal to 35% of the reference price in effect immediately after the close of business on such trading day.

Without the consent of any holders of purchase contracts, we may, by notice to such holders through the purchase contract agent, irrevocably elect whether we will pay contract adjustment payments in cash, shares of our common stock or a combination thereof (a “contract adjustment payment method”) and, if applicable, the amount or percentage of a contract adjustment payment to be paid in common stock that will apply to any contract adjustment payment following such notice (unless a contract adjustment payment method has previously been designated) and, subject to the foregoing, specify the effective time of such election (which may be any time subsequent to the delivery of such notice). Our irrevocable election of a contract adjustment payment method as described herein may be made by us in our sole discretion.

 

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No fractional shares of our common stock will be delivered to the holders of the Equity Units in respect of contract adjustment payments. We will instead pay a cash adjustment to each holder that would otherwise be entitled to a fraction of a share of our common stock based on (i) the five-day average price and (ii) the aggregate number of Equity Units held by such holder (or, if the Equity Units are held in global book-entry form, based on the applicable procedures of the depositary for determining such number of Equity Units).

To the extent a shelf registration statement is required in our reasonable judgment in connection with the issuance of or for resales (by persons who are not, and have not been at any time during the preceding three months, affiliates of ours) of common stock issued as a contract adjustment payment, including contract adjustment payments paid in connection with a fundamental change early settlement, we will, to the extent such a registration statement is not currently filed and effective, use our commercially reasonable efforts to file and maintain the effectiveness of such a shelf registration statement until the earlier of such time as all such shares of our common stock have been resold thereunder and such time as all such shares are freely tradable by such non-affiliates without registration. To the extent applicable, we will also use our commercially reasonable efforts to have the shares of our common stock qualified or registered under applicable U.S. state securities laws, if required, and approved for listing on the New York Stock Exchange (or if our common stock is not listed on the New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which our common stock is then listed).

Anti-dilution Adjustments

The maximum settlement rate will be subject to the following adjustments:

(1)    If we issue common stock as a dividend or distribution on our common stock to all or substantially all holders of our common stock, or if we effect a share split or share combination, the maximum settlement rate will be adjusted based on the following formula:

SR1 = SR0 x (OS1/OS0)

where,

SR0 = the maximum settlement rate in effect immediately prior to the close of business on the record date for such dividend or distribution or immediately prior to the open of business on the effective date for such share split or share combination, as the case may be;

SR1 = the maximum settlement rate in effect immediately after the close of business on such record date or such effective date, as the case may be;

OS0 = the number of shares of our common stock outstanding immediately prior to the close of business on such record date or such effective date, as the case may be, in each case, prior to giving effect to such event; and

OS1 = the number of shares of our common stock that would be outstanding immediately after, and solely as a result of, such event.

Any adjustment made pursuant to this paragraph (1) will become effective immediately after the close of business on (x) the record date for such dividend or other distribution or (y) the effective date for such share split or share combination becomes effective, as applicable. If any dividend or distribution in this paragraph (1) is declared but not so paid or made, the new maximum settlement rate will be readjusted, on the date that our board of directors determines not to pay or make such dividend or distribution, to the maximum settlement rate that would then be in effect if such dividend or distribution had not been declared.

(2)    If we distribute to all or substantially all holders of our common stock any rights, options or warrants entitling them for a period of not more than 60 calendar days after the date of distribution thereof to subscribe for or purchase our common stock, in any case at an exercise price per share of our common

 

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stock less than the closing price of our common stock on the trading day immediately preceding the date of announcement of such distribution (other than rights issued or otherwise distributed pursuant to a shareholder rights plan, as to which the provisions set forth in clause (3)(a) below and the third paragraph following clause (5) below will apply), the maximum settlement rate will be increased based on the following formula:

SR1 = SR0 x (OS0 + X)/(OS0 + Y)

where,

SR0 = the maximum settlement rate in effect immediately prior to the close of business on the record date for such distribution;

SR1 = the maximum settlement rate in effect immediately after the close of business on such record date;

OS0 = the number of shares of our common stock outstanding immediately prior to the close of business on the record date for such distribution;

X = the total number of shares of our common stock issuable pursuant to such rights, options or warrants; and

Y = the number of shares of our common stock equal to the quotient of (A) the aggregate price payable to exercise such rights, options or warrants divided by (B) the closing price of our common stock on the trading day immediately preceding the date of announcement for the distribution of such rights, options or warrants.

If any right, option or warrant described in this paragraph (2) is not exercised prior to the expiration of the exercisability thereof (and as a result no additional shares of our common stock are delivered or issued pursuant to such rights, options or warrants), the new maximum settlement rate will be readjusted, as of the date of such expiration, to the maximum settlement rate that would then be in effect had the increase with respect to the distribution of such rights, options or warrants been made on the basis of delivery or issuance of only the number of shares of our common stock actually delivered pursuant to such rights, options or warrants.

For purposes of this paragraph (2), in determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of our common stock at a price per share of our common stock less than the closing price of our common stock on the trading day immediately preceding the date of announcement of such distribution, and in determining the aggregate price payable to exercise such rights, options or warrants, there will be taken into account any consideration received by us for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined in good faith by us in a commercially reasonable manner. Any increase made under this paragraph (2) will be made successively whenever any such rights, options or warrants are distributed and will become effective immediately after the close of business on the record date for such distribution.

(3)    (a) If we distribute shares of capital stock, evidences of indebtedness or other assets or property of us or rights, options or warrants to acquire our capital stock or other securities to all or substantially all holders of our common stock (excluding (i) any dividend, distribution, share split and share combination described in clause (1) or (2) above, (ii) any dividend or distribution paid exclusively in cash, (iii) any spin-off to which the provisions in clause (3)(b) below apply, (iv) rights issued or otherwise distributed pursuant to a shareholder rights plan, except to the extent provided in the third paragraph following clause (5) below, (v) exchange property issued in exchange for, or upon conversion of, our common stock in connection with a reorganization event, as to which the provisions described below under the caption “— Reorganization Events” will apply and (vi) a distribution solely pursuant to a tender offer or exchange offer for shares of our common stock, as to which the provisions described below in paragraph (5) will apply), the maximum settlement rate will be increased based on the following formula:

SR1 = SR0 x SP0 / (SP0 — FMV)

 

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where,

SR0 = the maximum settlement rate in effect immediately prior to the close of business on the record date for such distribution;

SR1 = the maximum settlement rate in effect immediately after the close of business on such record date;

SP0 = the closing price of our common stock on the trading day immediately preceding the ex-dividend date for such distribution; and

FMV = the fair market value (as determined in good faith by us in a commercially reasonable manner), on the record date for such distribution, of the shares of capital stock, evidences of indebtedness, assets, property, rights, options or warrants so distributed, expressed as an amount per share of our common stock.

An adjustment to the maximum settlement rate made pursuant to the immediately preceding paragraph shall become effective immediately after the close of business on the record date for such distribution.

Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each holder of a purchase contract will receive, for each purchase contract, at the same time and upon the same terms as holders of shares of our common stock, the amount of such distributed shares of capital stock, evidences of indebtedness, assets, property, rights, options or warrants that such holder would have received if such holder owned a number of shares of our common stock equal to the maximum settlement rate on the record date for such dividend or distribution.

(b) However, if we distribute to all or substantially all holders of our common stock, capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit of ours, that is, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange, which we refer to as a “spin-off,” then the maximum settlement rate will instead be increased based on the following formula:

SR1 = SR0 x (FMV0 + MP0)/MP0

where,

SR0 = the maximum settlement rate in effect immediately prior to the close of business on the last trading day of the valuation period (as defined below);

SR1 = the maximum settlement rate in effect immediately after the close of business on the last trading day of the valuation period;

FMV0 = the average of the closing prices of the capital stock or similar equity interests distributed to holders of our common stock applicable to one share of our common stock over each of the 10 consecutive trading days commencing on, and including, the ex-dividend date for such distribution with respect to our common stock on the New York Stock Exchange or such other U.S. national or regional exchange or market that is at that time the principal exchange or market for our common stock (the “valuation period”) (such average to be determined as if references to our common stock in the definitions of “closing price,” “trading day” and “market disruption event” were instead references to such capital stock or equity interests); and

MP0 = the average of the closing prices of our common stock over the valuation period.

The adjustment to the maximum settlement rate under this paragraph (3)(b) will occur immediately after the close of business on the last trading day of the valuation period; provided that if the second trading day preceding the purchase contract settlement date (or, in the case of an early settlement, the second trading day preceding the date such early settlement is settled) occurs during the valuation period, references with respect to 10 trading days will be deemed replaced with such lesser number of trading days as have elapsed from, and including, the ex-dividend date of such spin-off to, and including, such second trading day in determining the maximum settlement rate applicable to the relevant settlement.

 

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If any distribution described in this paragraph (3)(b) is declared but not so paid or made, the new maximum settlement rate will be readjusted, as of the date our board of directors determines not to pay or make such distribution, to the maximum settlement rate that would then be in effect if such distribution had not been declared.

(4)    If any cash dividend or distribution is made to all or substantially all holders of our common stock during any quarterly fiscal period exceeds $0.345 per share (subject to adjustment as described below) (as so adjusted, the “reference dividend”), the maximum settlement rate will be increased based on the following formula:

SR1 = SR0 x [(SP0 — T)/(SP0 — C)]

where,

SR0 = the maximum settlement rate in effect immediately prior to the close of business on the record date for such dividend or distribution;

SR1 = the maximum settlement rate in effect immediately after the close of business on such record date;

SP0 = the closing price of our common stock on the trading day immediately before the ex-dividend date for such dividend or distribution;

C = the amount in cash per share we distribute to holders of our common stock; and

T = the reference dividend; provided that if the dividend or distribution is not a regular quarterly cash dividend, the reference dividend will be deemed to be zero for purposes of such dividend or distribution.

Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each holder of a purchase contract will receive, for each purchase contract, at the same time and upon the same terms as holders of shares of our common stock, the amount of distributed cash that such holder would have received if such holder owned a number of shares of our common stock equal to the maximum settlement rate on the record date for such cash dividend or distribution.

The reference dividend will be subject to an inversely proportional adjustment whenever the maximum settlement rate is adjusted pursuant to paragraph (1), (2), (3) or (5) under this “— Anti-dilution Adjustments” section. The reference dividend will be zero for any cash dividend that is not a regular quarterly dividend.

Any increase to the maximum settlement rate made pursuant to this paragraph (4) shall become effective immediately after the close of business on the record date for such dividend or distribution. If any dividend or distribution described in this paragraph (4) is declared but not so paid or made, the new maximum settlement rate will be readjusted, as of the date our board of directors determines not to pay or make such dividend or distribution, to the maximum settlement rate that would then be in effect if such dividend or distribution had not been declared.

(5)    If we or any of our subsidiaries makes a payment in respect of a tender offer or exchange offer for our common stock, other than an odd lot tender offer, to the extent that the cash and value of any other consideration included in the payment per share of our common stock validly tendered or exchanged exceeds the closing price of a share of our common stock on the trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the maximum settlement rate will be increased based on the following formula:

SR1 = SR0 x [FMV + (SP1 x OS1)] / (SP1 x OS0)

where,

SR0 = the maximum settlement rate in effect immediately prior to the close of business on the trading day immediately following the date on which such tender or exchange offer expires;

 

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SR1 = the maximum settlement rate in effect immediately after the close of business on the trading day immediately following the date on which such tender or exchange offer expires;

FMV = the fair market value (as determined in good faith by us in a commercially reasonable manner, which determination will be conclusive), at the close of business on the trading day immediately following the date on which such tender or exchange offer expires, of the aggregate value of all cash and any other consideration paid or payable for shares validly tendered or exchanged and not withdrawn as of the expiration date;

OS0 = the number of shares of our common stock outstanding immediately prior to the last time tenders or exchanges may be made pursuant to such tender or exchange offer (prior to giving effect to the purchase or exchange of shares pursuant to such tender or exchange offer);

OS1 = the number of shares of our common stock outstanding immediately after the last time tenders or exchanges may be made pursuant to such tender or exchange offer (after giving effect to the purchase or exchange of shares pursuant to such tender or exchange offer); and

SP1 = the closing price of our common stock for the trading day next succeeding the date such tender or exchange offer expires.

The adjustment to the maximum settlement rate under the preceding paragraph (5) shall become effective immediately after the close of business on the trading day immediately following the date on which such tender or exchange offer expires. To the extent such tender or exchange offer is announced but not consummated (including as a result of us or one of our subsidiaries being permanently prevented by applicable law from effecting any such purchase), the new maximum settlement rate shall be readjusted to be the maximum settlement rate that would be in effect had the adjustment been made on the basis of only the purchases or exchanges of shares of common stock, if any, actually made, and not rescinded, in such tender or exchange offer.

The term “ex-dividend date,” when used with respect to any issuance or distribution on our common stock or any other security, means the first date on which our common stock or such other security, as applicable, trades, regular way, on the principal U.S. securities exchange or market on which our common stock or such other security, as applicable, is listed or traded at that time, without the right to receive the issuance or distribution in question, from us or the issuer of such security, as the case may be, or, if applicable, from the seller of our common stock or such security, as the case may be, on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market. For the avoidance of doubt, any alternative trading convention on the applicable exchange or market in respect of our common stock or such other security under a separate ticker symbol or CUSIP number will not be considered “regular way” for this purpose.

If we have a shareholders rights plan involving the issuance of share purchase rights or other similar rights to all or substantially all holders of our common stock in effect upon settlement of a purchase contract, you will receive, in addition to the common stock issuable upon settlement of any purchase contract, the related rights for the common stock under the shareholders rights plan, unless, prior to any settlement of a purchase contract, the rights have separated from the common stock, in which case the maximum settlement rate will be adjusted at the time of separation as if we made a distribution to all holders of our common stock as described in clause (3)(a) above, subject to readjustment in the event of the expiration, termination or redemption of the rights under the shareholder rights plan.

You might be treated as receiving a constructive distribution from us if (1) the maximum settlement rate under the purchase contract is adjusted and as a result of such adjustment your proportionate interest in our assets or earnings and profits is increased and (2) the adjustment is not made pursuant to a bona fide, reasonable anti-dilution formula. For example, an adjustment to the maximum settlement rate would not be considered made pursuant to such a formula if the adjustment were made to compensate you for taxable distributions with respect to our common stock (such as if we increase the cash dividend on our common stock). Thus, under certain circumstances, an increase in the maximum settlement rate might give

 

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rise to a taxable dividend to you even though you will not receive any cash related thereto. In addition, in certain situations, you might be treated as receiving a constructive distribution if we fail to adjust the maximum settlement rate. Any deemed distribution will be taxable as a dividend, return of capital, or capital gain in accordance with the earnings and profits rules described below under “Material United States Federal Income Tax Consequences — Tax Consequences to U.S. Holders — Common Stock Acquired under a Purchase Contract or upon Conversion — Distributions.” In addition, non-U.S. holders (as defined in “Material United States Federal Income Tax Consequences”) may, in certain circumstances, be deemed to have received a distribution subject to United States federal withholding tax.

In addition, we may increase the maximum settlement rate if our board of directors deems it advisable to avoid or diminish any income tax to holders of our common stock resulting from any dividend or distribution of shares (or rights to acquire shares) or from any event treated as a dividend or distribution for income tax purposes or for any other reasons.

Adjustments to the maximum settlement rate will be calculated to the nearest ten thousandth of a share. No adjustment to the maximum settlement rate will be required unless the adjustment would require an increase or decrease of at least one percent in the maximum settlement rate. If any adjustment is not required to be made because it would not change the maximum settlement rate by at least one percent, then the adjustment will be carried forward and taken into account in any subsequent adjustment. All adjustments will be made not later than the purchase contract settlement date, any early settlement date and the time at which we are required to determine the relevant settlement rate or amount of make-whole shares (if applicable) in connection with any settlement with respect to the purchase contracts.

No adjustment to the maximum settlement rate will be made on account of the events referred to above (other than a share split or combination or a tender or exchange offer) if holders of Equity Units participate, as a result of holding the Equity Units and without having to settle the purchase contracts that form part of the Equity Units, in the transaction that would otherwise give rise to an adjustment as if they held, per purchase contract, a number of shares of our common stock equal to the maximum settlement rate, at the same time and upon the same terms as the holders of common stock participate in the transaction.

Except as described above, the maximum settlement rate will not be adjusted:

 

   

upon the issuance of any shares of our common stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on our securities and the investment of additional optional amounts in shares of our common stock under any plan;

 

   

upon the issuance of options, restricted stock or other awards in connection with any employment contract, executive compensation plan, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors, consultants or independent contractors or the exercise of such options or other awards;

 

   

upon the issuance of any shares of our common stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security outstanding as of the date the Equity Units were first issued;

 

   

for a change in the par value or no par value of the common stock; and

 

   

for accrued and unpaid contract adjustment payments.

We will, as promptly as practicable after the maximum settlement rate is adjusted, provide written notice of the adjustment to the holders of Equity Units.

If an adjustment is made to the maximum settlement rate, an adjustment also will be simultaneously made to the reference price (rounded to the nearest cent) on an inversely proportional basis solely to determine which of the clauses of the definition of settlement rate will be applicable to determine the settlement rate with respect to the purchase contract settlement date, any early settlement date or any fundamental change early settlement date.

 

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If any adjustment to the maximum settlement rate becomes effective, or any effective date, expiration time, ex-dividend date or record date for any stock split or reverse stock split, tender or exchange offer, issuance, dividend or distribution (relating to a required maximum settlement rate adjustment) occurs, during the period (x) beginning on, and including, (i) the open of business on the first trading day of the market value averaging period, (ii) in the case of any early settlement that is not a fundamental change early settlement, the open of business on the first trading day of the relevant early settlement averaging period, or (iii) in the case of a fundamental change early settlement (other than in respect of a fundamental change described in clause (i) of the definition of fundamental change above where all holders of our common stock receive only cash for their shares of common stock in the fundamental change), the first trading day of the period used to calculate the stock price for such fundamental change, and (y) ending on, and including, the date on which we deliver shares of our common stock under the related purchase contract, we will make appropriate adjustments, if any, to the stock price, the applicable market value, the maximum settlement rate, the reference price and/or the number of shares of our common stock deliverable upon settlement with respect to the purchase contract, in each case, consistent with the methodology used to determine the anti-dilution adjustments set forth above. Without duplication of the preceding sentence, if any adjustment to the maximum settlement rate becomes effective, or any effective date, expiration time, ex-dividend date or record date for any stock split or reverse stock split, tender or exchange offer, issuance, dividend or distribution (in each case, relating to a required maximum settlement rate adjustment) occurs, during the period used to determine the applicable market value, the “stock price” or any other averaging period or similar period hereunder, we will make appropriate adjustments, if any, to the applicable prices, consistent with the methodology used to determine the anti-dilution adjustments set forth above.

Reorganization Events

The following events are defined as “reorganization events”:

 

   

any recapitalization, reclassification or change of our common stock (other than changes resulting from a subdivision or combination or a change only in par value);

 

   

any consolidation, merger or combination involving us;

 

   

any sale, lease or other transfer to another person of the consolidated assets of ours and our subsidiaries substantially as an entirety;

 

   

any statutory exchange of our common stock; or

 

   

any similar event,

in each case, as a result of which our common stock would be converted into, or exchanged for, or represent solely the right to receive, stock, other securities, other property or assets (including cash or any combination thereof) (“exchange property”).

Following the effective date of a reorganization event, the settlement of the purchase contracts (including the settlement rate, the maximum settlement rate and the reference price, and adjustments to the maximum settlement rate and the reference price, following such reorganization event), and the consideration in which contract adjustment payments on the purchase contracts is payable, will be determined as if each reference to any number of shares of common stock in this “Description of the Purchase Contracts” section were instead a reference to the same number of exchange property units. An “exchange property unit” is the kind and amount of exchange property receivable in such reorganization event (without any interest thereon, without any right to dividends or distribution thereon which have a record date that is prior to the applicable settlement date and without giving effect to any arrangement not to issue or deliver a fractional portion of any security or other property) per share of our common stock by a holder of common stock that is not a person with which we are consolidated or into which we are merged or which merged into us or to which such sale or transfer was made, as the case may be (we refer to any such person as a “constituent person”), or an affiliate of a constituent person, to the extent such reorganization

 

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event provides for different treatment of common stock held by the constituent person and/or the affiliates of the constituent person, on the one hand, and non-affiliates of a constituent person, on the other hand. In the event holders of our common stock (other than any constituent person or affiliate thereof) have the opportunity to elect the form of consideration to be received in such transaction, the exchange property unit that holders of the Corporate Units or Treasury Units are entitled to receive will be deemed to be the weighted average, per share of our common stock, of the types and amounts of consideration received by the holders of our common stock. For the avoidance of doubt, if all holders of our common stock receive cash for their shares of common stock pursuant to a reorganization event, then, following the effective date of such reorganization event the purchase contracts will be settled solely in cash in the manner described in this paragraph.

