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CTXS > SEC Filings for CTXS > Form 8-K on 30-Apr-2014All Recent SEC Filings

Show all filings for CITRIX SYSTEMS INC

Form 8-K for CITRIX SYSTEMS INC


30-Apr-2014

Entry into a Material Definitive Agreement, Creation of a Direct Financial Obl


Item 1.01 Entry into a Material Definitive Agreement.

Convertible Notes and the Indenture

On April 30, 2014, Citrix Systems, Inc., a Delaware corporation (the "Company"), completed its previously announced private placement of $1.25 billion principal amount of 0.500% Convertible Senior Notes due 2019 (the "Convertible Notes"). The Company also granted the initial purchasers the right to purchase, within a 30-day period, up to an additional $187.5 million principal amount of Convertible Notes, solely to cover over-allotments (the "Over-Allotment Option"). The Convertible Notes are governed by the terms of an indenture, dated as of April 30, 2014 (the "Indenture"), between the Company and Wilmington Trust, National Association, as trustee (the "Trustee").

The net proceeds from this offering were approximately $1.23 billion, after deducting the initial purchasers' discounts and commissions and the estimated offering expenses payable by the Company. The Company used approximately $71.8 million of the net proceeds to pay the cost of the Bond Hedges described below (after such cost was partially offset by the proceeds to the Company from the Warrant Transactions described below).

The Company is using the remainder of the net proceeds from the offering and a portion of its existing cash and investments to purchase an aggregate of approximately $1.5 billion of its common stock, par value $0.001 per share (the "Common Stock"), as authorized under its previously announced share repurchase program. The Company used approximately $101 million to purchase shares of Common Stock from certain purchasers of the Convertible Notes in privately negotiated transactions concurrently with the closing of the offering, and the remaining $1.4 billion to purchase additional shares of Common Stock through an accelerated share repurchase transaction (the "ASR"), which the Company entered into with Citibank, N.A. on April 25, 2014, as described below. If the initial purchasers exercise the Over-Allotment Option, the Company expects to enter into additional convertible note hedge transactions (the "Additional Bond Hedges") and issue additional warrants (the "Additional Warrants") pursuant to additional warrant transactions, in each case on the same terms as the Bond Hedges and Warrant Transactions described below. The Company expects to use a portion of the net proceeds from the sale of the additional Convertible Notes to pay the cost of the Additional Bond Hedges (after such cost is partially offset by the proceeds to the Company from the sale of the Additional Warrants) and to use the remainder of such proceeds for working capital and general corporate purposes.

The Convertible Notes are, and any additional Convertible Notes issued in connection with the exercise of the Over-Allotment Option will be, the senior unsecured obligations of the Company and bear interest at a rate of 0.500% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing October 15, 2014. The Convertible Notes will mature on April 15, 2019, unless earlier repurchased or converted. At any time prior to the close of business on the business day immediately preceding October 15, 2018, holders may convert their Convertible Notes at their option only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2014 (and only during such calendar quarter), if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the "measurement period") in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Common Stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On or after October 15, 2018 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing circumstances.

Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Company's election, in respect of the remainder, if any, of the Company's conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. Holders will not receive any


additional cash payment or additional shares representing accrued and unpaid interest, if any, upon conversion of a Convertible Note, except in limited circumstances. Instead, interest will be deemed to be paid by the cash and shares, if any, of the Company's Common Stock paid or delivered, as the case may be, to such holder upon conversion of a Convertible Note.

The conversion rate for the Convertible Notes will initially be 11.1111 shares of Common Stock per $1,000 principal amount of Convertible Notes, which corresponds to an initial conversion price of approximately $90.00 per share of Common Stock and represents a premium of approximately 50% over the last reported sale price of $60.00 per share of Common Stock on The NASDAQ Global Select Market on April 24, 2014. The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of certain stock dividends on Common Stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness, or assets, the payment of cash dividends and certain issuer tender or exchange offers.

The Company may not redeem the Convertible Notes prior to the maturity date and no "sinking fund" is provided for the Convertible Notes, which means that the Company is not required to periodically redeem or retire the Convertible Notes. Upon the occurrence of certain fundamental changes involving the Company, holders of the Convertible Notes may require the Company to repurchase for cash all or part of their Convertible Notes in principal amounts of $1,000 or an integral multiple thereof at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The Indenture does not contain any financial or maintenance covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company or any of its subsidiaries. . . .



Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 of this report is incorporated by reference into this Item 2.03.




Item 3.02 Unregistered Sales of Equity Securities.

The Convertible Notes were, and any additional Convertible Notes issued in connection with the exercise of the Over-Allotment Option will be, sold to the initial purchasers in reliance on the exemption from the registration requirements provided by
Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), for resale to qualified institutional buyers pursuant to Rule 144A of the Securities Act. In addition, the Warrants were, and any Additional Warrants will be, issued to the Option Counterparties in reliance on the exemption from the registration requirements provided by Section 4(a)(2) of the Securities Act. The Company does not intend to file a shelf registration statement for the resale of the Convertible Notes or Warrants or Common Stock issuable upon conversion of the Convertible Notes or exercise of the Warrants, as applicable, if any.

This Current Report on Form 8-K does not constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful.

Additional information pertaining to the Convertible Notes and Warrants (and any Additional Warrants) and the shares of Common Stock issuable upon conversion of the Convertible Notes or exercise of the Warrants (and any Additional Warrants), as applicable, is contained in Item 1.01 of this report and is incorporated by reference into this Item 3.02.



Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
  No.                                     Description

 4.1         Indenture, dated as of April 30, 2014, between Citrix Systems, Inc.
             and Wilmington Trust, National Association, as Trustee

 4.2         Form of 0.500% Convertible Senior Notes due 2019 (included in Exhibit
             4.1)

10.1         Form of Call Option Transaction Confirmation between Citrix Systems,
             Inc. and each of JPMorgan Chase Bank, National Association, London
             Branch; Goldman, Sachs & Co.; Bank of America, N.A.; and Royal Bank of
             Canada

10.2         Form of Warrants Confirmation between Citrix Systems, Inc. and each of
             JPMorgan Chase Bank, National Association, London Branch; Goldman,
             Sachs & Co.; Bank of America, N.A.; and Royal Bank of Canada

10.3         Master Confirmation between Citibank, N.A. and Citrix Systems, Inc.,
             dated April 25, 2014


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