EMDEON CORPORATION
As filed with the Securities and Exchange Commission on
December 19, 2005
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Emdeon Corporation
(Exact name of registrant as specified in its charter)
|
|
|
Delaware |
|
94-3236644 |
(State or other jurisdiction of
incorporation or organization) |
|
(I.R.S. Employer
Identification No.) |
669 River Drive, Center 2
Elmwood Park, New Jersey 07407-1361
(201) 703-3400
(Address, including zip code, and telephone number, including
area code, of registrants principal executive offices)
Charles A. Mele, Esq.
Executive Vice President and General Counsel
Emdeon Corporation
669 River Drive, Center 2
Elmwood Park, New Jersey 07407-1361
(201) 703-3400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Stephen T. Giove
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
(212) 848-4000
Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this
registration statement.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box. o
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box. x
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering. o
If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
If this form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following
box. x
If this form is a post-effective amendment to registration
statement filed pursuant to General Instruction I.D. filed to
register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following
box. o
CALCULATION OF REGISTRATION FEE
|
|
|
|
|
|
|
|
|
|
|
|
|
Proposed maximum |
|
Proposed maximum |
|
|
Title of each class of |
|
Amount to be |
|
price per |
|
aggregate |
|
Amount of |
securities to be registered |
|
registered |
|
unit or share |
|
offering price(1) |
|
registration fee |
|
31/8
Convertible Notes due 2025
|
|
$300,000,000 |
|
100% |
|
$300,000,000 |
|
$32,100 |
|
Common Stock, $.0001 par value
|
|
(2) |
|
(2) |
|
(2) |
|
(3) |
|
|
|
|
(1) |
Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457. |
(2) |
Includes 19,273,393 shares of common stock issuable upon
conversion of the notes at the rate of 64.2446 shares of
common stock per $1,000 principal amount of the notes. Under
Rule 416 under the Securities Act, the number of shares of
common stock registered includes an indeterminate number of
shares of common stock that may be issued in connection with a
stock split, stock dividend, recapitalization or similar event. |
(3) |
Under Rule 457(i), there is no additional filing fee
payable with respect to the shares of common stock issuable upon
conversion of the notes because no additional consideration will
be received in connection with the exercise of the conversion
privilege. |
$300,000,000
Emdeon Corporation
31/8% Convertible
Notes due 2025
and
Common Stock Issuable Upon Conversion of the Notes
We issued $300,000,000 aggregate principal amount of our
31/8% convertible
notes due 2025 in a private placement on August 30, 2005.
The notes bear interest at the rate of
31/8% per
year. Interest on the notes is payable on March 1 and
September 1 of each year, beginning on March 1, 2006.
In addition, we will pay contingent interest during the period
from September 1, 2012 to February 28, 2013 and during
any period from March 1 to August 31 and from
September 1 to February 28 thereafter, if the average
trading price of a note for the five trading days ending on the
second trading day immediately preceding the first day of the
applicable period equals 120% or more of the principal amount of
the note. The amount of contingent interest payable per $1,000
principal amount of notes in respect of any such period will
equal 0.25% per annum of the average trading price of the
notes for the five trading days ending on the second trading day
immediately preceding such period. The notes will be issued only
in denominations of $1,000 and integral multiples of $1,000. The
notes will mature on September 1, 2025.
The selling security holders identified in this prospectus may
offer from time to time up to $300,000,000 of the notes and
shares of our common stock issuable upon conversion of the
notes. If required, we will set forth the names of any other
selling security holders in a prospectus supplement to this
prospectus. We will not receive any proceeds from the sale of
the notes or shares of common stock issuable upon conversion of
the notes by any of the selling security holders. The notes and
the shares of common stock may be offered in negotiated
transactions or otherwise, at market prices prevailing at the
time of sale or at negotiated prices. In addition, shares of our
common stock may be offered from time to time through ordinary
brokerage transactions on the Nasdaq National Market. See
Plan of Distribution.
Before September 5, 2010, the notes are not subject to
redemption. We may redeem the notes in whole or in part at any
time on or after September 5, 2010, for cash, at specified
redemption prices plus any accrued and unpaid interest to, but
not including, the redemption date. Holders may require us to
purchase for cash all or a portion of their notes on
September 1, 2012, September 1, 2015 and
September 1, 2020, for a price equal to 100% of the
principal amount of the notes being repurchased, plus any
accrued and unpaid interest to, but not including, the date of
repurchase. Holders have the option, subject to certain
conditions, to require us to repurchase any notes held by them
in the event of a change in control, as described in
this prospectus, at a price equal to 100% of the principal
amount of notes plus accrued and unpaid interest to the date of
repurchase in cash or, at our option, in shares of our common
stock, or a combination thereof.
As of the date of this prospectus, the notes are convertible at
a conversion rate of 64.2446 shares of our common stock per
$1,000 principal amount of notes. The conversion rate may be
adjusted under certain circumstances, but will not be adjusted
for accrued interest. In addition, if certain corporate
transactions that constitute a change of control occur on or
prior to September 1, 2012, we will increase the conversion
rate in certain circumstances, unless the cash transaction
constitutes a public acquirer change of control and we elect to
modify the conversion rate to allow conversion into public
acquirer common stock. Upon conversion, we will have the right
to deliver, in lieu of shares of our common stock, cash or a
combination of cash and shares of our common stock. At any time
on or prior to the 26th trading day prior to the maturity
date, we may irrevocably elect to satisfy our conversion
obligation with respect to the principal amount of the notes to
be converted with a combination of cash and shares of our common
stock. For a more detailed description of the notes, see
Description of Notes beginning on page 26.
On December 16, 2005, the last reported sale price for our
common stock on the Nasdaq National Market was $8.03 per share.
Our common stock is listed on the Nasdaq National Market under
the symbol HLTH.
We do not intend to apply for listing of the notes on any
securities exchange or for inclusion of the notes in any
automated quotation system. The notes originally issued in the
private placement are eligible for trading in The
Portalsm
Market of the NASD. However, notes sold pursuant to this
prospectus will no longer be eligible for trading in The
Portalsm
Market.
Investing in the notes and the common stock involves risks.
See Risk Factors beginning on page 9.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is December 19, 2005.
IMPORTANT NOTICE TO READERS
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission, or SEC, using
a shelf registration process. Under this shelf
registration process, the selling security holders may, from
time to time, offer notes or shares of our common stock owned by
them. You should read both this prospectus and, if applicable,
any prospectus supplement together with the information
incorporated by reference in this prospectus. See Where
You Can Find More Information and Incorporation by
Reference for more information.
You should rely only on the information contained or
incorporated by reference in this prospectus. We have not
authorized anyone else to provide you with different
information. If anyone provides you with different information,
you should not rely on it. We are not making an offer to sell
these securities in any jurisdiction where the offer or sale is
not permitted. You should assume that the information appearing
in this prospectus or any documents incorporated by reference in
this prospectus is accurate only as of the date on the front
cover of the applicable document or as specifically indicated in
the document. Our business, financial condition, results of
operations and prospects may have changed since that date.
Unless otherwise indicated, in this prospectus,
Emdeon, we, us and
our refer to Emdeon Corporation and its subsidiaries.
TABLE OF CONTENTS
i
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in
this prospectus. It is not complete and is qualified in its
entirety by, and should be read in conjunction with, the more
detailed information (including Risk Factors and
financial information) appearing elsewhere in this prospectus,
as well as in the documents incorporated by reference in this
prospectus.
Business
Emdeon Corporation is a Delaware corporation that was
incorporated in December 1995 and commenced operations in
January 1996 as Healtheon Corporation. We changed our name to
Healtheon/ WebMD Corporation in November 1999 and to WebMD
Corporation in September 2000. In October 2005, we changed our
name to Emdeon Corporation. See Recent Developments
below. Our common stock has traded on the Nasdaq National Market
under the symbol HLTH since February 11, 1999.
We are a leading provider of business, technology and
information solutions that transform both the financial and
clinical aspects of healthcare delivery. We connect providers,
payers, employers, physicians and consumers to simplify business
processes, to provide actionable knowledge at the right time and
place and to improve healthcare quality. Our business is
comprised of four segments:
|
|
|
|
|
Emdeon Business Services. We provide information-based
revenue cycle management and clinical communication solutions
that enable payers and providers to reduce administrative costs,
accelerate cashflows and improve the delivery of care. We offer
a full suite of products and services to automate key business
functions for healthcare payers and providers, including:
electronic transaction services; inbound and outbound document
management solutions; payment services; internet and
software-based client solutions; decision support and data
warehousing solutions; and consulting services. Our provider
customers include physicians, dentists, billing services,
laboratories, pharmacies and hospitals. Our payer customers
include commercial health insurance companies, managed care
organizations, Medicare and Medicaid agencies, Blue Cross and
Blue Shield organizations, and pharmacy benefit management
companies. In addition, Emdeon Business Services works with
numerous medical and dental practice management system vendors,
hospital information system vendors and other service providers
to provide integrated transaction processing between their
systems and ours. |
|
|
|
Emdeon Practice Services. We have been helping medical
practices automate practice management and streamline clinical
workflow for nearly 25 years. Our innovative practice
management and electronic health records software solutions are
used by large and small medical practices in all specialties to
improve efficiency and enhance patient care. Our systems and
services automate: scheduling, billing and other administrative
tasks; and maintenance of electronic medical records and
documentation of patient encounters. Emdeon Practice Services
also provides integrated electronic transaction solutions and
print-and-mail services powered by Emdeon Business Services. |
|
|
|
WebMD Health. We are a leading provider of health
information services to consumers, physicians, healthcare
professionals, employers and health plans through our public and
private online portals and health-focused publications. Our
public network of health portals enables consumers and
physicians to readily access healthcare information relevant to
their specific areas of interest and specialty. We provide a
means for advertisers and sponsors to reach, educate and inform
large target audiences of health-involved consumers and
clinically active physicians. Our private portals provide a
cost-effective platform for employers and health plans to
provide their employees and plan members with access to
personalized health and benefit information and decision support
technology that helps them make more informed benefit, provider
and treatment choices. |
|
|
|
Porex. We develop, manufacture and distribute proprietary
porous plastic products and components used in healthcare,
industrial and consumer applications. |
1
Earlier this year, we formed a corporation now called WebMD
Health Corp. (which we refer to in this prospectus as
WHC) to conduct the business of our WebMD Health
segment and to issue shares in an initial public offering.
WHCs Class A Common Stock began trading on the Nasdaq
National Market under the ticker symbol WBMD on
September 29, 2005. As of December 19, 2005, we own
48,100,000 shares of WHC Class B Common Stock, which
represents approximately 85.8% of WHCs outstanding common
stock and we have approximately 96.7% of the combined voting
power of WHCs outstanding common stock.
Recent Developments
Tender Offer
On November 23, 2005, we commenced a tender offer whereby
we offered to purchase for cash up to 60,000,000 shares of
our common stock, par value $0.0001 per share, upon the
terms and subject to the conditions set forth in the Offer to
Purchase, dated November 23, 2005, and in the related
Letter of Transmittal, copies of which have been filed with the
Securities Exchange Commission and are available upon request
from the Information Agent for the Offer: Innisfree M&A
Incorporated, 501 Madison Avenue, 20th Floor, New
York, NY 10022; 1-888-750-5834 (toll-free). We refer to the
Offer to Purchase and the related Letter of Transmittal, as they
each may be amended and supplemented from time to time, as the
Tender Offer Documents and the transactions
contemplated thereby as the Tender Offer.
In the Tender Offer, we have invited our stockholders to tender
their shares of common stock at a price of $8.20 per share,
without interest. The number of shares proposed to be purchased
in the tender offer represents approximately 17.4% of our
currently outstanding shares. The tender offer is subject to
certain conditions set forth in the Tender Offer Documents. We
will purchase shares tendered by those stockholders owning fewer
than 100 shares, without pro ration, and all other shares
tendered will be purchased on a pro rata basis, subject to the
conditional tender offer provisions described in the Tender
Offer Documents. Our directors and executive officers have
advised us that they do not intend to tender any of their shares
in the tender offer. The tender offer will expire at
12:00 midnight, New York City time, on Wednesday,
December 21, 2005, unless we, in our sole discretion,
extend the period of time during which the tender offer will
remain open.
We anticipate that we will pay for the shares tendered in the
Tender Offer and all expenses applicable to the Tender Offer
primarily from cash on hand (including proceeds from the sale of
available-for-sale securities). As of September 30, 2005,
we had approximately $832 million in cash and short and
long-term marketable debt securities. We believe that our
current financial resources, including debt capacity, will allow
us to fund capital requirements for improving our operations,
and to provide appropriate financial flexibility for general
corporate purposes. However, our future liquidity and capital
requirements will depend upon numerous factors, including the
costs of developing or enhancing our products and services and
the infrastructure we use to market and deliver them, the costs
of any potential future acquisitions of complementary businesses
or technologies and the costs of any additional repurchases of
our common stock. We may need to raise additional funds for
these purposes and or to take advantage of unanticipated
opportunities. If required, we may raise such additional funds
through public or private debt or equity financing, strategic
relationships or other arrangements. There can be no assurance
that such financing will be available on acceptable terms, if at
all, or that such financing will not be dilutive to our
stockholders.
Under certain circumstances the conversion rate of the notes may
be adjusted as a result of the tender offer. See
paragraph (5) of Description of Notes
Conversion Rate Adjustments on page 36. As of the
date of this prospectus, the notes are convertible at a
conversion rate of 64.2446 shares of our common stock per $1,000
principal amount of notes.
2
Name Change
In October 2005, we changed our corporate name to Emdeon
Corporation from WebMD Corporation. We had previously begun to
use Emdeon in the names of two of our segments, Emdeon Business
Services (formerly WebMD Business Services) and Emdeon Practice
Service (formerly WebMD Practice Services), and as a brand for
some of their products and services. Because the WebMD name had
been more closely associated with our WebMD Health
segments business and its Web sites than with our other
businesses, our Board of Directors determined that WHC would,
following its initial public offering, have the sole right to
use the name WebMD and related trademarks. In this prospectus,
we continue to use the name WebMD Health to refer to that
reporting segment of our company.
3
The Offering
|
|
|
Issuer |
|
Emdeon Corporation |
|
Notes |
|
We issued $300,000,000 aggregate principal amount of
31/8% convertible
notes due 2025. Each note was issued at a price of
$1,000 per note and has a principal amount at maturity of
$1,000. The selling security holders identified in this
prospectus may offer from time to time up to $300,000,000 of the
notes and shares of our common stock issuable upon conversion of
the notes. |
|
Maturity Date |
|
September 1, 2025, unless earlier converted, redeemed by us
at our option, or repurchased by us at your option upon a change
of control of Emdeon. |
|
Interest Rate |
|
31/8% per
annum on the principal amount, payable semiannually in arrears
in cash on March 1 and September 1 of each year,
commencing March 1, 2006. The first interest payment will
include interest from August 30, 2005, the date of original
issuance. |
|
Contingent Interest |
|
We will pay contingent interest to the holders of the notes
during the period from September 1, 2012 to
February 28, 2013 and during any period from March 1
to August 31 and from September 1 to February 28
thereafter, if the average trading price of a note for the five
trading days ending on the second trading day immediately
preceding the first day of the applicable period equals 120% or
more of the principal amount of the note. The amount of
contingent interest payable per $1,000 principal amount of notes
in respect of any such period will equal 0.25% per annum of
the average trading price of the notes for the five trading days
ending on the second trading day immediately preceding such
period. We will pay contingent interest, if any, in the same
manner as we will pay interest. |
|
Conversion Rights |
|
Holders may surrender their notes for conversion into our common
stock at a conversion rate of 64.2446 shares of our common
stock per $1,000 principal amount of notes. This is equivalent
to an initial conversion price of approximately $15.57 per
share of our common stock. The conversion rate may be adjusted
under certain circumstances, but will not be adjusted for
accrued interest. |
|
|
|
Upon conversion, we will have the right to deliver, in lieu of
shares of our common stock, cash or a combination of cash and
shares of our common stock, in each case calculated as described
under Description of Notes Conversion
Rights Settlement Upon Conversion. At any time
on or prior to the 26th trading day prior to the maturity
date, we may irrevocably elect to satisfy our conversion
obligation with respect to the principal amount of the notes to
be converted with a combination of cash and shares of our common
stock, as described under Description of Notes
Conversion Rights Our Right to Irrevocably Elect Net
Share Settlement Upon Conversion. Upon any conversion,
subject to certain exceptions, you will not receive any cash
payment representing accrued and unpaid interest. See
Description of Notes Conversion Rights. |
|
|
|
In addition, subject to our rights described under
Description of Notes Conversion
Rights Make Whole Amount and Public Acquirer Change
of Control Public Acquirer Change of Control,
if |
4
|
|
|
|
|
you elect to convert your notes in connection with the
occurrence of a make whole change of control that occurs on or
prior to September 1, 2012, we will increase the applicable
conversion rate for the notes such that you will be entitled to
receive additional shares of common stock (or cash, or a
combination of cash and shares of our common stock, if we so
elect) upon conversion in some circumstances as described under
Description of Notes Conversion
Rights Make Whole Amount and Public Acquirer Change
of Control. |
|
Public acquirer change of
control |
|
In the case of a make whole change of control that is a
public acquirer change of control, as defined under
Description of Notes Conversion
Rights Make Whole Amount and Public Acquirer Change
of Control, we may, in lieu of adjusting the conversion
rate as described in the preceding paragraph, elect to adjust
the conversion rate and the related conversion obligation such
that from and after the effective date of such public acquirer
change of control, holders of the notes will be entitled to
convert their notes into an adjusted number of shares of the
public acquirers common stock. |
|
Use of Proceeds |
|
We will not receive any proceeds from the sale by any selling
security holder of the notes or the shares of common stock
issuable upon conversion of the notes. |
|
Ranking |
|
The notes are the unsubordinated unsecured obligations of Emdeon
Corporation and will: |
|
|
|
be effectively junior to any future secured debt; |
|
|
|
rank equally in right of payment with any future
senior indebtedness; |
|
|
|
rank senior to our 1.75% convertible
subordinated notes due 2023; and |
|
|
|
be structurally subordinated to all existing and
future liabilities of our subsidiaries, including trade
payables, lease commitments and monies borrowed. |
|
|
|
As of September 30, 2005, we and our subsidiaries had
approximately $398.0 million of consolidated obligations
that rank equally with or effectively senior to the notes. In
addition, we have $350.0 million of convertible
subordinated notes due 2023 outstanding, which are contractually
subordinated to the notes. The indenture under which the notes
were issued does not restrict our ability to incur additional
indebtedness. See Description of Notes
Ranking. |
|
Global Notes; Book-Entry System |
|
We intend to issue the notes only in fully registered form
without interest coupons and in denominations of $1,000 and
integral multiples of $1,000. The notes will be evidenced by one
or more global notes deposited with the trustee for the notes,
as custodian for The Depository Trust Company, or DTC.
Beneficial interests in the global note will be shown on, and
transfers of those beneficial interests can only be made
through, records maintained by DTC and its participants. See
Description of Notes Form, Denomination,
Transfer, Exchange and Book-Entry Procedures. |
5
|
|
|
Optional Redemption |
|
We may not redeem the notes at our option prior to
September 5, 2010. On or after September 5, 2010, we
may, at our option, redeem the notes, in whole or in part, for
cash at specified redemption prices, plus any accrued and unpaid
interest to, but not including, the redemption date. See
Description of Notes Redemption by
Emdeon. |
|
Repurchase at the Option of the Holders |
|
Holders may require us to purchase for cash all or a portion of
their notes on September 1, 2012, September 1, 2015
and September 1, 2020, for a price equal to 100% of the
principal amount of the notes being repurchased, plus any
accrued and unpaid interest to, but not including, the date of
repurchase. See Description of Notes
Repurchase at the Option of Holders. |
|
Repurchase Upon a Change in Control |
|
Holders may require us to repurchase their notes upon a change
in control in cash, or, at our option, in our common stock or a
combination of cash and common stock, at 100% of the principal
amount of the notes, plus any accrued and unpaid interest to,
but not including, the date of repurchase. If we pay the
repurchase price in common stock, the common stock will be
valued at 95% of the average sale price of our common stock for
the five consecutive trading days ending on the third trading
day prior to the repurchase date. See Description of
Notes Repurchase Upon a Change in Control. |
|
Events of Default |
|
The following will be events of default for the notes: |
|
|
|
default in the payment of the principal amount,
redemption price or repurchase price of any note, including on a
redemption or repurchase date, when such amount becomes due and
payable; |
|
|
|
default in the payment of accrued and unpaid
interest, if any (including liquidated damages), on the notes
for 30 days; |
|
|
|
failure by us to provide notice of a change in
control as required by the indenture; |
|
|
|
failure by us to comply with any of our other
covenants in the notes or the indenture upon receipt by us of
notice of such default by the trustee or by holders of not less
than 25% in aggregate principal amount of the notes then
outstanding and our failure to cure (or obtain a waiver of) such
default within 60 days after receipt of such notice; |
|
|
|
default by us or by any significant
subsidiary in the payment at the final maturity thereof,
after the expiration of any applicable grace period, of
principal of, or premium, if any, on indebtedness for money
borrowed, other than non-recourse indebtedness, in the aggregate
principal amount then outstanding of $30.0 million or more,
or acceleration of any indebtedness for money borrowed in such
aggregate principal amount so that it becomes due and payable
prior to the date on which it would otherwise have become due
and payable and such acceleration is not rescinded or such
default is not cured within 30 business days after notice to us
in accordance with the indenture; or |
6
|
|
|
|
|
certain events of bankruptcy, insolvency or
reorganization affecting us or a significant subsidiary. |
|
|
|
See Description of Notes Events of Default and
Remedies. |
|
Nasdaq National Market Symbol for Common Stock |
|
HLTH. |
|
U.S. Federal Income Tax Considerations |
|
The notes are debt instruments subject to the U.S. federal
income tax contingent payment debt regulations, and we and each
holder agreed in the indenture to treat the notes as such for
U.S. federal income tax purposes. Pursuant to such
treatment, the notes will be deemed to be issued with original
issue discount for U.S. federal income tax purposes.
Holders will accrue the original issue discount on a constant
yield to maturity basis at a rate comparable to the rate at
which we would borrow in a noncontingent, nonconvertible
borrowing, even though the notes will have a significantly lower
stated yield to maturity. We intend to compute and report, and
pursuant to the terms of the indenture each holder agreed to
compute, accruals of the original issue discount based upon a
comparable yield of 6.8%, compounded semiannually. |
|
|
|
In accordance with our application of the contingent payment
debt tax regulations, you will also recognize gain or loss on
the sale, purchase by us at your option, exchange, conversion or
redemption of a note in an amount equal to the difference
between the amount realized, including the fair market value of
any common stock received, and your adjusted tax basis in the
note. Any gain recognized by you generally will be ordinary
interest income; any loss will be ordinary loss to the extent of
the interest previously included in your gross income and,
thereafter, capital loss. See U.S. Federal Income Tax
Considerations. |
|
Governing Law |
|
The indenture and the notes are governed by the laws of the
State of New York. |
|
Risk Factors |
|
See Risk Factors beginning on page 9 of this
prospectus and the other information in this prospectus for a
discussion of factors you should consider carefully before
deciding to invest in the notes and the common stock. |
For a more complete description of the terms of the notes, see
Description of Notes. For a more complete
description of the common stock, see Description of
Capital Stock.