In the event of such a reorganization event, the person formed by such consolidation or surviving such merger or, if other than us, the person which acquires our assets and those of our subsidiaries substantially as an entirety will execute and deliver to the purchase contract agent an agreement providing that the holder of each Equity Unit that remains outstanding after the reorganization event (if any) will have the rights described in the preceding paragraph and expressly assuming all of our obligations under the purchase contracts and the purchase contract and pledge agreement. Such supplemental agreement will provide for adjustments to the amount of any securities constituting all or a portion of an exchange property unit and/or adjustments to the maximum settlement rate, which, for events subsequent to the effective date of such reorganization event, will be as nearly equivalent as may be practicable, as determined by us in our sole commercially reasonable discretion, to the adjustments provided for under “— Anti-dilution Adjustments” above (it being understood that no such adjustments will be required with respect to any portion of the exchange property that does not consist of securities). In connection with any reorganization event, we will also adjust the reference dividend based on the number of shares of our common stock comprising an exchange property unit and (if applicable) the value of any non-stock consideration comprising an exchange property unit. If an exchange property unit is composed solely of non-stock consideration, the reference dividend will be zero.

The provisions described in the preceding three paragraphs will similarly apply to successive reorganization events.

Termination

The purchase contract and pledge agreement provides that the purchase contracts and the obligations and rights of us and of the holders of Corporate Units, Treasury Units and Cash Settled Units thereunder, including the holders’ obligation and right to purchase and receive shares of our common stock and the right to receive accrued and unpaid contract adjustment payments (including deferred contract adjustment payments, if any), will immediately and automatically terminate upon the occurrence of certain events of bankruptcy, insolvency or reorganization with respect to us (a “termination event”).

Upon any such termination, (1) we will promptly but in no event later than two business days thereafter give written notice to the purchase contract agent, the collateral agent and the holders of Corporate Units, Treasury Units and Cash Settled Units and (2) the collateral agent will release the convertible preferred stock, the relevant portion of the applicable ownership interest in the Treasury portfolio, Treasury securities or cash, as the case may be, from the pledge arrangement and transfer such convertible preferred stock, the relevant portion of the applicable ownership interest in the Treasury portfolio, Treasury securities or cash to the purchase contract agent for distribution to the holders of Corporate Units, Treasury Units and Cash Settled Units. Upon any termination, however, such release and distribution may be subject to a delay. In the event that we become the subject of a case under the U.S. Bankruptcy Code, such delay may occur as a result of the automatic stay under Section 362 of the U.S. Bankruptcy Code or other relief sought by the collateral agent, the purchase contract agent or other party asserting an interest in the pledged assets or contending that such termination is not effective and may continue until such automatic stay has been lifted or efforts to obtain such other relief has been resolved against such party.

 

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Moreover, claims arising out of the convertible preferred stock will be subject to the equitable jurisdiction and powers of the bankruptcy court.

Pledged Assets and Pledge

The shares of convertible preferred stock that are a component of the Corporate Units or, following a successful optional remarketing, solely with respect to the Treasury securities described in clause (1) of the definition of applicable ownership interest, the applicable ownership interests in the Treasury portfolio, that are a component of the Corporate Units or, if substituted, the Treasury securities that are a component of the Treasury Units or cash that is a component of the Cash Settled Units, collectively, the “pledged assets,” will be pledged to the collateral agent for our benefit pursuant to the purchase contract and pledge agreement to secure your obligation to purchase shares of our common stock under the related purchase contracts. The rights of the holders of the Corporate Units, Treasury Units and Cash Settled Units with respect to such pledged assets will be subject to our security interest therein. No holder of Corporate Units, Treasury Units or Cash Settled Units will be permitted to withdraw the pledged assets related to such Corporate Units, Treasury Units or Cash Settled Units from the pledge arrangement except:

 

   

in the case of Corporate Units, to substitute a Treasury security or cash, as the case may be, for the related convertible preferred stock as provided for under “Description of the Equity Units — Creating Treasury Units by Substituting a Treasury Security for Convertible Preferred Stock” and “Description of the Equity Units — Creating Cash Settled Units from Corporate Units”;

 

   

in the case of Treasury Units, to substitute convertible preferred stock for the related Treasury security, as provided for under “Description of the Equity Units — Recreating Corporate Units from Treasury Units”; and

 

   

upon any early settlement, final settlement or termination of the related purchase contracts.

Subject to our security interest and the terms of the purchase contract and pledge agreement, each holder of Corporate Units, unless the Treasury portfolio has replaced the convertible preferred stock as a component of the Corporate Units, will be entitled through the purchase contract agent and the collateral agent to all of the proportional rights and preferences of the related convertible preferred stock. Subject to our security interest and the terms of the purchase contract and pledge agreement, each holder of Treasury Units and each holder of Corporate Units, if the Treasury portfolio has replaced the convertible preferred stock as a component of the Corporate Units, will retain ownership of the related Treasury securities pledged in respect of the related purchase contracts. Subject to our security interest and the terms of the purchase contract and pledge agreement, each holder of Cash Settled Units will retain ownership of the related cash pledged in respect of the related purchase contracts. We will have no interest in the pledged assets other than our security interest.

Except as described in “Certain Provisions of the Purchase Contract and Pledge Agreement — General,” upon receipt of distributions on the pledged assets, the collateral agent will distribute such payments to the purchase contract agent, which in turn will distribute those payments, together with contract adjustment payments received from us, to the holders in whose names the Corporate Units, Treasury Units or Cash Settled Units are registered at the close of business on the record date preceding the date of such distribution.

 

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CERTAIN PROVISIONS OF THE PURCHASE CONTRACT AND PLEDGE AGREEMENT

The following is a summary of certain provisions of the purchase contract and pledge agreement among us, the purchase contract agent and the collateral agent, the custodial agent and the securities intermediary. The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the purchase contract and pledge agreement, including the definitions in the purchase contract and pledge agreement of certain terms. Wherever particular sections or defined terms of the purchase contract and pledge agreement are referred to, such sections or defined terms are incorporated into this prospectus supplement by reference.

As used in this Description of the Purchase Contract and Pledge Agreement, “we,” “us,” “our” or “the Company” refer only to UGI Corporation and any successor obligor, and not to any of its subsidiaries.

General

Except as described under “— Book-Entry System for Corporate Units, Treasury Units and Cash Settled Units” below, payments on the Corporate Units, Treasury Units and Cash Settled Units will be payable, the purchase contracts will be settled and transfers of the Corporate Units, Treasury Units and Cash Settled Units will be registrable at the designated corporate trust office of the purchase contract agent in the Borough of Manhattan, The City of New York. In addition, if the Corporate Units, Treasury Units or Cash Settled Units do not remain in book-entry only form, we have the option to make payments on the Corporate Units, Treasury Units and Cash Settled Units by check mailed to the address of the person entitled thereto as shown on the security register or by a wire transfer to the account designated by the holder by a prior written notice.

Shares of our common stock will be delivered on the purchase contract settlement date (or earlier upon early settlement), or, if the purchase contracts have terminated, the related pledged assets will be delivered (potentially after a delay as a result of the imposition of the automatic stay under the U.S. Bankruptcy Code, see “Description of the Purchase Contracts — Termination”) at the designated corporate trust office of the purchase contract agent upon presentation and surrender of the applicable Corporate Unit, Treasury Unit or Cash Settled Unit certificate, if in certificated form.

If Corporate Units, Treasury Units or Cash Settled Units are in certificated form and a holder fails to present and surrender the certificate evidencing the Corporate Units, Treasury Units or Cash Settled Units to the purchase contract agent on or prior to the purchase contract settlement date, the shares of our common stock issuable upon settlement of the related purchase contract will be registered in the name of the purchase contract agent. The shares of our common stock, together with any distributions, will be held by the purchase contract agent as agent for the benefit of the holder until the certificate is presented and surrendered or the holder provides satisfactory evidence that the certificate has been destroyed, lost or stolen, together with satisfactory indemnity or security to the purchase contract agent and us.

If the purchase contracts terminate prior to the purchase contract settlement date, the related pledged assets are transferred to the purchase contract agent for distribution to the holders, and a holder fails to present and surrender the certificate evidencing the holder’s Corporate Units, Treasury Units or Cash Settled Units, if in certificated form, to the purchase contract agent, the related pledged assets delivered to the purchase contract agent and payments on the pledged assets will be held by the purchase contract agent as agent for the benefit of the holder until the applicable certificate is presented, if in certificated form, or the holder provides the evidence and indemnity or security described above.

No service charge will be made for any registration of transfer or exchange of the Corporate Units, Treasury Units or Cash Settled Units, except for any tax or other governmental charge that may be imposed in connection therewith.

The purchase contract agent will have no obligation to invest or to pay interest on any amounts held by the purchase contract agent pending payment to any holder.

 

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Modification

Notwithstanding anything to the contrary in the following paragraph, the purchase contract and pledge agreement will contain provisions permitting us, the purchase contract agent and the collateral agent, to modify the purchase contracts and the purchase contract and pledge agreement without the consent of any holder for any of the following purposes:

 

   

to evidence the succession of another person to our obligations;

 

   

to add to the covenants for the benefit of holders or to surrender any of our rights or powers under the purchase contracts and/or the purchase contract and pledge agreement;

 

   

to evidence and provide for the acceptance of appointment of a successor purchase contract agent or a successor collateral agent or securities intermediary;

 

   

to conform the provisions of the purchase contracts and/or the purchase contract and pledge agreement to the description contained in the preliminary prospectus supplement for this offering, as supplemented by the related pricing term sheet;

 

   

to irrevocably elect a contract adjustment payment method to apply or to irrevocably eliminate the share limitation provision;

 

   

to cure any ambiguity, defect, inconsistency or mistake; or

 

   

to make such other provisions in regard to matters or questions arising under the purchase contract and pledge agreement that do not adversely affect the interests of any holders of Equity Units in any material respect.

The purchase contract and pledge agreement will contain provisions preventing us, the purchase contract agent and the collateral agent, subject to certain limited exceptions, from modifying the terms of the purchase contracts and the purchase contract and pledge agreement without the consent of the holders of not less than a majority of the outstanding purchase contracts. However, subject to the preceding paragraph, no modification may, without the consent of the holder of each outstanding purchase contract affected thereby:

 

   

subject to our right to defer contract adjustment payments, change any payment date;

 

   

change the place or currency or method of payment;

 

   

impair the right to institute suit for the enforcement of a purchase contract or any contract adjustment payment or deferred contract adjustment payment (including compounded contract adjustment payments thereon);

 

   

except as described under “Description of the Purchase Contracts — Early Settlement” or “— Anti-dilution Adjustments,” reduce the number of shares of our common stock purchasable under a purchase contract, increase the purchase price of the shares of our common stock issuable on settlement of any purchase contract, change the purchase contract settlement date or the right to early settlement;

 

   

adversely affect the holder’s rights with respect to the settlement of any purchase contract in any material respect;

 

   

change the amount or type of collateral required to be pledged to secure a holder’s obligations under the purchase contract and pledge agreement, impair the right of the holder of any purchase contract to receive distributions on such collateral, or otherwise adversely affect the holder’s rights in or to such collateral;

 

   

reduce any contract adjustment payments or any deferred contract adjustment payments (including compounded contract adjustment payments); or

 

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reduce the above-stated percentage of outstanding purchase contracts whose holders’ consent is required for the modification or amendment of the provisions of the purchase contracts and the purchase contract and pledge agreement;

provided that if any amendment or proposal would adversely affect only the Corporate Units, only the Treasury Units or only the Cash Settled Units, then only the affected voting group of holders will be entitled to vote on such amendment or proposal, and such amendment or proposal will not be effective except with the consent of the holders of not less than a majority of such voting group or, if referred to in the immediately preceding eight bullets above, all of the holders of such voting group.

We will be entitled to set any day as a record date for the purpose of determining the holders of outstanding Equity Units entitled to give or take any demand, direction, consent or other action under the Equity Units, in the manner and subject to the limitations provided in the purchase contract and pledge agreement. In certain circumstances, the purchase contract agent also will be entitled to set a record date for action by holders. If such a record date is set for any action to be taken by holders of particular Equity Units, such action may be taken only by persons who are holders of such Equity Units at the close of business on the record date.

No Consent to Assumption; Agreement by Purchasers

Each holder of a Corporate Unit, a Treasury Unit or a Cash Settled Unit will be deemed under the terms of the purchase contract and pledge agreement, by the purchase of such Corporate Unit, Treasury Unit or Cash Settled Unit, to have expressly withheld any consent to the assumption (i.e., affirmance) of the related purchase contracts by us, our receiver, liquidator or trustee in the event that we become the subject of a case under the U.S. Bankruptcy Code or other similar state or federal law providing for reorganization or liquidation.

Merger, Sale or Lease

We will covenant in the purchase contract and pledge agreement that we will not merge or consolidate with any entity or sell, convey, transfer, assign or otherwise dispose of all or substantially all of our consolidated assets unless:

 

   

either we are the continuing corporation or the successor entity is an entity duly organized under the laws of the United States, any state thereof or the District of Columbia and treated as a corporation for U.S. federal income tax purposes and this other entity expressly assumes all of our obligations under the purchase contracts and the purchase contract and pledge agreement by one or more supplemental agreements;

 

   

we are not, or such successor entity is not, immediately after such merger, consolidation, sale, conveyance, transfer, assignment or other disposition, in default of payment obligations under the purchase contracts, the purchase contract and pledge agreement, the convertible preferred stock, any Series B preferred stock or the remarketing agreement or in material default in the performance of any other obligations thereunder; and

 

   

an officer’s certificate and opinion of counsel is delivered to the purchase contract agent.

In case of any such consolidation, merger, sale, conveyance (other than by way of lease), transfer, assignment or other disposition, and upon any such assumption by the successor entity, such successor entity will succeed to and be substituted for us, with the same effect as if it had been named in the purchase contract and pledge agreement as us and we will be relieved of any further obligation under the purchase contract and pledge agreement and under the Corporate Units, Treasury Units and Cash Settled Units.

Title

We, the purchase contract agent and the collateral agent may treat the registered owner of any Corporate Units, Treasury Units or Cash Settled Units as the absolute owner of the Corporate Units,

 

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Treasury Units or Cash Settled Units for the purpose of making payment (subject to the record date provisions described above), settling the related purchase contracts and for all other purposes.

Replacement of Equity Unit Certificates

In the event that physical certificates have been issued, any mutilated Corporate Unit, Treasury Unit or Cash Settled Unit certificate will be replaced by us at the expense of the holder upon surrender of the certificate to the purchase contract agent. Corporate Unit, Treasury Unit or Cash Settled Unit certificates that become destroyed, lost or stolen will be replaced by us at the expense of the holder upon delivery to us and the purchase contract agent of satisfactory evidence of their destruction, loss or theft satisfactory to us and the purchase contract agent. In the case of a destroyed, lost or stolen Corporate Unit, Treasury Unit or Cash Settled Unit certificate, an indemnity or security satisfactory to the purchase contract agent and us shall be furnished at the expense of the holder before a replacement certificate will be issued.

Notwithstanding the foregoing, we will not be obligated to issue any Corporate Unit, Treasury Unit or Cash Settled Unit certificates on or after the business day immediately preceding the earliest of any early settlement date, any fundamental change early settlement date, the purchase contract settlement date or the date on which the purchase contracts have terminated. The purchase contract and pledge agreement will provide that, in lieu of the delivery of a replacement Corporate Unit, Treasury Unit or Cash Settled Unit certificate following any of these dates, the purchase contract agent, upon delivery of the evidence and indemnity or security described above, will deliver the shares of our common stock issuable pursuant to the purchase contracts included in the Corporate Units, Treasury Units or Cash Settled Units evidenced by the certificate, or, if the purchase contracts have terminated prior to the purchase contract settlement date, transfer the pledged assets included in the Corporate Units, Treasury Units or Cash Settled Units evidenced by the certificate.

Governing Law

The purchase contracts and the purchase contract and pledge agreement will be governed by, and construed in accordance with, the laws of the State of New York.

Information Concerning the Purchase Contract Agent and the Collateral Agent

U.S. Bank National Association will be the purchase contract agent and the collateral agent. The purchase contract agent will act as the agent for the holders of Corporate Units, Treasury Units and Cash Settled Units. The purchase contract agent will not be obligated to take any discretionary action in connection with a default under the terms of the Corporate Units, the Treasury Units, the Cash Settled Units or the purchase contract and pledge agreement. The collateral agent will act solely as our agent and will not assume any obligation or relationship of agency or trust for or with any of the holders of the Corporate Units, the Treasury Units and the Cash Settled Units except for the obligations owed by a pledgee of property to the owner thereof under the purchase contract and pledge agreement and applicable law.

U.S. Bank National Association and its affiliates maintain banking relationships with us.

The purchase contract and pledge agreement will contain provisions limiting the liability of and providing indemnification to the purchase contract agent and the collateral agent. The purchase contract and pledge agreement also will contain provisions under which the purchase contract agent or the collateral agent may resign or be replaced. Such resignation or replacement will be effective upon the earlier to occur of (i) as indicated in the notice of resignation or removal or (ii) the appointment of a successor.

Miscellaneous

The purchase contract and pledge agreement will provide that we will pay all fees and expenses (including fees and expenses of counsel and agents) related to the retention of the collateral agent and the

 

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purchase contract agent. Holders who elect to substitute the related pledged assets, thereby creating Treasury Units or Cash Settled Units or recreating Corporate Units, however, will be responsible for any fees or expenses (including fees and expenses of counsel and agents) payable in connection with such substitution, as well as for any commissions, fees or other expenses incurred in acquiring the pledged assets to be substituted. We will not be responsible for any such fees or expenses.

Book-Entry System for Corporate Units, Treasury Units and Cash Settled Units

The Depository Trust Company, or “DTC,” which we refer to along with its successors in this capacity as the depositary, will act as the initial securities depositary for the Corporate Units, Treasury Units and Cash Settled Units. The Corporate Units, Treasury Units and Cash Settled Units will initially be issued only as fully registered securities registered in the name of Cede & Co., the depositary’s nominee. One or more fully registered global security certificates, representing the total aggregate number of Corporate Units, Treasury Units and Cash Settled Units, will be issued and will be deposited with the depositary or its custodian and will bear a legend regarding the restrictions on exchanges and registration of transfer referred to below.

The laws of some jurisdictions may require that some purchasers of securities take physical delivery of securities in certificated form. These laws may impair the ability to transfer beneficial interests in the Corporate Units, Treasury Units and Cash Settled Units so long as the Corporate Units, Treasury Units and Cash Settled Units are represented by global security certificates.

DTC advises that it is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 1A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The depositary holds securities that its participants deposit with the depositary. The depositary also facilitates the settlement among participants of securities transactions, including transfers and pledges, in deposited securities through electronic computerized book-entry changes in participants’ accounts, thereby eliminating the need for physical movement of securities certificates. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. The depositary is a wholly owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the depositary’s system is also available to others, including securities brokers and dealers, banks, trust companies and clearing corporations that clear transactions through or maintain a custodial relationship with a direct participant, either directly or indirectly. The rules applicable to the depositary and its participants are on file with the SEC.

We will issue the Corporate Units, Treasury Units and Cash Settled Units in definitive certificated form if the depositary notifies us that it is unwilling or unable to continue as depositary or the depositary ceases to be a clearing agency registered under the Exchange Act and a successor depositary is not appointed by us within 90 calendar days. In addition, beneficial interests in a global security certificate may be exchanged for definitive certificated Corporate Units, Treasury Units or Cash Settled Units upon request by or on behalf of the depositary in accordance with customary procedures following the request of a beneficial owner seeking to exercise or enforce its rights under such Corporate Units, Treasury Units or Cash Settled Units. If we determine at any time that the Corporate Units, Treasury Units or Cash Settled Units will no longer be represented by global security certificates, we will inform the depositary of such determination and the depositary will, in turn, notify participants of their right to withdraw their beneficial interest from the global security certificates, and if such participants elect to withdraw their beneficial interests, we will issue certificates in definitive form in exchange for such beneficial interests in the global security certificates. Any global Corporate Unit, Treasury Unit or Cash Settled Unit, or portion thereof that is exchangeable pursuant to this paragraph will be exchangeable for Corporate Unit, Treasury Unit or Cash

 

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Settled Unit certificates, as the case may be, registered in the names directed by the depositary. We expect that these instructions will be based upon directions received by the depositary from its participants with respect to ownership of beneficial interests in the global security certificates.

As long as the depositary or its nominee is the registered owner of the global security certificates, the depositary or its nominee, as the case may be, will be considered the sole owner and holder of the global security certificates and all Corporate Units, Treasury Units and Cash Settled Units represented by these certificates for all purposes under the Corporate Units, Treasury Units, Cash Settled Units and the purchase contract and pledge agreement. Except in the limited circumstances referred to above, owners of beneficial interests in global security certificates:

 

   

will not be entitled to have the Corporate Units, the Treasury Units or the Cash Settled Units represented by these global security certificates registered in their names, and

 

   

will not be considered to be owners or holders of the global security certificates or any Corporate Units, Treasury Units or Cash Settled Units represented by these certificates for any purpose under the Corporate Units, Treasury Units, Cash Settled Units or the purchase contract and pledge agreement.

All payments on the Corporate Units, Treasury Units and Cash Settled Units represented by the global security certificates and all transfers and deliveries of related convertible preferred stock, Treasury securities, cash, Series B preferred stock and common stock will be made to the depositary or its nominee, as the case may be, as the holder of the securities.