7
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratio of
earnings to fixed charges for each of the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months | |
|
|
|
|
Ended | |
|
|
Fiscal Years Ended December 31, | |
|
September 30, | |
|
|
| |
|
| |
|
|
2000 | |
|
2001 | |
|
2002 | |
|
2003 | |
|
2004 | |
|
2004 | |
|
2005 | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Ratio of Earnings to Fixed Charges
|
|
|
* |
|
|
|
* |
|
|
|
* |
|
|
|
2.0 |
|
|
|
2.7 |
|
|
|
2.2 |
|
|
|
3.7 |
|
|
|
* |
The earnings for the years ended December 31, 2002 through
2000 were inadequate to cover total fixed charges. The coverage
deficiencies for the years ended December 31, 2002 through
2000 were (in thousands): $63,192, $6,665,780 and $3,082,114,
respectively. |
In computing the ratio of earnings to fixed charges, earnings
have been based on income (loss) from continuing operations
before income taxes plus fixed charges. Fixed charges consist of
interest, amortization of debt issuance costs and the portion of
rental expense on operating leases attributable to interest.
8
RISK FACTORS
This section describes or incorporates by reference
descriptions of circumstances or events that could have a
negative effect on our financial results or operations or that
could change, for the worse, existing trends in some or all of
our businesses. The occurrence of one or more of the
circumstances or events that are described below or that are
otherwise described in our filings that are incorporated by
reference, could have a material adverse effect on our financial
condition, results of operations and cash flows or on the
trading prices of the common stock and convertible notes that we
have issued. The risks and uncertainties described below or in
our filings that are incorporated by reference, are not the only
ones facing Emdeon. Additional risks and uncertainties that are
not currently known to us or that we currently believe are
immaterial may also adversely affect our business and
operations. You should carefully consider all of the information
contained or incorporated by reference in this prospectus before
deciding whether to invest in the notes and the common stock
and, in particular, the risks and uncertainties described
below.
Risks Related to the Notes and our Common Stock
|
|
|
The notes are effectively subordinated to our secured
indebtedness and are structurally subordinated to all
indebtedness and other liabilities of our subsidiaries |
The notes are effectively junior in right of payment to all of
our existing and future secured indebtedness to the extent of
the value of the assets securing the indebtedness and are
structurally subordinated to all indebtedness and other
liabilities of our subsidiaries, including trade payables, lease
commitments and monies borrowed. The indenture governing the
notes does not restrict the incurrence of secured indebtedness
or other debt by us or our subsidiaries.
A significant amount of our operations are conducted through
subsidiaries. None of our subsidiaries have guaranteed or are
otherwise obligated with respect to the notes and, as a result,
the notes are structurally subordinated to all indebtedness and
other obligations of our subsidiaries with respect to our
subsidiaries assets. By reason of such subordination, in
the event of the insolvency, bankruptcy, liquidation,
reorganization, dissolution or winding up of our business, our
assets will be available to pay the amounts due on the notes
only after all of our senior indebtedness has been paid in full,
and, therefore, there may not be sufficient assets remaining to
pay amounts due on any or all of the notes then outstanding.
|
|
|
We and our subsidiaries may still be able to incur
substantially more debt that could increase our leverage and the
risk to you of holding the notes |
The indenture, pursuant to which the notes are issued, does not
limit the creation of additional indebtedness. We and our
subsidiaries may be able to incur substantial additional debt in
the future, some or all of which could be secured indebtedness.
Your rights to receive payments under the notes will effectively
be junior to the rights of holders of such future secured
indebtedness to the extent of the value of the assets securing
such indebtedness.
Further, if new debt, in addition to the notes offered hereby,
is added to our and our subsidiaries current debt levels,
the risks to you of holding the notes may increase. For example,
it could:
|
|
|
|
|
limit our ability to obtain additional financing for working
capital, capital expenditures, acquisitions and general
corporate purposes; |
|
|
|
require us to dedicate a substantial portion of our cash flow
from operations to payments on our indebtedness, thereby
reducing the funds available to us for other purposes; |
|
|
|
make us more vulnerable to economic downturns, limiting our
ability to withstand competitive pressures and reducing our
flexibility in responding to changing business and economic
conditions; and |
9
|
|
|
|
|
limit our flexibility in planning for, or reacting to, changes
in our business and the industry in which we operate. |
Holders of the notes are not afforded protection in the event of
a highly leveraged transaction, except to the extent described
below under Description of Notes Repurchase
Upon a Change in Control and Description of
Notes Conversion Rights Make Whole
Amount and Public Acquirer Change of Control. Any of the
foregoing could adversely affect our business and our ability to
service our debt, including the notes.
|
|
|
We may be unable to repay or repurchase the notes on the
purchase date or upon a change in control |
Holders of the notes will have the right to require us to
repurchase all or a portion of their notes on September 1,
2012, September 1, 2015 and September 1, 2020 or if a
change in control (as defined in the indenture)
occurs. See Description of Notes Repurchase at
the Option of Holders and Description of
Notes Repurchase Upon a Change in Control
below. Although we have the right to repurchase the notes with
our common stock, subject to certain conditions, we cannot
assure you that we would have the financial resources, or would
be able to arrange financing, to pay the repurchase price in
cash for all the notes that might be delivered by holders of
notes seeking to exercise the repurchase right. Moreover, a
change in control could cause an event of default under, or be
prohibited or limited by, the terms of our other debt. If we
were to fail to repurchase the notes when required following a
change in control, an event of default under the indenture would
occur. Any such default may, in turn, cause an event of default
under our other debt.
|
|
|
The make whole amount payable on notes converted in
connection with certain changes of control may not adequately
compensate you for the lost option time value of your notes as a
result of such transaction |
If certain transactions that constitute a change of control
occur, under certain circumstances, we will increase, for the
time period described herein, the conversion rate for any
conversions of notes in connection with such transaction. The
number of additional shares will be determined based on the date
on which the change of control becomes effective and the price
paid per share of our common stock in the transaction
constituting a change of control, as described below under
Description of Notes Conversion
Rights Make Whole Amount and Public Acquirer Change
in Control. While the number of additional shares is
designed to compensate you for the lost option time value of
your notes as a result of such transaction, the make whole
amount is only an approximation of such lost value and may not
adequately compensate you for such loss. In addition, if the
stock price of our common stock on the conversion date is less
than $11.53 or greater than $100.00, the conversion rate will
not be increased. Our obligation to deliver the additional
shares upon a change of control could be considered a penalty,
in which case the enforceability thereof would be subject to
general principles of reasonableness of equitable remedies.
|
|
|
There may be no public market for the notes, and
purchasers of the notes may be unable to sell them for an
extended period of time |
There is no established public trading market for the notes. The
notes originally issued in the private placement are eligible
for trading on The
Portalsm
Market. However, notes sold pursuant to this prospectus will no
longer be eligible for trading on The
Portalsm
Market. The notes will not be listed on any securities exchange
or included in any automated quotation system. We cannot assure
you that an active trading market for the notes will develop or,
if such market develops, how liquid it will be.
If a trading market does not develop or is not maintained,
holders of the notes may experience difficulty in reselling, or
an inability to sell, the notes. If a market for the notes
develops, any such market may be discontinued at any time. If a
public trading market develops for the notes, future trading
prices of the notes will depend on many factors, including,
among other things, the price of our common stock into which the
notes are convertible, prevailing interest rates, our operating
results and the market for similar securities. Depending on the
price of our common stock, into which the notes are convertible,
prevailing
10
interest rates, the market for similar securities and other
factors, including our financial condition, the notes may trade
at a discount from their principal amount.
|
|
|
The market price of our common stock may be volatile, and
such volatility may adversely affect the market price of the
notes |
The market price of our common stock may be volatile. Many
factors, including many over which we have no control, may have
a significant impact on the market price of our common stock,
including, without limitation:
|
|
|
|
|
current events affecting the political, economic and social
situation in the United States; |
|
|
|
trends in our industry and the markets in which we operate; |
|
|
|
announcements of new technologies, products and services or
pricing policies by us or our competitors; |
|
|
|
changes in financial estimates and recommendations by securities
analysts; |
|
|
|
developments in existing customer or strategic relationships; |
|
|
|
actual or perceived changes in our business strategy; |
|
|
|
developments in new or pending litigation and claims; |
|
|
|
acquisitions and financings; |
|
|
|
quarterly variations in operating results; |
|
|
|
operating results being less than analysts estimates; |
|
|
|
changes in the market conditions in the healthcare, information
technology, Internet or plastic industries; |
|
|
|
the operating and stock price performance of other companies
that investors may deem comparable; and |
|
|
|
purchases or sales of blocks of our common stock. |
Part of this volatility, however, may be attributable to the
nature of the stock market, in which wide price swings are
common. This volatility may adversely affect the market price of
our common stock and the notes regardless of our operating
performance. The market price of the notes is expected to be
significantly affected by the market price of our common stock.
This may result in greater volatility in the trading value of
the notes than would be expected for nonconvertible debt
securities we issue.
|
|
|
We may issue additional shares of common stock and thereby
materially and adversely affect the price of our common
stock |
We are not restricted from issuing additional common stock
during the life of the notes. If we issue additional shares of
common stock, the price of our common stock and, in turn, the
price of the notes may be materially and adversely affected.
|
|
|
Before conversion, holders of the notes will not be
entitled to any stockholder rights with respect to our common
stock, but holders will be subject to all changes affecting our
common stock. |
Holders of notes will not be entitled to any rights with respect
to our common stock (including, without limitation, voting
rights and rights to receive any dividends or other
distributions on our common stock), but holders will be subject
to all changes affecting the common stock. A holder will only be
entitled to rights with respect to the common stock if and when
we deliver shares of common stock to the holder upon conversion
of their notes. For example, in the event that an amendment is
proposed to our certificate of incorporation or bylaws requiring
stockholder approval and the record date for determining
11
the stockholders of record entitled to vote on the amendment
occurs prior to the conversion date, the holders of the notes
will not be entitled to vote on the amendment, although they
will nevertheless be subject to any changes in the powers,
preferences or special rights of our common stock.
|
|
|
Provisions in our charter documents and Delaware law may
inhibit a takeover, which could adversely affect the value of
our common stock |
Our certificate of incorporation and bylaws, as well as Delaware
corporate law, contain provisions that could delay or prevent a
change of control or changes in our management and Board of
Directors that a holder of our common stock might consider
favorable and may prevent you from receiving a takeover premium
for your shares. These provisions include, for example, our
classified board structure, and the authorization of our Board
of Directors to issue preferred stock without a stockholder
vote. In addition, our certificate of incorporation provides
that a majority of the combined voting power of our outstanding
capital stock stockholders may not act by written consent. These
provisions apply even if the offer may be considered beneficial
by some of our stockholders. If a change of control or change in
management is delayed or prevented, the market price of our
common stock could decline.
Other Risks
As more fully described under Incorporation by
Reference below, we are incorporating by reference in this
prospectus information from other SEC filings we have made and
will make. We include disclosure regarding risk factors
applicable to our company and its businesses in our Annual
Reports on Form 10-K and our Quarterly Reports on
Form 10-Q under the heading Managements
Discussion and Analysis of Financial Condition and Results of
Operations Factors That May Affect Our Future
Financial Condition or Results of Operations or under
other headings that contain the phrase Risk Factors,
Risks or similar language.
12
FORWARD LOOKING STATEMENTS
This prospectus contains both historical and forward-looking
statements. All statements other than statements of historical
fact are, or may be, forward-looking statements. For example,
statements concerning projections, predictions, expectations,
estimates or forecasts and statements that describe our
objectives, plans or goals are, or may be, forward-looking
statements. These forward-looking statements reflect
managements current expectations concerning future results
and events and can generally be identified by the use of
expressions such as may, will,
should, could, would,
likely, predict, potential,
continue, future, estimate,
believe, expect, anticipate,
intend, plan, foresee, and
other similar words or phrases, as well as statements in the
future tense.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual
results, performance or achievements to be different from any
future results, performance and achievements expressed or
implied by these statements. The following important risks and
uncertainties could affect future results, causing those results
to differ materially from those expressed in our forward-looking
statements:
|
|
|
|
|
the failure to achieve sufficient levels of customer utilization
and market acceptance of new or updated products and services; |
|
|
|
the inability to successfully deploy new or updated applications
or services; |
|
|
|
difficulties in forming and maintaining relationships with
customers and strategic partners; |
|
|
|
the anticipated benefits from acquisitions not being fully
realized or not being realized within the expected time frames; |
|
|
|
the inability to attract and retain qualified personnel; |
|
|
|
general economic, business or regulatory conditions affecting
the healthcare, information technology, Internet and plastic
industries being less favorable than expected; and |
|
|
|
the other risks and uncertainties described or incorporated by
reference in this prospectus. |
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 also could have material
adverse effects on our future results.
The forward-looking statements included or incorporated by
reference in this prospectus are made only as of the date of
this prospectus. We expressly disclaim any intent or obligation
to update any forward-looking statements to reflect subsequent
events or circumstances.
13
USE OF PROCEEDS
We will receive no proceeds from the sale by any selling
security holder of their notes or the shares of common stock
issuable upon conversion of the notes.
14
SELLING SECURITY HOLDERS
We originally issued the notes in a private placement in August
2005. The notes were resold by the initial purchaser of the
notes in the United States to qualified institutional buyers
under Rule 144A under the Securities Act. Selling security
holders may offer and sell the notes and the underlying common
stock pursuant to this prospectus.
We have prepared the table below based on information given to
us by those selling security holders who have supplied us with
this information and we have not sought to verify this
information. We will update this table if we receive more
information from holders of the notes that have not yet provided
us with their information. We will supplement this prospectus to
include additional selling security holders upon request and
upon provision of all required information to us. Information
concerning the selling security holders may change from time to
time and any changed information will be set forth in
supplements to this prospectus if and when necessary.
Because the selling security holders may offer all or some
portion of the notes and shares of common stock into which the
notes are convertible listed below, we have assumed for purposes
of this table that the selling security holders will sell all of
the shares of common stock offered by this prospectus pursuant
to this prospectus. Accordingly, we cannot estimate the amounts
of notes or shares of common stock that will be held by the
selling security holders following the consummation of any such
sales.
The number of shares of common stock issuable upon conversion of
the notes shown in the table below assumes conversion of the
full amount of notes held by each selling security holder. The
percentage of notes outstanding beneficially owned by each
selling security holder is based on $300,000,000 aggregate
principal amount of notes outstanding. The number of shares of
common stock beneficially owned prior to the offering includes
shares of common stock into which the notes may be convertible.
The number of shares of common stock that may be offered is
based on a conversion rate of 64.2446 shares of our common
stock per $1,000 principal amount of notes. In addition, the
conversion rate and, therefore, the number of shares of common
stock issuable upon conversion of the notes is subject to
adjustment under certain circumstances. Accordingly, the
aggregate principal amount of notes and the number of shares of
common stock into which the notes are convertible may increase
or decrease.
The following table sets forth information as of
December 19, 2005 about the principal amount of notes and
the underlying common stock beneficially owned by each selling
security holder that may be offered using this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal | |
|
|
|
|
|
|
|
|
Amount | |
|
|
|
Number of | |
|
|
|
|
of Notes | |
|
|
|
Shares of | |
|
|
|
|
Beneficially | |
|
Percentage of | |
|
Common Stock | |
|
Percentage of | |
|
|
Owned that | |
|
Notes | |
|
that may be | |
|
Common Stock | |
Name of Selling Security Holder |
|
may be Sold | |
|
Outstanding | |
|
Sold(1) | |
|
Outstanding(2) | |
|
|
| |
|
| |
|
| |
|
| |
Alabama Childrens Hospital Foundation(3)
|
|
$ |
65,000 |
|
|
|
* |
|
|
|
4,176 |
|
|
|
* |
|
Allstate Insurance Company(4)
|
|
$ |
3,000,000 |
|
|
|
1.0 |
% |
|
|
192,734 |
|
|
|
* |
|
Aloha Airlines Non-Pilots Pension Trust(5)
|
|
$ |
60,000 |
|
|
|
* |
|
|
|
3,855 |
|
|
|
* |
|
American Beacon Funds(6)
|
|
$ |
300,000 |
|
|
|
* |
|
|
|
19,273 |
|
|
|
* |
|
Argent Classic Convertible Arbitrage Fund L.P.(7)
|
|
$ |
600,000 |
|
|
|
* |
|
|
|
38,547 |
|
|
|
* |
|
Argent Classic Convertible Arbitrage Fund II, L.P.(8)
|
|
$ |
160,000 |
|
|
|
* |
|
|
|
10,279 |
|
|
|
* |
|
Argent Classic Convertible Arbitrage Fund (Bermuda) Ltd.(9)
|
|
$ |
3,940,000 |
|
|
|
1.3 |
% |
|
|
253,124 |
|
|
|
* |
|
Argentum Multistrategy Fund Ltd. Classic(10)
|
|
$ |
10,000 |
|
|
|
* |
|
|
|
642 |
|
|
|
* |
|
Aristeia International Limited(11)
|
|
$ |
13,860,000 |
|
|
|
4.6 |
% |
|
|
890,430 |
|
|
|
* |
|
Aristeia Trading LLC(12)
|
|
$ |
2,640,000 |
|
|
|
* |
|
|
|
169,606 |
|
|
|
* |
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal | |
|
|
|
|
|
|
|
|
Amount | |
|
|
|
Number of | |
|
|
|
|
of Notes | |
|
|
|
Shares of | |
|
|
|
|
Beneficially | |
|
Percentage of | |
|
Common Stock | |
|
Percentage of | |
|
|
Owned that | |
|
Notes | |
|
that may be | |
|
Common Stock | |
Name of Selling Security Holder |
|
may be Sold | |
|
Outstanding | |
|
Sold(1) | |
|
Outstanding(2) | |
|
|
| |
|
| |
|
| |
|
| |
Arkansas PERS(13)
|
|
$ |
1,750,000 |
|
|
|
* |
|
|
|
112,428 |
|
|
|
* |
|
AstraZenca Holdings Pension(14)
|
|
$ |
320,000 |
|
|
|
* |
|
|
|
20,558 |
|
|
|
* |
|
Attorneys Title Insurance Fund(15)
|
|
$ |
170,000 |
|
|
|
* |
|
|
|
10,922 |
|
|
|
* |
|
Aventis Pension Master Trust(16)
|
|
$ |
340,000 |
|
|
|
* |
|
|
|
21,843 |
|
|
|
* |
|
Bank of America Pension Plan (17)