Ownership of beneficial interests in the global security certificates will be limited to participants or persons that may hold beneficial interests through institutions that have accounts with the depositary or its nominee. Ownership of beneficial interests in global security certificates will be shown only on, and the transfer of those ownership interests will be effected only through, records maintained by the depositary or its nominee, with respect to participants’ interests, or any participant, with respect to interests of persons held by the participant on their behalf. Procedures for settlement of purchase contracts on the purchase contract settlement date, or upon early settlement, will be governed by arrangements among the depositary, participants and persons that may hold beneficial interests through participants designed to permit settlement without the physical movement of certificates. Payments, transfers, deliveries, exchanges and other matters relating to beneficial interests in global security certificates may be subject to various policies and procedures adopted by the depositary from time to time. None of us, the purchase contract agent or any agent of us or the purchase contract agent will have any responsibility or liability for any aspect of the depositary’s or any participant’s records relating to, or for payments made on account of, beneficial interests in global security certificates, or for maintaining, supervising or reviewing any of the depositary’s records or any participant’s records relating to these beneficial ownership interests.

Although the depositary has agreed to the foregoing procedures in order to facilitate transfers of interest in the global security certificates among participants, the depositary is under no obligation to perform or continue to perform these procedures, and these procedures may be discontinued at any time. We will not have any responsibility for the performance by the depositary or its direct participants or indirect participants under the rules and procedures governing the depositary.

The information in this section concerning the depositary and its book-entry system has been obtained from sources that we believe to be reliable, but we have not attempted to verify the accuracy of this information.

 

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DESCRIPTION OF THE CONVERTIBLE PREFERRED STOCK

The following is a summary of certain provisions of the convertible preferred stock. The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of our amended and restated articles of incorporation, as amended, including the statement with respect to shares establishing the designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions on the convertible preferred stock and our amended and restated bylaws, as currently in effect, and applicable laws. Wherever particular provisions or defined terms of the convertible preferred stock are referred to, such provisions or defined terms are incorporated into this prospectus supplement by reference.

As used in this Description of the Convertible Preferred Stock, “we,” “us,” “our” or “the Company” refer only to UGI Corporation and any successor obligor, and not to any of its subsidiaries.

General

Under our amended and restated articles of incorporation, as amended, our board of directors designated up to 220,000 shares of our authorized but unissued preferred stock as, and approved a statement with respect to shares creating, a series of our preferred stock, designated as the     % Series A Cumulative Perpetual Convertible Preferred Stock, which we refer to as the “convertible preferred stock.” We will not (i) change any terms of the convertible preferred stock except as set forth in the statement with respect to shares and (ii) issue any additional shares of convertible preferred stock other than in accordance with the statement with respect to shares.

We will issue an aggregate of up to 200,000 shares of convertible preferred stock, or 220,000 shares if the underwriters exercised in full their over-allotment option on the Corporate Units. When issued in accordance with this prospectus supplement and the accompanying prospectus, the convertible preferred stock will be validly issued, fully paid and non-assessable.

Each Corporate Unit includes a 1/10th, or 10%, undivided beneficial ownership interest in one share of convertible preferred stock with an initial $1,000 liquidation preference that corresponds to the stated amount of $100 per Corporate Unit.

We do not intend to list the convertible preferred stock that are not a part of Corporate Units on any securities exchange.

Ranking

The convertible preferred stock, with respect to dividend rights or rights upon our liquidation, winding-up or dissolution, ranks:

 

   

senior to all classes or series of our common stock and to any other class or series of our capital stock expressly designated as ranking junior to the convertible preferred stock;

 

   

on parity with any class or series of our capital stock expressly designated as ranking on parity with the convertible preferred stock, including the Series B preferred stock (if any);

 

   

junior to any other class or series of our capital stock expressly designated as ranking senior to the convertible preferred stock; and

 

   

junior to our existing and future indebtedness and other liabilities (including trade payables).

The term “capital stock” does not include convertible or exchangeable debt securities, which, as such, will rank senior in right of payment to the convertible preferred stock.

In the case of our liquidation, dissolution or winding up, holders of the convertible preferred stock will not have the right to receive any payment or distribution unless all of our liabilities are first paid in full and the priority of any senior stock is satisfied.

 

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We currently have no capital stock outstanding that is senior to or on parity with the convertible preferred stock. If and when issued, any Series B preferred stock will rank on parity with the convertible preferred stock. As of March 31, 2021, we had $6,386 million principal amount of outstanding indebtedness, all of which is senior in right of payment to the convertible preferred stock. In addition, the convertible preferred stock will be structurally subordinated to all debt, preferred stock and other liabilities of our subsidiaries, which means that creditors and preferred shareholders of our subsidiaries will be paid from the assets of such subsidiaries before holders of the convertible preferred stock would have any claims to those assets.

Dividends

Without limiting the operation of the provisions described under “— Conversion Rate Adjustments,” holders of the convertible preferred stock, as such, will not have participation rights with respect to any dividends or distributions on our common stock or any other class or series of our capital stock.

Holders of the convertible preferred stock will receive, when, as and if declared by our board of directors, cumulative dividends, at the rate of     % per year (the “dividend rate”) on the $1,000 liquidation preference per share of convertible preferred stock, payable in cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election, unless we have previously irrevocably elected a dividend payment method to apply.

Dividends will accumulate from the first date of original issuance of the convertible preferred stock and will be payable when, as and if declared by our board of directors quarterly in arrears on March 1, June 1, September 1 and December 1 of each year (each, a “payment date”) beginning on September 1, 2021, to the person whose name appears in our stock records at the close of business on the applicable record date, which will be the immediately preceding February 15, May 15, August 15 and November 15 (in each case, whether or not a business day), respectively, or, if (x) the Corporate Units are held in global book-entry form or (y) the separate shares of convertible preferred stock are held in global book-entry form, the record date will be the business day immediately preceding the applicable payment date. We refer to each period beginning on and including a payment date (or, in respect of the first dividend period, the first date of original issuance of the convertible preferred stock) to, but excluding, the next payment date as a “dividend period.”

We will calculate dividends on the convertible preferred stock on the basis of a 360-day year of twelve 30-day months. Dollar amounts resulting from that calculation will be rounded to the nearest cent, with one-half cent being rounded upward. Dividends on the convertible preferred stock will cease to accumulate upon conversion or redemption, as the case may be, as described below.

If a payment date falls on a date that is not a business day, the payment due on such date will be instead made on the next succeeding business day and no interest or other payment will be paid in respect of the delay.

Dividends on the convertible preferred stock will accumulate whether or not:

 

   

we have earnings;

 

   

there are funds legally available for the payment of those dividends; or

 

   

those dividends are authorized or declared.

So long as any shares of convertible preferred stock remain outstanding, except as described below, unless full cumulative dividends on the convertible preferred stock for all past completed dividend periods (including compounded dividends thereon, if any) have been or contemporaneously are declared and paid or declared and a sum or number of shares of our common stock sufficient for the payment thereof is set apart for payment, we will not:

 

   

declare and pay or declare and set aside for payment of dividends, and we will not declare and make any distribution of cash or other property, directly or indirectly, on or with respect to any shares of

 

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our common stock or shares of any other class or series of our capital stock ranking, as to dividends, on parity with or junior to the convertible preferred stock, including the Series B preferred stock (if any), for any period;

 

   

redeem, purchase or otherwise acquire for any consideration, or make any other distribution of cash or other property, directly or indirectly, on or with respect to, or pay or make available any monies for a sinking fund for the redemption of, any common stock or shares of any other class or series of our capital stock ranking, as to dividends or upon liquidation, on parity with or junior to the convertible preferred stock, including the Series B preferred stock (if any); or

 

   

redeem, purchase or otherwise acquire for any consideration, or make any other distribution of cash or other property, directly or indirectly, on or with respect to the purchase contracts or make any payments (including any contract adjustment payments) under the purchase contracts or any payment under any similar agreement providing for the issuance by us of capital stock on a forward basis.

The foregoing sentence, however, will not prohibit:

 

   

purchases, redemptions or other acquisitions of shares of capital stock ranking junior to the convertible preferred stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of current or former employees, officers, directors, agents or consultants (including, for the avoidance of doubt, the forfeiture of unvested shares of restricted stock, or any withholdings (including withholdings effected by a repurchase or similar transaction), or other surrender, of capital stock that would otherwise be deliverable upon exercise, delivery or vesting of equity awards under any such contract, plan or arrangement, in each case whether for payment of applicable taxes or the exercise price, or otherwise) or a stock purchase or dividend reinvestment plan, or the satisfaction of our obligations pursuant to any contract or security (provided such contract or security was entered into or first issued, as applicable, either (x) before the initial settlement date of this offering or (y) at a time when full cumulative dividends, if any, on the convertible preferred stock for all past completed dividend periods (including compounded dividends thereon, if any) have been or contemporaneously are declared and paid or declared and a sum or number of shares of our common stock sufficient for the payment thereof is set apart for payment) requiring us to purchase, redeem or acquire our capital stock;

 

   

purchases of shares of our common stock pursuant to a contractually binding requirement to buy stock (including under a contractually binding stock repurchase plan) which binding requirement was entered into either (x) before the initial settlement date of this offering or (y) at a time when full cumulative dividends, if any, on the convertible preferred stock for all past completed dividend periods (including compounded dividends thereon, if any) have been or contemporaneously are declared and paid or declared and a sum or number of shares of our common stock sufficient for the payment thereof is set apart for payment;

 

   

the purchase of, or the payment of cash in lieu of, fractional interests in shares of capital stock ranking junior to the convertible preferred stock issued by us (i) in connection with a bona fide acquisition of a business or (ii) pursuant to the conversion or exchange provisions of such capital stock or securities convertible into or exchangeable for, or pursuant to the exercise of any other right to acquire, such capital stock;

 

   

any declaration of a dividend on our capital stock in connection with the implementation of a shareholders rights plan designed to protect us against unsolicited offers to acquire our capital stock, or the issuance of our capital stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto;

 

   

dividends or distributions payable solely in (x) capital stock ranking junior to the convertible preferred stock (or payment of cash in lieu of any fractional interests in shares of such capital stock) or (y) warrants, options or rights to acquire such capital stock (other than options or rights in the

 

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form of indebtedness or our capital stock ranking, as to dividends or upon liquidation, on parity with or senior to the convertible preferred stock, including the Series B preferred stock (if any), in each case, which indebtedness or capital stock is convertible into, exercisable for or exchangeable for our capital stock ranking junior to the convertible preferred stock);

 

   

delivery of Series B preferred stock and (if applicable) our common stock, and/or payment of cash in lieu of any fractional share of our common stock, in each case, upon conversion of the convertible preferred stock;

 

   

the settlement of any convertible note hedge transactions or capped call transactions entered into in connection with the issuance, by us or any of our subsidiaries, of any debt securities that are convertible into, or exchangeable for, our common stock (or into or for any combination of cash and our common stock based on the value of our common stock), provided such convertible note hedge transactions or capped call transactions, as applicable, are on customary terms and were entered into either (x) before the initial settlement date of this offering or (y) at a time when full cumulative dividends, if any, on the convertible preferred stock for all past completed dividend periods (including compounded dividends thereon, if any) have been or contemporaneously are declared and paid or declared and a sum or number of shares of our common stock sufficient for the payment thereof is set apart for payment;

 

   

the conversion of our capital stock into, or exchange of our capital stock for, other shares of any class or series of capital stock ranking equally to the convertible preferred stock, so long as the liquidation preference of such class or series of capital stock issued upon conversion or exchange is less than or equal to the liquidation preference of the capital stock surrendered for conversion or exchange;

 

   

payments on the purchase contracts or the Series B preferred stock (if any), in each case so long as the amount of payments made on account of such purchase contracts or Series B preferred stock (if any) and the convertible preferred stock is paid on all such purchase contracts or Series B preferred stock (if any) and the convertible preferred stock then outstanding on a pro rata basis in proportion to the full payment to which each such purchase contract, Series B preferred stock or convertible preferred stock is then entitled if paid in full; or

 

   

the conversion into or exchange for other shares of any class or series of capital stock ranking junior to the convertible preferred stock.

We will not permit any of our subsidiaries to purchase or otherwise acquire for consideration any shares of our stock unless we could, under the above paragraph, purchase or otherwise acquire such shares at such time and in such manner. We refer to the provisions described in this paragraph and the above paragraph as the “dividend blocker provisions.”

When we do not pay dividends in full (or do not set apart a sum sufficient to pay them in full) on the convertible preferred stock and the shares of any other class or series of capital stock ranking, as to dividends, on parity with the convertible preferred stock (including the Series B preferred stock, if any), we will declare any dividends upon the convertible preferred stock and each such other class or series of capital stock ranking, as to dividends, on parity with the convertible preferred stock pro rata, so that the amount of dividends declared per share of convertible preferred stock and such other class or series of capital stock will in all cases bear to each other the same ratio that accumulated but unpaid dividends per share on the convertible preferred stock and such other class or series of capital stock (which will not include any accumulation in respect of unpaid dividends on such other class or series of capital stock for prior dividend periods if such other class or series of capital stock does not have a cumulative dividend) bear to each other.

Any accumulated but unpaid dividends will accumulate additional dividends at the then-applicable dividend rate (as such dividend rate may be adjusted in connection with a remarketing) until paid, compounded quarterly, to, but excluding, the payment date. We refer to these additional dividends that accumulate on accumulated but unpaid dividends as “compounded dividends” and the payments in respect thereof as “compounded dividend payments.”

 

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Holders of shares of convertible preferred stock are not entitled to any dividends in excess of the full cumulative dividends (including compounded dividends) on the convertible preferred stock as described above. Any dividend payment made on the convertible preferred stock will first be credited against the earliest accumulated but unpaid dividends due with respect to those shares which remain payable.

No dividend will be paid unless and until our board of directors declares a dividend payable with respect to the convertible preferred stock. Our ability to declare and pay dividends and make other distributions with respect to our capital stock, including the convertible preferred stock, may be limited by the terms of any indentures, loan agreements or other financing arrangements that we enter into in the future. In addition, our ability to declare and pay dividends may be limited by the Pennsylvania Business Corporation Law. Notwithstanding the foregoing, except in the case of a dividend deficiency event, all accumulated but unpaid dividends (including compounded dividends thereon), including with respect to the June 1, 2024 payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. If a dividend deficiency event occurs, following the final remarketing (whether successful or failed), we will have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date (or such next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such convertible preferred stock for so long as the convertible preferred stock remains outstanding, and such dividends will be payable to the holders of such convertible preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

Method of Payment of Dividends

Subject to the limitations described below, we may pay any dividend (or any portion of any dividend) on the convertible preferred stock (whether or not for a current dividend period or any prior dividend period), determined in the sole discretion of our board of directors:

 

   

in cash;

 

   

by delivery of shares of our common stock; or

 

   

through any combination of cash and shares of our common stock.

We will make each payment of a declared dividend on the convertible preferred stock in cash, except to the extent we elect, or have previously elected, to make all or any portion of such payment in shares of our common stock. Unless we have previously irrevocably elected a dividend payment method to apply, we will give the holders of the convertible preferred stock notice of any election with respect to any particular dividend payment, the portion of such payment that will be made in cash and the portion of such payment that will be made in common stock no later than eight scheduled trading days prior to the payment date for such dividend.

If we elect, or have previously irrevocably elected, to make any such payment of a dividend, or any portion thereof, in shares of our common stock, such shares will be valued for such purpose at the average of the daily VWAPs per share of our common stock over the five consecutive trading day period ending on, and including, the second trading day immediately preceding the applicable payment date (the “five-day average price”), multiplied by 97%. However, the number of shares of common stock that we will deliver as payment for any declared dividend on the convertible preferred stock will be limited to a maximum number equal to the total dollar amount of the declared dividend (including any portion thereof that we have not elected to pay in shares of our common stock) divided by the floor price in effect on the second trading day immediately preceding the applicable payment date. If the dollar amount of any declared dividend per

 

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share of convertible preferred stock that we have duly elected to pay in shares of common stock exceeds the product of (x) 97% of the applicable five-day average price and (y) the number of shares of common stock deliverable (without regard to our obligation to pay cash in lieu of delivering any fractional share of our common stock) per share of convertible preferred stock in respect of such dividend, then we will, to the extent we are not prohibited from doing so as a result of a dividend deficiency event, declare and pay such excess amount in cash. For the avoidance of doubt, any cash amount referred to in the preceding sentence that we fail to declare and pay will be deemed to be accumulated but unpaid dividends on the convertible preferred stock. We refer to the provision described in the second and third sentences of this paragraph as the “share limitation provision.” Notwithstanding anything to the contrary, we will have the right, exercisable at our sole election by notice sent to the holders of the convertible preferred stock, to irrevocably eliminate the share limitation provision. If we have made such an irrevocable election, then we will state so in each subsequent notice, if any, that we send electing to pay any portion of a declared dividend on the convertible preferred stock in shares of common stock. For the avoidance of doubt, such an irrevocable election, if made, will be effective without the need to amend or supplement the statement with respect to shares, including pursuant to the provision described in the sixth bullet point of the third paragraph under the caption “— Limited Voting Rights — When a Supermajority Vote is Required” below. However, we may nonetheless choose to effect such an amendment or supplement at our option. In addition, such irrevocable election, if made, will not affect any prior election that we have made or prior notice that we have sent with respect to the payment of any portion of a declared dividend in shares of common stock.

For purposes of the convertible preferred stock, the floor price has the meaning ascribed to it under the purchase contract and pledge agreement, assuming, solely for these purposes, that that purchase contracts remain outstanding for so long as any convertible preferred stock is outstanding.

Without the consent of any holders of the convertible preferred stock, we may, by notice to such holders, irrevocably elect whether we will pay dividend payments in cash, shares of our common stock or a combination thereof (a “dividend payment method”) and, if applicable, the amount or percentage of a dividend payment to be paid in common stock that will apply to any dividend payment following such notice (unless a dividend payment method has previously been designated) and, subject to the foregoing, specify the effective time of such election (which may be any time subsequent to the delivery of such notice). Our irrevocable election of a dividend payment method as described herein may be made by us in our sole discretion.

No fractional shares of our common stock will be delivered to the holders of the convertible preferred stock in respect of dividends. We will instead pay a cash adjustment to each holder that would otherwise be entitled to a fraction of a share of our common stock based on (i) the five-day average price and (ii) the aggregate number of shares of convertible preferred stock held by such holder (or, if the convertible preferred stock is held in global book-entry form, based on the applicable procedures of the depositary for determining such number of shares).

To the extent a shelf registration statement is required in our reasonable judgment in connection with the issuance of or for resales (by persons who are not, and have not been at any time during the preceding three months, affiliates of ours) of common stock issued as payment of a dividend, we will, to the extent such a registration statement is not currently filed and effective, use our commercially reasonable efforts to file and maintain the effectiveness of such a shelf registration statement until the earlier of such time as all such shares of our common stock have been resold thereunder and such time as all such shares are freely tradable by such non-affiliates without registration. To the extent applicable, we will also use our commercially reasonable efforts to have the shares of our common stock qualified or registered under applicable U.S. state securities laws, if required, and approved for listing on the New York Stock Exchange (or if our common stock is not listed on the New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which our common stock is then listed).

Any dividends paid in shares of our common stock will be subject to the listing standards of the New York Stock Exchange, if applicable.

 

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Liquidation Preference

Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, before any distribution or payment will be made to holders of shares of our common stock or any other class or series of capital stock ranking, as to rights upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, junior to the convertible preferred stock, holders of shares of convertible preferred stock are entitled to be paid out of our assets legally available for distribution to our shareholders, after payment of or provision for our debts and other liabilities, a liquidation preference of $1,000 per share of convertible preferred stock, plus an amount equal to any accumulated but unpaid dividends (whether or not authorized or declared) up to but excluding the date of payment, but subject to the prior payment in full of all our liabilities and the payment of our senior stock. If, upon our voluntary or involuntary liquidation, dissolution or winding up, our available assets are insufficient to pay the full amount of the liquidating distributions on all outstanding shares of convertible preferred stock and the corresponding amounts payable on all shares of each other class or series of capital stock ranking, as to liquidation rights, on parity with the convertible preferred stock in the distribution of assets (including the Series B preferred stock, if any), then holders of shares of convertible preferred stock and each such other class or series of capital stock ranking, as to voluntary or involuntary liquidation rights, on parity with the convertible preferred stock will share ratably in any distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

Holders of shares of convertible preferred stock will be entitled to written notice of any event triggering the right to receive a distribution in connection with any voluntary or involuntary liquidation, dissolution or winding up of our affairs. After payment of the full amount of the liquidating distributions to which they are entitled, holders of shares of convertible preferred stock will have no right or claim to any of our remaining assets. Our consolidation or merger with or into any other corporation, trust or other entity, or the voluntary sale, lease, transfer or conveyance of all or substantially all of our property or business, will not be deemed to constitute a liquidation, dissolution or winding up of our affairs.

No Maturity

The convertible preferred stock has no maturity date, but we are permitted to redeem the convertible preferred stock as described under “— Optional Redemption.” Accordingly, the convertible preferred stock will remain outstanding indefinitely unless a holder of shares of convertible preferred stock decides, subject to satisfaction of the conditions described herein, to convert it, or we elect to redeem it. See “— Conversion Rights,” and “— Optional Redemption” below.

Optional Redemption

We do not have the right to redeem any shares of convertible preferred stock before September 3, 2024. On or after September 3, 2024, we will have the option to redeem some or all the shares of convertible preferred stock at a redemption price equal to 100% of the liquidation preference per share, plus any accumulated but unpaid dividends, if any (whether or not declared) to, but excluding, the redemption date. The redemption price will be paid solely in cash. In connection with a successful remarketing of the convertible preferred stock, the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025.

In the event of a redemption, we will request that the depositary notify its participants holding convertible preferred stock or, if the convertible preferred stock is in certificated form, send a written notice by first class mail to each applicable holder of record of the convertible preferred stock at such holders registered address, not fewer than 25 scheduled trading days nor more than 90 calendar days prior to the redemption date, stating, among other things, the redemption price per share of convertible preferred stock. The redemption date will be a business day of our choosing that complies with the preceding sentence. In addition, we will (i) issue a press release containing such information or (ii) include the same information in a current report that is filed with, or furnished to, the SEC. In no event will we give any

 

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notice of redemption prior to the earlier of a remarketing settlement date and the purchase contract settlement date.

If we give notice of redemption, then, by 12:00 p.m., New York City time, on the redemption date, we will, with respect to:

 

   

shares of convertible preferred stock held by DTC or its nominees, deposit or cause to be deposited, irrevocably with DTC cash sufficient to pay the redemption price and will give DTC irrevocable instructions and authority to pay the redemption price to holders of such shares of convertible preferred stock; and

 

   

shares of convertible preferred stock held in certificated form, deposit or cause to be deposited, irrevocably with the paying agent cash sufficient to pay the redemption price and will give the paying agent irrevocable instructions and authority to pay the redemption price to holders of such shares of convertible preferred stock upon surrender to the paying agent of their certificates evidencing their shares of convertible preferred stock.

If on the redemption date there has been irrevocably deposited with DTC or the paying agent cash sufficient to pay the redemption price for the shares of convertible preferred stock delivered for redemption in accordance with the terms of the statement with respect to shares, then, except as described in the next paragraph, dividends will cease to accumulate on those shares of convertible preferred stock called for redemption and all rights of holders of such shares will terminate except for the right to receive the redemption price. Payment of the redemption price for the shares of convertible preferred stock is conditioned upon book-entry transfer of or physical delivery of certificates representing the convertible preferred stock, together with necessary endorsements, to the paying agent, or to the paying agent’s account at DTC, at any time after delivery of the redemption notice. Payment of the redemption price for the convertible preferred stock will be made (i) if book-entry transfer of or physical delivery of the convertible preferred stock has been made by or on the redemption date, on the redemption date, or (ii) if book-entry transfer of or physical delivery of the convertible preferred stock has not been made by or on such date, at the time of book-entry transfer of or physical delivery of the convertible preferred stock.

If the redemption date falls after a dividend payment record date and on or before the related payment date, then (x) holders of the shares of convertible preferred stock at the close of business on that dividend payment record date will be entitled to receive the full dividend payable on those shares on the corresponding payment date; and (y) the redemption price payable per share on such redemption date as described above will be reduced by the amount of such dividend payable per share of convertible preferred stock on the related payment date.

In the case of any partial redemption, we will select the shares of convertible preferred stock to be redeemed on a pro rata basis, by lot or in accordance with, and subject to, DTC’s applicable procedures.

We do not have the right to authorize, issue a press release or give notice of redemption unless (a) we have funds legally available for the payment of the aggregate redemption price and (b) prior to giving the notice (i) all accumulated but unpaid dividends on the convertible preferred stock (whether or not declared) for dividend periods ended prior to the date of such notice of redemption have been or contemporaneously are declared and paid out of legally available funds and (ii) if the redemption date occurs following a record date and on or prior to the related payment date, a cash dividend for the related dividend period has been declared and sufficient funds legally available therefor have been set aside for payment of such dividend.

If any shares of convertible preferred stock are called for redemption, we must also call for redemption a proportionate number (rounded to the nearest whole number) of outstanding shares of Series B preferred stock, if any, on the same redemption date.

 

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Limited Voting Rights

Holders of shares of convertible preferred stock generally do not have any voting rights, except as set forth below and as required by law. In matters where holders of the convertible preferred stock are entitled to vote, each share of convertible preferred stock will be entitled to one vote.

Preferred Stock Directors

If at any time dividends on the convertible preferred stock have not been declared and paid in full for six or more dividend periods, whether or not consecutive (which we refer to as a “preferred dividend default”), holders of shares of convertible preferred stock (voting together as a class with the holders of all other classes or series of preferred stock upon which equivalent voting rights have been conferred (including the Series B preferred stock (if any)) and are exercisable (and with voting rights allocated pro rata based on the liquidation preference of the convertible preferred stock and each such other class or series of preferred stock)) will be entitled to vote for the election of two additional directors to serve on our board of directors (which we refer to as “preferred stock directors”), until all accumulated but unpaid dividends with respect to the convertible preferred stock and any other class or series of preferred stock upon which equivalent voting rights have been conferred (including the Series B preferred stock (if any)) and are exercisable have been paid or declared and a sum sufficient for payment is set aside for such payment. In such a case, the number of directors serving on our board of directors will be increased by two. As a condition to the election of any such preferred stock directors, such election must not cause us to violate the corporate governance requirements of The New York Stock Exchange (or any other exchange or automated quotation system on which our securities may be listed or quoted) that requires listed or quoted companies to have a majority of independent directors. In addition, our board of directors will at no time include more than two directors, in total, appointed pursuant to the provisions under this “— Preferred Stock Directors” subsection, the provisions set forth under the heading “Description of the Series B Preferred Stock — Limited Voting Rights — Preferred Stock Directors” and the analogous provisions in any other classes or series of Parity Stock upon which equivalent voting rights have been conferred and are exercisable. The preferred stock directors will be elected by a plurality of the votes cast in the election to serve until the next annual meeting and each preferred stock director will serve until his successor is duly elected and qualifies or until the director’s right to hold the office terminates, whichever occurs earlier. Subject to the timing and notice requirements of our amended and restated bylaws as in effect on the date of this prospectus supplement, the election will take place at:

 

   

a special meeting called by holders of at least 10% of the outstanding shares of convertible preferred stock together with any other class or series of preferred stock upon which equivalent voting rights have been conferred (including the Series B preferred stock, if any) and are exercisable, if this request is received more than 90 calendar days before the date fixed for our next annual or special meeting of shareholders or, if we receive the request for a special meeting within 90 calendar days before the date fixed for our next annual or special meeting of shareholders, at our annual or special meeting of shareholders; and

 

   

each subsequent annual meeting (or special meeting held in its place) until all accumulated but unpaid dividends on the convertible preferred stock and on any other class or series of preferred upon which equivalent voting rights have been conferred (including the Series B preferred stock, if any) and are exercisable have been paid in full for all past completed dividend periods and the dividend for the then current dividend period has been fully paid or declared and a sum sufficient for the payment thereof set aside for payment.

If and when all accumulated dividends on the convertible preferred stock and all other classes or series of preferred stock upon which equivalent voting rights have been conferred (including the Series B preferred stock, if any) and are exercisable have been paid in full or a sum sufficient for such payment in full is set aside for payment, holders of shares of convertible preferred stock will be divested of the voting rights set forth above (subject to re-vesting in the event of any subsequent preferred dividend defaults) and

 

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the term of office of such preferred stock directors so elected will terminate and the entire board of directors will be reduced accordingly. Each preferred stock director will be entitled to one vote on any matter.

When a Supermajority Vote is Required

So long as any shares of convertible preferred stock remain outstanding, we will not, without the consent or the affirmative vote of the holders of at least two-thirds of the outstanding shares of convertible preferred stock together with each other class or series of preferred stock ranking on parity with the convertible preferred stock, including the Series B preferred stock (if any), with respect to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up and upon which equivalent voting rights have been conferred (including the Series B preferred stock, if any) (voting as a single class):

 

   

authorize, create or issue, or increase the number of authorized or issued shares of, any class or series of stock ranking senior to the convertible preferred stock with respect to payment of dividends, or the distribution of assets upon the liquidation, dissolution or winding up of our affairs, or reclassify any of our authorized capital stock into any such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares;

 

   

amend, alter or repeal the provisions of our amended and restated articles of incorporation, as amended, so as to materially and adversely affect any right, preference, privilege or voting power of the convertible preferred stock (other than an amendment, alteration or repeal permitted by the provisions described in the second immediately following paragraph below); or

 

   

consummate a binding share exchange or reclassification involving the shares of convertible preferred stock or a merger or consolidation of us with another entity, unless either (i) the shares of convertible preferred stock remain outstanding and have rights, preferences, privileges and voting powers, taken as a whole, that are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the convertible preferred stock immediately prior to such consummation, taken as a whole, or (ii) in the case of any such merger or consolidation with respect to which we are not the surviving or resulting entity, the shares of convertible preferred stock are converted into or exchanged for, or represent the right to receive, preference securities of the surviving or resulting entity or its ultimate parent, such surviving or resulting entity or ultimate parent is organized under the laws of the United States, any state thereof or the District of Columbia and treated as a corporation for U.S. federal income tax purposes, and such preference securities have rights, preferences, privileges and voting powers, taken as a whole, that are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the convertible preferred stock immediately prior to such consummation, taken as a whole;

provided that (x) a binding share exchange, reclassification, merger or consolidation that satisfies the third bullet point of this sentence will not require the affirmative vote or consent of any holders of the convertible preferred stock pursuant to the second bullet point of this sentence; (y) the creation and issuance, or an increase in the authorized or issued amount, whether pursuant to pre-emptive or similar rights or otherwise, of any series of preferred stock (including the convertible preferred stock and Series B preferred stock), ranking equally with and/or junior to the convertible preferred stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and the distribution of assets upon our liquidation, dissolution and winding-up, will not be deemed to adversely affect the rights, preferences, privileges or voting powers of the convertible preferred stock, and will not require the affirmative vote or consent of any holders of the convertible preferred stock; and (z) the application of the provisions described below under the captions “— Series B Preferred Stock Reorganization Events” and “— Recapitalizations, Reclassifications and Changes of Our Common Stock,” including the execution and delivery of any supplemental instruments solely to give effect to such provisions, will not, in itself, be deemed to adversely affect the rights, preferences, privileges or voting powers of the convertible preferred stock and will not require the affirmative vote or consent of any holders of the convertible preferred stock.

 

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If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified above would adversely affect one or more but not all series of parity stock (including the convertible preferred stock and/or the Series B preferred stock for this purpose), then only the one or more series of parity stock adversely affected and entitled to vote, rather than all series of parity stock, will vote as a class.

Without the consent of the holders of the convertible preferred stock, we may amend, alter, supplement, or repeal any terms of the convertible preferred stock or the statement with respect to shares for the following purposes:

 

   

to cure any ambiguity, defect, inconsistency or mistake, or to correct or supplement any provision contained in the statement with respect to shares establishing the terms of the convertible preferred stock that may be defective or inconsistent with any other provision contained in such statement with respect to shares;

 

   

so long as such action does not adversely affect the special rights, preferences, privileges or voting powers of the convertible preferred stock, and limitations and restrictions thereof, to make such other provisions in regard to matters or questions relating to the convertible preferred stock that is not inconsistent with the provisions of the statement with respect to shares establishing the terms of the convertible preferred stock;

 

   

to waive any of our rights with respect to the convertible preferred stock;

 

   

to amend, alter, supplement or repeal any terms of the convertible preferred stock or the statement with respect to shares in order to conform the terms of the convertible preferred stock to the description contained in the preliminary prospectus supplement for this offering, as supplemented by the related pricing term sheet;

 

   

to amend, alter, supplement or repeal any terms of the convertible preferred stock or the statement with respect to shares in order to implement the changes under “— Terms of the Remarketed Preferred Stock”;

 

   

to irrevocably elect a dividend payment method to apply or to irrevocably eliminate the share limitation provision;

 

   

to amend the terms of the convertible preferred stock or the statement with respect to shares solely to give effect to the provisions described below under “— Series B Preferred Stock Reorganization Events” or “— Recapitalizations, Reclassifications and Changes of Our Common Stock”; or

 

   

to file a statement of correction with respect to the statement with respect to shares to the extent permitted by Section 138 of the Pennsylvania Business Corporation Law.

Holders of shares of convertible preferred stock will not be entitled to vote with respect to any increase in the total number of authorized shares of our common stock or preferred stock, any increase in the number of authorized shares of convertible preferred stock or the creation or issuance of any other class or series of capital stock, or any increase in the number of authorized shares of any other class or series of capital stock, in each case ranking on parity with or junior to the convertible preferred stock, including the Series B preferred stock (if any), with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up, except as set forth above.

Holders of shares of convertible preferred stock will not have any voting rights with respect to, and the consent of the holders of shares of convertible preferred stock is not required for, the taking of any corporate action, including any merger or consolidation involving us or a sale of all or substantially all of our consolidated assets, regardless of the effect that such merger, consolidation or sale may have upon the powers, preferences, voting power or other rights or privileges of the convertible preferred stock, except as set forth above.

 

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In addition, the voting provisions above will not apply if, at or prior to the time when the act with respect to which the vote would otherwise be required would occur, we have redeemed upon proper procedures all outstanding shares of convertible preferred stock.

Conversion Rights

General

Holders of Corporate Units do not have the right to convert their ownership interests in the convertible preferred stock that are a part of such Corporate Units. Only shares of convertible preferred stock that are not a part of Corporate Units may be so converted. Holders of such separate shares of convertible preferred stock that are not a part of Corporate Units may convert their shares into the consideration described under “— Settlement Upon Conversion” at their option prior to June 1, 2024 only upon the occurrence of a fundamental change if such fundamental change occurs prior to a successful remarketing of the convertible preferred stock. In order for a holder of Corporate Units to separate their convertible preferred stock from the purchase contracts in order to convert the convertible preferred stock in connection with a fundamental change prior to a successful remarketing of the convertible preferred stock, the holder must either (1) create Treasury Units (at any time other than during a blackout period), (2) settle the related purchase contracts early (at any time other than during a blackout period) or (3) during the period after the date we give notice of a final remarketing, create Cash Settled Units at or prior to the close of business on the second business day immediately preceding the first day of the final remarketing period. If a fundamental change occurs prior to a successful remarketing of the convertible preferred stock, holders of separate shares of convertible preferred stock can convert such shares at any time from or after the effective date of such transaction to the close of business on the 35th business day after such effective date (such 35th business day, the “fundamental change conversion deadline”). Conversions in connection with such fundamental change will be settled on the second business day following the final trading day of a 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately preceding the fundamental change conversion deadline (such second business day, the “fundamental change settlement date”).

On and after June 1, 2024, holders of shares of convertible preferred stock may, at their option, at any time and from time to time, convert some or all of their outstanding shares of convertible preferred stock into the consideration described under “— Settlement Upon Conversion.”

The conversion rate will initially be                 shares of our common stock per share of convertible preferred stock, which is equivalent to an initial conversion price of approximately $                 per share of our common stock. Upon conversion of the convertible preferred stock, we will settle our obligations in the manner set forth under “— Settlement Upon Conversion.” Whenever in this prospectus supplement we refer to the conversion rate as of a particular date without setting forth a particular time on such date, such reference will be deemed to be to the conversion rate immediately after the close of business on such date.

Upon settlement of a conversion of the convertible preferred stock and except as set forth in the immediately succeeding paragraph, a holder will not receive payment of accumulated but unpaid dividends as described under “— Dividends” and we will not make any payments in respect of or adjust the conversion rate to account for accumulated but unpaid dividends to the conversion date except as provided under “— Adjusted Conversion Rate Upon a Fundamental Change.”

If a holder of shares of convertible preferred stock exercises its conversion rights, on and after the conversion date, those shares will cease to accumulate dividends as of the end of the day immediately preceding the conversion date, except as provided in the next sentence. A holder of shares of convertible preferred stock at the close of business on the record date for the payment of a dividend that has been declared will receive that dividend notwithstanding a conversion of the convertible preferred stock following such record date. However, shares of convertible preferred stock surrendered for conversion after the close of business on any record date for the payment of any declared dividend and before the open of business on the payment date relating to that record date must be accompanied by a payment in cash of an

 

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amount equal to the dividend payable in respect of those shares for the dividend period in which the shares are converted; provided that no such payment need be made:

 

   

if we have specified a redemption date that is after such dividend payment record date and on or prior to the second business day immediately following the corresponding payment date; or

 

   

if a fundamental change conversion deadline occurs after such dividend payment record date and on or prior to the business day immediately following the corresponding payment date.

In case any shares of convertible preferred stock are to be redeemed, the right to convert those shares of convertible preferred stock will terminate at 5:00 p.m., New York City time, on the second business day immediately preceding the redemption date, unless we default in the payment of the redemption price of those shares of convertible preferred stock.

Adjusted Conversion Rate Upon a Fundamental Change

If a fundamental change (as defined in “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change” above) occurs prior to a successful remarketing of the convertible preferred stock, a holder may elect to convert separate shares of convertible preferred stock in connection with such fundamental change (such right of conversion, the “fundamental change conversion right”). If the stock price (as defined in “Description of the Purchase Contracts — Early Settlement Upon a Fundamental Change — Calculation of Make-Whole Shares” above) is less than the conversion price of the convertible preferred stock then in effect, any such conversion in connection with such fundamental change will be settled based on an adjusted conversion rate that will be equal to (x) the $1,000 liquidation preference plus, other than in the event that the converting holder receives, upon conversion of each share of convertible preferred stock, a share of Series B preferred stock or a share of reference preferred stock, as the case may be, all accumulated but unpaid dividends to, but excluding the fundamental change settlement date described below (unless the conversion date for a share of convertible preferred stock occurs after the record date for the payment of declared dividends and prior to the related payment date, in which case the conversion rate calculation for such share will not include accumulated but unpaid dividends that will be paid to holders of record on such record date) divided by (y) the average of the closing prices of our common stock for the five consecutive trading days ending on, and including, the second trading day prior to the fundamental change settlement date (or, in the case of a fundamental change described in clause (i) of the definition of fundamental change where all holders of our common stock receive only cash in the fundamental change, the cash amount paid per share of our common stock) (the amount described in clause (y), the “fundamental change settlement price”). Notwithstanding the foregoing, in no event will the conversion rate exceed                shares of our common stock per share of convertible preferred stock (subject to adjustment in the same manner as the conversion rate is adjusted pursuant to paragraphs (1) through (5), inclusive, below under“—Conversion Rate Adjustments”), which initial amount is equal to the $1,000 liquidation preference divided by 50% of $                 (the closing price of our common stock on the pricing date of this offering).

However, on and after a successful remarketing of the convertible preferred stock, there will be no fundamental change conversion right.

The conversion price as of any time is equal to $1,000 divided by the conversion rate as of such time.

A conversion of the convertible preferred stock will be deemed for these purposes to be “in connection with” such a fundamental change (regardless of the stock price) if the conversion date occurs from, and including, the effective date of such fundamental change to, and including, the fundamental change conversion deadline.

If such fundamental change occurs prior to a successful remarketing of the convertible preferred stock, we will send a notice to holders of such fundamental change within five business days after the effective

 

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date of such fundamental change (the “fundamental change company notice”). Such fundamental change company notice will state:

 

   

the events constituting the fundamental change;

 

   

the effective date of the fundamental change;

 

   

the name and address of the paying agent and the conversion agent;

 

   

the conversion rate, or if the stock price is less than the conversion price, the formula for determination of the conversion rate;

 

   

the procedures that the holder of the convertible preferred stock must follow to exercise the fundamental change conversion right;

 

   

the fundamental change conversion deadline; and

 

   

the scheduled fundamental change settlement date.

To exercise the fundamental change conversion right, a holder of a separate share of convertible preferred stock must deliver, on or before the close of business on the fundamental change conversion deadline, the convertible preferred stock to be converted, duly endorsed for transfer, together with a written conversion notice completed, to our conversion agent. The conversion notice will state:

 

   

the relevant fundamental change conversion date; and

 

   

the number of shares of convertible preferred stock to be converted pursuant to the fundamental change conversion right.

If the convertible preferred stock is held in global form, the conversion notice must comply with applicable DTC procedures.

The convertible preferred stock as to which the fundamental change conversion right has been properly exercised will be converted in accordance with “— Settlement Upon Conversion” below.

If all holders of our common stock receive only cash in a reorganization event, then notwithstanding the foregoing, for all conversions in connection with a fundamental change that occur after the effective date of such transaction, the consideration due upon conversion of each such share of convertible preferred stock will be solely cash in an amount equal to the conversion rate as modified by this “— Adjusted Conversion Rate Upon a Fundamental Change,” multiplied by the fundamental change settlement price for such transaction.

We will, to the extent applicable, comply with listing standards of the New York Stock Exchange in connection with the issuance of our common stock upon any exercise of the fundamental change conversion right.