|
|
$ |
2,000,000 |
|
|
|
* |
|
|
|
128,489 |
|
|
|
* |
|
Barnet Partners Ltd.(18)
|
|
$ |
5,000,000 |
|
|
|
1.7 |
% |
|
|
321,223 |
|
|
|
* |
|
BNP Paribas Equity Strategies, SNC(19)
|
|
$ |
939,000 |
|
|
|
* |
|
|
|
60,326 |
|
|
|
* |
|
Boilermakers Blacksmith Pension Trust (CA)(20)
|
|
$ |
2,025,000 |
|
|
|
* |
|
|
|
130,095 |
|
|
|
* |
|
Boilermakers Blacksmith Pension Trust (IL)(21)
|
|
$ |
2,400,000 |
|
|
|
* |
|
|
|
154,187 |
|
|
|
* |
|
BP Amoco PLC Master Trust(22)
|
|
$ |
1,011,000 |
|
|
|
* |
|
|
|
64,951 |
|
|
|
* |
|
C&H Sugar Company, Inc.(23)
|
|
$ |
80,000 |
|
|
|
* |
|
|
|
5,140 |
|
|
|
* |
|
Calamos Convertible Fund Calamos Investment Trust(24)
|
|
$ |
10,850,000 |
|
|
|
3.6 |
% |
|
|
697,054 |
|
|
|
* |
|
Calamos Convertible and High Income Fund(25)
|
|
$ |
10,500,000 |
|
|
|
3.5 |
% |
|
|
674,568 |
|
|
|
* |
|
Calamos Convertible Opportunities and Income Fund(26)
|
|
$ |
8,500,000 |
|
|
|
2.8 |
% |
|
|
546,079 |
|
|
|
* |
|
Calamos High Yield Fund Calamos Investment Trust(27)
|
|
$ |
2,200,000 |
|
|
|
* |
|
|
|
141,338 |
|
|
|
* |
|
Calamos Strategic Total Return Fund(28)
|
|
$ |
17,000,000 |
|
|
|
5.7 |
% |
|
|
1,092,158 |
|
|
|
* |
|
The California Wellness Foundation(29)
|
|
$ |
530,000 |
|
|
|
* |
|
|
|
34,050 |
|
|
|
* |
|
Cemex Pension Plan(30)
|
|
$ |
155,000 |
|
|
|
* |
|
|
|
9,958 |
|
|
|
* |
|
Century Park Trust(31)
|
|
$ |
1,000,000 |
|
|
|
* |
|
|
|
64,245 |
|
|
|
* |
|
CIBC World Markets(32)
|
|
$ |
5,000,000 |
|
|
|
1.7 |
% |
|
|
321,223 |
|
|
|
* |
|
Citigroup Global Markets (33)
|
|
$ |
36,337,000 |
|
|
|
12.1 |
% |
|
|
2,334,456 |
|
|
|
* |
|
City of Knoxville Pension System(34)
|
|
$ |
255,000 |
|
|
|
* |
|
|
|
16,382 |
|
|
|
* |
|
The City of Southfield Fire & Police Retirement
System(35)
|
|
$ |
38,000 |
|
|
|
* |
|
|
|
2,441 |
|
|
|
* |
|
Clinton Multistrategy Master Fund, Ltd.(36)
|
|
$ |
2,390,000 |
|
|
|
* |
|
|
|
153,545 |
|
|
|
* |
|
The Cockrell Foundation(37)
|
|
$ |
85,000 |
|
|
|
* |
|
|
|
5,461 |
|
|
|
* |
|
CooperNeff Convertible Strategies (Cayman) Master Fund, LP(38)
|
|
$ |
268,000 |
|
|
|
* |
|
|
|
17,218 |
|
|
|
* |
|
Delaware PERS(39)
|
|
$ |
1,000,000 |
|
|
|
* |
|
|
|
64,245 |
|
|
|
* |
|
Delta Airlines Master Trust (CA)(40)
|
|
$ |
450,000 |
|
|
|
* |
|
|
|
28,910 |
|
|
|
* |
|
Delta Airlines Master Trust (IL)(41)
|
|
$ |
1,200,000 |
|
|
|
* |
|
|
|
77,094 |
|
|
|
* |
|
Delta Pilots Disability & Survivorship Trust(42)
|
|
$ |
450,000 |
|
|
|
* |
|
|
|
28,910 |
|
|
|
* |
|
Dorinco Reinsurance Company(43)
|
|
$ |
990,000 |
|
|
|
* |
|
|
|
63,602 |
|
|
|
* |
|
Dow Chemical Company Employees Retirement Plan(44)
|
|
$ |
2,000,000 |
|
|
|
* |
|
|
|
128,489 |
|
|
|
* |
|
Duke Endowment(45)
|
|
$ |
400,000 |
|
|
|
* |
|
|
|
25,698 |
|
|
|
* |
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal | |
|
|
|
|
|
|
|
|
Amount | |
|
|
|
Number of | |
|
|
|
|
of Notes | |
|
|
|
Shares of | |
|
|
|
|
Beneficially | |
|
Percentage of | |
|
Common Stock | |
|
Percentage of | |
|
|
Owned that | |
|
Notes | |
|
that may be | |
|
Common Stock | |
Name of Selling Security Holder |
|
may be Sold | |
|
Outstanding | |
|
Sold(1) | |
|
Outstanding(2) | |
|
|
| |
|
| |
|
| |
|
| |
Empyrean Capital Fund, L.P.(46)
|
|
$ |
2,627,100 |
|
|
|
* |
|
|
|
168,777 |
|
|
|
* |
|
Empyrean Capital Overseas Benefit Plan Fund, LTD(47)
|
|
$ |
503,100 |
|
|
|
* |
|
|
|
32,321 |
|
|
|
* |
|
Empyrean Capital Overseas Fund, Ltd(48)
|
|
$ |
4,369,800 |
|
|
|
1.5 |
% |
|
|
280,736 |
|
|
|
* |
|
The Estate of James Campbell CH(49)
|
|
$ |
116,000 |
|
|
|
* |
|
|
|
7,452 |
|
|
|
* |
|
The Estate of James Campbell EST 2(50)
|
|
$ |
940,000 |
|
|
|
* |
|
|
|
60,390 |
|
|
|
* |
|
Froley Revy Convertible Arbitrage Offshore(51)
|
|
$ |
500,000 |
|
|
|
* |
|
|
|
32,122 |
|
|
|
* |
|
The Fondren Foundation(52)
|
|
$ |
80,000 |
|
|
|
* |
|
|
|
5,140 |
|
|
|
* |
|
Goldman Sachs & Co.(53)
|
|
$ |
1,645,000 |
|
|
|
* |
|
|
|
105,682 |
|
|
|
* |
|
Grace Convertible Arbitrage Fund, Ltd.(54)
|
|
$ |
3,000,000 |
|
|
|
1.0 |
% |
|
|
192,734 |
|
|
|
* |
|
Hallmark Convertible Securities Fund(55)
|
|
$ |
100,000 |
|
|
|
* |
|
|
|
6,424 |
|
|
|
* |
|
HFR CA Select Fund(56)
|
|
$ |
1,250,000 |
|
|
|
* |
|
|
|
80,306 |
|
|
|
* |
|
Hotel Union & Hotel Industry of Hawaii Pension Plan(57)
|
|
$ |
155,000 |
|
|
|
* |
|
|
|
9,958 |
|
|
|
* |
|
ICI American Holdings Trust(58)
|
|
$ |
385,000 |
|
|
|
* |
|
|
|
24,734 |
|
|
|
* |
|
Institutional Benchmark Series (Master Feeder), Ltd.(59)
|
|
$ |
2,750,000 |
|
|
|
* |
|
|
|
176,673 |
|
|
|
* |
|
JMG Capital Partners, LP(60)
|
|
$ |
21,750,000 |
|
|
|
7.3 |
% |
|
|
1,397,320 |
|
|
|
* |
|
JMG Triton Offshore Fund, Ltd.(61)
|
|
$ |
21,750,000 |
|
|
|
7.3 |
% |
|
|
1,397,320 |
|
|
|
* |
|
Kettering Medical Center Funded Depreciation Account(62)
|
|
$ |
120,000 |
|
|
|
* |
|
|
|
7,709 |
|
|
|
* |
|
Knoxville Utilities Board Retirement System(63)
|
|
$ |
150,000 |
|
|
|
* |
|
|
|
9,637 |
|
|
|
* |
|
Louisiana CCRF(64)
|
|
$ |
200,000 |
|
|
|
* |
|
|
|
12,849 |
|
|
|
* |
|
Louisiana Workers Compensation Corporation(65)
|
|
$ |
450,000 |
|
|
|
* |
|
|
|
28,910 |
|
|
|
* |
|
Lyxor/ Convertible Arbitrage Fund Limited(66)
|
|
$ |
86,000 |
|
|
|
* |
|
|
|
5,525 |
|
|
|
* |
|
Macomb County Employees Retirement System(67)
|
|
$ |
350,000 |
|
|
|
* |
|
|
|
22,486 |
|
|
|
* |
|
Mohican VCA Master Fund, Ltd.(68)
|
|
$ |
3,000,000 |
|
|
|
1.0 |
% |
|
|
192,734 |
|
|
|
* |
|
MSS Convertible Arbitrage(69)
|
|
$ |
26,000 |
|
|
|
* |
|
|
|
1,670 |
|
|
|
* |
|
Municipal Employees Benefit Trust(70)
|
|
$ |
415,000 |
|
|
|
* |
|
|
|
26,662 |
|
|
|
* |
|
Nomura Securities International(71)
|
|
$ |
10,000,000 |
|
|
|
3.3 |
% |
|
|
642,446 |
|
|
|
* |
|
Nuveen Preferred & Convertible Income Fund JPC(72)
|
|
$ |
6,600,000 |
|
|
|
2.2 |
% |
|
|
424,014 |
|
|
|
* |
|
Nuveen Preferred & Convertible Fund JQC(73)
|
|
$ |
9,000,000 |
|
|
|
3.0 |
% |
|
|
578,201 |
|
|
|
* |
|
Oakwood Assurance Company Ltd.(74)
|
|
$ |
50,000 |
|
|
|
* |
|
|
|
3,212 |
|
|
|
* |
|
Oakwood Healthcare Inc. Endowment/A & D(75)
|
|
$ |
10,000 |
|
|
|
* |
|
|
|
642 |
|
|
|
* |
|
Oakwood Healthcare Inc. Funded Depreciation(76)
|
|
$ |
110,000 |
|
|
|
* |
|
|
|
7,067 |
|
|
|
* |
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal | |
|
|
|
|
|
|
|
|
Amount | |
|
|
|
Number of | |
|
|
|
|
of Notes | |
|
|
|
Shares of | |
|
|
|
|
Beneficially | |
|
Percentage of | |
|
Common Stock | |
|
Percentage of | |
|
|
Owned that | |
|
Notes | |
|
that may be | |
|
Common Stock | |
Name of Selling Security Holder |
|
may be Sold | |
|
Outstanding | |
|
Sold(1) | |
|
Outstanding(2) | |
|
|
| |
|
| |
|
| |
|
| |
Oakwood Healthcare Inc. OHP(77)
|
|
$ |
13,000 |
|
|
|
* |
|
|
|
835 |
|
|
|
* |
|
Oakwood Healthcare Inc. Pension(78)
|
|
$ |
200,000 |
|
|
|
* |
|
|
|
12,849 |
|
|
|
* |
|
OCLC Online Computer Library Center Inc.(79)
|
|
$ |
55,000 |
|
|
|
* |
|
|
|
3,533 |
|
|
|
* |
|
Peoples Benefit Life Insurance Company Teamsters(80)
|
|
$ |
10,000,000 |
|
|
|
3.3 |
% |
|
|
642,446 |
|
|
|
* |
|
Port Authority of Allegheny County Consolidated
Trust Fund(81)
|
|
$ |
60,000 |
|
|
|
* |
|
|
|
3,855 |
|
|
|
* |
|
Port Authority of Allegheny County Retirement and Disability
Allowance Plan for the Employees Represented by Local 85 of the
Amalgamated Transit Union (82)
|
|
$ |
700,000 |
|
|
|
* |
|
|
|
44,971 |
|
|
|
* |
|
Prisma Foundation(83)
|
|
$ |
100,000 |
|
|
|
* |
|
|
|
6,424 |
|
|
|
* |
|
Prudential Insurance Company of America(84)
|
|
$ |
100,000 |
|
|
|
* |
|
|
|
6,424 |
|
|
|
* |
|
Radcliffe SPC, Ltd. for and on behalf of the Class A
Convertible Crossover Segregated Portfolio(85)
|
|
$ |
11,500,000 |
|
|
|
3.8 |
% |
|
|
738,813 |
|
|
|
* |
|
Redbourn Partners Ltd.(86)
|
|
$ |
4,500,000 |
|
|
|
1.5 |
% |
|
|
289,101 |
|
|
|
* |
|
Retail Clerks Pension Trust #1(87)
|
|
$ |
1,000,000 |
|
|
|
* |
|
|
|
64,245 |
|
|
|
* |
|
San Diego County Employees Retirement Association(88)
|
|
$ |
2,500,000 |
|
|
|
* |
|
|
|
160,612 |
|
|
|
* |
|
SCI Endowment Care Common Trust Fund National
Fiduciary Services(89)
|
|
$ |
190,000 |
|
|
|
* |
|
|
|
12,206 |
|
|
|
* |
|
SCI Endowment Care Common Trust Fund Suntrust
Bank(90)
|
|
$ |
75,000 |
|
|
|
* |
|
|
|
4,818 |
|
|
|
* |
|
SCI Endowment Care Common Trust Fund Wachovia
Bank, N.A.(91)
|
|
$ |
45,000 |
|
|
|
* |
|
|
|
2,891 |
|
|
|
* |
|
SG Americas Securities, LLC(92)
|
|
$ |
2,415,000 |
|
|
|
* |
|
|
|
155,151 |
|
|
|
* |
|
Singlehedge US Convertible Arbitrage Fund(93)
|
|
$ |
84,000 |
|
|
|
* |
|
|
|
5,397 |
|
|
|
* |
|
Southern Farm Bureau Life Insurance(94)
|
|
$ |
750,000 |
|
|
|
* |
|
|
|
48,183 |
|
|
|
* |
|
Sphinx Convertible Arb Fund SPC(95)
|
|
$ |
690,000 |
|
|
|
* |
|
|
|
44,329 |
|
|
|
* |
|
Sphinx Convertible Arbitrage (Clinton) Segregated Portfolio(96)
|
|
$ |
610,000 |
|
|
|
* |
|
|
|
39,189 |
|
|
|
* |
|
Sphinx Fund(97)
|
|
$ |
155,000 |
|
|
|
* |
|
|
|
9,958 |
|
|
|
* |
|
SPT(98)
|
|
$ |
2,260,000 |
|
|
|
* |
|
|
|
145,193 |
|
|
|
* |
|
State of Oregon/ Equity(99)
|
|
$ |
5,000,000 |
|
|
|
1.7 |
% |
|
|
321,223 |
|
|
|
|
|
Sturgeon Limited(100)
|
|
$ |
123,000 |
|
|
|
* |
|
|
|
7,902 |
|
|
|
* |
|
Syngenta AG(101)
|
|
$ |
280,000 |
|
|
|
* |
|
|
|
17,988 |
|
|
|
* |
|
TQA Master Fund(102)
|
|
$ |
910,000 |
|
|
|
* |
|
|
|
58,463 |
|
|
|
* |
|
TQA Master Plus Fund(103)
|
|
$ |
1,606,000 |
|
|
|
* |
|
|
|
103,177 |
|
|
|
* |
|
Union Carbide Retirement Account(104)
|
|
$ |
1,175,000 |
|
|
|
* |
|
|
|
75,487 |
|
|
|
* |
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal | |
|
|
|
|
|
|
|
|
Amount | |
|
|
|
Number of | |
|
|
|
|
of Notes | |
|
|
|
Shares of | |
|
|
|
|
Beneficially | |
|
Percentage of | |
|
Common Stock | |
|
Percentage of | |
|
|
Owned that | |
|
Notes | |
|
that may be | |
|
Common Stock | |
Name of Selling Security Holder |
|
may be Sold | |
|
Outstanding | |
|
Sold(1) | |
|
Outstanding(2) | |
|
|
| |
|
| |
|
| |
|
| |
United Food and Commercial Workers Local 1262 and Employers
Pension Fund(105)
|
|
$ |
350,000 |
|
|
|
* |
|
|
|
22,486 |
|
|
|
* |
|
Univar USA Inc. Retirement Plan(106)
|
|
$ |
445,000 |
|
|
|
* |
|
|
|
28,589 |
|
|
|
* |
|
Viacom Inc. Pension Plan Master Trust(107)
|
|
$ |
50,000 |
|
|
|
* |
|
|
|
3,212 |
|
|
|
* |
|
Vicis Capital Master Fund(108)
|
|
$ |
12,000,000 |
|
|
|
4.0 |
% |
|
|
770,935 |
|
|
|
* |
|
Xavex Convertible Arbitrage 10 Fund(109)
|
|
$ |
290,000 |
|
|
|
* |
|
|
|
18,631 |
|
|
|
* |
|
Yield Strategies Fund I, L.P.(110)
|
|
$ |
1,000,000 |
|
|
|
* |
|
|
|
64,245 |
|
|
|
* |
|
Zurich Institutional Benchmark Master Fund(111)
|
|
$ |
188,000 |
|
|
|
* |
|
|
|
12,078 |
|
|
|
* |
|
Zazove Convertible Arbitrage Fund, L.P.(112)
|
|
$ |
7,500,000 |
|
|
|
2.5 |
% |
|
|
481,835 |
|
|
|
* |
|
Zazove Hedged Convertible Fund, L.P.(113)
|
|
$ |
3,750,000 |
|
|
|
1.3 |
% |
|
|
240,917 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
300,000,000 |
** |
|
|
100 |
%** |
|
|
19,273,393 |
** |
|
|
5.3% |
** |
|
|
** |
The maximum principal amount of notes and underlying shares of
common stock that may be sold by selling securityholders
pursuant to the prospectus forming part of this registration
statement, as declared effective by the Securities and Exchange
Commission under the Securities Act, may not exceed $300,000,000
and 19,273,393 shares of common stock issuable upon conversion
thereof. The sum of the principal amount of securities
beneficially owned by selling securityholders that have been
included in this registration statement relating to the notes
and underlying common stock may actually be more than
$300,000,000 because certain of the selling securityholders may
have transferred their notes or common stock in transactions
exempt from the registration requirements of the Securities Act,
or otherwise reduced their position prior to selling pursuant to
this prospectus, and as a result, we have received beneficial
ownership information from additional selling securityholders
with respect to the same notes or shares of common stock. |
|
|
(1) |
Assumes conversion of all of the holders notes at a
conversion rate of 64.2446 shares of common stock per
$1,000 principal amount of the notes. However, this conversion
rate will be subject to adjustment as described under
Description of Notes Conversion Rights.
As a result, the amount of common stock issuable upon conversion
of the notes may increase or decrease in the future. |
|
(2) |
Calculated based on 345,005,627 shares of the common stock
outstanding as of December 9, 2005. In calculating these
percentages for each holder of notes, we also treated as
outstanding that number of shares of common stock issuable upon
conversion of that holders notes. However, we did not
assume the conversion of any other holders notes. |
|
(3) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Alabama Childrens Hospital Foundation. |
|
(4) |
Allstate Insurance Company is owned by The Allstate Corporation,
which is a publicly held entity. Allstate Investments LLC is the
investment manager for Allstate Insurance Company, and has the
power to direct the voting and disposition of securities held by
Allstate Insurance Company. Allstate Insurance Company is an
affiliate of a registered broker-dealer. |
|
(5) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Aloha Airlines Non-Pilots Pension Trust. |
19
|
|
(6) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by American Beacon Funds. |
|
(7) |
Argent Management Company, LLC has the power to direct the
voting and disposition of securities held by Argent Classic
Convertible Arbitrage Fund L.P. Mr. Nathanial Brown
and Mr. Robert Richardson are managing members of Argent
Management, LLC. |
|
(8) |
Argent Management Company, LLC has the power to direct the
voting and disposition of securities held by Argent Classic
Convertible Arbitrage Fund II L.P. Mr. Nathanial Brown
and Mr. Robert Richardson are managing members of Argent
Management, LLC. |
|
(9) |
Argent Financial Group (Bermuda) Ltd. has the power to direct
the voting and disposition of securities held by Argent Classic
Convertible Arbitrage Fund (Bermuda) Ltd. Mr. Henry J. Cox
is a director of Argent Financial Group (Bermuda) Ltd. |
|
(10) |
Argent Financial Group (Bermuda) Ltd. has the power to direct
the voting and disposition of securities held by Argentum
Multistrategy Fund Ltd Classic. Mr. Henry
J. Cox is a director of Argent Financial Group (Bermuda) Ltd. |
|
(11) |
Aristeia Capital LLC, the investment manager for Aristeia
International Limited, has the power to direct the voting and
disposition of securities held by Aristeia International
Limited. Aristeia Capital LLC is jointly owned by
Mr. Robert H. Lynch, Mr. Kevin Toner and
Mr. Anthony Frascella. |
|
(12) |
Aristeia Advisors LLC, the investment manager for Aristeia
Trading LLC, has the power to direct the voting and disposition
of securities held by Aristeia Trading LLC. Aristeia Advisors
LLC is jointly owned by Mr. Robert H. Lynch, Mr. Kevin
Toner and Mr. Anthony Frascella. |
|
(13) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Arkansas PERS. |
|
(14) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by AstraZenca Holdings Pension. |
|
(15) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Attorneys Title Insurance Fund. |
|
(16) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Aventis Pension Master Trust. |
|
(17) |
Camden Asset Management has the power to direct the voting and
disposition of securities held by Bank of America Pension Plan.
Mr. Alex Lach is the portfolio manager of Bank of America
Pension Plan. |
|
(18) |
Camden Asset Management has the power to direct the voting and
disposition of securities held by Barnet Partners Ltd.
Mr. Alex Lach is the portfolio manager of Barnet Partners
Ltd. |
|
(19) |
CooperNeff Advisors Inc. has the power to direct the voting and
disposition of securities held by BNP Paribas Equity Strategies,
SNC. Mr. Christian Menestrier is the Chief Executive
Officer of CooperNeff Advisors Inc. BNP Paribas Equity
Strategies, SNC is an affiliate of BNP Paribas Securities Corp.,
which is a registered broker-dealer. |
|
(20) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Boilermakers Blacksmith Pension Trust (CA). |
|
(21) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Boilermakers Blacksmith
Pension Trust (IL). |
|
(22) |
SSI Investment Management has the power to direct the voting and
disposition of securities held by BP Amoco PLC Master Trust. SSI
Investment Management is controlled by Mr. John Gott
Furcht, Mr. George Douglas and Mrs. Amy Jo Gott Furcht. |
|
(23) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by C&H Sugar Company, Inc. |
|
(24) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Calamos Convertible
Fund Calamos Investment Trust. |
20
|
|
(25) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Calamos Convertible and High
Income Fund. |
|
(26) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Calamos Convertible
Opportunities and Income Fund. |
|
(27) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Calamos High Yield
Fund Calamos Investment Trust. |
|
(28) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Calamos Strategic Total Return
Fund. |
|
(29) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by The California Wellness
Foundation. |
|
(30) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by CEMEX Pension Plan. |
|
(31) |
Camden Asset Management has the power to direct the voting and
disposition of securities held by Century Park Trust.
Mr. Alex Lach is the portfolio manager of Century Park
Trust. |
|
(32) |
CIBC World Markets, a registered broker-dealer, is a publicly
held entity. |
|
(33) |
Citigroup Global Markets Inc. is a wholly owned subsidiary of
Citigroup Inc., which is a publicly held entity. Citigroup
Global Markets Inc. is a registered broker-dealer and acted as
the sole bookrunner in connection with the private placement of
the securities. |
|
(34) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by the City of Knoxville Pension
System. |
|
(35) |
SSI Investment Management has the power to direct the voting and
disposition of securities held by The City of Southfield
Fire & Police Retirement System. SSI Investment
Management is controlled by Mr. John Gott Furcht,
Mr. George Douglas and Mrs. Amy Jo Gott Furcht. |
|
(36) |
Mr. Michael Vacca of the Clinton Group Inc. has the power
to direct the voting and disposition of securities held by the
Clinton Multistrategy Master Fund, Ltd. |
|
(37) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by The Cockrell Foundation. |
|
(38) |
CooperNeff Advisors Inc. has the power to direct the voting and
disposition of securities held by CooperNeff Convertible
Strategies (Cayman) Master Fund, LP. Mr. Christian
Menestrier is the Chief Executive Officer of CooperNeff Advisors
Inc. |
|
(39) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Delaware PERS. |
|
(40) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Delta Airlines Master Trust (CA). |
|
(41) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Delta Airlines Master Trust
(IL). |
|
(42) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Delta Pilots Disability and
Survivorship Trust. |
|
(43) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Dorinco Reinsurance Company. |
|
(44) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by The Dow Chemical Company
Employees Retirement Plan. |
|
(45) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Duke Endowment. |
|
(46) |
Empyrean Associates, LLC has the power to direct the voting and
disposition of securities held by Empyrean Capital Fund, LP. The
managing members of Empyrean Associates, LLC are Tian Xue, Scott
Imbach, Amos Meron and Michael Price. |
21
|
|
(47) |
Empyrean Associates, LLC has the power to direct the voting and
disposition of securities held by Empyrean Capital Overseas
Benefit Plan Fund, LTD. The managing members of Empyrean
Associates, LLC are Tian Xue, Scott Imbach, Amos Meron and
Michael Price. |
|
(48) |
Empyrean Associates, LLC has the power to direct the voting and
disposition of securities held by Empyrean Capital Overseas
Fund, LTD. The managing members of Empyrean Associates, LLC are
Tian Xue, Scott Imbach, Amos Meron and Michael Price. |
|
(49) |
SSI Investment Management has the power to direct the voting and
disposition of securities held by The Estate of James Campbell
CH. SSI Investment Management is controlled by Mr. John
Gott Furcht, Mr. George Douglas and Mrs. Amy Jo Gott
Furcht. |
|
(50) |
SSI Investment Management has the power to direct the voting and
disposition of securities held by The Estate of James Campbell
EST2. SSI Investment Management is controlled by Mr. John
Gott Furcht, Mr. George Douglas and Mrs. Amy Jo Gott
Furcht. |
|
(51) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Froley Revy Convertible Arbitrage Offshore. |
|
(52) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by The Frondren Foundation. |
|
(53) |
Goldman Sachs & Co., a registered broker-dealer, is a
publicly held entity. |
|
(54) |
Grace Brothers Management, LLC has the power to direct the
voting and disposition of securities held by Grace Convertible
Arbitrage Fund, Ltd. Bradford Whitmore and Michael Brailov are
managing members of Grace Brothers Management, LLC. |
|
(55) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Hallmark Convertible Securities Fund. |
|
(56) |
Mr. Gene T. Pretti, of Zazove Associates, LLC, has the
power to direct the voting and disposition of securities held by
HFR CA Select Fund. |
|
(57) |
SSI Investment Management has the power to direct the voting and
disposition of securities held by the Hotel Union &
Hotel Industry of Hawaii Pension Plan. SSI Investment Management
is controlled by Mr. John Gott Furcht, Mr. George
Douglas and Mrs. Amy Jo Gott Furcht. |
|
(58) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by ICI American Holdings Trust. |
|
(59) |
Mr. Gene T. Pretti, of Zazove Associates, LLC, has the
power to direct the voting and disposition of securities held by
Institutional Benchmark Series (Master Feeder), Ltd. |
|
(60) |
JMG Capital Management, LLC has the power to direct the voting
and disposition of securities held by JMG Capital Partners, L.P.