Conversion Procedures

Holders of shares of convertible preferred stock represented by a beneficial interest in a global security may convert their shares by complying with the depositary’s procedures and, if required, by paying any dividends as described in this prospectus supplement. Holders of shares of convertible preferred stock in certificated form may convert some or all of their shares by surrendering to us at our principal office or at the office of our conversion agent, as may be designated by our board of directors, the certificate or certificates, if any, for the shares of convertible preferred stock to be converted, accompanied by a written notice stating that the holder of shares of convertible preferred stock elects to convert all or a specified whole number of those shares in accordance with the provisions described in this prospectus supplement and specifying the name or names in which the holder of shares of convertible preferred stock wishes the certificate or certificates for any Series B preferred stock and for any shares of our common stock to be issued. If the notice specifies a name or names other than the name of the holder of shares of convertible

 

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preferred stock, the notice will be accompanied by payment of all transfer taxes payable upon the issuance of shares of Series B preferred stock and shares of our common stock in that name or names. Other than such transfer taxes, we will pay any documentary, stamp or similar issue or transfer taxes that may be payable in respect of any issuance or delivery of shares of Series B preferred stock and shares of our common stock upon conversion of shares of convertible preferred stock. The first business day on which the foregoing procedures have been complied with will be deemed the “conversion date” with respect to a share of convertible preferred stock.

The person in whose name any share of Series B preferred stock or any share of common stock is issuable upon conversion of any convertible preferred stock will be deemed to become the holder of record of that share as of the close of business on the final trading day of the relevant observation period. In addition, if the Series B preferred stock or common stock to be issued upon conversion, if any, is certificated, promptly after the issuance of the Series B preferred stock certificate or common stock certificate, as the case may be (or, if the convertible preferred stock is certificated, promptly after, and in any case, no later than two business days after the later of the surrender of the certificates representing the shares that are converted and the final trading day of the observation period) we will deliver or cause to be delivered (i) certificates representing the number of validly issued, fully paid and non-assessable shares of Series B preferred stock and shares of our common stock, as the case may be, to which the holders of such shares of convertible preferred stock, or the transferee of the holder of such shares of convertible preferred stock, will be entitled, if any, and (ii) if the convertible preferred stock is then certificated and if less than the full number of shares of convertible preferred stock represented by the surrendered certificate or certificates, if any, or specified in the notice, are being converted, a new certificate or certificates for the number of shares represented by the surrendered certificate or certificates, less the number of shares being converted. Subject to the first sentence of this paragraph, the conversion will be deemed to have been made at the close of business on the conversion date so that the rights of the holder of shares of convertible preferred stock as to the shares being converted will cease, except for the right to receive the shares of Series B preferred stock or cash, as the case may be, and shares of our common stock, if any, due upon conversion (and, if applicable, (x) any dividend payment referred to in the second sentence of the fifth paragraph under the caption “— Conversion Rights — General” above and (y) any payment referred to in clause (y) of the second sentence of the tenth paragraph under the caption “— Settlement Upon Conversion” below).

Holders of shares of convertible preferred stock are not eligible to exercise any rights of a holder of the shares of Series B preferred stock or shares of our common stock issuable upon conversion of such convertible preferred stock until the close of business on the final trading day of the observation period for such conversion. If more than one share of convertible preferred stock is surrendered for conversion by the same shareholder at the same time, the consideration due upon conversion of those shares of convertible preferred stock will be computed on the basis of the total number of shares of convertible preferred stock so surrendered (subject to any applicable depositary rules).

We will at all times reserve and keep available, free from preemptive rights, out of our authorized but unissued shares of capital stock, for issuance upon the conversion of shares of convertible preferred stock, a number of authorized but unissued shares of Series B preferred stock and a number of authorized but unissued shares of our common stock that will from time to time be sufficient to permit the conversion of all outstanding shares of convertible preferred stock (assuming, for such purposes, that no conversions are induced conversions).

Before the delivery of any securities upon conversion of shares of convertible preferred stock, we will comply in all material respects with all applicable federal and state laws and regulations. All shares of Series B preferred stock and all shares of our common stock, in each case, delivered upon conversion of shares of convertible preferred stock, if any, will, upon delivery, be duly and validly issued, fully paid and non-assessable, free of all liens and charges and not subject to any preemptive rights.

 

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Settlement Upon Conversion

To satisfy our obligations with respect to a conversion in connection with a redemption (an “induced conversion”), we will deliver to the converting holder in respect of each $1,000 liquidation preference of the convertible preferred stock being converted up to $1,000 in cash plus all accumulated but unpaid dividends (whether or not declared), if any, on such converted convertible preferred stock to, but excluding, the payment date immediately preceding the relevant conversion date, and shares of our common stock (if any), as described below.

To satisfy our obligations with respect to a conversion other than an induced conversion (an “optional conversion”), we will deliver to the converting holder in respect of each $1,000 liquidation preference of the convertible preferred stock being converted, a share of Series B preferred stock and shares of our common stock (if any), as described below.

A conversion of shares of convertible preferred stock will be deemed for these purposes to be an induced conversion if such shares have been called for redemption and the relevant conversion date occurs from, and including, the effective date of our notice of redemption to, and including, the second business day immediately preceding the redemption date. Notwithstanding the foregoing, if we call less than all outstanding shares of convertible preferred stock for redemption and a holder (including, for this purpose, the owner of a beneficial interest in a global share of convertible preferred stock) is not able to reasonably determine, prior to the close of business on the 26th scheduled trading day immediately preceding the relevant redemption date, whether the shares of convertible preferred stock owned by such holder (or beneficially owned by such owner of a beneficial interest, as applicable) are subject to such partial redemption (and, as a result thereof, whether a conversion of such shares of convertible preferred stock (or such beneficial interests, as applicable) with a conversion date occurring during the period from, and including, the date of the relevant notice of redemption to, and including, the second business day immediately preceding the redemption date would be an induced conversion) for any reason, then any conversion of such shares of convertible preferred stock (or such beneficial interests, as applicable) with a conversion date occurring during such period will, regardless of whether such shares of convertible preferred stock (or such beneficial interests, as applicable) are subject to such partial redemption, be deemed to be an induced conversion for purposes of determining the consideration due upon conversion of such shares of convertible preferred stock (or such beneficial interests, as applicable).

The consideration due upon conversion of the convertible preferred stock will be computed as follows:

 

   

to satisfy our obligations with respect to an optional conversion, we will deliver to the converting holder in respect of each $1,000 liquidation preference of the convertible preferred stock being converted one share of Series B preferred stock and a number of shares of our common stock (if any) equal to the net share settlement amount; and

 

   

to satisfy our obligations with respect to an induced conversion, we will deliver to the converting holder in respect of each $1,000 liquidation preference of the convertible preferred stock being converted a “settlement amount” equal to the sum of the daily settlement amounts for each of the 20 consecutive trading days during the related observation period.

In the case of an induced conversion, the converting holder will also receive all accumulated but unpaid dividends (whether or not declared), if any, on such converted convertible preferred stock to, but excluding, the payment date immediately preceding the relevant conversion date.

The “daily settlement amount,” for each of the 20 consecutive trading days during the observation period, will consist of:

 

   

cash equal to the lesser of (i) $1,000 divided by 20 (such quotient being referred to as the “daily measurement value”) and (ii) the daily conversion value for such trading day; and

 

   

to the extent the daily conversion value for such trading day exceeds the daily measurement value, a number of shares equal to (i) the difference between such daily conversion value and the daily

 

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measurement value, divided by (ii) the daily VWAP for such trading day (such number of shares, the “daily net share settlement amount”).

“Daily conversion value” means, for each of the 20 consecutive trading days during the observation period, one-twentieth of the product of (i) the applicable conversion rate in effect on such trading day and (ii) the daily VWAP of our common stock on such trading day.

“Net share settlement amount” means the sum of the daily net share settlement amounts for each of the 20 consecutive trading days during the related observation period.

“Observation period” means, with respect to any share of convertible preferred stock being converted, the 20 consecutive trading day period beginning on and including the second trading day after the conversion date for such share of convertible preferred stock, provided that if the relevant conversion date occurs on or after the date of our issuance of a notice of redemption with respect to the convertible preferred stock as described under “— Optional Redemption” and on or prior to the second business day before the relevant redemption date, the observation period will be the 20 consecutive trading days beginning on, and including, the 21st scheduled trading day immediately preceding such redemption date; provided further that for conversions in connection with a fundamental change prior to a successful remarketing of the convertible preferred stock, the observation period will refer to the 20 consecutive trading day period beginning on and including the 21st scheduled trading day immediately preceding the fundamental change conversion deadline (as defined herein under “Description of the Convertible Preferred Stock — Conversion Rights — General”).

Except as provided in the next two sentences or under the caption “— Conversion Rate Adjustments,” we will pay or deliver, as the case may be, the consideration due upon conversion to converting holders on the second business day following the final trading day of the relevant observation period and such holders will be deemed to be the owners of the shares of Series B preferred stock and/or common stock included in such consideration, if any, as of the close of business on the last trading day of the relevant observation period. However, if the record date for a declared dividend on the Series B preferred stock occurs during the period from, and including, the first trading day of the observation period for the optional conversion of any convertible preferred stock (or, if earlier, the conversion date for such optional conversion) to, and including, the date such optional conversion is otherwise required to be settled in accordance with the preceding sentence, then (x) we will have the right to delay the delivery of any shares of Series B preferred stock due upon such settlement until no later than the business day after the payment date for such dividend and (y) we will make a separate payment of cash and/or a separate delivery of our common stock, as the case may be, to the relevant converting holder of the amount per share of convertible preferred stock equal to the amount of the dividend payable per share of Series B preferred stock on such payment date. In such case, the persons in whose name such shares of Series B preferred stock are to be registered will instead be deemed to be owners of such Series B preferred stock as of the date we issue such Series B preferred stock in accordance with the preceding sentence.

We will not issue fractional shares of our common stock upon conversion of the convertible preferred stock. Instead of a fractional share, the holder will receive cash based on the daily VWAP of our common stock on the last trading day of the relevant observation period.

Series B Preferred Stock Reorganization Events

If a “Series B preferred stock reorganization event” (as defined below under “— Description of the Series B Preferred Stock — Limited Voting Rights — When a Supermajority Vote is Required”) occurs, then, from and after the effective time of such Series B preferred stock reorganization event, the consideration due upon conversion of any convertible preferred stock will be determined in the same manner as if each reference to any number of shares of Series B preferred stock in the “— Conversion Rights” section above or in the “— Recapitalizations, Reclassifications and Changes of Our Common Stock” section below (or in any related definitions) were instead a reference to a number of shares or other units of the applicable “reference preferred stock” (as defined below under “— Description of the Series B Preferred Stock — Limited Voting

 

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Rights — When a Supermajority Vote is Required”) having an equivalent liquidation preference. If an event (including, for the avoidance of doubt, a transaction pursuant to which, following a vote of the holders of the Series B preferred stock, the Series B preferred stock is exchanged for, or represents solely the right to receive, other securities or property that does not constitute reference preferred stock) analogous to a reorganization event occurs with respect to the Series B preferred stock and such reorganization event is not also a Series B preferred stock reorganization event with respect to which there is any reference preferred stock, then, from and after the effective time of such analogous reorganization event, the consideration due upon conversion of any convertible preferred stock will be determined in the same manner as if each reference to any number of shares of Series B preferred stock in the “— Conversion Rights” section above or in the “— Recapitalizations, Reclassifications and Changes of Our Common Stock” section below (or in any related definitions) were instead a reference to the kind and amount of consideration that is receivable in such reorganization event for an equivalent number of shares of Series B preferred stock (without giving effect to any arrangement in such analogous reorganization event not to issue or deliver a fractional portion of any security or other property).

Recapitalizations, Reclassifications and Changes of Our Common Stock

In the case of any reorganization event, at and after the effective time of such reorganization event, the consideration due upon conversion of any convertible preferred stock, and the consideration in which dividends on the convertible preferred stock is payable, will be determined in the same manner as if each reference to any number of shares of common stock in the provisions described under this “Description of the Convertible Preferred Stock” section (or in any related definitions) were instead a reference to the same number of exchange property units of such reorganization event, subject to the fourth immediately succeeding sentence. However, at and after the effective time of the reorganization event, (x) any amount payable or deliverable, as the case may be, in cash or Series B preferred stock, as applicable, upon conversion as set forth under “— Conversion Rights — Settlement Upon Conversion” will continue to be payable in cash or deliverable in Series B preferred stock, as applicable, except as provided in the third immediately succeeding sentence, and (y) the daily VWAP and fundamental change settlement price will be calculated based on the value of such exchange property unit. In the event all holders of our common stock (other than any constituent person or affiliate thereof) have the opportunity to elect the form of consideration to be received in such transaction, the exchange property unit that holders of the convertible preferred stock are entitled to receive will be deemed to be the weighted average, per share of our common stock, of the types and amounts of consideration received by the holders of our common stock. We will notify holders of the weighted average as soon as reasonably practicable after such determination is made. If the holders receive only cash in such transaction, then notwithstanding anything herein to the contrary for all conversions that occur after the effective date of such transaction (i) the consideration due upon conversion of each share of convertible preferred stock will be solely cash in an amount equal to the conversion rate (as may be increased as described under “— Conversion Rights — Adjusted Conversion Rate Upon a Fundamental Change”) in effect on the conversion date, multiplied by the price paid per share of our common stock in such transaction and (ii) we will satisfy our conversion obligation by paying cash to converting holders on the second scheduled trading day immediately following the conversion date. In addition, we will amend the statement with respect to shares (1) to provide for anti-dilution and other adjustments that are as nearly equivalent as possible to the adjustments described under “— Conversion Rate Adjustments” below (it being understood that no such adjustments will be required with respect to any portion of the exchange property that does not consist of securities), (2) in the case of any transaction that results in the securities of any entity other than us (or our successor in such transaction) being included as exchange property, (a) by replacing references to “us” or “our” (and similar references) in the definitions of “fundamental change” with references to that other entity and (b) by causing the dividend blocker provisions to apply to that other entity, with its common equity securities being deemed stock ranking junior to the convertible preferred stock for this purpose and (3) to include such additional provisions to protect the interests of the holders of convertible preferred stock as our board of directors reasonably considers necessary by reason of the foregoing. We will not become party to any such reorganization event unless its terms are consistent with the foregoing.

 

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In connection with any adjustment to the conversion rate described below, we will also adjust the dividend threshold (as defined under “— Conversion Rate Adjustments”) based on the number of shares of common stock comprising the exchange property and (if applicable) the value of any non-stock consideration comprising the exchange property. If the exchange property is composed solely of non-stock consideration, the dividend threshold will be zero.

The provisions described in the two preceding paragraphs will similarly apply to successive reorganization events.

Conversion Rate Adjustments

The applicable conversion rate will be adjusted from time to time for any of the following events that occur following the original issue date of the convertible preferred stock:

(1)     If we issue common stock as a dividend or distribution on our common stock to all or substantially all holders of our common stock, or if we effect a share split or share combination, the conversion rate will be adjusted based on the following formula:

 

CR1  =  CR0 x    OS1
  OS0

where:

CR0 = the conversion rate in effect immediately prior to the open of business on the ex-dividend date for such dividend or distribution, or the open of business on the effective date of such share split or share combination;

CR1 = the new conversion rate in effect immediately at and after the open of business on the ex-dividend date for such dividend or distribution, or the open of business on the effective date of such share split or share combination;

OS0 = the number of shares of our common stock outstanding immediately prior to the open of business on the ex-dividend date, or the open of business on the effective date of such share split or share combination; and

OS1 = the number of shares of our common stock outstanding immediately after, and solely as a result of, such dividend, distribution, share split or share combination.

Any adjustment made pursuant to this clause (1) will become effective as of the open of business on (x) the ex-dividend date for such dividend or other distribution or (y) the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in this clause (1) is declared but not so paid or made, the new conversion rate will be readjusted to the conversion rate that would then be in effect if such dividend or distribution had not been declared.

(2)    If we distribute to all or substantially all holders of our common stock any rights, warrants or options entitling them for a period of not more than 60 calendar days after the date of distribution thereof to subscribe for or purchase our common stock, in any case at an exercise price per share of our common stock less than the closing price of our common stock on the trading day immediately preceding the date of announcement of such distribution (other than rights issued or otherwise distributed pursuant to a shareholder rights plan, as to which the provisions set forth in clause (3)(a) below and the paragraph following clause (5) below will apply), the conversion rate will be increased based on the following formula:

 

CR1  = CR0   OS0 + X
  OS0 + Y

 

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where:

CR0 = the conversion rate in effect immediately prior to the open of business on the ex-dividend date for such distribution;

CR1 = the new conversion rate in effect immediately at and after the open of business on the ex-dividend date for such distribution;

OS0 = the number of shares of our common stock outstanding immediately prior to the open of business on the ex-dividend date for such distribution;

X = the aggregate number of shares of our common stock issuable pursuant to such rights, warrants or options; and

Y = the number of shares of our common stock equal to the quotient of (A) the aggregate price payable to exercise all such rights, warrants or options and (B) the closing price of our common stock on the trading day immediately preceding the date of announcement for the distribution of such rights, warrants or options.

For purposes of this clause (2), in determining whether any rights, warrants or options entitle the holders to subscribe for or purchase our common stock at less than the closing price of our common stock on the trading day immediately preceding the date of announcement of such distribution, and in determining the aggregate exercise price payable for such common stock, there will be taken into account any consideration received by us for such rights, warrants or options and any amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined by us. Any increase made under this clause (2) will be made successively whenever any such rights, options or warrants are distributed and will become effective at the open of business on the ex-dividend date for such distribution. If any right, warrant or option described in this clause (2) is not exercised or converted prior to the expiration of the exercisability thereof, the new conversion rate will be readjusted to the conversion rate that would then be in effect if such right, warrant or option had not been so distributed.

(3)    (a) If we distribute shares of capital stock, evidences of indebtedness or other assets or property of us or rights, options or warrants to acquire our capital stock or other securities to all or substantially all holders of our common stock, excluding:

(A)    dividends, distributions, share splits and share combinations described in clause (1) or (2) above;

(B)    dividends or distributions paid exclusively in cash;

(C)    spin-offs described below in clause (3)(b);

(D)    rights issued or otherwise distributed pursuant to a shareholder rights plan, except to the extent provided in the paragraph following clause (5) below;

(E)    exchange property issued in exchange for, or upon conversion of, our common stock in connection with a reorganization event, as to which the provisions described above under the caption “— Recapitalizations, Reclassifications and Changes of Our Common Stock” will apply; and

(F)    a distribution solely pursuant to a tender offer or exchange offer for shares of our common stock, as to which the provisions described below in paragraph (5) will apply,

then the conversion rate will be increased based on the following formula:

 

CR1  =  CR0 x    SP0
  SP0 - FMV

where

CR0 = the conversion rate in effect immediately prior to the open of business on the ex-dividend date for such distribution;

 

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CR1 = the new conversion rate in effect immediately at and after the open of business on the ex-dividend date for such distribution;

SP0 = the closing price of our common stock on the trading day immediately preceding the ex-dividend date for such distribution; and

FMV = the fair market value (as determined in good faith by us) of the shares of capital stock, evidences of indebtedness, assets, property, rights, options or warrants distributed with respect to each outstanding share of our common stock on the ex-dividend date for such distribution.

An adjustment to the conversion rate made pursuant to the immediately preceding paragraph will become effective as of the open of business on the ex-dividend date for such distribution.

Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each holder of convertible preferred stock will receive, in respect of each share of convertible preferred stock, at the same time and upon the same terms as holders of our common stock and without having to convert its shares of convertible preferred stock, the amount and kind of our capital stock, evidences of indebtedness, other assets, property, rights, options or warrants that such holder would have received if such holder owned a number of shares of our common stock equal to the conversion rate in effect on the ex-dividend date for the distribution.

(b)    However, if we distribute to all or substantially all holders of our common stock, capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit of ours, that is, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (which we refer to as a “spin-off”), the conversion rate will be increased based on the following formula:

 

CR1  = CR0   FMV0 + MP0
  MP0

where:

CR0 = the conversion rate in effect immediately before the close of business on the 10th trading day immediately following, and including the ex-dividend date for the spin-off;

CR1 = the new conversion rate in effect at and after the close of business on the 10th trading day immediately following (and including) the ex-dividend date for the spin-off;

FMV0 = the average of the closing prices of the capital stock or similar equity interest distributed to holders of our common stock applicable to one share of our common stock over the first 10 consecutive trading days from (and including) the ex-dividend date for the spin-off (the “valuation period”) (such average to be determined as if references to our common stock in the definitions of “closing price,” “trading day” and “market disruption event” were instead references to such capital stock or equity interest); and

MP0 = the average of the closing prices of our common stock over the valuation period.

The increase to the conversion rate under the preceding paragraph will occur at the close of business on the last trading day of the valuation period; provided that for any trading day that falls within the observation period for any conversion of convertible preferred stock and within the valuation period, each reference to “10” in the preceding paragraph will, solely for purposes of determining the conversion rate applicable to such conversion for such trading day, be deemed replaced with such lesser number of trading days as have elapsed from, and including, the ex-dividend date for such spin-off to, and including, such trading day.

If any such distribution described in this clause (3)(b) is declared but not paid or made, the new conversion rate will be readjusted to be the conversion rate that would then be in effect if such distribution had not been declared.

(4)    If any cash dividend or distribution is made to all or substantially all holders of our common stock, other than a regular, quarterly cash dividend that does not exceed $0.345 per share (subject to

 

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adjustment as described below) (as so adjusted, the “dividend threshold”), the conversion rate will be adjusted based on the following formula:

 

CR1  =  CR0 x    SP0 - DT
  SP0 - C

where,

CR0 = the conversion rate in effect immediately prior to the open of business on the ex-dividend date for such dividend or distribution;

CR1 = the conversion rate in effect as of and after the open of business on the ex-dividend date for such dividend or distribution;

SP0 = the closing price of our common stock on the trading day immediately preceding the ex-dividend date for such distribution;

C = the amount in cash per share we distribute to holders of our common stock; and

DT = the dividend threshold; provided that if the dividend or distribution is not a regular quarterly cash dividend, the dividend threshold will be deemed to be zero for purposes of such dividend or distribution.

Any increase to the conversion rate made pursuant to this clause (4) will become effective as of the open of business on the ex-dividend date for such dividend or distribution. If any such dividend or distribution is not so paid or made, the new conversion rate will be readjusted to the conversion rate that would be in effect if such dividend or distribution had not been declared.

Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each holder of convertible preferred stock will receive, for each share of convertible preferred stock, at the same time and upon the same terms as holders of shares of our common stock and without having to convert its shares of convertible preferred stock, the amount of cash that such holder would have received if such holder owned a number of shares of our common stock equal to the conversion rate on the ex-dividend date for such cash dividend or distribution.

The dividend threshold is subject to adjustment in a manner inversely proportional to adjustments made to the conversion rate pursuant to clauses (1), (2), (3) and (5) under this “— Conversion Rate Adjustments” section.

(5)    If we or any of our subsidiaries makes a payment in respect of a tender offer or exchange offer for our common stock, other than an odd lot tender offer, to the extent that the cash and value of any other consideration included in the payment per share of our common stock exceeds the closing price of a share of our common stock on the trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the conversion rate will be increased based on the following formula:

 

CR1  =  CR0 x    AC + (SP1 x OS1)
  OS0 x SP1

where:

CR0 = the conversion rate in effect immediately prior to the close of business on the trading day immediately following the date on which such tender or exchange offer expires;

CR1 = the conversion rate in effect at and after the close of business on the trading day immediately following the date on which such tender or exchange offer expires;

AC = the aggregate value of all cash and any other consideration (as determined in good faith by us) paid or payable for our common stock purchased in such tender or exchange offer;

 

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OS0 = the number of shares of our common stock outstanding immediately prior to the time such tender or exchange offer expires (prior to giving effect to the purchase or exchange of shares pursuant to such tender or exchange offer);

OS1 = the number of shares of our common stock outstanding immediately after the time such tender or exchange offer expires (after giving effect to the purchase or exchange of shares pursuant to such tender or exchange offer); and

SP1 = the closing price of our common stock for the trading day next succeeding the date such tender or exchange offer expires.

If the application of the foregoing formula would result in a decrease in the conversion rate, no adjustment to the conversion rate will be made.

Any adjustment to the conversion rate made pursuant to this clause (5) will become effective at the close of business on the trading day immediately following the date on which such tender offer or exchange offer expires. To the extent such tender or exchange offer is announced but not consummated (including as a result of us or one of our subsidiaries being permanently prevented by applicable law from effecting any such purchase), the new conversion rate will be readjusted to be the conversion rate that would be in effect had the adjustment been made on the basis of only the purchases or exchanges of shares of common stock, if any, actually made, and not rescinded, in such tender or exchange offer.

If we have in effect a rights plan while any convertible preferred stock remains outstanding, holders of convertible preferred stock will receive, upon a conversion of convertible preferred stock, to the extent they receive shares of our common stock in settlement of such conversion, rights under our shareholder rights agreement unless, prior to conversion, the rights have expired, terminated or been redeemed or unless the rights have separated from our common stock. If the rights provided for in the rights plan adopted by us have separated from our common stock in accordance with the provisions of the applicable shareholder rights agreement so that holders of convertible preferred stock would not be entitled to receive any rights in respect of our common stock, if any, delivered upon conversion of convertible preferred stock, the conversion rate will be adjusted at the time of separation as if we had distributed to all holders of our common stock capital stock, evidences of indebtedness, other assets, property, rights, options or warrants pursuant to clause (3)(a) above, subject to readjustment upon the subsequent expiration, termination or redemption of the rights.

Notwithstanding anything to the contrary, if:

 

   

a conversion rate adjustment for any dividend or distribution becomes effective on any ex-dividend date pursuant to the provisions described in clauses (1) through (4), inclusive, above;

 

   

a share of convertible preferred stock is to be converted;

 

   

any trading day in the observation period for such conversion occurs on or after such ex-dividend date and on or before the related record date;

 

   

the consideration due in respect of such trading day includes any whole or fractional shares of our common stock based on a conversion rate that is adjusted for such dividend or distribution; and

 

   

such shares would be entitled to participate in such dividend or distribution,

then the conversion rate adjustment relating to such ex-dividend date will be made for such conversion in respect of such trading day, but the shares of common stock issuable with respect to such trading day based on such adjusted conversion rate will not be entitled to participate in such dividend or distribution.

In addition, notwithstanding anything to the contrary, if:

 

   

a share of convertible preferred stock is to be converted;

 

   

the record date for any event that requires an adjustment to the conversion rate pursuant to the provisions described in clauses (1) through (4), inclusive, above has occurred on or before any

 

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trading day in the observation period for such conversion, but an adjustment to the conversion rate for such event has not yet become effective as of such trading day;

 

   

the consideration due in respect of such trading day includes any whole or fractional shares of our common stock; and

 

   

such shares are not entitled to participate in such event (because they were not held on the related record date or otherwise),

then, solely for purposes of such conversion, we will, without duplication, give effect to such adjustment on such trading day. In such case, if the date we are otherwise required to deliver the consideration due upon such conversion is before the first date on which the amount of such adjustment can be determined, then we will delay the settlement of such conversion until the second business day after such first date.

In addition to the adjustments pursuant to paragraphs (1) through (5) above, we may increase the conversion rate in order to avoid or diminish any income tax to holders of our common stock resulting from any dividend or distribution of capital stock (or rights to acquire our common stock) or from any event treated as such for income tax purposes. We may also, from time to time, to the extent permitted by applicable law, increase the conversion rate by any amount for any period of at least 20 business days if we have determined that such increase would be in our best interests. If we make such determination, it will be conclusive and we will send to holders of the convertible preferred stock a notice of the increased conversion rate and the period during which it will be in effect on or prior to the date the increased conversion rate takes effect in accordance with applicable law.

No adjustment to the conversion rate will be made on account of the events referred to above (except in the case of a share split or combination or a tender or exchange offer) if holders of the convertible preferred stock, as a result of holding the convertible preferred stock and without conversion thereof, are entitled to participate at the same time as our common stock holders participate in any of the transactions described above as if such holders of the convertible preferred stock held a number shares of our common stock equal to the conversion rate, multiplied by the number of shares of convertible preferred stock held by such holder.

As used in this section and in “Description of the Purchase Contracts — Anti-dilution Adjustments” above, “record date” means, with respect to any dividend, distribution or other transaction or event in which the holders of our common stock (or other applicable security) have the right to receive any cash, securities or other property or in which our common stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of our common stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by our board of directors, statute, contract or otherwise).

The conversion rate will not be adjusted except as specifically set forth in this “— Conversion Rate Adjustments” and in “— Conversion Rights — Adjusted Conversion Rate Upon a Fundamental Change.” Without limiting the foregoing, the conversion rate will not be adjusted for:

 

   

the issuance of our common stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of ours and the investment of additional optional amounts in shares of our common stock under any plan;

 

   

upon the issuance of options, restricted stock or other awards in connection with any employment contract, executive compensation plan, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors, consultants or independent contractors or the exercise of such options or other awards;

 

   

the issuance of our common stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security outstanding as of the date the convertible preferred stock was first issued;

 

   

a change in the par value of our common stock; and

 

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accumulated but unpaid dividends, except as explicitly set forth in this “Description of the Convertible Preferred Stock” section.

All required calculations will be made to the nearest cent or 1/10,000th of a share, as the case may be. We will not be required to make an adjustment to the conversion rate unless the adjustment would require a change of at least 1% in the conversion rate. However, we will carry forward any adjustments that are less than 1% of the conversion rate and make such carried-forward adjustments (x) when all such carried-forward adjustments aggregate to a change of at least 1% in the conversion rate and (y) regardless of whether the aggregate adjustment is less than 1% (i) on the effective date for any fundamental change and (ii) on each trading day of any observation period in respect of any conversion of convertible preferred stock.

In the event of an adjustment to the conversion rate, holders of Corporate Units and convertible preferred stock may, in certain circumstances, be deemed to have received a distribution subject to U.S. federal income tax as a dividend. See “Material United States Federal Income Tax Consequences — Tax Consequences to U.S. Holders — Convertible Preferred Stock — Constructive Distributions” below. In addition, non-U.S. holders of Corporate Units and convertible preferred stock may, in certain circumstances, be deemed to have received a distribution subject to U.S. federal withholding tax requirements. See “Material United States Federal Income Tax Consequences — Tax Consequences to Non-U.S. Holders.”

Adjustments of Prices

Whenever any provision of the statement with respect to shares requires us to calculate the closing prices, the daily VWAPs, the daily conversion values or the daily settlement amounts over a span of multiple days (including any observation period, the five-day average price and the “stock price” and “fundamental change settlement price” (if applicable) for purposes of this “Description of the Convertible Preferred Stock” section), we will make appropriate adjustments, if any, to each to account for any adjustment to the conversion rate that becomes effective, or any event requiring an adjustment to the conversion rate where the ex-dividend date of the event occurs, at any time during the period when the closing prices, the daily VWAPs, the daily conversion values or the daily settlement amounts are to be calculated.

Transfer Agent, Registrar, Paying Agent, Conversion Agent

The registrar and transfer agent for the convertible preferred stock is Computershare Inc. The paying agent and conversion agent for the convertible preferred stock is U.S. Bank National Association.

Remarketing

The convertible preferred stock will be remarketed as described under “Description of the Purchase Contracts — Remarketing.”

In connection with a successful remarketing of the convertible preferred stock:

 

   

(a) the dividend rate on the convertible preferred stock may be increased, (b) if the closing price on the pricing date for a successful remarketing is less than or equal to the reference price on such date, the conversion rate of the convertible preferred stock may be increased to an amount (rounded to the nearest ten-thousandth of a share) equal to $1,000, divided by     % of the closing price on such date and/or (c) the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025, each as described under “— Terms of the Remarketed Preferred Stock”; and

 

   

dividends will continue to be payable on the convertible preferred stock quarterly at the then-applicable dividend rate (as such dividend rate may be adjusted in connection with such remarketing), when, as and if declared by our board of directors.

 

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The increased dividend rate and/or increased conversion rate will be a fixed dividend rate and/or conversion rate (subject to adjustment in certain circumstances) determined by, and any other changes to the terms of the convertible preferred stock in connection with a successful remarketing of the convertible preferred stock will be determined by, our board of directors, after consultation with the remarketing agent, as the rate(s) the convertible preferred stock should bear and the terms the convertible preferred stock should include in order for the aggregate net remarketing proceeds to equal (a) in the case of a final remarketing, at least $1,000 multiplied by the number of shares of convertible preferred stock being remarketed and (b) in the case of an optional remarketing, at least the sum of (x) 100% of the Treasury portfolio purchase price and (y) the separate convertible preferred stock purchase price for shares of convertible preferred stock that are not included in Corporate Units whose holders have elected to participate in the remarketing. We will not decrease the conversion rate or the dividend rate in connection with a successful remarketing of the convertible preferred stock.

Remarketing of Shares That Are Not Included in Corporate Units

At any time prior to 5:00 p.m., New York City time, on the second business day immediately preceding the first day of the applicable optional remarketing period or the final remarketing period, as applicable, holders of convertible preferred stock that do not underlie Corporate Units may elect to have their shares of convertible preferred stock remarketed in such remarketing in the same manner as shares of convertible preferred stock that underlie Corporate Units by delivering their shares along with a notice of this election to the custodial agent. The custodial agent will hold the shares of convertible preferred stock in an account separate from the collateral account in which the pledged assets will be held. Holders of shares of convertible preferred stock electing to have their shares remarketed will also have the right to withdraw their election at any time prior to 5:00 p.m., New York City time, on the second business day immediately preceding the first day of the applicable optional remarketing period or the final remarketing period, as applicable.

If we elect to conduct an optional remarketing, the remarketing agent will use its reasonable best efforts to obtain a price (i) for shares of convertible preferred stock that are components of Corporate Units, that results in aggregate net proceeds of at least 100% of the Treasury portfolio purchase price and (ii) for shares of convertible preferred stock that are not part of Corporate Units, at least equal to the separate convertible preferred stock purchase price (as defined below), which will be the same price, on a per share basis, as for the shares of convertible preferred stock included as components of Corporate Units. For purposes of determining the proceeds that the remarketing agent will seek to obtain for the convertible preferred stock in an optional remarketing, the “separate convertible preferred stock purchase price” means the amount in cash equal to the product of (A) the remarketing price per share of convertible preferred stock (as defined below) and (B) the number of shares of convertible preferred stock included in such remarketing that are not part of Corporate Units, which will be the same price on a per share basis, as shares of convertible preferred stock remarketed as Corporate Units. The “remarketing price per share of convertible preferred stock” for an optional remarketing means, for each share of convertible preferred stock, an amount in cash equal to the quotient of the Treasury portfolio purchase price divided by the number of shares of convertible preferred stock included in such remarketing that are held as components of Corporate Units.

With respect to the final remarketing, the remarketing agent will use its reasonable best efforts to obtain a price that results in aggregate net proceeds of at least $1,000 multiplied by the number of shares of convertible preferred stock being remarketed.

In the event of a successful remarketing of the convertible preferred stock, proceeds from the remarketing attributable to holders of separate shares of convertible preferred stock that elected to have their shares remarketed will be remitted by the remarketing agent for the benefit of such holders on the optional remarketing settlement date (in the case of any optional remarketing) or on the purchase contract settlement date (or, if the purchase contract settlement date is not business day, the next business day) (in the case of the final remarketing). Except in the case of a dividend deficiency event, any accumulated but

 

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unpaid dividends on such shares (including compounded dividends thereon, if any), whether or not declared, will be paid by us, on the purchase contract settlement date (or, if such date is not a business day, the next business day), to holders of record on the immediately preceding dividend payment record date. If a dividend deficiency event occurs, following the final remarketing (whether successful or failed), we will have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date (or such next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such convertible preferred stock for so long as the convertible preferred stock remains outstanding, notwithstanding such remarketing, and such dividends will be payable to the holders of such convertible preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever). If a termination event has occurred, there are any accumulated but unpaid dividends on the convertible preferred stock for prior dividend periods, or we have not declared a dividend payable on the March 1, 2024 payment date, we may not conduct an optional remarketing.

Terms of the Remarketed Preferred Stock

In the case of a successful remarketing of the convertible preferred stock, (a) the dividend rate on the convertible preferred stock may be increased, (b) if the closing price on the pricing date for a successful remarketing is less than or equal to the reference price on such date, the conversion rate of the convertible preferred stock may be increased to an amount (rounded to the nearest ten-thousandth of a share) equal to $1,000, divided by     % of the closing price on such date and/or (c) the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to August 29, 2025. The changes to the terms of the convertible preferred stock in connection with a successful remarketing of the convertible preferred stock, if any, will become effective on the settlement date of such remarketing (the “remarketing settlement date”), which will be, in the case of a successful optional remarketing, the second business day following the optional remarketing date (or such other date as we and the remarketing agent agree upon) and, in the case of the final remarketing period, the purchase contract settlement date (or, if such date is not a business day, the next business day); provided, however, that if (i) the dividend rate on the convertible preferred stock is increased in connection with any remarketing; (ii) as of the pricing date of such remarketing, we have declared a dividend on the convertible preferred stock or the Series B preferred stock in respect of the payment date occurring on the purchase contract settlement date; and (iii) the remarketing settlement date occurs before the purchase contract settlement date, then such increase to the dividend rate will instead become effective from, and including, the purchase contract settlement date. For the avoidance of doubt, any increase in the dividend rate in connection with a remarketing will not affect the rate at which dividends have accumulated on the convertible preferred stock before the date as of which such increase becomes effective as provided in the preceding sentence. Accordingly, if such date as of which such increase becomes effective occurs during the middle of a dividend period, then any such increase to the dividend rate will apply for only a portion of such dividend period.

If the dividend rate and/or the conversion rate is increased, or any other terms are modified, pursuant to a successful remarketing, the increased dividend rate and/or increased conversion rate will be a fixed dividend rate and/or conversion rate (subject to adjustment in certain circumstances) determined by, and any other changes to the terms of the convertible preferred stock in connection with a successful remarketing of the convertible preferred stock will be determined by, our board of directors, after consultation with the remarketing agent, as the rate(s) the convertible preferred stock should bear and the terms the convertible preferred stock should include in order for the aggregate net remarketing proceeds to equal (a) in the case of a final remarketing, at least $1,000 multiplied by the number of shares of convertible preferred stock being remarketed and (b) in the case of an optional remarketing, at least the sum of (x) 100% of the Treasury portfolio purchase price and (y) the separate convertible preferred stock purchase price for shares of convertible preferred stock that are not included in Corporate Units whose holders have elected to

 

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participate in the remarketing. We will not decrease the conversion rate or the dividend rate in connection with a successful remarketing of the convertible preferred stock.

If the convertible preferred stock is not successfully remarketed, no terms of the convertible preferred stock will be changed.

The remarketing agent is not obligated to purchase any shares of convertible preferred stock that would otherwise remain unsold in the remarketing. None of us, the remarketing agent or any agent of us or the remarketing agent will be obligated in any case to provide funds to make payment upon tender of convertible preferred stock for remarketing.

Automatic Settlement Upon Failed Final Remarketing

If the convertible preferred stock has not been successfully remarketed on or prior to the last day of the final remarketing period, all ownership interests in shares of convertible preferred stock held as part of Corporate Units will be delivered to us on the purchase contract settlement date in full satisfaction of the Corporate Unit holders’ obligations to purchase our common stock under the related purchase contracts on the purchase contract settlement date, unless the holder separately cash settles purchase contracts as described below.

Notwithstanding the foregoing, except in the case of a dividend deficiency event, all accumulated but unpaid dividends (including compounded dividends thereon, if any), including with respect to the June 1, 2024 payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. If a dividend deficiency event occurs, following the final remarketing (whether successful or failed), we will have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date (or such next business day) to the holders of the shares of convertible preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such convertible preferred stock for so long as the convertible preferred stock remains outstanding, and such dividends will be payable to the holders of such convertible preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

If the convertible preferred stock has not been successfully remarketed on or prior to the last day of the final remarketing period, the ownership interest in convertible preferred stock underlying a Corporate Unit will be automatically delivered to us thereby satisfying such holder’s obligations to us under the related purchase contracts in full, unless, prior to 5:00 p.m., New York City time, on the second business day immediately prior to the purchase contract settlement date, the holder provides written notice of an intention to settle the related purchase contracts with separate cash and on or prior to the business day immediately preceding the purchase contract settlement date delivers to the securities intermediary $1,000 in cash per 10 purchase contracts. Holders of Corporate Units may settle their purchase contracts with separate cash only in integral multiples of 10 Corporate Units.

Payment

So long as any separate shares of convertible preferred stock are registered in the name of DTC, as depository for the convertible preferred stock as described herein under “— Book-Entry Issuance — The Depository Trust Company,” or DTC’s nominee, payments on the convertible preferred stock will be made as described therein.

Form

So long as any separate shares of convertible preferred stock are registered in the name of DTC, as depository for the convertible preferred stock as described herein under “— Book-Entry Issuance — The

 

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Depository Trust Company,” or DTC’s nominee, transfers and exchanges of beneficial interests in the separate shares of convertible preferred stock will be made as described therein.

Certain Trading Characteristics

The convertible preferred stock is expected to trade at a price that takes into account the value, if any, of accumulated but unpaid dividends (except for declared dividends accumulated after a record date and prior to a payment date, which dividends will be payable to the holders as of the record date, as described above); thus, it is expected that purchasers of the convertible preferred stock will not pay, and sellers will not receive, accumulated but unpaid dividends with respect to the convertible preferred stock that is not included in the trading price thereof.

Title

We and any agent of ours will treat the person or entity in whose name shares of convertible preferred stock are registered as the absolute owner of those securities for the purpose of making payments and for all other purposes irrespective of notice to the contrary.

Book-Entry Issuance — The Depository Trust Company

The shares of convertible preferred stock that form a part of the Corporate Units will be issued in fully registered form and will initially be evidenced by one or more global securities held by the purchase contract agent as custodian for DTC. We expect that the shares of convertible preferred stock that do not form a part of the Corporate Units will initially be evidenced by one or more global securities registered in the name of DTC’s nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. Such global securities will be deposited with the transfer agent as custodian for DTC. See “Certain Provisions of the Purchase Contract and Pledge Agreement — Book-Entry System for Corporate Units, Treasury Units and Cash Settled Units” for a description of DTC.