JMG Capital Management, LLC is indirectly controlled by
Mr. Jonathan M. Glaser. |
|
(61) |
Pacific Assets Management LLC has the power to direct the voting
and disposition of securities held by JMG Triton Offshore Fund,
Ltd. Pacific Assets Management LLC is indirectly Mr. Roger
Richter, Mr. Jonathan M. Glaser and Daniel A. David. |
|
(62) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Kettering Medical Center
Funded Depreciation Account. |
|
(63) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by the Knoxville Utilities Board
Retirement System. |
|
(64) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Louisiana CCRF. |
|
(65) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by the Louisiana Workers
Compensation Corporation. |
|
(66) |
CooperNeff Advisors Inc., has the power to direct the voting and
disposition of securities held by Lyxor/ Convertible Arbitrage
Fund Limited. Mr. Christian Menestrier is the Chief
Executive Officer of CooperNeff Advisors Inc. |
|
(67) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by the Macomb County
Employees Retirement System. |
22
|
|
(68) |
Mr. Eric C. Hage and Mr. Daniel C. Hage have the power
to direct the voting and disposition of securities held by
Mohican VCA Master Fund, Ltd. |
|
(69) |
TQA Investors, LLC has the power to direct the voting and
disposition of securities held by MSS Convertible Arbitrage. The
principals of TQA Investors, LLC are Mr. Robert Butman,
Mr. George Esser, Mr. John Idone, Mr. Paul Bucci
and Mr. Bartholomew Tesoriero. |
|
(70) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by the Municipal Employees
Benefit Trust. |
|
(71) |
Nomura Securities International is a wholly owned subsidiary of
Nomura Holdings Inc., which is a publicly held entity. |
|
(72) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Nuveen Preferred & Convertible
Income Fund JPC. |
|
(73) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Nuveen Preferred & Convertible
Fund JQC. |
|
(74) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Oakwood Assurance Company Ltd. |
|
(75) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Oakwood Healthcare Inc.
Endowment/ A & D. |
|
(76) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Oakwood Healthcare Inc. Funded
Depreciation. |
|
(77) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Oakwood Healthcare
Inc. OHP. |
|
(78) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Oakwood Healthcare Inc.
Pension. |
|
(79) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by OCLC Online Computer Library Center Inc. |
|
(80) |
Camden Asset Management has the power to direct the voting and
disposition of securities held by the Peoples Benefit Life
Insurance Company Teamsters. Mr. Alex Lach is the portfolio
manager of the Peoples Benefit Life Insurance Company Teamsters. |
|
(81) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by the Port Authority of
Allegheny County Consolidated Trust Fund. |
|
(82) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by the Port Authority of
Allegheny County Retirement and Disability Allowance Plan for
the Employees Represented by Local 85 of the Amalgamated Transit
Union. |
|
(83) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Prisma Foundation. |
|
(84) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Prudential Insurance Company of America. |
|
(85) |
Pursuant to an investment management agreement, RG Capital
Management, L.P. (RG Capital) serves as the
investment manager of Radcliffe SPC, Ltd.s Class A
Convertible Crossover Segregated Portfolio. RGC Management
Company, LLC (Management) is the general partner of
RG Capital. Mr. Steve Katznelson and Mr. Gerald
Stahlecker serve as the managing members of Management. Each of
RG Capital, Management and Messrs. Katznelson and
Stahlecker disclaims beneficial ownership of the securities
owned by Radcliffe SPC, Ltd. for and on behalf of the
Class A Convertible Crossover Segregated Portfolio. |
|
(86) |
Camden Asset Management has the power to direct the voting and
disposition of securities held by Redbourn Partners Ltd.
Mr. Alex Lach is the portfolio manager of Redbourn Partners
Ltd. |
|
(87) |
Camden Asset Management has the power to direct the voting and
disposition of securities held by Retail Clerks Pension
Trust #1. Mr. Alex Lach is the portfolio manager of
Retail Clerks Pension Trust #1. |
23
|
|
(88) |
Mr. Gene T. Pretti, of Zazove Associates, LLC, has the
power to direct the voting and disposition of securities held by
the San Diego Employees Retirement Association. |
|
(89) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by SCI Endowment Care Common
Trust Fund National Fiduciary Services. |
|
(90) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by SCI Endowment Care Common
Trust Fund Suntrust Bank. |
|
(91) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by SCI Endowment Care Common
Trust Fund Wachovia Bank, N.A. |
|
(92) |
S.G. Americas Securities, LLC, a registered broker-dealer, is a
publicly held entity. |
|
(93) |
CooperNeff Advisors Inc., has the power to direct the voting and
disposition of securities held by Singlehedge US Convertible
Arbitrage Fund. Mr. Christian Menestrier is the Chief
Executive Officer of CooperNeff Advisors Inc. |
|
(94) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Southern Farm Bureau Life Insurance. |
|
(95) |
SSI Investment Management has the power to direct the voting and
disposition of securities held by Sphinx Convertible Arb
Fund SPC. SSI Investment Management is controlled by
Mr. John Gott Furcht, Mr. George Douglas and
Mrs. Amy Jo Gott Furcht. |
|
(96) |
Mr. Michael Vacca of the Clinton Group Inc. has the power
to direct the voting and disposition of securities held by
Sphinx Convertible Arbitrage (Clinton) Segregated Portfolio. |
|
(97) |
TQA Investors, LLC has the power to direct the voting and
disposition of securities held by Sphinx Fund. The principals of
TQA Investors, LLC are Mr. Robert Butman, Mr. George
Esser, Mr. John Idone, Mr. Paul Bucci and
Mr. Bartholomew Tesoriero. |
|
(98) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by SPT. |
|
(99) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by the State of Oregon/ Equity. |
|
(100) |
CooperNeff Advisors Inc. has the power to direct the voting and
disposition of securities held by Sturgeon Limited.
Mr. Christian Menestrier is the Chief Executive Officer of
CooperNeff Advisors Inc. |
|
(101) |
Ms. Ann Houlihan C.C.O., of Froley Revy Investment Co.,
Inc., has the power to direct the voting and disposition of
securities held by Syngenta AG. |
|
(102) |
TQA Investors, LLC has the power to direct the voting and
disposition of securities held by TQA Master Fund. The
principals of TQA Investors, LLC are Mr. Robert Butman,
Mr. George Esser, Mr. John Idone, Mr. Paul Bucci
and Mr. Bartholomew Tesoriero. |
|
(103) |
TQA Investors, LLC has the power to direct the voting and
disposition of securities held by TQA Master Plus Fund. The
principals of TQA Investors, LLC are Mr. Robert Butman,
Mr. George Esser, Mr. John Idone, Mr. Paul Bucci
and Mr. Bartholomew Tesoriero. |
|
(104) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by the Union Carbide Retirement
Account. |
|
(105) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by the United Food and Commercial
Workers Local 1262 and Employers Pension Fund. |
|
(106) |
Mr. Nick Calamos has the power to direct the voting and
disposition of securities held by Univar USA Inc. Retirement
Plan. |
|
(107) |
SSI Investment Management has the power to direct the voting and
disposition of securities held by Viacom Inc. Pension Plan
Master Trust. SSI Investment Management is controlled by
Mr. John Gott Furcht, Mr. George Douglas and
Mrs. Amy Jo Gott Furcht. |
|
(108) |
Vicis Capital LLC is the investment manager for Vicis Capital
Master Fund and as the power to direct the voting and
disposition of securities held by Vicis Capital Master Fund.
John Succo, Sky Lucas and Shad Stastney control Vicis Capital
LLC, but disclaim beneficial ownership of the securities. |
24
|
|
(109) |
Argent Management Company, LLC has the power to direct the
voting and disposition of securities held by Xavex Convertible
Arbitrage 10 Fund. Mr. Nathanial Brown and
Mr. Robert Richardson are managing members of Argent
Management, LLC. |
|
(110) |
Camden Asset Management has the power to direct the voting and
disposition of securities held by Yield Strategy Fund I,
L.P. Mr. Alex Lach is the portfolio manager of the Yield
Strategy Fund I, L.P. |
|
(111) |
TQA Investors, LLC has the power to direct the voting and
disposition of securities held by Zurich Institutional Benchmark
Master Fund. The principals of TQA Investors, LLC are
Mr. Robert Butman, Mr. George Esser, Mr. John
Idone, Mr. Paul Bucci and Mr. Bartholomew Tesoriero. |
|
(112) |
Mr. Gene T. Pretti, of Zazove Associates, LLC, has the
power to direct the voting and disposition of securities held by
Zazove Convertible Arbitrage Fund, L.P. |
|
(113) |
Mr. Gene T. Pretti, of Zazove Associates, LLC, has the
power to direct the voting and disposition of securities held by
Zazove Hedged Convertible Fund, L.P. |
To the extent that any of the selling security holders
identified above are broker-dealers, they are deemed to be,
under interpretations of the Securities and Exchange Commission,
underwriters within the meaning of the Securities
Act.
With respect to selling security holders that are affiliates of
broker-dealers, we believe that such entities acquired their
notes or underlying common stock in the ordinary course of
business and, at the time of the purchase of the notes or the
underlying common stock, such selling security holders had no
agreements or understandings, directly or indirectly, with any
person to distribute the notes or underlying common stock. To
the extent that we become aware that such entities did not
acquire their notes or underlying common stock in the ordinary
course of business or did have such an agreement or
understanding, we will file a post-effective amendment to the
registration statement or a prospectus supplement to this
prospectus, to designate such affiliate as an
underwriter within the meaning of the Securities Act.
We prepared this table based on the information supplied to us
by the selling security holders named in the table. Unless
otherwise disclosed in the footnotes to the table, no selling
security holder has indicated that it has held any position or
office or had any other material relationship with us or our
affiliates during the past three years. The selling security
holders listed in the above table may have sold or transferred,
in transactions exempt from the registration requirements of the
Securities Act, some or all of their notes since the date as of
which the information is presented in the above table.
Because the selling security holders may offer all or some of
their notes or the underlying common stock from time to time, we
cannot estimate the amount of the notes or the underlying common
stock that will be held by the selling security holders upon the
termination of any particular offering. See Plan of
Distribution.
Only selling security holders identified above who beneficially
own the notes set forth opposite each such selling security
holders name in the foregoing table on the effective date
of the registration statement, of which this prospectus forms a
part, may sell such securities pursuant to the registration
statement. Prior to any use of this prospectus in connection
with an offering of the notes or the underlying common stock by
any holder not identified above, this prospectus will be
supplemented by a prospectus supplement to set forth the name
and aggregate amount of notes beneficially owned by the selling
security holder intending to sell such notes or the underlying
common stock and the aggregate amount of notes or the number of
shares of the underlying common stock to be offered. The
prospectus supplement will also disclose whether any selling
security holder has held any position or office with, has been
employed by or otherwise has had a material relationship with us
during the three years prior to the date of the prospectus
supplement if such information has not been disclosed herein.
25
DESCRIPTION OF NOTES
We issued $300.0 million aggregate principal amount of
notes in a private placement on August 30, 2005. The notes
were issued under an indenture, dated as of August 30,
2005, between us and The Bank of New York, as trustee. In this
prospectus, we refer to this indenture as the
indenture. The following statements are subject to
the detailed provisions of the indenture and are qualified in
their entirety by reference to the indenture. Copies of the
indenture are available for inspection at the office of the
trustee and may also be obtained from us upon request.
Particular provisions of the indenture that are referred to in
this prospectus are incorporated by reference as a part of the
statements made, and the statements are qualified in their
entirety by the reference. For purposes of this summary, the
terms Emdeon, we, us and
our refer only to Emdeon Corporation and not to any
of our subsidiaries.
General
The notes are our general, unsecured obligations. The
notes are limited to $300.0 million aggregate principal
amount. The notes will mature on September 1, 2025, unless
earlier redeemed at our option as described under
Redemption by Emdeon, repurchased by us at a holders
option on certain dates as described under
Repurchase at the Option of Holders or
repurchased by us at a holders option upon a change in
control of Emdeon as described under
Repurchase Upon a Change in Control. The
notes are convertible into shares of our common stock as
described under Conversion Rights.
The notes bear interest at the rate of
31/8% per
annum from the date of original issuance. We will pay interest
on the notes on March 1 and September 1 of each year,
commencing on March 1, 2006. We will pay interest in cash
to the persons in whose name the note is registered at the close
of business on February 15 or August 15, whether or
not a business day, immediately preceding the relevant interest
payment date. We also will pay contingent interest on the notes
in the circumstances described under
Contingent Interest below. Interest on
the notes is computed on the basis of a 360-day year comprised
of twelve 30-day months.
The indenture does not contain any financial covenants or any
restrictions on the payment of dividends or the incurrence of
debt or on the repurchase of our securities. The indenture does
not require us to maintain any sinking fund or other reserves
for repayment of the notes.
The notes are not subject to defeasance or covenant defeasance.
Under the terms of the indenture, we and each holder of the
notes agreed to treat the notes for U.S. federal income tax
purposes as debt subject to the contingent payment debt
regulations and to accrue interest on the notes at our
comparable yield. For a discussion of the tax
consequences of an investment in the notes, see
U.S. Federal Income Tax Considerations.
Ranking
The notes are:
|
|
|
|
|
our unsubordinated unsecured obligations; |
|
|
|
effectively junior to future secured debt; |
|
|
|
equal in ranking (pari passu) with any future
senior debt; and |
|
|
|
senior in right of payment to all our existing and future
subordinated debt, including our 1.75% Convertible
Subordinated Notes due 2023. |
As of September 30, 2005, we and our subsidiaries had
approximately $398.0 million of consolidated obligations
that rank equally with or effectively senior to the notes. In
addition, we have $350.0 million of convertible
subordinated notes due 2023 outstanding, which are contractually
subordinated to the notes. The indenture under which the notes
were issued does not restrict our ability to incur additional
indebtedness.
26
We only have a stockholders claim on the assets of our
subsidiaries. This stockholders claim is junior to the
claims that creditors of our subsidiaries have against those
subsidiaries. Holders of the notes will only be creditors of
Emdeon, and not of our subsidiaries. As a result, all the
existing and future liabilities of our subsidiaries, including
any claims of trade creditors and preferred stockholders, will
be effectively senior to the notes.
Our subsidiaries do not have any indebtedness; however, they
have other liabilities, including trade payables and contingent
liabilities, that may be significant. The indenture does not
contain any limitations on the amount of additional debt that we
and our subsidiaries may incur, and the amounts of this debt
could be substantial. In addition, this debt may be debt of our
subsidiaries, in which case this debt would be effectively
senior in right of payment to the notes.
The notes are obligations exclusively of Emdeon. Substantially
all of our operations are conducted through subsidiaries.
Therefore, our ability to service our debt, including the notes,
is dependent upon the earnings of our subsidiaries and their
ability to distribute those earnings as dividends, loans or
other payments to us. Certain laws restrict the ability of our
subsidiaries to pay dividends and make loans and advances to us.
Contingent Interest
We will pay contingent interest to holders of the notes during
the period from September 1, 2012 to February 28, 2013
and during any period from March 1 to August 31 and
from September 1 to February 28 thereafter, if the
average trading price of a note (as defined below) for the five
trading days ending on the second trading day immediately
preceding the first day of the applicable period equals 120% or
more of the principal amount of the note.
The amount of contingent interest payable per $1,000 principal
amount of notes in respect of any such period will equal
0.25% per annum of the average trading price of the notes
for the five trading days ending on the second trading day
immediately preceding such period.
We will pay contingent interest, if any, in the same manner as
we will pay interest described below under
General and your obligations in respect
of the payment of contingent interest in connection with the
conversion of any notes will also be the same as described below
under Conversion Rights Conversion
Procedures. Upon determination that holders of the notes
will be entitled to receive contingent interest, which may
become payable during a relevant period, on or prior to the
start of such period, we will provide notice to the trustee
setting forth the amount of contingent interest per $1,000
principal amount of notes and disseminate a press release
through Dow Jones & Company, Inc. or Bloomberg Business
News or other similarly broad public medium that is customary
for such press releases. Under the indenture, we and each holder
of the notes agreed, for U.S. federal income tax purposes,
to treat the notes as indebtedness that is subject to
U.S. Treasury regulations governing contingent payment debt
instruments.
The trading price of the notes on any date of
determination means the average of the secondary market bid
quotations per $1,000 principal amount of notes obtained by the
trustee for $5,000,000 principal amount of the notes at
approximately 3:30 p.m., New York City time, on such
determination date from two independent nationally recognized
securities dealers we select, provided that if at least two such
bids cannot reasonably be obtained by the trustee, but one such
bid can reasonably be obtained by the trustee, this one bid
shall be used. If the trustee cannot reasonably obtain at least
one bid for $5,000,000 principal amount of the notes from a
nationally recognized securities dealer, or in the our
reasonable judgment the bid quotations are not indicative of the
secondary market value of the notes, then the trading price of
the notes will equal (a) the applicable conversion rate of
the notes multiplied by (b) the closing sale price (as
defined under Conversion Rights
Conversion Procedures) of our common stock on such
determination date.
The Bank of New York, as trustee, will determine the trading
price.
27
Conversion Rights
Holders may convert their notes into our common stock initially
at a conversion rate of 64.2446 shares of our common stock
per $1,000 principal amount of notes (equivalent to an initial
conversion price of approximately $15.57 per share). As
described below under Settlement Upon
Conversion, upon conversion, we may choose to deliver, in
lieu of shares of our common stock, cash or a combination of
cash and shares of our common stock. In addition, at any time on
or prior to the 26th trading day preceding the maturity
date, we may irrevocably elect to satisfy our conversion
obligation with respect to the principal amount of the notes to
be converted with a combination of cash and shares of our common
stock, as described under Settlement Upon
Conversion Our Right to Irrevocably Elect Net Share
Settlement Upon Conversion. The conversion rate and the
equivalent conversion price in effect at any given time are
referred to in this prospectus as the conversion
rate and the conversion price, respectively,
and will be subject to adjustment as described below.
You may convert all or part of any note by delivering the note
at the corporate trust office of the trustee, The Bank of New
York, accompanied by a duly signed and completed conversion
notice, a copy of which may be obtained from the trustee. The
conversion date will be the date on which the note
and the duly signed and completed conversion notice are so
delivered.
Subject to our right to deliver, in lieu of shares of our common
stock, cash or a combination of cash and shares of our common
stock, as described below under Settlement
Upon Conversion, as promptly as practicable on or after
the conversion date, we will issue and deliver to the trustee a
certificate or certificates for the number of full shares of our
common stock issuable upon conversion, together with a cash
payment in lieu of any fraction of a share. The certificate(s)
will then be sent by the trustee to the conversion agent for
delivery to the holder of the note being converted. Any shares
of our common stock issuable upon conversion of the notes will
be fully paid and nonassessable.
If a note has been called for redemption, holders will be
entitled to convert such note from the date of notice of the
redemption until the close of business on the second business
day immediately preceding the date of redemption. If a holder
has already delivered a repurchase notice, however, the holder
may not surrender that note for conversion until the holder has
withdrawn the notice in accordance with the indenture. A holder
may convert fewer than all of such holders notes so long
as the notes converted are an integral multiple of $1,000
principal amount.
If you surrender a note for conversion on a date that is not an
interest payment date, you will not be entitled to receive any
interest for the period from the preceding interest payment date
to the date of conversion, except as described below. However,
if you are a holder of a note on a regular record date,
including a note surrendered for conversion after the regular
record date, you will receive the interest payable on such note
on the next succeeding interest payment date. Accordingly, any
note surrendered for conversion during the period from the close
of business on a regular record date to the opening of business
on the next succeeding interest payment date must be accompanied
by payment of an amount equal to the interest payable on such
interest payment date on the principal amount of notes being
surrendered for conversion. The foregoing sentence shall not
apply to notes called for redemption on a redemption date within
the period between and including the regular record date and the
next succeeding interest payment date.
No other payment or adjustment for interest, or for any
dividends in respect of our common stock, will be made upon
conversion. Holders of our common stock issued upon conversion
will not be entitled to receive any dividends payable to holders
of our common stock as of any record time or date before the
close of business on the conversion date. We will not issue
fractional shares of common stock upon conversion. Instead, we
will pay cash in lieu of fractional shares of common stock.
Delivery of our common stock (or cash or a combination of cash
and shares of common stock, if we so elect) will be deemed to
satisfy our obligation to pay all amounts owed on the notes,
including accrued interest. Accrued and unpaid interest will be
deemed paid in full rather than canceled, extinguished or
forfeited. We will not
28
adjust the conversion rate to account for the accrued interest.
For a summary of the U.S. federal income tax considerations
relating to conversion of a note, see U.S. Federal
Income Tax Considerations.
The closing sale price of our common stock or any
other security on any date means the last reported per share
sale price (or, if no last 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) on
such date as reported on The Nasdaq National Market, or if our
common stock or such other security is not quoted on The Nasdaq
National Market, as reported by the principal U.S. exchange
or quotation system on which our common stock or such other
security is then listed or quoted. In the absence of such
quotations, our board of directors will make a good faith
determination of the closing sale price.
We have initially appointed the trustee as conversion agent. We
may terminate the appointment of any conversion agent or appoint
additional or other conversion agents. However, so long as the
notes remain outstanding, we will maintain an office or agency
in the Borough of Manhattan in New York for surrender of notes
for conversion. Notice of any termination or appointment and of
any change in the office through which any conversion agent will
act will be given in accordance with
Notices below.
You will not be required to pay any taxes or duties relating to
the issue or delivery of our common stock on conversion but you
will be required to pay any tax or duty relating to any transfer
involved in the issue or delivery of our common stock in a name
other than yours. Certificates representing shares of our common
stock will not be issued or delivered unless all taxes and
duties, if any, payable by you have been paid.
|
|
|
Settlement Upon Conversion |
Except to the extent we have irrevocably elected net share
settlement upon conversion of the notes (as described below), in
lieu of delivery of shares of our common stock in satisfaction
of our obligation upon conversion of notes, we may elect to
deliver cash or a combination of cash and shares of our common
stock.
Except to the extent we have irrevocably elected net share
settlement upon conversion, we will inform the holders through
the trustee of the method we choose to satisfy our obligation
upon conversion no later than the second trading day immediately
following the related conversion date. We may, in lieu of
sending individual notices of our election, send one notice to
all holders of the method we choose to satisfy our conversion
obligation for conversions following our notice of redemption of
the notes or on or following the twenty-fifth trading day
preceding the maturity date.
Except to the extent we have irrevocably elected net share
settlement upon conversion, if we do not give any notice within
the applicable time period as to how we intend to settle, we
shall satisfy our conversion obligation only in shares of our
common stock (and cash in lieu of fractional shares). If we
choose to satisfy any portion of our conversion obligation in
cash, we will specify the amount to be satisfied in cash as a
percentage of the conversion obligation or a fixed dollar
amount. We will treat all holders converting on the same trading
day in the same manner. We will not, however, have any
obligation to settle our conversion obligations arising on
different trading days in the same manner. That is, we may
choose on one trading day to settle in shares of our common
stock only and choose on another trading day to settle in cash
or a combination of cash and shares of our common stock.