Purchases of the convertible preferred stock under the DTC system must be made by or through direct participants, which will receive a credit for the convertible preferred stock on DTC’s records. The ownership interest of each actual purchaser of each share of convertible preferred stock (“beneficial owner”) is in turn to be recorded on the direct and indirect participants’ records. Beneficial owners will not receive written confirmation from DTC of their purchases, but beneficial owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the direct or indirect participant through which they purchased the convertible preferred stock. Transfers of ownership interests on the convertible preferred stock are to be accomplished by entries made on the books of direct and indirect participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in convertible preferred stock, except in the event that use of the book-entry system for the convertible preferred stock is discontinued.

To facilitate subsequent transfers, all convertible preferred stock deposited by direct participants with DTC are registered in the name of DTC’s nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the convertible preferred stock with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the convertible preferred stock; DTC’s records reflect only the identity of the direct participants to whose accounts the shares of convertible preferred stock are credited, which may or may not be the beneficial owners. The direct and indirect participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by direct participants and indirect participants to beneficial owners, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Notices will be sent to DTC.

 

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Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the convertible preferred stock unless authorized by a direct participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns the voting or consenting rights of Cede & Co. to those direct participants to whose accounts the shares of convertible preferred stock are credited on the record date. We believe that these arrangements will enable the beneficial owners to exercise rights equivalent in substance to the rights that can be directly exercised by a registered holder of the convertible preferred stock.

Payments of dividends on the convertible preferred stock will be made to Cede & Co. (or such other nominee of DTC). DTC’s practice is to credit direct participants’ accounts upon DTC’s receipt of funds and corresponding detail information from us or the transfer agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by participants to beneficial owners will be governed by standing instructions and customary practices and will be the responsibility of each participant and not of DTC or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of dividends to Cede & Co. (or other such nominee of DTC) is our responsibility. Disbursement of such payments to direct participants will be the responsibility of DTC, and disbursement of such payments to the beneficial owners is the responsibility of direct and indirect participants.

A beneficial owner will not be entitled to receive physical delivery of the convertible preferred stock, except in the limited circumstances described below. Accordingly, each beneficial owner of an interest in a global certificate must rely on the procedures of DTC to exercise any rights under the convertible preferred stock.

We will issue the convertible preferred stock in definitive certificated form if DTC notifies us that it is unwilling or unable to continue as depositary or DTC ceases to be a clearing agency registered under the Exchange Act and a successor depositary is not appointed by us within 90 calendar days.

The information in this section concerning DTC’s book-entry system has been obtained from sources that we believe to be reliable, but neither we nor the underwriters take any responsibility for the accuracy of this information.

 

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DESCRIPTION OF THE SERIES B PREFERRED STOCK

The following is a summary of certain provisions of the Series B preferred stock. The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of our amended and restated articles of incorporation, as amended, including the statement with respect to shares establishing the designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions on the Series B preferred stock and our amended and restated bylaws, as currently in effect, and applicable laws. Wherever particular provisions or defined terms of the Series B preferred stock are referred to, such provisions or defined terms are incorporated into this prospectus supplement by reference.

As used in this Description of the Series B Preferred Stock, “we,” “us,” “our” or “the Company” refer only to UGI Corporation and any successor obligor, and not to any of its subsidiaries.

General

Under our amended and restated articles of incorporation, as amended, our board of directors designated up to 220,000 shares of our authorized but unissued preferred stock as, and approved a statement with respect to shares creating, a series of our preferred stock, designated as the     % Series B Cumulative Perpetual Preferred Stock, which we refer to as the “Series B preferred stock.” We will not (i) change any terms of the Series B preferred stock except as set forth in the statement with respect to shares and (ii) issue any additional shares of Series B preferred stock other than in accordance with the statement with respect to shares.

We may issue an aggregate of up to 200,000 shares of Series B preferred stock, or 220,000 shares if the underwriters exercised in full their over-allotment option on the Corporate Units, upon optional conversion of the convertible preferred stock as described under “Description of the Convertible Preferred Stock — Conversion Rights — Settlement Upon Conversion.” When issued in accordance with this prospectus supplement and the accompanying prospectus, the Series B preferred stock will be validly issued, fully paid and non-assessable. The Series B preferred stock will not be pledged to us to secure your obligation under any purchase contract. The dividend rate and other terms of the Series B preferred stock may not be the same as the terms of similar securities issued at the time. In addition, the Series B preferred stock will have no protections in connection with fundamental changes or similar corporate transactions.

We do not intend to list the Series B preferred stock that are not a part of Corporate Units on any securities exchange.

Ranking

The Series B preferred stock, with respect to dividend rights or rights upon our liquidation, winding-up or dissolution, will rank:

 

   

senior to all classes or series of our common stock and to any other class or series of our capital stock expressly designated as ranking junior to the Series B preferred stock;

 

   

on parity with our convertible preferred stock and any other class or series of our capital stock expressly designated as ranking on parity with the Series B preferred stock, including the convertible preferred stock;

 

   

junior to any other class or series of our capital stock expressly designated as ranking senior to the Series B preferred stock; and

 

   

junior to our existing and future indebtedness and other liabilities (including trade payables).

The term “capital stock” does not include convertible or exchangeable debt securities, which, as such, will rank senior in right of payment to the Series B preferred stock.

 

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In the case of our liquidation, dissolution or winding up, holders of the Series B preferred stock will not have the right to receive any payment or distribution unless all of our liabilities are first paid in full and the priority of any senior stock is satisfied.

We currently have no capital stock outstanding that is senior to or on parity with the Series B preferred stock. When issued, our convertible preferred stock will rank on parity with the Series B preferred stock. All our indebtedness will rank senior in right of payment to the Series B preferred stock. In addition, the Series B preferred stock will be structurally subordinated to all debt, preferred stock and other liabilities of our subsidiaries, which means that creditors and preferred shareholders of our subsidiaries will be paid from the assets of such subsidiaries before holders of the Series B preferred stock would have any claims to those assets.

Dividends

Holders of the convertible preferred stock, as such, will not have participation rights with respect to any dividends or distributions on our common stock or any other class or series of our capital stock.

Holders of the Series B preferred stock will receive, when, as and if declared by our board of directors, cumulative dividends, at the rate of     % per year, subject to the provisions described below under “— Increased Dividend Rate” (the “dividend rate”), on the $1,000 liquidation preference per share of Series B preferred stock, payable in cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election, unless we have previously irrevocably elected a dividend payment method to apply.

The shares of Series B preferred stock delivered to a holder upon conversion will have initial accumulated dividends per share at issuance equal to the amount of any accumulated but unpaid dividends per share on the convertible preferred stock (including compounded dividends thereon, if any) to, but excluding, date of issuance of such Series B preferred stock, which we refer to as the “initial accumulated dividends.” However, subject to the second sentence of the tenth paragraph under the caption “Description of the Convertible Preferred Stock — Conversion Rights — Settlement Upon Conversion” above, the amount of initial accumulated dividends on any share of Series B preferred stock at the time of its original issuance in settlement of an optional conversion will not include any dividends paid on the convertible preferred stock during the period from, and including, the first trading day of the relevant observation period (or, if earlier, the relevant conversion date) to, and including, the date such share of Series B preferred stock is originally issued. Thereafter, dividends will continue to accumulate from the first date of original issuance of the Series B preferred stock and will be payable when, as and if declared by our board of directors quarterly in arrears on March 1, June 1, September 1 and December 1 of each year (each, a “payment date”) beginning on the first payment date following the date on which the Series B preferred stock is first issued, to the person whose name appears in our stock records at the close of business on the applicable record date, which will be the February 15, May 15, August 15 or November 15 (in each case, whether or not a business day), as applicable, immediately preceding the relevant payment date or, if the shares of Series B preferred stock are held in global book-entry form, the record date will be the business day immediately preceding the applicable payment date. We refer to each period beginning on and including a payment date (or, if no dividends have been paid on the Series B preferred stock, the date of first issuance) to, but excluding, the next payment date as a “dividend period,” provided that accumulated dividends for the first dividend period will include initial accumulated dividends.

We will calculate dividends on the Series B preferred stock on the basis of a 360-day year of twelve 30-day months. Dollar amounts resulting from that calculation will be rounded to the nearest cent, with one-half cent being rounded upward. Dividends on the Series B preferred stock will cease to accumulate upon redemption, as described below.

If a payment date falls on a date that is not a business day, the payment due on such date will be instead made on the next succeeding business day and no interest or other payment will be paid in respect of the delay.

 

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Dividends on the Series B preferred stock will accumulate whether or not:

 

   

we have earnings;

 

   

there are funds legally available for the payment of those dividends; or

 

   

those dividends are authorized or declared.

So long as any shares of Series B preferred stock remain outstanding, except as described below, unless full cumulative dividends on the Series B preferred stock for all past completed dividend periods (including compounded dividends thereon, if any) have been or contemporaneously are declared and paid or declared and a sum or number of shares of our common stock sufficient for the payment thereof is set apart for payment, we will not:

 

   

declare and pay or declare and set aside for payment of dividends, and we will not declare and make any distribution of cash or other property, directly or indirectly, on or with respect to any shares of our common stock or shares of any other class or series of our capital stock ranking, as to dividends, on parity with or junior to the Series B preferred stock, including the convertible preferred stock, for any period;

 

   

redeem, purchase or otherwise acquire for any consideration, or make any other distribution of cash or other property, directly or indirectly, on or with respect to, or pay or make available any monies for a sinking fund for the redemption of, any common stock or shares of any other class or series of our capital stock ranking, as to dividends or upon liquidation, on parity with or junior to the Series B preferred stock, including the convertible preferred stock; or

 

   

redeem, purchase or otherwise acquire for any consideration, or make any other distribution of cash or other property, directly or indirectly, on or with respect to the purchase contracts or make any payments (including any contract adjustment payments) under the purchase contracts or any payment under any similar agreement providing for the issuance by us of capital stock on a forward basis.

The foregoing sentence, however, will not prohibit:

 

   

purchases, redemptions or other acquisitions of shares of capital stock ranking junior to the Series B preferred stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of current or former employees, officers, directors, agents or consultants (including, for the avoidance of doubt, the forfeiture of unvested shares of restricted stock, or any withholdings (including withholdings effected by a repurchase or similar transaction), or other surrender, of capital stock that would otherwise be deliverable upon exercise, delivery or vesting of equity awards under any such contract, plan or arrangement, in each case whether for payment of applicable taxes or the exercise price, or otherwise) or a stock purchase or dividend reinvestment plan, or the satisfaction of our obligations pursuant to any contract or security (provided such contract or security was entered into or first issued, as applicable, either (x) before the date on which shares of the Series B preferred stock are first issued or (y) at a time when full cumulative dividends, if any, on the series B preferred stock for all past completed dividend periods (including compounded dividends thereon, if any) have been or contemporaneously are declared and paid or declared and a sum or number of shares of our common stock sufficient for the payment thereof is set apart for payment) requiring us to purchase, redeem or acquire our capital stock;

 

   

purchases of shares of our common stock pursuant to a contractually binding requirement to buy stock (including under a contractually binding stock repurchase plan) which binding requirement was entered into either (x) before the date on which shares of the Series B preferred stock are first issued or (y) at a time when full cumulative dividends, if any, on the Series B preferred stock for all past completed dividend periods (including compounded dividends thereon, if any) have been or contemporaneously are declared and paid or declared and a sum or number of shares of our common stock sufficient for the payment thereof is set apart for payment;

 

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the purchase of, or the payment of cash in lieu of, fractional interests in shares of capital stock ranking junior to the Series B preferred stock issued by us (i) in connection with a bona fide acquisition of a business or (ii) pursuant to the conversion or exchange provisions of such capital stock or securities convertible into or exchangeable for, or pursuant to the exercise of any other right to acquire, such capital stock;

 

   

any declaration of a dividend on our capital stock in connection with the implementation of a shareholders rights plan designed to protect us against unsolicited offers to acquire our capital stock, or the issuance of our capital stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto;

 

   

dividends or distributions payable solely in (x) capital stock ranking junior to the Series B preferred stock (or payment of cash in lieu of any fractional interests in shares of such capital stock) or (y) warrants, options or rights to acquire such capital stock (other than options or rights in the form of indebtedness or our capital stock ranking, as to dividends or upon liquidation, on parity with or senior to the Series B preferred stock, including the convertible preferred stock, in each case, which indebtedness or capital stock is convertible into, exercisable for or exchangeable for our capital stock ranking junior to the convertible preferred stock);

 

   

delivery of Series B preferred stock and (if applicable) our common stock, and/or payment of cash in lieu of any fractional share of our common stock, in each case, upon conversion of the convertible preferred stock;

 

   

the settlement of any convertible note hedge transactions or capped call transactions entered into in connection with the issuance, by us or any of our subsidiaries, of any debt securities that are convertible into, or exchangeable for, our common stock (or into or for any combination of cash and our common stock based on the value of our common stock), provided such convertible note hedge transactions or capped call transactions, as applicable, are on customary terms and were entered into either (x) before the date on which shares of the Series B preferred stock are first issued or (y) at a time when full cumulative dividends, if any, on the Series B preferred stock for all past completed dividend periods (including compounded dividends thereon, if any) have been or contemporaneously are declared and paid or declared and a sum or number of shares of our common stock sufficient for the payment thereof is set apart for payment;

 

   

the conversion of our capital stock into, or exchange of our capital stock for, other shares of any class or series of capital stock ranking equally to the Series B preferred stock, so long as the liquidation preference of such class or series of capital stock issued upon conversion or exchange is less than or equal to the liquidation preference of the capital stock surrendered for conversion or exchange;

 

   

payments on the purchase contracts or the convertible preferred stock, in each case so long as the amount of payments made on account of such purchase contracts or convertible preferred stock and the Series B preferred stock is paid on all such purchase contracts or convertible preferred stock and the Series B preferred stock then outstanding on a pro rata basis in proportion to the full payment to which each such purchase contract, convertible preferred stock or Series B preferred stock is then entitled if paid in full; or

 

   

the conversion into or exchange for other shares of any class or series of capital stock ranking junior to the Series B preferred stock.

We will not permit any of our subsidiaries to purchase or otherwise acquire for consideration any shares of our stock unless we could, under the above paragraph, purchase or otherwise acquire such shares at such time and in such manner. We refer to the provisions described in this paragraph and the above paragraph as the “dividend blocker provisions.”

When we do not pay dividends in full (or do not set apart a sum sufficient to pay them in full) on the Series B preferred stock and the shares of any other class or series of capital stock ranking, as to dividends,

 

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on parity with the Series B preferred stock, including the convertible preferred stock, we will declare any dividends upon the Series B preferred stock and each such other class or series of capital stock ranking, as to dividends, on parity with the Series B preferred stock pro rata, so that the amount of dividends declared per share of Series B preferred stock and such other class or series of capital stock will in all cases bear to each other the same ratio that accumulated but unpaid dividends per share on the Series B preferred stock and such other class or series of capital stock (which will not include any accumulation in respect of unpaid dividends on such other class or series of capital stock for prior dividend periods if such other class or series of capital stock does not have a cumulative dividend) bear to each other.

Any accumulated but unpaid dividends will accumulate additional dividends at the then-applicable dividend rate (as such dividend rate may be adjusted in connection with a remarketing) until paid, compounded quarterly, to, but excluding, the payment date. We refer to these additional dividends that accumulate on accumulated but unpaid dividends as “compounded dividends” and the payments in respect thereof as “compounded dividend payments.”

Holders of shares of Series B preferred stock are not entitled to any dividends in excess of the full cumulative dividends (including compounded dividends) on the Series B preferred stock as described above. Any dividend payment made on the Series B preferred stock will first be credited against the earliest accumulated but unpaid dividends due with respect to those shares which remain payable.

No dividend will be paid unless and until our board of directors declares a dividend payable with respect to the Series B preferred stock. Our ability to declare and pay dividends and make other distributions with respect to our capital stock, including the Series B preferred stock, if any, may be limited by the terms of any indentures, loan agreements or other financing arrangements that we enter into in the future. In addition, our ability to declare and pay dividends may be limited by the Pennsylvania Business Corporation Law. Notwithstanding the foregoing, except in the case of a dividend deficiency event, all accumulated but unpaid dividends (including compounded dividends thereon), including with respect to the June 1, 2024 payment date, whether or not declared, will be paid on the purchase contract settlement date (or, if such date is not a business day, the next business day) to the holders of the shares of Series B preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. If a dividend deficiency event occurs, we will have no obligation to pay the then accumulated but unpaid dividends on the Series B preferred stock on the purchase contract settlement date (or such next business day) to the holders of the shares of Series B preferred stock as of the close of business on the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) will continue to exist (and such accumulated but unpaid dividends will continue to compound) with respect to such Series B preferred stock for so long as the Series B preferred stock remains outstanding, and such dividends will be payable to the holders of such Series B preferred stock as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

Method of Payment of Dividends

Subject to the limitations described below, we may pay any dividend (or any portion of any dividend) on the Series B preferred stock (whether or not for a current dividend period or any prior dividend period), determined in the sole discretion of our board of directors:

 

   

in cash;

 

   

by delivery of shares of our common stock; or

 

   

through any combination of cash and shares of our common stock.

We will make each payment of a declared dividend on the Series B preferred stock in cash, except to the extent we elect, or have previously elected, to make all or any portion of such payment in shares of our common stock. Unless we have previously irrevocably elected a dividend payment method to apply, we will give the holders of the Series B preferred stock notice of any election with respect to any particular dividend

 

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payment, the portion of such payment that will be made in cash and the portion of such payment that will be made in common stock no later than eight scheduled trading days prior to the payment date for such dividend.

If we elect, or have previously irrevocably elected, to make any such payment of a dividend, or any portion thereof, in shares of our common stock, such shares will be valued for such purpose at the average of the daily VWAPs per share of our common stock over the five consecutive trading day period ending on, and including, the second trading day immediately preceding the applicable payment date (the “five-day average price”), multiplied by 97%. However, the number of shares of common stock that we will deliver as payment for any declared dividend on the Series B preferred stock will be limited to a maximum number equal to the total dollar amount of the declared dividend (including any portion thereof that we have not elected to pay in shares of our common stock) divided by the floor price in effect on the second trading day immediately preceding the applicable payment date. If the dollar amount of any declared dividend per share of Series B preferred stock that we have duly elected to pay in shares of common stock exceeds the product of (x) 97% of the applicable five-day average price and (y) the number of shares of common stock deliverable (without regard to our obligation to pay cash in lieu of delivering any fractional share of our common stock) per share of Series B preferred stock in respect of such dividend, then we will, to the extent we are not prohibited from doing so as a result of a dividend deficiency event, declare and pay such excess amount in cash. For the avoidance of doubt, any cash amount referred to in the preceding sentence that we fail to declare and pay will be deemed to be accumulated but unpaid dividends on the Series B preferred stock. We refer to the provision described in the second and third sentences of this paragraph as the “share limitation provision.” Notwithstanding anything to the contrary, we will have the right, exercisable at our sole election by notice sent to the holders of the Series B preferred stock, to irrevocably eliminate the share limitation provision. If we have made such an irrevocable election, then we will state so in each subsequent notice, if any, that we send electing to pay any portion of a declared dividend on the Series B preferred stock in shares of common stock. For the avoidance of doubt, such an irrevocable election, if made, will be effective without the need to amend or supplement the statement with respect to shares, including pursuant to the provision described in the seventh bullet point of the third paragraph under the caption “— Limited Voting Rights — When a Supermajority Vote is Required” below. However, we may nonetheless choose to effect such an amendment or supplement at our option. In addition, such irrevocable election, if made, will not affect any prior election that we have made or prior notice that we have sent with respect to the payment of any portion of a declared dividend in shares of common stock.

For purposes of the Series B preferred stock, the floor price has the meaning ascribed to it under the purchase contract and pledge agreement, assuming, solely for these purposes, that that purchase contracts remain outstanding for so long as any Series B preferred stock is outstanding.

Without the consent of any holders of the Series B preferred stock, we may, by notice to such holders, irrevocably elect whether we will pay dividend payments in cash, shares of our common stock or a combination thereof (a “dividend payment method”) and, if applicable, the amount or percentage of a dividend payment to be paid in common stock that will apply to any dividend payment following such notice (unless a dividend payment method has previously been designated) and, subject to the foregoing, specify the effective time of such election (which may be any time subsequent to the delivery of such notice). Our irrevocable election of a dividend payment method as described herein may be made by us in our sole discretion.

No fractional shares of our common stock will be delivered to the holders of the Series B preferred stock in respect of dividends. We will instead pay a cash adjustment to each holder that would otherwise be entitled to a fraction of a share of our common stock based on (i) the five-day average price and (ii) the aggregate number of shares of Series B preferred stock held by such holder (or, if the Series B preferred stock is held in global book-entry form, based on the applicable procedures of the depositary for determining such number of shares).