If we elect to satisfy any portion of our conversion obligation
in cash (other than cash in lieu of fractional shares), you may
retract your conversion notice at any time during the two
trading-day period beginning on the trading day after we have
notified the trustee of our method of settlement. We refer to
this period as the conversion retraction period. You cannot
retract your conversion notice if: (a) we have irrevocably
elected net share settlement upon conversion before you
delivered your conversion notice; (b) you are converting
your notes during the period beginning on the date we have
issued a notice of redemption and ending on the related
redemption date; or (c) you are converting your notes
during the period beginning twenty-five trading days preceding
the maturity date and ending one trading day
29
preceding the maturity date, even if we have not otherwise
notified you prior to the conversion date of our settlement
method election.
Settlement of our conversion obligation that we have not elected
to satisfy partially or entirely in cash will occur in shares of
our common stock as soon as practicable after we notify you that
we have chosen this method of settlement.
Settlement of our conversion obligation that we have elected to
satisfy partially or entirely in cash will occur on the third
trading day following the final trading day of the cash
settlement averaging period (as defined below).
If we elect to satisfy the entire conversion obligation with
shares of our common stock, we will deliver to you a number of
shares equal to (i) the aggregate principal amount of notes
to be converted divided by $1,000, multiplied by (ii) the
applicable conversion rate. In addition, we will pay cash for
all fractional shares of common stock based on the closing sale
price of the common stock on the trading day immediately
preceding the conversion date.
If we elect to satisfy the entire conversion obligation in cash,
we will deliver to you cash in an amount equal to the product of:
|
|
|
|
|
a number equal to (A) the aggregate principal amount of
notes to be converted divided by $1,000 multiplied by
(ii) the applicable conversion rate, and |
|
|
|
The average closing sale price of shares of our common stock
during the 20 trading day period beginning on the third trading
day after the conversion date (the cash settlement
averaging period). |
If we elect to satisfy a fixed amount (but not all) of the
conversation obligation per $1,000 principal amount of notes in
cash, we will deliver to you:
(x) such fixed amount per $1,000 principal amount of notes
(the cash amount) and
|
|
|
|
(y) |
a number of shares of our common stock per $1,000 principal
amount of notes equal to the sum, for each trading day of the
cash settlement averaging period, of the greater of: |
zero, and
a number of shares determined by the following
formula:
(closing sale price of our common stock on such trading day x
applicable conversion rate) the cash amount
closing sale price of our common stock on such trading day x
number of trading days
in the cash settlement averaging period
In these cases, we will pay cash for fractional shares of common
stock (calculated on an aggregate basis in respect of all the
notes you have surrendered for conversion) based on the closing
sale price of the common stock on the last trading day of the
cash settlement averaging period.
A trading day means (x) if the applicable
security is quoted on The Nasdaq National Market, a day on which
trades may be made thereon or (y) if the applicable
security is listed or admitted for trading on the American Stock
Exchange, New York Stock Exchange or another national securities
exchange, a day on which the American Stock Exchange, New York
Stock Exchange or another national securities exchange is open
for business or (z) if the applicable security is not so
listed, admitted for trading or quoted, any day other than a
Saturday or Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or
executive order to close.
|
|
|
Our Right to Irrevocably Elect Net Share Settlement Upon
Conversion |
At any time on or prior to the 26th trading day preceding
the maturity date, we may irrevocably elect to satisfy our
conversion obligation with respect to the principal amount of
the notes to be converted after the date of such election with a
combination of cash and shares of our common stock as described
above based on a cash amount of $1,000. Such election would be
in our sole discretion without the consent of
30
holders of the notes. If we make such election, we will notify
the trustee and holders of the notes at their addresses shown in
the register of the registrar.
|
|
|
Make Whole Amount and Public Acquirer Change of
Control |
If the effective date or anticipated effective date of a
transaction (which we refer to in this prospectus as a
make whole change of control) that
(1) constitutes a change in control (as set
forth under Repurchase Upon a Change in
Control and regardless of the exclusions set forth in the
sentence immediately following such definition) and
(2) pursuant to which (a) our common stock is
exchanged for, converted into or constitutes solely the right to
receive cash, securities or other property and (b) more
than 10% of the consideration received in connection with such
transaction consists of cash (excluding cash payments for
fractional shares of our common stock and cash payments made
pursuant to dissenters appraisal rights), or of securities
or other property that are not, or upon issuance will not be,
traded on a national securities exchange or quoted on The Nasdaq
National Market occurs on or prior to September 1, 2012,
and a holder surrenders its notes for conversion during the
period commencing 20 days prior to the anticipated
effective date of such transaction and ending 20 days
following the actual effective date (which we refer to in this
prospectus as the effective date) of such
transaction, we will increase the applicable conversion rate for
the notes surrendered for conversion by a number of additional
shares of common stock (which we refer to in this prospectus as
the additional shares), as described below. However,
if such make whole change of control is also a public
acquirer change of control, as described below under
Public Acquirer Change of Control then,
in lieu of increasing the conversion rate as described above, we
may elect to change the conversion right in the manner described
below.
We will mail a notice to holders and issue a press release no
later than 25 days prior to such transactions
anticipated effective date. If such transaction also constitutes
a public acquirer change of control, our notice will
also state whether we elect to modify the conversion rate into
acquirer common stock as described below.
The number of additional shares to be added to the conversion
rate will be determined by reference to the table below and is
based on the conversion date and the applicable
price in connection with such transaction.
The applicable price in connection with a make whole
change of control means:
|
|
|
|
|
If the consideration (excluding cash payment for fractional
share or pursuant to statutory appraisal rights) paid to holders
of our common stock in connection with such transaction consists
exclusively of cash, the amount of such cash per share of our
common stock; and |
|
|
|
In all other cases, the average of the closing sale prices per
share of our common stock for the five consecutive trading days
immediately preceding the related conversion date. |
The stock prices set forth in the first row of the table below
(i.e., the column headers), will be adjusted as of any date on
which the conversion rate of the notes is adjusted. The adjusted
stock prices will equal the applicable prices in effect
immediately prior to such adjustment multiplied by a fraction,
the numerator of which is the conversion rate in effect
immediately prior to the adjustment giving rise to the
applicable price adjustment and the denominator of which is the
conversion rate as so adjusted. The increase of the additional
shares to the conversion rate will be subject to adjustment in
the same manner as the conversion rate as set forth under
Conversion Rate Adjustments.
31
The following table sets forth the applicable price and number
of additional shares to be added to the conversion rate per
$1,000 principal amount of notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Applicable Price | |
|
|
| |
Conversion Date |
|
$11.53 | |
|
$13.00 | |
|
$15.00 | |
|
$17.00 | |
|
$19.00 | |
|
$30.00 | |
|
$40.00 | |
|
$50.00 | |
|
$100.00 | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
August 30, 2005
|
|
|
22.5285 |
|
|
|
18.2408 |
|
|
|
13.8162 |
|
|
|
10.8588 |
|
|
|
8.8033 |
|
|
|
3.9931 |
|
|
|
2.5642 |
|
|
|
1.8310 |
|
|
|
0.0000 |
|
September 1, 2006
|
|
|
22.1535 |
|
|
|
17.1996 |
|
|
|
12.6723 |
|
|
|
9.7165 |
|
|
|
7.7141 |
|
|
|
3.3173 |
|
|
|
2.1213 |
|
|
|
1.5205 |
|
|
|
0.0000 |
|
September 1, 2007
|
|
|
21.1631 |
|
|
|
15.9473 |
|
|
|
11.2824 |
|
|
|
8.3332 |
|
|
|
6.4077 |
|
|
|
2.5577 |
|
|
|
1.6358 |
|
|
|
1.1807 |
|
|
|
0.0000 |
|
September 1, 2008
|
|
|
20.0237 |
|
|
|
14.4205 |
|
|
|
9.5518 |
|
|
|
6.6196 |
|
|
|
4.8165 |
|
|
|
1.7262 |
|
|
|
1.1180 |
|
|
|
0.8156 |
|
|
|
0.0000 |
|
September 1, 2009
|
|
|
18.7559 |
|
|
|
12.4444 |
|
|
|
7.1822 |
|
|
|
4.2940 |
|
|
|
2.7392 |
|
|
|
0.8441 |
|
|
|
0.5699 |
|
|
|
0.4189 |
|
|
|
0.0000 |
|
September 1, 2010
|
|
|
23.2600 |
|
|
|
13.3653 |
|
|
|
3.0173 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
September 1, 2011
|
|
|
22.8729 |
|
|
|
13.0219 |
|
|
|
2.7197 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
September 1, 2012
|
|
|
22.4857 |
|
|
|
12.6785 |
|
|
|
2.4221 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
The exact applicable price and conversion date may not be set
forth in the table above, in which case:
|
|
|
1. if the actual applicable price is between two applicable
price amounts in the table or the conversion date is between two
dates in the table, the increase in the conversion rate will be
determined by straight-line interpolation between the numbers
set forth for the higher and lower applicable price amounts,
and/or the two dates, based on a 365 day year, as
applicable; |
|
|
2. if the actual applicable price is equal to or in excess
of $100.00 per share (subject to adjustment), we will not
increase the conversion rate applicable to the converted
note; and |
|
|
3. if the actual applicable price is equal to or less than
$11.53 per share (the last bid price of our common stock on
the date of this offering memorandum) (subject to adjustment),
we will not increase the conversion rate applicable to the
converted note. |
Notwithstanding the foregoing, in no event will we increase the
conversion rate as described above to the extent the increase
will cause the conversion rate to exceed 86.7303 per $1,000
principal amount of notes, subject to adjustment in the same
manner as the conversion rate as set forth under
Conversion Rate Adjustments.
Our obligation to increase the conversion rate as described
above could be considered a penalty, in which case the
enforceability thereof would be subject to general principles of
reasonableness of economic remedies.
|
|
|
Public Acquirer Change of Control |
Notwithstanding the foregoing, and in lieu of adjusting the
conversion rate as set forth above, in the case of a
public acquirer change of control (as defined
below), we may elect that, from and after the effective date of
such public acquirer change of control, the right to convert a
note into cash and, if applicable, shares of our common stock
will be changed into the right to convert it into cash and, if
applicable, shares of public acquirer common stock
(as described below), based on an initial conversion equal to
the product of:
|
|
|
|
|
the conversion rate in effect immediately prior to the effective
date of such public acquirer change of control; and |
|
|
|
the average of the quotients obtained, for each trading day in
the 10 consecutive trading day period commencing on the trading
day immediately after the effective date of such public acquirer
change of control (the valuation period), by dividing |
|
|
|
|
(1) |
the acquisition value per share of our common stock
on such trading day, by |
|
|
(2) |
the closing sale price per share of the acquirer common stock on
such trading day. |
The acquisition value per share is calculated based
on the value of the consideration paid per share of our common
stock in connection with such public acquirer change of control.
Specifically, the
32
acquisition value per share of our common stock on
each trading day in the valuation period means the sum of:
|
|
|
|
|
if any of such consideration consists of cash, 100% of the face
amount of such cash consideration per share of our common stock; |
|
|
|
if any of such consideration consists of shares of acquirer
common stock, the product of 100% of the closing sale price of
such acquirer common stock on such trading day and the number of
shares of acquirer common stock paid per share of our common
stock; and |
|
|
|
if any of such consideration consists of any other securities,
assets or property, 100% of the fair market value, on such
trading day, of the amount of such security, asset or property
paid per share of our common stock, as determined in good faith
by our board of directors. |
If we elect to change the conversion rate as described above in
connection with a public acquirer change of control, then:
|
|
|
|
|
such change will apply to all holders from and after the
effective date of the public acquirer change of control; |
|
|
|
our right to elect to settle our conversion obligation in shares
of our common stock, cash or a combination of cash and shares of
our common stock, as described above under
Settlement Upon Conversion, and our
right to irrevocably elect net share settlement will be based on
the acquirer common stock; |
|
|
|
the conversion rate will be subject to further adjustments in
the manner described under Make Whole Amount
and Public Acquirer Change of Control and
Conversion Rate Adjustments; and |
|
|
|
we will not change the conversion right in the manner described
under Recapitalizations, Reclassifications and
Changes of Our Common Stock below in connection with such
public acquirer change of control. |
A public acquirer change of control is any make
whole change of control where the acquirer, or any entity that
it is a direct or indirect beneficial owner (as
defined in
Rule 13d-3 under
the Exchange Act) of more than 50% of the total voting power of
all shares of such acquirers capital stock that are
entitled to vote generally in the election of directors, but in
each case other than us, has a class of common stock traded on a
national securities exchange or quoted on The Nasdaq National
Market or which will be so traded or quoted when issued or
exchanged in connection with such make whole change of control;
provided that if there is more than one such entity, the
relevant entity will be such entity that has the most direct
beneficial ownership to such acquirers or entitys
capital stock. We refer to such acquirers or other
entitys class of common stock which is traded on a
national securities exchange or quoted on The Nasdaq National
Market or which will be so traded or quoted when issued or
exchanged in connection with such change in control as the
acquirer common stock.
For a discussion of the tax consequences to a holder of changes
to the conversion rate of the notes, see U.S. Federal
Income Tax Considerations
U.S. Holders Constructive Dividends and
Non-U.S. Holders
Adjustments to Conversion Ratio.
33
|
|
|
Conversion Rate Adjustments |
The initial conversion rate will be adjusted for the following
events:
|
|
|
(1) the issuance of our common stock as a dividend or
distribution to all holders of our common stock, or a
subdivision or combination of our common stock, in which event
the conversion rate will be adjusted based on the following
formula: |
where,
|
|
|
|
|
CR 0
|
|
= |
|
the conversion rate in effect at the close of business on the
record date |
|
CR 1
|
|
= |
|
the conversion rate in effect immediately after the record date |
|
OS 0
|
|
= |
|
the number of shares of our common stock outstanding at the
close of business on the record date |
|
OS 1
|
|
= |
|
the number of shares of our common stock that would be
outstanding immediately after, and solely as a result of, such
event |
|
|
|
(2) the issuance to all holders of our common stock of
certain rights or warrants entitling them for a period expiring
60 days or less from the date of issuance of such rights or
warrants to purchase shares of our common stock (or securities
convertible into our common stock) at less than (or having a
conversion price per share less than) the current market price
of our common stock; in which event the conversion rate will be
adjusted based on the following formula: |
|
|
|
|
|
|
|
|
|
CR 1 = CR 0 × |
|
OS 0 + X
OS
0 + Y |
|
|
where,
|
|
|
|
|
CR 0
|
|
= |
|
the conversion rate in effect at the close of business on the
record date |
|
CR 1
|
|
= |
|
the conversion rate in effect immediately after the record date |
|
OS 0
|
|
= |
|
the number of shares of our common stock outstanding at the
close of business on the record date |
|
X
|
|
= |
|
the total number of shares of our common stock issuable pursuant
to such rights |
|
Y
|
|
= |
|
the aggregate price payable to exercise such rights divided by
the average of the closing sale prices of our common stock for
the ten consecutive trading days prior to the business day
immediately preceding the announcement of the issuance of such
rights |
|
|
|
However, the conversion rate will be readjusted to the extent
that such rights or warrants are not exercised prior to their
expiration |
|
|
|
(3) the dividend or other distribution to all holders of
our common stock of shares of our capital stock (other than
common stock) or evidences of our indebtedness or our assets
(excluding (A) any |
34
|
|
|
dividend, distribution or issuance covered by clauses (1)
or (2) above or (4) or (5) below) in which event the
conversion rate will be adjusted based on the following formula: |
|
|
|
|
|
|
|
|
|
CR 1 = CR 0 × |
|
SP 0
SP
0 - FMV |
|
|
where,
|
|
|
|
|
CR 0
|
|
= |
|
the conversion rate in effect at the close of business on the
record date |
|
CR 1
|
|
= |
|
the conversion rate in effect immediately after the record date |
|
SP 0
|
|
= |
|
the current market price |
|
FMV
|
|
= |
|
the fair market value (as determined by our board of directors),
on the record date, of the shares of capital stock, evidences of
indebtedness or assets so distributed, expressed as an amount
per share of our common stock |
|
|
|
However, if the transaction that gives rise to an adjustment
pursuant to this clause (3) is one pursuant to which the
payment of a dividend or other distribution on our common stock
consist of shares of capital stock of, or similar equity
interests in, a subsidiary or other business unit of ours,
(i.e., a spin-off) that are, or, when issued, will be,
traded on a U.S. securities exchange or quoted on The
Nasdaq National Market or the Nasdaq Small Cap Market, then the
conversion rate will instead be adjusted based on the following
formula: |
|
|
|
|
|
|
|
|
|
CR 1 = CR 0 × |
|
FMV 0 + MP 0
MP
0 |
|
|
where,
|
|
|
|
|
CR 0
|
|
= |
|
the conversion rate in effect at the close of business on the
record date |
|
CR 1
|
|
= |
|
the conversion rate in effect immediately after the record date |
|
FMV 0
|
|
= |
|
the average of the closing sale 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 the 10
consecutive trading days commencing on and including the third
trading day after the date on which ex-distribution
trading commences for such dividend or distribution on The
Nasdaq National Market or such other national or regional
exchange or market on our common stock then listed or quoted |
|
MP 0
|
|
= |
|
the average of the closing sale prices of our common stock over
the 10 consecutive trading days commencing on and including the
third trading day after the date on which ex-distribution
trading commences for such dividend or distribution on The
Nasdaq National Market or such other national or regional
exchange or market on our common stock is then listed or quoted |
|
|
|
(4) dividends or other distributions consisting exclusively
of cash to all holders of our common stock, in which event the
conversion rate will be adjusted based on the following formula: |
|
|
|
|
|
|
|
|
|
CR 1 = CR 0 × |
|
SP 0
SP
0 - C |
|
|
where,
|
|
|
|
|
CR 0
|
|
= |
|
the conversion rate in effect at the close of business on the
record date |
|
CR 1
|
|
= |
|
the conversion rate in effect immediately after the record date |
|
SP 0
|
|
= |
|
the current market price |
|
C
|
|
= |
|
the amount in cash per share we distribute to holders of our
common stock |
35
|
|
|
(5) we or one or more of our subsidiaries make purchases of
our common stock pursuant to a tender offer or exchange offer by
us or one of our subsidiaries for our common stock 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 current market price per share of our
common stock on the trading day next preceding the last date on
which tenders or exchanges may be made pursuant to such tender
or exchange offer (the expiration date), in which
event the conversion rate will be adjusted based on the
following formula: |
|
|
|
|
|
|
|
|
|
CR 1
= CR
0
× |
|
FMV + (SP
1
× OS
1
)
OS
0
× SP
1 |
|
|
where,
|
|
|
|
|
CR
0
|
|
= |
|
the conversion rate in effect at the close of business on the
expiration date |
|
CR
1
|
|
= |
|
the conversion rate in effect immediately after the expiration
date |
|
FMV
|
|
= |
|
the fair market value (as determined by our board of directors),
on the expiration date, 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 (the purchased shares) |
|
OS
1
|
|
= |
|
the number of shares of our common stock outstanding as of the
last time tenders or exchanges may be made pursuant to such
tender or exchange offer (the expiration time) less
any purchased shares |
|
OS
0
|
|
= |
|
the number of shares of our common stock outstanding at the
expiration time, including any purchased shares |
|
SP
1
|
|
= |
|
the average of the closing sale prices of our common stock for
the 10 consecutive trading days commencing on the trading day
immediately after the expiration date |
In addition, in no event will we adjust the conversion rate to
the extent that the adjustment would reduce the conversion price
below the par value per share of our common stock.
As used in the conversion rate adjustment formulas described
above, current market price of our common stock on
any day, means the average of the closing sale prices of our
common stock for each of the 10 consecutive trading days ending
on the earlier of the day in question and the day before the
ex-date with respect to the issuance or distribution
requiring such computation. For purposes of this paragraph,
ex-date
means the first date on which the shares of our common stock
trade on the applicable exchange or in the applicable market,
regular way, without the right to receive such issuance or
distribution.
As used in the conversion rate adjustment formulas described
above, record date means, with respect to any
dividend, distribution or other transaction or event in which
the holders of our common stock have the right to receive any
cash, securities or other property or in which our common stock
(or other applicable 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
entitled to receive such cash, securities or other property
(whether such date is fixed by our board of directors or by
statute, contract or otherwise).
To the extent that we have a shareholder rights plan (i.e., a
poison pill) in effect, upon conversion of the notes into common
stock, you will receive, in addition to the cash and, if
applicable, common stock due upon conversion, the rights under
the rights plan, whether or not the rights have separated from
the common stock, prior to any conversion. So long as we comply
with the preceding sentence, a distribution of rights pursuant
to such a rights plan will not trigger a conversion rate
adjustment.
36
The indenture does not require us to adjust the conversion rate
for any of the transactions described above if we make provision
for holders of the notes to participate in the transaction
without conversion on a basis and with notice that our board of
directors determines to be fair and appropriate.
No adjustment in the conversion rate will be required unless
such adjustment would require a change of at least 1% in the
conversion rate then in effect at such time. Any adjustment that
would otherwise be required to be made shall be carried forward
and taken into account in any subsequent adjustment; provided
that, notwithstanding the foregoing, all such carried forward
adjustments shall be made at the time we mail a notice of
redemption and thereafter any conversion rate adjustment shall
be made without regard to the 1% threshold described in the
preceding sentence.
Except as stated above, the conversion rate will not be adjusted
for the issuance of our common stock or any securities
convertible into or exchangeable for our common stock or
carrying the right to purchase any of the foregoing.
We may from time to time, to the extent permitted by law and
subject to applicable rules of The Nasdaq Stock Market, increase
the conversion rate of the notes by any amount for any period of
at least 20 days. In that case, we will give at least
15 days notice of such increase. We may make such increases
in the conversion rate, in addition to those set forth above, as
our board of directors deems advisable, including to avoid or
diminish any income tax to holders of our common stock resulting
from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
As a result of any adjustment of the conversion rate, the
holders of notes may, in certain circumstances, be deemed to
have received a distribution subject to U.S. income tax as
a dividend. In certain other circumstances, the absence of an
adjustment may result in taxable dividend income to the holders
of common stock. In addition,
non-U.S. holders
of notes in certain circumstances may be deemed to have received
a distribution subject to U.S. federal withholding tax
requirements. See U.S. Federal Income Tax
Considerations U.S. Holders
Constructive Dividends and
Non-U.S. Holders
Adjustments to Conversion Ratio.
Recapitalizations, Reclassifications and Changes of Our
Common Stock
In the case of any recapitalization, reclassification or change
of our common stock (other than changes resulting from a
subdivision or combination), a consolidation, merger or
combination involving us, a sale, lease or other transfer to a
third party of the consolidated assets of ours and our
subsidiaries substantially as an entirety, or any statutory
share exchange, in each case as a result of which our common
stock would be converted into, or exchanged for, stock, other
securities, other property or assets (including cash or any
combination thereof), then, at the effective time of the
transaction, the right to convert a note will be changed,
subject to our (or our successors) right to deliver, in
lieu of the reference property, cash or a combination of cash
and reference property, as described under
Settlement Upon Conversion, into a right
to convert it into the kind and amount of shares of stock, other
securities or other property or assets (including cash or any
combination thereof) that a holder of a number of shares of
common stock equal to the conversion rate prior to such
transaction would have owned or been entitled to receive (which
we refer to in this prospectus as the reference
property) upon such transaction. In the event holders of
our common stock have the opportunity to elect the form of
consideration to be received in such transaction, the type and
amount of consideration that holders of notes would have been
entitled to receive will be deemed to be the weighted average of
the types and amounts of consideration received by the holders
of our common stock that affirmatively make an election, subject
to our (or our successors) right to deliver, in lieu of
the reference property, cash or a combination of cash and
reference property, as described under
Settlement Upon Conversion. We agreed in
the indenture not to become a party to any such transaction
unless its terms are consistent with the foregoing. However, if
the transaction described above also constitutes a public
acquirer change of control, then we may in certain
circumstances elect to change the conversion right in the manner
described under Make Whole Amount and Public
Acquirer Change of Control in lieu of changing the
conversion right in the manner
37
described in this paragraph. For a discussion of the tax
consequences to a holder of changes to the conversion rate of
the notes, see U.S. Federal Income Tax
Considerations U.S. Holders
Constructive Dividends, and
Non-U.S. Holders
Adjustments to Conversion Ratio.
Adjustments of Average Prices
Whenever any provision of the indenture requires us to calculate
an average of closing sale prices over a span of multiple days,
we will make appropriate adjustments 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 date of the event occurs, at any time during the period from
which the average is to be calculated.
Redemption by Emdeon
We may not redeem the notes at our option prior to
September 5, 2010. Starting on that date, we may redeem all
or any portion of the notes, for cash, at once or over time,
upon at least 15 and not more than 60 days notice by
mail to the holders of the notes. We may redeem the notes at the
redemption prices set forth below, plus accrued and unpaid
interest, if any, to the redemption date (subject to the right
of holders of record on the relevant record date to receive
interest due on the relevant interest payment date). The
following cash prices are for notes redeemed during the
12-month period
commencing on September 5 of the years set forth below, and
are expressed as percentages of principal amount:
|
|
|
|
|
Redemption Year |
|
Price | |
|
|
| |
2010
|
|
|
100.893 |
% |
2011
|
|
|
100.446 |
% |
2012 and thereafter
|
|
|
100.000 |
% |
No sinking fund is provided for the notes, which means that the
indenture does not require us to redeem or retire the notes
periodically.
We or a third party may, to the extent permitted by applicable
law, at any time purchase notes in the open market, by tender at
any price or by private agreement. Any note that we or a third
party purchase may, to the extent permitted by applicable law
and subject to restrictions contained in the purchase agreement
with the initial purchaser, be re-issued or resold or may, at
our or such third partys option, be surrendered to the
trustee for cancellation. Any notes surrendered for cancellation
may not be re-issued or resold and will be canceled promptly.
Repurchase at the Option of Holders
On September 1, 2012, September 1, 2015 and
September 1, 2020, you will have the right, at your option,
to require us to repurchase any outstanding notes for which you
have properly delivered and not withdrawn a written repurchase
notice, subject to certain additional conditions. You may submit
your notes for repurchase to the paying agent at any time from
the opening of business on the date that is 30 business days
prior to the repurchase date until the close of business on the
fifth business day prior to the repurchase date.
We will purchase each outstanding note for which such holder has
properly delivered and not withdrawn a written repurchase notice
at a purchase price equal to 100% of the principal amount of
such note, together with accrued and unpaid interest up to, but
not including, the repurchase date.
We will pay the repurchase price in cash. For a discussion of
the tax treatment of a holder receiving cash, see
U.S. Federal Income Tax Considerations.
On a date not less than 20 business days prior to each
repurchase date, we will be required to give notice to all
holders at their addresses shown in the register of The Bank of
New York, as registrar, and to beneficial owners as required by
applicable law, and disseminate a press release through Dow
Jones & Company, Inc. or Bloomberg Business News or
other similarly broad public medium that is customary for
38
such press releases, stating, among other things, the procedures
that holders must follow to require us to repurchase their notes.
The repurchase notice given by each holder electing to require
us to purchase notes must be given so as to be received by the
paying agent no later than the close of business on the fifth
business day prior to the repurchase date and must state:
|
|
|
|
|
the certificate numbers of the holders notes to be
delivered for repurchase; |
|
|
|
the aggregate principal amount of notes to be
repurchased; and |
|
|
|
that the notes are to be repurchased by us pursuant to the
applicable provisions of the notes. |
A holder may withdraw any repurchase notice by delivering a
written notice of withdrawal to the paying agent prior to the
close of business on the second business day prior to the
repurchase date. The notice of withdrawal shall state:
|
|
|
|
|
the certificate numbers of the notes being withdrawn; |
|
|
|
the aggregate principal amount of the notes being
withdrawn; and |
|
|
|
the aggregate principal amount, if any, of the notes that remain
subject to the repurchase notice. |
In connection with any repurchase offer, we will
|
|
|
|
|
comply in all material respects with the applicable provisions
of Rule 13e-4,
Rule 14e-1 and any
other tender offer rules under the Securities Exchange Act of
1934, as amended (the Exchange Act), that may then
apply; |
|
|
|
file a Schedule TO, if required, or any other required
schedule under the Exchange Act; and |
|
|
|
otherwise comply with the federal and state securities laws. |
Our obligation to pay the repurchase price for a note as to
which a repurchase notice has been delivered and not validly
withdrawn is conditioned upon the holder delivering the note,
together with the necessary endorsements, to the paying agent at
any time after delivery of the repurchase notice. We will cause
the repurchase price for the note to be paid on the later of the
repurchase date or the time of delivery of the note.
If the paying agent holds money or securities sufficient to pay
the repurchase price of the note on the business day following
the repurchase date in accordance with the terms of the
indenture, then, immediately after the repurchase date, the note
will cease to be outstanding and interest on such note will
cease to accrue, whether or not the note is delivered to the
paying agent. After the note ceases to be outstanding, all other
rights of the holder shall terminate, other than the right to
receive the repurchase price upon delivery of the note.
Repurchase Upon a Change in Control
If a change in control, as defined below, occurs,
you will have the right, at your option, to require us to
repurchase all of your notes not previously repurchased or
called for redemption, or any portion of the principal amount
thereof, that is equal to $1,000 or an integral multiple of
$1,000. The price we are required to pay is 100% of the
principal amount of the notes to be repurchased, plus any
accrued and unpaid interest to, but not including, the
repurchase date.
At our option, instead of paying the repurchase price in cash,
we may pay the repurchase price in our common stock or a
combination of cash and our common stock. If we decide to pay
all or a portion of the repurchase price with our own common
stock, our common stock will be valued at 95% of the average
closing sale prices of our common stock for the five consecutive
trading days ending on the third trading day prior to the
repurchase date. We may only pay the repurchase price in common
stock if we satisfy conditions provided in the indenture.
39
Within 30 days after the occurrence of a change in control,
we are obligated to give each holder of the notes notice of the
change in control, which notice must state, among other things,
the repurchase right arising as a result of the change in
control, the procedures that holders must follow to exercise
these rights and whether the purchase price will be paid in
cash, our common stock or a combination of cash and our common
stock. We must also deliver a copy of this notice to the
trustee. To exercise the repurchase right, a registered holder
must deliver on or before the 30th day after the date of
our notice irrevocable written notice to the trustee of such
holders exercise of its repurchase right, together with
the notes with respect to which the right is being exercised. We
are required to repurchase the notes on the date that is
30 business days after the date of our notice.
A change in control will be deemed to have occurred
at the time after the notes are originally issued that any of
the following occurs:
|
|
|
|
|
any person acquires beneficial ownership, directly or
indirectly, through a purchase, merger or other acquisition
transaction or series of transactions, of shares of our capital
stock entitling the person to exercise 50% or more of the total
voting power of all shares of our capital stock that are
entitled to vote generally in elections of directors, other than
an acquisition by us, any of our subsidiaries or any of our
employee benefit plans; or |
|
|
|
we convey, sell, transfer or lease all or substantially all of
our assets to another person. |
However, a change in control will not be deemed to have occurred
if:
|
|
|
|
|
the closing sale price of our common stock for any five trading
days within the period of ten consecutive trading days ending
immediately after the later of the change in control or the
public announcement of the change in control, in the case of a
change in control relating to an acquisition of capital stock,
or the period of ten consecutive trading days ending immediately
before the change in control, in the case of a change in control
relating to a merger, consolidation or asset sale, equals or
exceeds 105% of the conversion price of the notes in effect on
each of those five trading days; or |
|
|
|
all or substantially all (but in no event less than 90%) of the
consideration, excluding cash payments for fractional shares of
our common stock and cash payments made pursuant to
dissenters appraisal rights, in a merger or consolidation
otherwise constituting a change in control in the preceding
paragraph consists of shares of common stock, depositary
receipts or other certificates representing common equity
interests traded on a national securities exchange or quoted on
The Nasdaq National Market, or will be so traded or quoted
immediately following such merger or consolidation, and as a
result of such merger or consolidation the notes become
convertible solely into such consideration. |
For purposes of these provisions:
|
|
|
|
|
the conversion price is equal to $1,000 divided by the
conversion rate; |
|
|
|
whether a person is a beneficial owner will be
determined in accordance with
Rule 13d-3 under
the Exchange Act; and |
|
|
|
a person includes any syndicate or group that would
be deemed to be a person under Section 13(d)(3) of the
Exchange Act. |
The rules and regulations promulgated under the Exchange Act
require the dissemination of prescribed information to security
holders in the event of an issuer tender offer and may apply in
the event that the repurchase option becomes available to you.
We will comply with these rules to the extent they apply at that
time.
The definition of change in control includes a phrase relating
to the conveyance, sale, transfer or lease of all or
substantially all of our assets. There is no precise,
established definition of the phrase substantially
all under applicable law. Accordingly, your ability to
require us to repurchase your notes as a result of the
conveyance, sale, transfer or lease of less than all of our
assets may be uncertain.
40
The foregoing provisions would not necessarily provide you with
protection if we are involved in a highly leveraged or other
transaction that may adversely affect you. For example, we
could, in the future, enter into transactions, including
recapitalizations, that would not constitute a change in control
but that would increase the amount of our indebtedness or our
subsidiaries indebtedness, some or all of which could be
effectively senior to the notes.
Although we have the right to repurchase the notes with our
common stock, subject to certain conditions, we cannot assure
you that we would have the financial resources, or would be able
to arrange financing, to pay the repurchase price in cash for
all the notes that might be delivered by holders of the notes
seeking to exercise the repurchase right. Moreover, a change in
control could cause an event of default under, or be prohibited
or limited by, the terms of our other debt. If we were to fail
to repurchase the notes when required following a change in
control, an event of default under the indenture would occur.
Any such default may, in turn, cause an event of default under
our other debt.
Merger or Consolidation, or Conveyance, Transfer or Lease of
Properties and Assets
The indenture provides that we may not consolidate with or merge
with or into any other person or convey, transfer or lease our
properties and assets substantially as an entirety to another
person, unless, among other things:
|
|
|
|
|
the resulting, surviving or transferee person is a corporation
organized and existing under the laws of the United States, any
state thereof or the District of Columbia or a corporation or
comparable legal entity organized under the laws of a foreign
jurisdiction and whose equity securities are listed on a
national securities exchange in the United States or authorized
for quotation on The Nasdaq National Market (provided,
however, that in the case of a transaction where the
surviving entity is organized under the laws of a foreign
jurisdiction, we may not consummate the transaction without
first (1) making provision for the satisfaction of our
obligations to repurchase notes following a change in control,
if any, (2) amending the terms of the notes to provide
that, in the event we are required under the laws of such
foreign jurisdiction (or any political subdivision thereof) to
withhold or deduct amounts in respect of taxes from payments
made to holders on the notes, we will pay, subject to certain
standard exceptions, such additional amounts to the holders as
may be necessary so that each holder will receive the same
amounts it would have received had no such withholding or
deduction been required, and (3) obtaining an opinion of
tax counsel experienced in such matters to the effect that,
under then existing U.S. federal income tax laws, there
would be no material adverse tax consequences to holders of the
notes resulting from such transaction); |
|
|
|
such person assumes all our obligations under the notes and the
indenture; and |
|
|
|
we or such successor person shall not immediately thereafter be
in default under the indenture. |
Upon the assumption of our obligations by such a person in such
circumstances, subject to certain exceptions, we shall be
discharged from all obligations under the notes and the
indenture.
Although such transactions are permitted under the indenture,
certain of the foregoing transactions could constitute a change
in control resulting in an adjustment to the conversion rate as
described in Conversion Rights
Make Whole Amount and Public Acquirer Change of Control
and permitting each holder to require us to purchase the notes
of such holder as described in Repurchase Upon
a Change in Control.
Events of Default and Remedies
The following will be events of default for the notes:
|
|
|
|
|
default in the payment of the principal amount, redemption price
or repurchase price with respect to any note when such amount
becomes due and payable; |
|
|
|
default in the payment of accrued and unpaid interest, if any
(including liquidated damages), on the notes for 30 days; |
41
|
|
|
|
|
failure by us to comply with any of our other covenants in the
notes or the indenture upon receipt by us of notice of such
default by the trustee or by holders of not less than 25% in
aggregate principal amount of the notes then outstanding and our
failure to cure (or obtain a waiver of) such default within
60 days after receipt of such notice; |
|
|
|
failure by us to provide notice of a change in control in
accordance with the terms of the indenture; |
|
|
|
default by us or any significant subsidiary in the
payment at the final maturity thereof, after the expiration of
any applicable grace period, of principal of, or premium, if
any, on indebtedness for money borrowed, other than non-recourse
indebtedness, in the aggregate principal amount then outstanding
of $30,000,000 or more, or acceleration of any indebtedness for
money borrowed in such aggregate principal amount so that it
becomes due and payable prior to the date on which it would
otherwise have become due and payable and such acceleration is
not rescinded or such default is not cured within 30 business
days after notice to us in accordance with the indenture; or |
|
|
|
certain events of bankruptcy, insolvency or reorganization
affecting us or a significant subsidiary. |
A significant subsidiary is any significant
subsidiary of ours as defined in
Rule 1-02 of
Regulation S-X of
the SEC (as such regulation is in effect on the date of issuance
of the notes). Our principal significant
subsidiaries as of the date of this prospectus are Porex
Holdings, Inc., WebMD Health Corp., Emdeon Practice Services,
Inc. and Emdeon Business Services, Inc.
If an event of default shall have occurred and be continuing,
either the trustee or the holders of not less than 25% in
aggregate principal amount of notes then outstanding may declare
the principal amount of the notes plus accrued and unpaid
interest, if any, on the notes accrued through the date of such
declaration to be immediately due and payable. In the case of
certain events of bankruptcy, insolvency or reorganization
involving us, the principal amount of the notes plus accrued and
unpaid interest, if any, accrued thereon through the occurrence
of such event shall automatically become and be immediately due
and payable.
Modifications of the Indenture
We and the trustee may enter into supplemental indentures that
add, change or eliminate provisions of the indenture or modify
the rights of holders of the notes with the consent of the
holders of at least a majority in principal amount of the notes
then outstanding. However, without the consent of each holder,
no supplemental indenture may:
|
|
|
|
|
reduce the rate or change the time of payment of interest
(including any liquidated damages) on any note; |
|
|
|
make any note payable in money or securities other than that
stated in the note; |
|
|
|
change the stated maturity of any note; |
|
|
|
reduce the principal amount, redemption price or repurchase
price with respect to any note; |
|
|
|
make any change that adversely affects the right of a holder to
require us to repurchase a note; |
|
|
|
adversely affect the right to convert, or receive payment with
respect to, a note, or the right to institute suit for the
enforcement of any payment with respect to, or conversion of,
the notes; or |
|
|
|
change the provisions in the indenture that relate to modifying
or amending the indenture. |
Without the consent of any holder of the notes, we and the
trustee may enter into supplemental indentures for any of the
following purposes:
|
|
|
|
|
to evidence a successor to us and the assumption by that
successor of our obligations under the indenture and the notes; |
|
|
|
to evidence and provide for the acceptance of the appointment
under the indenture of a successor trustee; |
42
|
|
|
|
|
to add to our covenants for the benefit of holders of the notes
or to surrender any right or power conferred upon us; |
|
|
|
to secure our obligations in respect of the notes; |
|
|
|
to make any changes or modifications to the indenture necessary
in connection with the registration of the notes under the
Securities Act and the qualification of the indenture under the
Trust Indenture Act; or |
|
|
|
to cure any ambiguity, inconsistency or other defect in the
indenture. |
No supplemental indenture entered into pursuant to the third,
fourth, fifth or sixth bullets of the preceding paragraph may be
entered into without the consent of the holders of a majority in
principal amount of the notes, if such supplemental indenture
may materially and adversely affect the interests of the holders
of the notes.
The holders of a majority in principal amount of the outstanding
notes may, on behalf of the holders of all notes:
|
|
|
|
|
waive compliance by us with restrictive provisions of the
indenture, as detailed in the indenture; and |
|
|
|
waive any past default under the indenture and its consequences,
except a default in the payment of the principal amount, accrued
and unpaid interest, if any (including liquidated damages),
redemption price or repurchase price or obligation to deliver
common shares (or cash or a combination of cash and common
shares if we so elect) upon conversion with respect to any note
or in respect of any provision which under the indenture cannot
be modified or amended without the consent of the holder of each
outstanding note affected. |
Form, Denomination, Transfer, Exchange and Book-Entry
Procedures
The notes will be issued:
|
|
|
|
|
only in fully registered form; |
|
|
|
without interest coupons; and |
|
|
|
in denominations of $1,000 and greater multiples. |
The notes will be evidenced by one or more global notes, which
will be deposited with the trustee, as custodian for the
Depository Trust Company, or DTC, and registered in the name of
Cede & Co., or Cede, as nominee of DTC. The global note
and any notes issued in exchange for the global note will be
subject to restrictions on transfer and will bear the legend
regarding those restrictions set forth under Notice to
Investors. Except as set forth below, record ownership of
the global note may be transferred, in whole or in part, only to
another nominee of DTC or to a successor of DTC or its nominee.
The global note will not be registered in the name of any
person, or exchanged for notes that are registered in the name
of any person, other than DTC or its nominee unless either of
the following occurs:
|
|
|
|
|
DTC notifies us that it is unwilling, unable or no longer
qualified to continue acting as the depositary for the global
note or DTC ceases to be a registered clearing agency or ceases
doing business or announces an intention to cease doing
business; or |
|
|
|
an event of default with respect to the notes represented by the
global note has occurred and is continuing. |
In those circumstances, DTC will determine in whose names any
securities issued in exchange for the global note will be
registered.
43
So long as the notes are in global form, DTC or its nominee will
be considered the sole owner and holder of the global note for
all purposes, and as a result:
|
|
|
|
|
you cannot receive notes registered in your name if they are
represented by the global note; |
|
|
|
you cannot receive physical certificated notes in exchange for
your beneficial interest in the global notes; |
|
|
|
you will not be considered to be the owner or holder of the
global note or any note it represents for any purpose; and |
|
|
|
all payments on the global note will be made to DTC or its
nominee. |
The laws of some jurisdictions require that certain kinds of
purchasers, such as insurance companies, can only own securities
in definitive certificated form. These laws may limit your
ability to transfer your beneficial interests in the global note
to these types of purchasers.
Only institutions, such as a securities broker or dealer, that
have accounts with DTC or its nominee (called participants) and
persons that may hold beneficial interests through participants
can own a beneficial interest in the global note. The only place
where the ownership of beneficial interests in the global note
will appear and the only way the transfer of those interests can
be made will be on the records kept by DTC (for their
participants interests) and the records kept by those
participants (for interests of persons held by participants on
their behalf).
Secondary trading in bonds and notes of corporate issuers is
generally settled in clearinghouse (that is, next-day) funds. In
contrast, beneficial interests in a global note usually trade in
DTCs same-day funds settlement system, and settle in
immediately available funds. We make no representations as to
the effect that settlement in immediately available funds will
have on trading activity in those beneficial interests.
We will make payments of interest on and principal of and the
redemption or repurchase price of the global note, as well as
any payment of liquidated damages, to Cede &Co., the
nominee for DTC, as the registered owner of the global note. We
will make these payments by wire transfer of immediately
available funds on each payment date.
We have been informed that DTCs practice is to credit
participants accounts on the payment date with payments in
amounts proportionate to their respective beneficial interests
in the notes represented by the global note as shown on
DTCs records, unless DTC has reason to believe that it
will not receive payment on that payment date. Payments by
participants to owners of beneficial interests in notes
represented by the global note held through participants will be
the responsibility of those participants, as is now the case
with securities held for the accounts of customers registered in
street name.
We will send any redemption notices to Cede & Co. We
understand that if less than all the notes are being redeemed,
DTCs practice is to determine by lot the amount of the
holdings of each participant to be redeemed.
We also understand that neither DTC nor Cede & Co. will
consent or vote with respect to the notes. We have been advised
that under its usual procedures, DTC will mail an omnibus proxy
to us as soon as possible, after the record date. The omnibus
proxy assigns Cede & Co.s consenting or voting
rights to those participants to whose account the notes are
credited on the record date identified in a listing attached to
the omnibus proxy.
Because DTC can only act on behalf of participants, who in turn
act on behalf of indirect participants, the ability of a person
having a beneficial interest in the principal amount represented
by the global note to pledge the interest to persons or entities
that do not participate in the DTC book-entry system, or
otherwise take actions in respect of that interest, may be
affected by the lack of a physical certificate evidencing its
interest.
DTC has advised us that it will take any action permitted to be
taken by a holder of the notes (including the presentation of
notes for exchange) only at the direction of one or more
participants to
44
whose account with DTC interests in the global note are credited
and only in respect of such portion of the principal amount of
the notes represented by the global note as to which such
participant or participants has or have given such direction.
DTC has also advised us as follows:
|
|
|
|
|
DTC is a limited purpose trust company organized under the laws
of the State of New York, a member of the Federal Reserve
System, a clearing corporation within the meaning of the Uniform
Commercial Code, as amended, and a clearing agency registered
pursuant to the provisions of Section 17A of the Exchange
Act; |
|
|
|
DTC was created to hold securities for its participants and
facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry
changes in accounts of its participants; |
|
|
|
participants include securities brokers and dealers, banks,
trust companies and clearing corporations and may include
certain other organizations; |
|
|
|
certain participants, or their representatives, together with
other entities, own DTC; and |
|
|
|
indirect access to the DTC system is available to other entities
such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a participant,
either directly or indirectly. |
The policies and procedures of DTC, which may change
periodically, will apply to payments, transfers, exchanges and
other matters relating to beneficial interests in the global
note. We and the trustee have no responsibility or liability for
any aspect of DTCs or any participants records
relating to beneficial interests in the global note, including
for payments made on the global note. Further, we and the
trustee are not responsible for maintaining, supervising or
reviewing any of those records.