To the extent a shelf registration statement is required in our reasonable judgment in connection with the issuance of or for resales (by persons who are not, and have not been at any time during the preceding

 

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three months, affiliates of ours) of common stock issued as payment of a dividend, we will, to the extent such a registration statement is not currently filed and effective, use our commercially reasonable efforts to file and maintain the effectiveness of such a shelf registration statement until the earlier of such time as all such shares of our common stock have been resold thereunder and such time as all such shares are freely tradable by such non-affiliates without registration. To the extent applicable, we will also use our commercially reasonable efforts to have the shares of our common stock qualified or registered under applicable U.S. state securities laws, if required, and approved for listing on the New York Stock Exchange (or if our common stock is not listed on the New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which our common stock is then listed).

Any dividends paid in shares of our common stock will be subject to the listing standards of the New York Stock Exchange, if applicable.

Recapitalizations, Reclassifications and Changes of Our Common Stock

In the case of any reorganization event, at and after the effective time of such reorganization event, the consideration in which dividends on the Series B preferred stock is payable will be determined in the same manner as if each reference to any number of shares of common stock in the provisions described in the “— Dividends” section (or in any related definitions) were instead a reference to the same number of exchange property units of such reorganization event. At and after the effective time of the reorganization event, the daily VWAP will be calculated based on the value of such exchange property unit. In the all event holders of our common stock (other than any constituent person or affiliate thereof) have the opportunity to elect the form of consideration to be received in such transaction, the exchange property unit will be deemed to be the weighted average, per share of our common stock, of the types and amounts of consideration received by the holders of our common stock. We will notify holders of the weighted average as soon as reasonably practicable after such determination is made. If the holders receive only cash in such transaction, then notwithstanding anything herein to the contrary, dividends on the Series B preferred stock must, if declared, be paid entirely in cash. In addition, we will amend the statement with respect to shares (1) in the case of any transaction that results in the securities of any entity other than us (or our successor in such transaction) being included as exchange property, by causing the dividend blocker provisions to apply to that other entity, with its common equity securities being deemed stock ranking junior to the Series B preferred stock for this purpose and (2) to include such additional provisions to protect the interests of the holders of Series B preferred stock as our board of directors reasonably considers necessary by reason of the foregoing. We will not become party to any such reorganization event unless its terms are consistent with the foregoing.

The provisions described in the preceding two paragraphs will similarly apply to successive reorganization events.

Liquidation Preference

Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, before any distribution or payment will be made to holders of shares of our common stock or any other class or series of capital stock ranking, as to rights upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, junior to the Series B preferred stock, holders of shares of Series B preferred stock are entitled to be paid out of our assets legally available for distribution to our shareholders, after payment of or provision for our debts and other liabilities, a liquidation preference of $1,000 per share of Series B preferred stock, plus an amount equal to any accumulated but unpaid dividends (whether or not authorized or declared) up to but excluding the date of payment, but subject to the prior payment in full of all our liabilities and the payment of our senior stock. If, upon our voluntary or involuntary liquidation, dissolution or winding up, our available assets are insufficient to pay the full amount of the liquidating distributions on all outstanding shares of Series B preferred stock and the corresponding amounts payable on all shares of each other class or series of capital stock ranking, as to liquidation rights, on parity with the Series B preferred stock (including the convertible preferred stock) in the distribution of assets, then holders of

 

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shares of Series B preferred stock and each such other class or series of capital stock ranking, as to voluntary or involuntary liquidation rights, on parity with the Series B preferred stock (including the convertible preferred stock) will share ratably in any distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

Holders of shares of Series B preferred stock will be entitled to written notice of any event triggering the right to receive a distribution in connection with any voluntary or involuntary liquidation, dissolution or winding up of our affairs. After payment of the full amount of the liquidating distributions to which they are entitled, holders of shares of Series B preferred stock will have no right or claim to any of our remaining assets. Our consolidation or merger with or into any other corporation, trust or other entity, or the voluntary sale, lease, transfer or conveyance of all or substantially all of our property or business, will not be deemed to constitute a liquidation, dissolution or winding up of our affairs.

No Maturity

The Series B preferred stock has no maturity date, but we are permitted to redeem the Series B preferred stock as described under “— Optional Redemption.” Accordingly, the Series B preferred stock will remain outstanding indefinitely unless redeemed by us.

Optional Redemption

We do not have the right to redeem any shares of Series B preferred stock before September 3, 2024. On or after September 3, 2024, we will have the option to redeem some or all the shares of Series B preferred stock at a redemption price equal to 100% of the liquidation preference per share, plus any accumulated but unpaid dividends, if any (whether or not declared) to, but excluding, the redemption date. The redemption price will be paid solely in cash.

The Series B preferred stock will not be subject to remarketing. However, if in connection with a successful remarketing of the convertible preferred stock, the earliest redemption date for the convertible preferred stock is changed to a later date that is on or prior to August 29, 2025 as described under “Description of the Purchase Contracts — Remarketing” and “Description of the Convertible Preferred Stock — Remarketing,” the earliest redemption date for the Series B preferred stock will be changed to such later date.

In the event of a redemption, we will request that the depositary notify its participants holding Series B preferred stock or, if Series B preferred stock is in certificated form, send a written notice by first class mail to each holder of record of the Series B preferred stock at such holders registered address, not fewer than 25 scheduled trading days nor more than 90 calendar days prior to the redemption date, stating, among other things, the redemption price per share of Series B preferred stock. The redemption date will be a business day of our choosing that complies with the preceding sentence. In addition, we will (i) issue a press release containing such information or (ii) include the same information in a current report that is filed with, or furnished to, the SEC. In no event will we give any notice of redemption prior to the earlier of a remarketing settlement date and the purchase contract settlement date.

If we give notice of redemption, then, by 12:00 p.m., New York City time, on the redemption date, we will, with respect to:

 

   

shares of Series B preferred stock held by DTC or its nominees, deposit or cause to be deposited, irrevocably with DTC cash sufficient to pay the redemption price and will give DTC irrevocable instructions and authority to pay the redemption price to holders of such shares of Series B preferred stock; and

 

   

shares of Series B preferred stock held in certificated form, deposit or cause to be deposited, irrevocably with the paying agent cash sufficient to pay the redemption price and will give the paying agent irrevocable instructions and authority to pay the redemption price to holders of such shares of Series B preferred stock upon surrender to the paying agent of their certificates evidencing their shares of Series B preferred stock.

 

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If on the redemption date there has been irrevocably deposited with DTC or the paying agent cash sufficient to pay the redemption price for the shares of Series B preferred stock delivered for redemption in accordance with the terms of the statement with respect to shares, then, except as described in the next paragraph, dividends will cease to accumulate on those shares of Series B preferred stock called for redemption and all rights of holders of such shares will terminate except for the right to receive the redemption price. Payment of the redemption price for the shares of Series B preferred stock is conditioned upon book-entry transfer of or physical delivery of certificates representing the Series B preferred stock, together with necessary endorsements, to the paying agent, or to the paying agent’s account at DTC, at any time after delivery of the redemption notice. Payment of the redemption price for the Series B preferred stock will be made (i) if book-entry transfer of or physical delivery of the Series B preferred stock has been made by or on the redemption date, on the redemption date, or (ii) if book-entry transfer of or physical delivery of the Series B preferred stock has not been made by or on such date, at the time of book-entry transfer of or physical delivery of the Series B preferred stock.

If the redemption date falls after a dividend payment record date and on or before the related payment date, then (x) holders of the shares of Series B preferred stock at the close of business on that dividend payment record date will be entitled to receive the full dividend payable on those shares on the corresponding payment date; and (y) the redemption price payable per share on such redemption date as described above will be reduced by the amount of such dividend payable per share of Series B preferred stock on the related payment date.

In the case of any partial redemption, we will select the shares of Series B preferred stock to be redeemed on a pro rata basis, by lot or in accordance with, and subject to, DTC’s applicable procedures.

We do not have the right to authorize, issue a press release or give notice of redemption unless (a) we have funds legally available for the payment of the aggregate redemption price and (b) prior to giving the notice (i) all accumulated but unpaid dividends on the Series B preferred stock (whether or not declared) for dividend periods ended prior to the date of such notice of redemption have been or contemporaneously are declared and paid out of legally available funds and (ii) if the redemption date occurs following a record date and on or prior to the related payment date, a cash dividend for the related dividend period has been declared and sufficient funds legally available therefor have been set aside for payment of such dividend.

If any shares of Series B preferred stock are called for redemption, we must also call for redemption a proportionate number (rounded to the nearest whole number) of outstanding shares of convertible preferred stock, if any, on the same redemption date.

Limited Voting Rights

Holders of shares of Series B preferred stock generally do not have any voting rights, except as set forth below and as required by law. In matters where holders of the Series B preferred stock are entitled to vote, each share of Series B preferred stock will be entitled to one vote.

Preferred Stock Directors

If at any time dividends on the Series B preferred stock have not been declared and paid in full for six or more dividend periods, whether or not consecutive (which we refer to as a “preferred dividend default”), holders of shares of Series B preferred stock (voting together as a class with the holders of all other classes or series of preferred stock upon which equivalent voting rights have been conferred (including the convertible preferred stock) and are exercisable (and with voting rights allocated pro rata based on the liquidation preference of the Series B preferred stock and each such other class or series of preferred stock)), will be entitled to vote for the election of two additional directors to serve on our board of directors (which we refer to as “preferred stock directors”), until all accumulated but unpaid dividends with respect to the Series B preferred stock and any other class or series of preferred stock upon which equivalent voting rights have been conferred (including the convertible preferred stock) and are exercisable have been paid or declared and a sum sufficient for payment is set aside for such payment. In such a case, the number of

 

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directors serving on our board of directors will be increased by two. As a condition to the election of any such preferred stock directors, such election must not cause us to violate the corporate governance requirements of The New York Stock Exchange (or any other exchange or automated quotation system on which our securities may be listed or quoted) that requires listed or quoted companies to have a majority of independent directors. In addition, our board of directors will at no time include more than two directors, in total, appointed pursuant to the provisions under this “— Preferred Stock Directors” subsection, the provisions set forth under the heading “Description of the Convertible Preferred Stock — Limited Voting Rights — Preferred Stock Directors” and the analogous provisions in any other classes or series of Parity Stock upon which equivalent voting rights have been conferred and are exercisable. The preferred stock directors will be elected by a plurality of the votes cast in the election to serve until the next annual meeting and each preferred stock director will serve until his successor is duly elected and qualifies or until the director’s right to hold the office terminates, whichever occurs earlier. Subject to the timing and notice requirements of our amended and restated bylaws as in effect on the date of this prospectus supplement, the election will take place at:

 

   

a special meeting called by holders of at least 10% of the outstanding shares of Series B preferred stock together with any other class or series of preferred stock upon which equivalent voting rights have been conferred (including the convertible preferred stock) and are exercisable, if this request is received more than 90 calendar days before the date fixed for our next annual or special meeting of shareholders or, if we receive the request for a special meeting within 90 calendar days before the date fixed for our next annual or special meeting of shareholders, at our annual or special meeting of shareholders; and

 

   

each subsequent annual meeting (or special meeting held in its place) until all accumulated dividends on the Series B preferred stock and on any other class or series of preferred upon which equivalent voting rights have been conferred (including the convertible preferred stock) and are exercisable have been paid in full for all past completed dividend periods and the dividend for the then current dividend period has been fully paid or declared and a sum sufficient for the payment thereof set aside for payment.

If and when all accumulated dividends on the Series B preferred stock and all other classes or series of preferred stock upon which equivalent voting rights have been conferred (including the convertible preferred stock) and are exercisable have been paid in full or a sum sufficient for such payment in full is set aside for payment, holders of shares of Series B preferred stock will be divested of the voting rights set forth above (subject to re-vesting in the event of any subsequent preferred dividend defaults) and the term of office of such preferred stock directors so elected will terminate and the entire board of directors will be reduced accordingly. Each preferred stock director will be entitled to one vote on any matter.

When a Supermajority Vote is Required

So long as any shares of Series B preferred stock remain outstanding, we will not, without the consent or the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series B preferred stock together with each other class or series of preferred stock ranking on parity with the Series B preferred stock, including the convertible preferred stock, with respect to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up and upon which equivalent voting rights have been conferred (including the convertible preferred stock) (voting as a single class):

 

   

authorize, create or issue, or increase the number of authorized or issued shares of, any class or series of stock ranking senior to the Series B preferred stock with respect to payment of dividends, or the distribution of assets upon the liquidation, dissolution or winding up of our affairs, or reclassify any of our authorized capital stock into any such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase, any such shares;

 

   

amend, alter or repeal the provisions of our amended and restated articles of incorporation, as amended, so as to materially and adversely affect any right, preference, privilege or voting power of

 

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the Series B preferred stock (other than an amendment, alteration or repeal permitted by the provisions described in the second immediately following paragraph below); or

 

   

consummate a binding share exchange or reclassification involving the shares of Series B preferred stock or a merger or consolidation of us with another entity, unless either (i) the shares of Series B preferred stock remain outstanding and have rights, preferences, privileges and voting powers, taken as a whole, that are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the Series B preferred stock immediately prior to such consummation, taken as a whole, or (ii) in the case of any such merger or consolidation with respect to which we are not the surviving or resulting entity, the shares of Series B preferred stock are converted into or exchanged for, or represent the right to receive, preference securities of the surviving or resulting entity or its ultimate parent, such surviving or resulting entity or ultimate parent is organized under the laws of the United States, any state thereof or the District of Columbia and treated as a corporation for U.S. federal income tax purposes, and such preference securities have rights, preferences, privileges and voting powers, taken as a whole, that are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the Series B preferred stock immediately prior to such consummation, taken as a whole (such a binding share exchange, reclassification, merger or consolidation, a “Series B preferred stock reorganization event,” and the class of Series B preferred stock referred to in clause (i) above or the class of preference securities referred to in clause (ii) above, as applicable, the “reference preferred stock”);

provided that (x) a binding share exchange, reclassification, merger or consolidation that satisfies the third bullet point of this sentence will not require the affirmative vote or consent of any holders of the Series B preferred stock pursuant to the second bullet point of this sentence; (y) the creation and issuance, or an increase in the authorized or issued amount, whether pursuant to pre-emptive or similar rights or otherwise, of any series of preferred stock (including the convertible preferred stock and Series B preferred stock), ranking equally with and/or junior to the Series B preferred stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and the distribution of assets upon our liquidation, dissolution and winding-up, will not be deemed to adversely affect the rights, preferences, privileges or voting powers of the Series B preferred stock, and will not require the affirmative vote or consent of any holders of the Series B preferred stock; and (z) the application of the provisions described above under the caption “— Recapitalizations, Reclassifications and Changes of Our Common Stock,” including the execution and delivery of any supplemental instruments solely to give effect to such provisions, will not, in itself, be deemed to adversely affect the rights, preferences, privileges or voting powers of the convertible preferred stock and will not require the affirmative vote or consent of any holders of the convertible preferred stock.

If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified above would adversely affect one or more but not all series of parity stock (including the convertible preferred stock and/or the Series B preferred stock for this purpose), then only the one or more series of parity stock adversely affected and entitled to vote, rather than all series of parity stock, will vote as a class.

Without the consent of the holders of the Series B preferred stock, we may amend, alter, supplement, or repeal any terms of the Series B preferred stock or the statement with respect to shares for the following purposes:

 

   

to cure any ambiguity, defect, inconsistency or mistake, or to correct or supplement any provision contained in the statement with respect to shares establishing the terms of the Series B preferred stock that may be defective or inconsistent with any other provision contained in such statement with respect to shares;

 

   

so long as such action does not adversely affect the special rights, preferences, privileges or voting powers of the Series B preferred stock, and limitations and restrictions thereof, to make such other provisions in regard to matters or questions relating to the Series B preferred stock that is not

 

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inconsistent with the provisions of the statement with respect to shares establishing the terms of the Series B preferred stock;

 

   

to waive any of our rights with respect to the Series B preferred stock;

 

   

to amend, alter, supplement or repeal any terms of the Series B preferred stock or the statement with respect to shares in order to conform the terms of the Series B preferred stock to the description contained in the preliminary prospectus supplement for this offering, as supplemented by the related pricing term sheet;

 

   

to amend, alter, supplement or repeal any terms of the Series B preferred stock or the statement with respect to shares in order to implement the changes under “— Increased Dividend Rate”;

 

   

to amend, alter, supplement or repeal any terms of the Series B preferred stock or the statement with respect to shares in order to change the earliest redemption date for the Series B preferred stock in connection with a successful remarketing of the convertible preferred stock;

 

   

to irrevocably elect a dividend payment method to apply or to irrevocably eliminate the share limitation provision;

 

   

to amend the terms of the Series B preferred stock or the statement with respect to shares solely to give effect to the provisions described above under “— Recapitalizations, Reclassifications and Changes of Our Common Stock”; or

 

   

to file a statement of correction with respect to the statement with respect to shares to the extent permitted by Section 138 of the Pennsylvania Business Corporation Law.

Holders of shares of Series B preferred stock will not be entitled to vote with respect to any increase in the total number of authorized shares of our common stock or preferred stock, any increase in the number of authorized shares of Series B preferred stock or the creation or issuance of any other class or series of capital stock, or any increase in the number of authorized shares of any other class or series of capital stock, in each case ranking on parity with or junior to the Series B preferred stock, including the convertible preferred stock, with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up, except as set forth above.

Holders of shares of Series B preferred stock will not have any voting rights with respect to, and the consent of the holders of shares of Series B preferred stock is not required for, the taking of any corporate action, including any merger or consolidation involving us or a sale of all or substantially all of our consolidated assets, regardless of the effect that such merger, consolidation or sale may have upon the powers, preferences, voting power or other rights or privileges of the Series B preferred stock, except as set forth above.

In addition, the voting provisions above will not apply if, at or prior to the time when the act with respect to which the vote would otherwise be required would occur, we have redeemed upon proper procedures all outstanding shares of Series B preferred stock.

Transfer Agent, Registrar, Paying Agent, Conversion Agent

The registrar and transfer agent for the Series B preferred stock is Computershare Inc. The paying agent and conversion agent for the Series B preferred stock is U.S. Bank National Association.

Increased Dividend Rate

In connection with a successful remarketing of the convertible preferred stock, the dividend rate on the convertible preferred stock may be increased as described under “Description of the Purchase Contracts — Remarketing” and “Description of the Convertible Preferred Stock — Remarketing.” In that case, the dividend rate on the Series B preferred stock will be increased to be equal to such increased dividend rate on the convertible preferred stock, with such increase becoming effective for the Series B preferred stock

 

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from, and including, the date as of which such increase to the dividend rate on the convertible preferred stock becomes effective.

Payment

So long as any shares of Series B preferred stock are registered in the name of DTC, as depository for the Series B preferred stock as described herein under “— Book-Entry Issuance — The Depository Trust Company,” or DTC’s nominee, payments on the Series B preferred stock will be made as described therein.

Form

So long as any shares of Series B preferred stock are registered in the name of DTC, as depository for the Series B preferred stock as described herein under “— Book-Entry Issuance — The Depository Trust Company,” or DTC’s nominee, transfers and exchanges of beneficial interests in the shares of Series B preferred stock will be made as described therein.

Certain Trading Characteristics

The Series B preferred stock is expected to trade at a price that takes into account the value, if any, of accumulated but unpaid dividends (except for declared dividends accumulated after a record date and prior to a payment date, which dividends will be payable to the holders as of the record date, as described above); thus, it is expected that purchasers of the Series B preferred stock will not pay, and sellers will not receive, accumulated but unpaid dividends with respect to the Series B preferred stock that is not included in the trading price thereof.

Title

We and any agent of ours will treat the person or entity in whose name shares of Series B preferred stock are registered as the absolute owner of those securities for the purpose of making payments and for all other purposes irrespective of notice to the contrary.

Book-Entry Issuance — The Depository Trust Company

We expect the shares of Series B preferred stock to be initially evidenced by one or more global securities registered in the name of DTC’s nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. Such global securities will be deposited with the transfer agent as custodian for DTC. See “Certain Provisions of the Purchase Contract and Pledge Agreement — Book-Entry System for Corporate Units, Treasury Units and Cash Settled Units” for a description of DTC.

Purchases of the Series B preferred stock under the DTC system must be made by or through direct participants, which will receive a credit for the Series B preferred stock on DTC’s records. The ownership interest of each actual purchaser of each share of Series B preferred stock (“beneficial owner”) is in turn to be recorded on the direct and indirect participants’ records. Beneficial owners will not receive written confirmation from DTC of their purchases, but beneficial owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the direct or indirect participant through which they purchased the Series B preferred stock. Transfers of ownership interests on the Series B preferred stock are to be accomplished by entries made on the books of direct and indirect participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in Series B preferred stock, except in the event that use of the book-entry system for the Series B preferred stock is discontinued.

To facilitate subsequent transfers, all Series B preferred stock deposited by direct participants with DTC are registered in the name of DTC’s nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Series B preferred stock with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial

 

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ownership. DTC has no knowledge of the actual beneficial owners of the Series B preferred stock; DTC’s records reflect only the identity of the direct participants to whose accounts the shares of Series B preferred stock are credited, which may or may not be the beneficial owners. The direct and indirect participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by direct participants and indirect participants to beneficial owners, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Notices will be sent to DTC.

Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Series B preferred stock unless authorized by a direct participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns the voting or consenting rights of Cede&n