Payment
We will make all payments of principal and interest on the notes
by dollar check drawn on an account maintained at a bank in The
City of New York. If you hold registered notes with a face value
greater than $2,000,000, we will make payments of principal or
interest to you by wire transfer to an account maintained by you
at a bank in The City of New York.
Payment of any interest on the notes will be made to the person
in whose name the note, or any predecessor note, is registered
at the close of business on February 15 or August 15,
whether or not a business day, immediately preceding the
relevant interest payment date (each a regular record
date).
Payments on any global note registered in the name of DTC or its
nominee will be payable by the trustee to DTC or its nominee in
its capacity as the registered holder under the indenture. Under
the terms of the indenture, we and the trustee will treat the
persons in whose names the notes, including any global note, are
registered as the owners for the purpose of receiving payments
and for all other purposes. Consequently, neither we, the
trustee nor any of our agents or the trustees agents has
or will have any responsibility or liability for:
|
|
|
|
|
any aspect of DTCs records or any participants or
indirect participants records relating to or payments made
on account of beneficial ownership interests in the global note,
or for maintaining, supervising or reviewing any of DTCs
records or any participants or indirect participants
records relating to the beneficial ownership interests in the
global notes; or |
|
|
|
any other matter relating to the actions and practices of DTC or
any of its participants or indirect participants. |
We will not be required to make any payment on the notes due on
any day which is not a business day until the next succeeding
business day. The payment made on the next succeeding business
day will
45
be treated as though it were paid on the original due date and
no interest will accrue on the payment for the additional period
of time.
We have initially appointed the trustee as paying agent. We may
terminate the appointment of any paying agent and appoint
additional or other paying agents. Notice of any termination or
appointment and of any change in the office through which any
paying agent will act will be given in accordance with
Notices below.
All monies deposited with the trustee or any paying agent, or
then held by us, in trust for the payment of principal of,
premium, if any, interest, repurchase price or redemption price
on any notes which remain unclaimed at the end of two years
after the payment has become due and payable will be repaid to
us, and you will then look only to us for payment.
No Personal Liability of Directors, Officers, Employees,
Incorporators and Shareholders
No director, officer, employee, incorporator or shareholder of
ours, as such, shall have any liability for any of our
obligations under the notes or the indenture or for any claim
based on, in respect of, or by reason of, such obligations or
their creation. Each holder of notes by accepting a note waives
and releases all such liability. The waiver and release are part
of the consideration for issuance of the notes. The waiver may
not be effective to waive liabilities under the federal
securities laws, and it is the view of the SEC that a waiver of
such liabilities is against public policy.
Reports to Trustee
We will regularly furnish to the trustee copies of our annual
report to stockholders, containing audited financial statements,
and any other financial reports which we furnish to our
stockholders. We will also furnish the trustee with a
certificate following the end of each fiscal year as to whether
any default or event of default exists under the Indenture.
Registration Rights
In connection with the private placement of the notes on
August 30, 2005, we entered into a registration rights
agreement with the initial purchaser of the notes. In the
registration rights agreement, we agreed, for the benefit of the
holders of the notes and the shares of common stock issuable
upon conversion of the notes, commonly referred to as the
registrable securities, at our expense to use our reasonable
best efforts to keep effective the shelf registration statement
of which this prospectus is a part until the earliest of
(i) the sale of all outstanding registrable securities
registered under the shelf registration statement; (ii) the
expiration of the period referred to in Rule 144(k) of the
Securities Act with respect to the notes held by non-affiliates
of Emdeon; or (iii) two years after the effective date of
the shelf registration statement of which this prospectus is a
part.
We are permitted to suspend the use of the prospectus that is
part of this shelf registration statement in connection with the
sale of registrable securities during prescribed periods of time
for reasons relating to pending corporate developments, public
filings with the SEC and other events. The periods during which
we can suspend the use of the prospectus may not, however,
exceed a total of 45 days in any 90-day period or a total
of 90 days in any 12-month period. We will provide to each
holder of registrable securities that has delivered to us a
properly completed notice and questionnaire described below
copies of the prospectus that is a part of the shelf
registration statement, notify such holders when the shelf
registration statement has been filed with the SEC and when such
shelf registration statement has become effective and take
certain other actions required to permit such holders to
publicly resell their registrable securities.
We may, upon written notice to all holders of notes, postpone
having the shelf registration statement declared effective for a
reasonable period not to exceed 90 days if we possess
material non-public information the disclosure of which would
have a material adverse effect on us and our subsidiaries taken
as a whole.
46
Notwithstanding any such postponement, additional interest,
referred to as liquidated damages, will accrue on
the notes if either of the following registration defaults
occurs:
|
|
|
|
|
on or prior to the 120th day following the date the notes
were originally issued, a shelf registration statement has not
been filed with the SEC; or |
|
|
|
on or prior to the 180th day following the date the notes
were originally issued, the shelf registration statement is not
declared effective. |
In addition, liquidated damages will accrue on any notes (but
not shares of common stock issued upon conversion of the notes)
which are then registrable securities if:
|
|
|
|
|
the shelf registration statement ceases to be effective, or we
otherwise prevent or restrict holders of registrable securities
from making sales under the shelf registration statement, for
more than 45 days, whether or not consecutive, during any
90-day period; or |
|
|
|
the shelf registration statement ceases to be effective, or we
otherwise prevent or restrict holders of registrable securities
from making sales under the shelf registration statement, for
more than 90 days, whether or not consecutive, during any
12-month period. |
In any of the above cases, during such times as we are obligated
to keep a shelf registration statement effective, liquidated
damages will accrue on any notes (but not shares issued on
conversion of the notes) which are then registrable securities,
and whose holders have timely provided to us the required
selling security holder information for inclusion in the
prospectus related to the shelf registration statement, from and
including the day following the registration default to but
excluding the day on which the registration default has been
cured. Liquidated damages will be paid semiannually in arrears,
with the first semiannual payment due on the first interest
payment date following the date on which the liquidated damages
began to accrue. We will pay liquidated damages, if any, in cash
to the persons in whose name the note is registered at the close
of business on February 15 or August 15, whether or
not a business day, immediately preceding the relevant interest
payment date.
The rates at which liquidated damages will accrue will be as
follows:
|
|
|
|
|
0.25% of the principal amount per annum to and including the
90th day after the registration default; and |
|
|
|
0.5% of the principal amount per annum from and after the
91st day after the registration default. |
A holder who elects to sell any registrable securities pursuant
to the shelf registration statement:
|
|
|
|
|
will be required to be named as a selling security holder in the
related prospectus; |
|
|
|
may be required to deliver a prospectus to purchasers; |
|
|
|
may be subject to certain civil liability provisions under the
Securities Act in connection with those sales; and |
|
|
|
will be bound by the provisions of the registration rights
agreement that apply to a holder making such an election,
including certain indemnification provisions. |
No holder of registrable securities will be entitled:
|
|
|
|
|
to be named as a selling security holder in a shelf registration
statement as of the date the shelf registration statement is
declared effective; or |
|
|
|
to use the prospectus forming a part of the shelf registration
statement for offers and resales of registrable securities at
any time, |
unless such holder has returned a completed and signed notice
and questionnaire, in the form provided in Annex A hereto,
to us.
47
Holders are required to complete and deliver the signed notice
and questionnaire at least five business days prior to the
effective date of the shelf registration statement to be named
as selling security holders in the prospectus at the time of
effectiveness. Beneficial owners of registrable securities who
have not returned a notice and questionnaire prior to the time
the shelf registration is declared effective may receive another
notice and questionnaire from us upon request. Following our
receipt of a completed and signed notice and questionnaire, we
will include the registrable securities covered thereby in a
shelf registration statement.
We have agreed to use our reasonable best efforts to cause the
shares of common stock issuable upon conversion of the notes to
be quoted on The Nasdaq National Market. However, if the common
stock is not then quoted on The Nasdaq National Market, we will
use our reasonable best efforts to cause the shares of common
stock issuable upon conversion of the notes to be quoted or
listed on whichever market or exchange the common stock is then
primarily traded, upon effectiveness of the shelf registration
statement.
This summary of certain provisions of the registration rights
agreement is not complete and is subject to, and qualified in
its entirety by reference to, all the provisions of the
registration rights agreement, a copy of which will be made
available to beneficial owners of the notes upon request to us.
Notices
Notice to holders of the notes will be given by mail to the
addresses as they appear in the security register. Notices will
be deemed to have been given on the date of such mailing.
Notice of a redemption of notes will be given not less than 15
nor more than 60 days prior to the redemption date and will
specify the redemption date. A notice of redemption of the notes
will be irrevocable.
Replacement of Notes
We will replace any note that becomes mutilated, destroyed,
stolen or lost at the expense of the holder upon delivery to the
trustee of the mutilated notes or evidence of the loss, theft or
destruction satisfactory to us and the trustee. In the case of a
lost, stolen or destroyed note, indemnity satisfactory to the
trustee and us may be required at the expense of the holder of
the note before a replacement note will be issued.
Governing Law
The indenture, the notes, and the registration rights agreement
are governed by and construed in accordance with the laws of the
State of New York, United States of America.
The Trustee
The Bank of New York is the trustee, security registrar, paying
agent and the conversion agent.
If an event of default occurs and is continuing, the trustee
will be required to use the degree of care of a prudent person
in the conduct of his own affairs in the exercise of its powers.
Subject to such provisions, the trustee will be under no
obligation to exercise any of its rights or powers under the
indenture at the request of any of the holders of notes, unless
they shall have furnished to the trustee reasonable security or
indemnity.
The Bank of New York also serves as trustee under the indenture
governing our 1.75% Convertible Subordinated Notes due 2023. The
Bank of New York may in the future engage in other commercial
banking transactions with us. The trustee will be permitted to
engage in such other transactions; provided, however,
that if it acquires any conflicting interest, it must eliminate
such conflict or resign.
48
DESCRIPTION OF CAPITAL STOCK
The following summary of certain provisions of our common stock
and preferred stock is not complete and is subject to, and
qualified in its entirety by, the provisions of our amended and
restated certificate of incorporation and our amended and
restated bylaws, copies of which are available to investors upon
request.
General
Our authorized capital stock consists of 900,000,000 shares
of common stock, par value $0.0001 per share,
4,999,000 shares of preferred stock, par value
$0.0001 per share, and 10,000 shares of convertible
redeemable exchangeable preferred stock, par value
$0.0001 per share. As of December 9, 2005, there were
345,005,627 shares of our common stock outstanding,
10,000 shares of the series of convertible redeemable
exchangeable preferred stock designated Convertible Redeemable
Exchangeable Preferred Stock were outstanding, and no shares of
preferred stock were outstanding.
Common Stock
Issued and outstanding shares of our common stock are fully paid
and nonassessable upon payment. The holders of outstanding
shares of our common stock are entitled to receive dividends out
of assets legally available therefor at such time and in such
amounts as our Board of Directors may from time to time
determine. We have never declared or paid any cash dividends on
our common stock, and we do not anticipate paying cash dividends
in the foreseeable future. Shares of our common stock are not
convertible and holders have no preemptive or subscription
rights to purchase any of our securities. Upon liquidation,
dissolution or winding up of Emdeon, the holders of our common
stock are entitled to receive pro rata those of our assets that
are legally available for distribution, after payment of all
debts and other liabilities. Each outstanding share of our
common stock is entitled to one vote on all matters submitted to
a vote of our stockholders, including election of directors.
There is no cumulative voting in the election of directors.
Preferred Stock
Our Board of Directors is authorized to issue preferred stock
and to determine its rights, preferences and privileges. While
providing flexibility in connection with possible financings,
acquisitions and other corporate purposes, the issuance of
preferred stock by us could adversely affect the voting power of
the holders of our common stock. In addition, we could issue
preferred stock as a means of discouraging, delaying or
preventing a change in control.
|
|
|
Convertible Redeemable Exchangeable Preferred Stock |
There are 10,000 shares of Convertible Redeemable
Exchangeable Preferred Stock outstanding, which were issued in a
private transaction to CalPERS/PCG Corporate Partners, LLC
(CalPERS/PCG Corporate Partners). As of the date of
this prospectus, CalPERS/PCG Corporate Partners continues to own
all outstanding shares of the Convertible Redeemable
Exchangeable Preferred Stock. CalPERS/PCG Corporate Partners is
a private equity fund managed by the Pacific Corporate Group and
principally backed by California Public Employees
Retirement System, or CalPERS.
The Convertible Redeemable Exchangeable Preferred Stock has a
liquidation preference of $100 million in the aggregate and
is convertible into 10,638,297 shares of our common stock
in the aggregate, representing a conversion price of
$9.40 per share of common stock. We may not redeem the
Convertible Redeemable Exchangeable Preferred Stock prior to
March 2007. After March 2007, we may redeem any portion of the
Convertible Redeemable Exchangeable Preferred Stock at 105% of
its liquidation preference, but we may not redeem any portion of
the Convertible Redeemable Exchangeable Preferred Stock before
March 2008 unless the average closing sale prices of our common
stock is at least $13.16 per share, subject to adjustment.
We are required to redeem the Convertible Redeemable
49
Exchangeable Preferred Stock that is outstanding in March 2012
at a redemption price equal to the liquidation preference of the
Convertible Redeemable Exchangeable Preferred Stock, which we
may pay in cash or, at our option, in shares of our common stock.
If the average closing sales price of our common stock during
the three-month period ended on the fourth anniversary of the
issuance date is less than $7.50 per share, holders of the
Convertible Redeemable Exchangeable Preferred Stock will have a
right to exchange the Convertible Redeemable Exchangeable
Preferred Stock into our 10% subordinated notes due March
2010 (which we refer to in this Prospectus as the
10% notes). The 10% notes may be redeemed,
in whole or in part, at any time after March 2010 at our option
at a price equal to 105% of the principal amount of the
10% notes being redeemed.
The Convertible Redeemable Exchangeable Preferred Stock ranks,
with respect to distribution of assets upon liquidation,
dissolution or winding up, whether voluntary or involuntary,
senior to all of our common stock. The Convertible Redeemable
Exchangeable Preferred Stock pays no annual dividend and shares
in any dividends paid on our common stock on an as-converted
basis. So long as the Convertible Redeemable Exchangeable
Preferred Stock remains outstanding, we are required to pay to
CalPERS/PCG Corporate Partners, on a quarterly basis, an
aggregate annual fee of 0.35% of the face amount of the
outstanding Convertible Redeemable Exchangeable Preferred Stock.
Holders of the shares of the Convertible Redeemable Exchangeable
Preferred Stock have the right to vote together with holders of
our common stock on an as-converted basis, on matters that are
put to a vote of holders of our common stock. In addition, we
cannot issue any additional shares of the Convertible Redeemable
Exchangeable Preferred Stock or create any other class or series
of capital stock or series of capital stock that ranks senior to
or on a parity with the Convertible Redeemable Exchangeable
Preferred Stock without the prior approval of holders of 75% of
the Convertible Redeemable Exchangeable Preferred Stock then
outstanding, voting as a separate class.
Warrants
As of September 30, 2005, warrants to
purchase 5,560,038 shares of our common stock were
outstanding at exercise prices ranging from $0.67 to
$38.13 per share, with a weighted average exercise price of
$13.02 per share. All of these outstanding warrants were
vested and exercisable as of September 30, 2005.
Anti-Takeover Provisions
Certain provisions of Delaware law and our certificate of
incorporation and bylaws could have the effect of making it more
difficult for a third party to acquire, or of discouraging a
third party from acquiring, control of us. Such provisions could
limit the price that some investors might be willing to pay in
the future for shares of our common stock. These provisions of
Delaware law and the certificate of incorporation and bylaws may
also have the effect of discouraging or preventing certain types
of transactions involving an actual or threatened change of
control of us, including unsolicited takeover attempts, even
though such a transaction may offer our stockholders the
opportunity to sell their stock at a price above the prevailing
market price.
Delaware Takeover Statute
We are subject to the business combination
provisions of Section 203 of the Delaware General
Corporation Law. In general, such provisions prohibit a publicly
held Delaware corporation from engaging in various
business combination transactions with any
interested stockholder for a period of three years after the
date of the transaction in which the person became an interested
stockholder, unless:
|
|
|
|
|
the transaction is approved by the board of directors prior to
the date the interested stockholder obtained such status; |
|
|
|
upon consummation of the transaction that resulted in the
stockholders becoming an interested stockholder, the
stockholder owned at least 85% of the voting stock of the
corporation outstanding |
50
|
|
|
|
|
at the time the transaction commenced, excluding for purposes of
determining the number of shares outstanding those shares owned
by persons who are directors and also officers and by employee
stock plans in which employee participants do not have the right
to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer; or |
|
|
|
on or subsequent to such date the business combination is
approved by the board of directors and authorized at an annual
or special meeting of stockholders by the affirmative vote of at
least
662/3%
of the outstanding voting stock that is not owned by the
interested stockholder. |
A business combination is defined to include
mergers, asset sales and other transactions resulting in
financial benefit to a stockholder. In general, an
interested stockholder is a person who, together
with affiliates and associates, owns, or within three years, did
own, 15% or more of a corporations voting stock. The
statute could prohibit or delay mergers or other takeover or
change in control attempts with respect to Emdeon and,
accordingly, may discourage attempts to acquire us.
Certificate of Incorporation and Bylaws
Board Authority to Issue Preferred Stock Without Stockholder
Approval. Our Board of Directors is authorized to issue
preferred stock having a preference as to dividends or
liquidation over the common stock without stockholder approval.
However, our Board of Directors cannot issue any additional
shares of the Convertible Redeemable Exchangeable Preferred
Stock or create any other class or series of capital stock or
series of capital stock that ranks on a parity with the
Convertible Redeemable Exchangeable Preferred Stock without the
prior approval of holders of 75% of the Convertible Redeemable
Exchangeable Preferred Stock then outstanding, voting as a
separate class.
Staggered Board; Ability of Board to Change Size of
Board. Our Board of Directors consists of nine members. Our
bylaws provide that this number may be changed by a resolution
adopted by our Board of Directors. Directors are divided into
three classes. Each year the directors positions in one of
the three classes are subject to election so that it would take
three years to replace the entire board and two years to replace
a majority of the board, absent resignation or premature
expiration of a directors term, which may have the effect
of deterring a hostile takeover or delaying or preventing
changes in control or management of Emdeon.
Filling of Board Vacancies; Removals. Any vacancies on
the Board of Directors resulting from death, resignation,
disqualification or removal shall, unless the Board of Directors
determines by resolution that any such vacancies shall be filled
by stockholders, be filled only by the affirmative vote of a
majority of the remaining directors then in office, even though
less than a quorum. Newly created directorships resulting from
any increase in the number of directors shall, unless the Board
of Directors determines by resolution that any such newly
created directorship shall be filled by the stockholders, be
filled only by the affirmative vote of the directors then in
office, even though less than a quorum. Any director so elected
shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created or
the vacancy occurred and until such directors successor is
elected and qualified. A director may be removed, only with
cause, by the holders of a majority of the shares then entitled
to vote at an election of directors.
Stockholder Action Instead of Meeting by Unanimous Written
Consent. Our certificate of incorporation provides that any
action to be taken by our stockholders must be effected at an
annual or special stockholder meeting and may not be taken by
written consent.
Calling Special Meetings. Our bylaws provide that special
meetings of our stockholders may be called by a majority of the
members of our Board of Directors, by the chairman of our Board
of Directors or by our chief executive officer.
Stockholder Proposals and Nominations. Our bylaws require
advance written notice by a stockholder of a proposal that such
stockholder desires to present at an annual meeting or of a
nomination of a person for election to our Board of Directors at
an annual or special meeting. These provisions will delay
51
consideration of a stockholder proposal or nomination until the
next annual meeting unless a special meeting is called by our
Board of Directors.
Generally, we must receive a stockholders notice of a
proposal to be considered at an annual meeting not less than
60 days nor more than 90 days prior to the anniversary
date of the prior years annual meeting. If the annual
meeting is called for a date that is not within 30 days
before or after such anniversary date, however, we must receive
the notice not later than the close of business on the tenth day
following the earlier of the day on which notice of the annual
meeting is mailed and the day on which we publicly announce the
date of the annual meeting. No business other than that stated
in the notice may be transacted at any special meeting.
Generally, we must receive a stockholders notice of a
nomination for director to be considered at an annual meeting
not less than 60 days nor more than 90 days prior to
the anniversary date of the prior years annual meeting. If
the annual meeting is called for a date that is not within
30 days before or after such anniversary date, however, we
must receive the notice not later than the close of business on
the tenth day following the earlier of the day on which notice
of the annual meeting is mailed and the day on which we publicly
announce the date of the annual meeting. We must receive a
stockholders notice of a nomination for director to be
considered at a special meeting not later than the close of
business on the tenth day following the earlier of the day on
which notice of the special meeting is mailed and the day on
which we publicly announce the date of the special meeting.
Bylaw Amendments. Our bylaws may be amended or repealed,
and new bylaws made, by the affirmative vote of the holders of a
majority of the total voting power of all classes of outstanding
capital stock voting thereon as a single class or by our Board
of Directors.
Limitations on Liability and Indemnification of Officers and
Directors. Our certificate of incorporation limits the
liability of directors to the fullest extent permitted by
Delaware law. In addition, our certificate of incorporation and
bylaws provide that we will indemnify our directors and officers
to the fullest extent permitted by Delaware law. We generally
enter into separate indemnification agreements with our
directors and executive officers implementing such
indemnification and providing similar protection even if our
certificate of incorporation or bylaws are subsequently amended.
Transfer Agent and Registrar
American Stock Transfer & Trust Company is the transfer
agent and registrar for our common stock.
Listing
Our common stock has traded on The Nasdaq National Market under
the symbol HLTH since February 11, 1999.
52
U.S. FEDERAL INCOME TAX CONSIDERATIONS
TO COMPLY WITH U.S. TREASURY REGULATIONS, WE ADVISE YOU
THAT ANY U.S. FEDERAL TAX ADVICE INCLUDED IN THIS
COMMUNICATION (1) IS NOT INTENDED OR WRITTEN TO BE USED,
AND CANNOT BE USED, TO AVOID ANY U.S. FEDERAL TAX
PENALTIES, AND (2) WAS WRITTEN TO SUPPORT THE PROMOTION OR
MARKETING OF THE TRANSACTION OR MATTER ADDRESSED BY THIS
COMMUNICATION. ANY TAXPAYER RECEIVING THIS COMMUNICATION SHOULD
SEEK ADVICE FROM AN INDEPENDENT TAX ADVISOR BASED ON THE
TAXPAYERS PARTICULAR CIRCUMSTANCES.
General
This is a summary of certain U.S. federal income tax
consequences relevant to a holder of notes. All references to
holders (including U.S. Holders and
Non-U.S. Holders) are to beneficial owners of notes. The
discussion applies only to notes held as capital assets and does
not purport to deal with persons in special tax situations,
including, for example, financial institutions, insurance
companies, regulated investment companies, dealers in securities
or currencies, tax exempt entities, persons holding notes in a
tax-deferred or tax-advantaged account, or persons holding notes
as a hedge against currency risks, as a position in a
straddle or as part of a hedging or
conversion or risk-reduction transaction for tax
purposes.
Except where specifically indicated below, this discussion also
does not address all of the tax consequences that may be
relevant to a holder. In particular, it does not address:
|
|
|
|
|
the U.S. federal income tax consequences to shareholders
in, or partners or beneficiaries of, an entity that is a holder
of notes; |
|
|
|
the U.S. federal estate, gift or alternative minimum tax
consequences of the purchase, ownership or disposition of notes; |
|
|
|
U.S. Holders (as defined below) whose functional currency
is not the U.S. dollar; |
|
|
|
any state, local or foreign tax consequences of the purchase,
ownership or disposition of notes; or |
|
|
|
any U.S. federal, state, local or foreign tax consequences
of owning or disposing of the common stock. |
Persons considering the acquisition of notes should consult
their own tax advisors concerning the application of the
U.S. federal income tax laws to their particular situations
as well as any consequences of the purchase, ownership and
disposition of the notes arising under the laws of any other
taxing jurisdiction. This summary is based upon laws,
regulations, rulings and decisions now in effect, all of which
are subject to change (including retroactive changes in
effective dates) or possible differing interpretations. No
statutory, regulatory, administrative or judicial authority
directly addresses the treatment of the notes for
U.S. federal income tax purposes, although a published
ruling from the Internal Revenue Service (which we refer to as
the IRS) on the treatment of notes similar to the notes offered
hereby is consistent with the treatment described herein. No
rulings have been sought or are expected to be sought from the
IRS with respect to any of the U.S. federal income tax
consequences discussed below. As a result, there is a
possibility that the IRS will disagree with the tax
characterizations and the tax consequences described below.
For purposes of this discussion, a U.S. Holder
is a beneficial owner of a note that, for U.S. federal
income tax purposes, is:
|
|
|
|
|
a citizen or resident alien individual of the United States; |
|
|
|
a corporation (or other entity treated as a corporation for
U.S. federal income tax purposes) organized under the laws
of the United States or any political subdivision thereof; |
53
|
|
|
|
|
an estate whose income is subject to U.S. federal income
tax regardless of its source; or |
|
|
|
a trust if (1) a U.S. court can exercise primary
supervision over the trusts administration and one or more
U.S. persons are authorized to control all substantial
decisions of the trust or (2) the trust has a valid
election in effect under applicable Treasury regulations to be
treated as a U.S. person. |
A Non-U.S. Holder is a beneficial owner of a
note that is not a U.S. Holder. If a partnership holds
notes, the tax treatment of a partner generally will depend upon
the status of the partner and upon the activities of the
partnership. Partners of partnerships holding notes should
consult their own tax advisors.
We urge prospective investors to consult their own tax
advisors with respect to the tax consequences to them of the
purchase, ownership and disposition of the notes and the common
stock in light of their own particular circumstances, including
the tax consequences under state, local, foreign and other tax
laws and the possible effects of changes in U.S. federal or
other tax laws.
Classification of the Notes
We have been advised by our counsel, Shearman &
Sterling LLP, that the notes will be treated as indebtedness for
U.S. federal income tax purposes and that the notes will be
subject to the special regulations governing contingent payment
debt instruments (which we refer to as the CPDI regulations).
Moreover, pursuant to the terms of the indenture, we and each
holder of notes agreed, for U.S. federal income tax
purposes, to treat the notes as debt instruments that are
subject to the CPDI regulations.
U.S. Holders
The following discussion is a summary of certain
U.S. federal income tax consequences that will apply to you
if you are a U.S. Holder.
|
|
|
Accrual of Interest on the Notes |
Pursuant to the CPDI regulations, a U.S. Holder will be
required to accrue interest income on a note, in the amounts
described below for each taxable year the U.S. Holder holds
a note, regardless of whether the U.S. Holder uses the cash
or accrual method of tax accounting. Accordingly,
U.S. Holders may be required to include interest in taxable
income in each year in excess of any interest payments (whether
fixed or contingent) actually received in that year. The CPDI
regulations provide that a U.S. Holder must accrue an
amount of ordinary interest income, as original issue discount
for U.S. federal income tax purposes, for each accrual
period prior to and including the maturity date of the notes.
The amount required to be accrued equals the sum of the daily
portions of original issue discount with respect to the note for
each day during the taxable year or portion of a taxable year on
which the U.S. Holder holds the note, adjusted if necessary
as described below. In general, the daily portion is
(1) the product of (i) the adjusted issue price (as
defined below) of the notes as of the beginning of the accrual
period; and (ii) the comparable yield (as defined below) of
the notes, adjusted for the length of the accrual period,
divided by (2) the number of days in the accrual period.
The issue price of the notes is the first price at which a
substantial amount of the notes is sold to the public, excluding
sales to bond houses, brokers or similar persons or
organizations acting in the capacity of underwriters, placement
agents or wholesalers. The adjusted issue price of a note is its
issue price increased by any interest income previously accrued,
determined without regard to any adjustments to interest
accruals described below, and decreased by the projected amount
of any payments previously made with respect to the notes. The
term comparable yield means the annual yield we
would pay, as of the initial issue date, on a fixed rate
nonconvertible debt security with no contingent payments, but
with terms and conditions otherwise comparable to those of the
notes. We determined that the comparable yield for the notes is
an annual rate of 6.8%, compounded semiannually. The specific
yield, however, is not entirely clear. If our determination of
the comparable yield were successfully challenged by the IRS,
the redetermined yield could be materially greater or less than
the comparable yield which we determined.
54
The CPDI regulations require that we provide to
U.S. Holders, solely for U.S. federal income tax
purposes, a schedule of the projected amounts of payments, which
we refer to as projected payments, on the notes. The payments
set forth on the projected payment schedule must produce a total
return on the notes equal to the comparable yield. The projected
payment schedule includes both fixed coupon payments and
estimated payments of contingent interest, as well as an
estimate for a payment at maturity taking into account the fair
market value of the common stock that might be paid upon a
conversion of the notes.
Pursuant to the terms of the indenture, each holder of notes
agreed to use the comparable yield and the schedule of projected
payments as described above in determining its interest
accruals, and the adjustments thereto described below, in
respect of the notes. This comparable yield and the schedule of
projected payments are set forth in the indenture. You may also
obtain the projected payment schedule by submitting a written
request for such information to the address set forth under
Where You Can Find More Information.
The comparable yield and the schedule of projected payments
are not determined for any purpose other than for the
determination of a holders interest accruals and
adjustments thereof in respect of the notes for
U.S. federal income tax purposes and do not constitute a
projection or representation regarding the actual amounts
payable on the notes.
Amounts treated as interest under the CPDI regulations are
treated as original issue discount for all purposes of the Code.
We may be required to make payments of liquidated damages if we
do not comply with certain covenants set forth in the
registration rights agreement, as described in more detail under
Description of Notes Registration
Rights. We intend to take the position for
U.S. federal income tax purposes that any payments of
liquidated damages should be taxable to U.S. Holders as
additional ordinary income when received or accrued, in
accordance with their method of tax accounting. If we do not
comply with certain covenants set forth in the registration
rights agreement, U.S. Holders should consult their tax
advisors concerning the appropriate tax treatment of the payment
of liquidated damages with respect to the notes.
|
|
|
Adjustments to Interest Accruals on the Notes |
If, during any taxable year, a U.S. Holder receives actual
payments with respect to the notes that in the aggregate exceed
the total amount of projected payments for that taxable year,
the U.S. Holder will incur a net positive
adjustment under the CPDI regulations equal to the amount
of such excess. The U.S. Holder will treat a net
positive adjustment as additional interest income. For
this purpose, the payments in a taxable year include the fair
market value of our common stock received in that year.
If a U.S. Holder receives in a taxable year actual payments
with respect to the notes that in the aggregate were less than
the amount of projected payments for that taxable year, the
U.S. Holder will incur a net negative
adjustment under the CPDI regulations equal to the amount
of such deficit. This adjustment will (a) reduce the
U.S. Holders interest income on the notes for that
taxable year, and (b) to the extent of any excess after the
application of (a), give rise to an ordinary loss to the extent
of the U.S. Holders interest income on the notes
during prior taxable years, reduced to the extent such interest
was offset by prior net negative adjustments. Any negative
adjustment in excess of the amount described in (a) and
(b) will be carried forward as a negative adjustment to
offset future interest income in respect of the notes or to
reduce the amount realized on a sale, exchange or retirement of
the notes.
If a U.S. Holder were to purchase a note at a discount or
premium to the adjusted issue price, the discount would be
treated as a positive adjustment under the contingent debt
regulations and the premium would be treated as a negative
adjustment under the contingent debt regulations. The U.S.
Holder must reasonably allocate the adjustment over the
remaining term of the note by reference to the accruals of
original issue discount at the comparable yield or to the
projected payments. For this purpose, it may be reasonable to
allocate the adjustment over the remaining term of the note pro
rata with the accruals of original issue discount at the
comparable yield. U.S. Holders should consult their own tax
advisors regarding these allocations.
55
|
|
|
Sale, Conversion, Repurchase, Exchange or
Redemption |
Upon the sale, conversion, repurchase by us at the option of a
holder, exchange of a note, or redemption of a note, a
U.S. Holder generally will recognize gain or loss. As
described above, our calculation of the comparable yield and the
schedule of projected payments for the notes include the receipt
of stock upon conversion as a contingent payment with respect to
the notes. Accordingly, we intend to treat the receipt of our
common stock by a U.S. Holder upon the conversion of a
note, or upon the repurchase of a note where we elect to pay in
common stock, as a payment under the CPDI regulations. As
described above, holders agreed to be bound by our determination
of the comparable yield and the schedule of projected payments.
The amount of gain or loss on a taxable sale, conversion,
repurchase by us at the option of a holder, exchange or
redemption will be equal to the difference between (a) the
amount of cash plus the fair market value of any other property
received by the U.S. Holder, including the fair market
value of any of our common stock received, and (b) the
U.S. Holders adjusted tax basis in the note. A
U.S. Holders adjusted tax basis in a note will
generally be equal to the U.S. Holders original
purchase price for the note, increased by any interest income
previously accrued by the U.S. Holder (determined without
regard to any adjustments to interest accruals described above),
and decreased by the amount of any projected payments that have
been previously scheduled to be made in respect of the note
(without regard to the actual amount paid). Gain recognized upon
a sale, conversion, repurchase, exchange or redemption of a note
will generally be treated as ordinary interest income; any loss
will be ordinary loss to the extent of interest previously
included in gross income, and thereafter, capital loss (which
will be long-term if the note is held for more than one year).
The deductibility of capital losses is subject to limitations
under the Code.
A U.S. Holders tax basis in our common stock received
upon a conversion of a note or upon a U.S. Holders
exercise of a put right that we elect to pay in common stock
will equal the then current fair market value of such common
stock. The U.S. Holders holding period for the common
stock received will commence on the day immediately following
the date of conversion or redemption.
If at any time we were to make a distribution of property to our
stockholders that would be taxable to the stockholders as a
dividend for U.S. federal income tax purposes and, in
accordance with the antidilution provisions of the notes, the
conversion rate of the notes is increased, such increase might
be deemed to be the payment of a taxable dividend to holders of
the notes. For example, an increase in the conversion rate in
the event of distributions of our evidences of indebtedness or
our assets or an increase in the event of a cash dividend could
result in deemed dividend treatment to holders of the notes, but
generally an increase in the event of stock dividends or the
distribution of rights to subscribe for common stock will not.
Any such deemed dividend would not be eligible for the
preferential rates of U.S. federal income tax applicable to
qualified dividend income of certain non-corporate
U.S. Holders.
Since under the notes there are increases in the conversion rate
in the case of cash dividends to stockholders, these adjustments
might result in deemed dividends to U.S. Holders as
described above, or, because the notes are subject to the CPDI
regulations, such adjustments might result in income upon
conversion or earlier at the time of such adjustment.
|
|
|
Backup Withholding Tax and Information Reporting |
Payments of principal, premium, if any, and interest (including
original issue discount) on, and the proceeds of dispositions
of, the notes may be subject to information reporting and
U.S. federal backup withholding tax if the U.S. Holder
thereof fails to supply an accurate taxpayer identification
number or otherwise fails to comply with applicable
U.S. information reporting or certification requirements.
Any amounts so withheld will be allowed as a credit against such
U.S. Holders U.S. federal income tax liability.
56
Non-U.S. Holders
The following is a summary of certain U.S. federal tax
consequences that will apply to you if you are a
Non-U.S. Holder.
Non-U.S. Holders should consult their own tax advisors
to determine the U.S. federal, state, local and foreign tax
consequences that may be relevant to them.
|
|
|
Payments with Respect to the Notes |
All payments on the notes to a Non-U.S. Holder, including
payments of contingent interest, a payment in common stock
pursuant to a conversion, and any gain realized on a sale or
exchange of the notes, will be exempt from U.S. federal
income or withholding tax, provided that:
|
|
|
(i) such Non-U.S. Holder does not own, actually or
constructively, 10% or more of the total combined voting power
of all classes of our stock entitled to vote, is not a
controlled foreign corporation related, directly or indirectly,
to us through stock ownership, and is not a bank receiving
certain types of interest; |
|
|
(ii) the beneficial owner of a note certifies on IRS
Form W-8BEN (or successor form), under penalties of
perjury, that it is not a U.S. person and provides its name
and address or otherwise satisfies applicable documentation
requirements; |
|
|
(iii) such payments and gain are not effectively connected
with the conduct by such Non-U.S. Holder of a trade or
business in the United States (or, where a tax treaty applies,
are not attributable to a United States permanent establishment); |
|
|
(iv) our common stock continues to be actively traded,
within the meaning of section 871(h)(4)(C)(v)(1) of the
Code (which, for these purposes and subject to certain
exceptions, includes trading on the NASDAQ); and |
|
|
(v) we are not, and have not been within the relevant
period specified in section 897(c)(1) of the Code, a United
States real property holding corporation (USRPHC)
within the meaning of section 897(c)(2) of the Code. |
We do not believe that we currently are a USRPHC. In the event
that we were to become a USRPHC, income or gain derived by a
Non-U.S. Holder in respect of the notes nevertheless would
not be subject to the special tax rules applicable to ownership
interests in USRPHCs as long as the Non-U.S. Holder did not
own (including through ownership of the notes) a greater than 5%
interest in our common stock, and shares of our common stock
were regularly traded on an established securities market such
as NASDAQ. No assurances can be given that we will not become a
USRPHC, or that our common stock will remain regularly traded on
NASDAQ.
If a Non-U.S. Holder of the notes is engaged in a trade or
business in the United States, and if interest on the notes is
effectively connected with the conduct of such trade or business
(and if required by an applicable income tax treaty, is
attributable to a U.S. permanent establishment), the
Non-U.S. Holder, although exempt from the withholding tax
discussed in the preceding paragraphs, will generally be subject
to regular U.S. federal income tax on interest,
constructive dividends and any gain realized on the sale,
exchange, conversion, repurchase or redemption of the notes in
the same manner as if it were a U.S. Holder. In lieu of IRS
Form W-8BEN described above, such a Non-U.S. Holder
will be required to provide to the withholding agent a properly
executed IRS Form W-8ECI (or successor form) in order to
claim an exemption from withholding tax. In addition, if such a
Non-U.S. Holder is a foreign corporation, such Holder may
be subject to a branch profits tax equal to 30% (or such lower
rate provided by an applicable treaty) of its effectively
connected earnings and profits for the taxable year, subject to
certain adjustments.
57
|
|
|
Adjustments to Conversion Ratio |
A Non-U.S. Holder may be subject to U.S. federal
withholding tax at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty on income
attributable to an adjustment to the conversion rate of the
notes.
|
|
|
Backup Withholding Tax and Information Reporting |
In general, a Non-U.S. Holder will not be subject to backup
withholding and information reporting with respect to payments
made by us with respect to the notes if the Non-U.S. Holder
has provided us with an IRS Form W-8BEN described above and
we do not have actual knowledge or reason to know that such
Non-U.S. Holder is a U.S. person. In addition, no
backup withholding will be required regarding the proceeds of
the sale of notes made within the United States or conducted
through certain U.S. financial intermediaries if the payor
receives that statement described above and does not have actual
knowledge or reason to know that the Non-U.S. Holder is a
U.S. person or the Non-U.S. Holder otherwise
establishes an exemption.
58
PLAN OF DISTRIBUTION
We will not receive any of the proceeds of the sale of the notes
and the underlying common stock offered by this prospectus. The
notes and the underlying common stock may be sold from time to
time to purchasers:
|
|
|
|
|
directly by the selling security holder; or |
|
|
|
through underwriters, broker-dealers or agents who may receive
compensation in the form of discounts, concessions or
commissions from the selling security holder or the purchasers
of the notes and the underlying common stock. |
The selling security holder and any underwriters, broker-dealers
or agents who participate in the distribution of the notes and
the underlying common stock may be deemed to be
underwriters within the meaning of the Securities
Act. As a result, any profits on the sale of the underlying
common stock by selling security holder and any discounts,
commissions or concessions received by any such broker-dealers
or agents may be deemed to be underwriting discounts and
commissions under the Securities Act. If the selling security
holder were deemed to be underwriters, the selling security
holder may be subject to statutory liabilities including, but
not limited to, those of Sections 11, 12 and 17 of the
Securities Act and Rule 10b-5 under the Exchange Act.
If the notes and the underlying common stock are sold through
underwriters or broker-dealers, the selling security holder will
be responsible for underwriting discounts or commissions or
agents commissions. The notes and the underlying common
stock may be sold in one or more transactions at:
|
|
|
|
|
fixed prices; |
|
|
|
prevailing market prices at the time of sale; |
|
|
|
varying prices determined at the time of sale; or |
|
|
|
negotiated prices. |
These sales may be effected in transactions:
|
|
|
|
|
on any national securities exchange or quotation service on
which the notes and underlying common stock may be listed or
quoted at the time of the sale, including the Nasdaq National
Market in the case of the common stock; |
|
|
|
in the over-the-counter market; |
|
|
|
in transactions otherwise than on such exchanges or services or
in the over-the-counter market; or |
|
|
|
through the writing of options. |
These transactions may include block transactions or crosses.
Crosses are transactions in which the same broker acts as an
agent on both sides of the transaction.
In connection with the sales of the notes and the underlying
common stock or otherwise, the selling security holder may enter
into hedging transactions with broker-dealers. These
broker-dealers may in turn engage in short sales of the notes
and the underlying common stock in the course of hedging their
positions. The selling security holder may also sell the notes
and the underlying common stock short and deliver notes and the
underlying common stock to close out short positions, or loan or
pledge notes and the underlying common stock to broker-dealers
that, in turn, may sell the notes and the underlying common
stock.
To our knowledge, there are currently no plans, arrangements or
understandings between any selling security holder and any
underwriter, broker-dealer or agent regarding the sale of the
notes and the underlying common stock by the selling security
holder. Selling security holders may decide not to sell all or a
portion of the notes and the underlying common stock offered by
them pursuant to this prospectus or may decide not to sell notes
or the underlying common stock under this prospectus. In
addition, any
59
selling security holder may transfer, devise or give the notes
and the underlying common stock by other means not described in
this prospectus. Any notes or underlying common stock covered by
this prospectus that qualify for sale pursuant to Rule 144
or Rule 144A of the Securities Act, or Regulation S
under the Securities Act, may be sold under Rule 144 or
Rule 144A or Regulation S rather than pursuant to this
prospectus.
Our common stock is listed on the Nasdaq National Market under
the symbol HLTH. We do not intend to apply for
listing of the notes on any securities exchange or for quotation
through Nasdaq. The notes originally issued in the private
placement are eligible for trading on The
Portalsm
Market. However, notes sold pursuant to this prospectus will no
longer be eligible for trading on The
Portalsm
Market. Accordingly, no assurance can be given as to the
development of liquidity or any trading market for the notes.
The selling security holders and any other persons participating
in the distribution of the notes or underlying common stock will
be subject to the Exchange Act. The Exchange Act rules include,
without limitation, Regulation M, which may limit the
timing of purchases and sales of any of the notes and the
underlying common stock by the selling security holders and any
such other person. In addition, Regulation M of the
Exchange Act may restrict the ability of any person engaged in
the distribution of the notes and the underlying common stock to
engage in market-making activities with respect to the
particular notes and underlying common stock being distributed
for a period of up to five business days prior to the
commencement of such distribution. This may affect the
marketability of the notes and the underlying common stock and
the ability to engage in market-making activities with respect
to the notes and the underlying common stock.
Under the registration rights agreement that has been filed as
an exhibit to this registration statement, we agreed to use our
reasonable best efforts to keep the registration statement of
which this prospectus is a part effective until the earliest of
(i) the sale of all outstanding registrable securities
registered under the shelf registration statement of which this
prospectus is a part, (ii) the expiration of the period
referred to in Rule 144(k) of the Securities Act with
respect to the notes held by non-affiliates of Emdeon or
(iii) two years after the effective date of the shelf
registration statement of which this prospectus is a part.
We are permitted to suspend the use of this prospectus in
connection with the sale of securities pursuant to this
prospectus under certain circumstances and subject to certain
conditions for a period not to exceed a total of 45 days in
any 90-day period or a total of 90 days in any 12-month
period. During the time periods when the use of this prospectus
is suspended, each selling security holder has agreed not to
sell notes or shares of common stock issuable upon conversion of
the notes. We also agreed to pay liquidated damages to certain
holders of the notes and shares of common stock issuable upon
conversion of the notes if the prospectus is unavailable for
periods in excess of those permitted.
Under the registration rights agreement, we and the selling
security holders will each indemnify the other against certain
liabilities, including certain liabilities under the Securities
Act, or will be entitled to contribution in connection with
these liabilities.
We have agreed to pay substantially all of the expenses
incidental to the registration, offering and sale of the notes
and the underlying common stock to the public other than
commissions, fees and discounts of underwriters, brokers,
dealers and agents.
60
LEGAL MATTERS
Shearman & Sterling LLP, New York, New York, counsel to
Emdeon, will pass upon the validity of the notes and the shares
of common stock issuable upon their conversion. As of
September 30, 2005, Shearman & Sterling LLP owned
an aggregate of 305,582 Emdeon shares.
EXPERTS
The consolidated financial statements and schedule of Emdeon
Corporation appearing in Emdeon Corporations Annual Report
(Form 10-K) for the year ended December 31, 2004, and
Emdeon Corporation managements assessment of the
effectiveness of internal control over financial reporting as of
December 31, 2004 included therein (which did not include
an evaluation of the internal control over financial reporting
of VIPS, Inc.), have been audited by Ernst & Young LLP,
independent registered public accounting firm, as set forth in
its reports thereon, included therein, and incorporated herein
by reference. Ernst & Young LLPs report on internal
control over financial reporting contains an explanatory
paragraph describing the above referenced exclusion of VIPS,
Inc. from (i) the scope of managements assessment of
the effectiveness of internal control over financial reporting
and (ii) such firms audit of internal control over
financial reporting. Such financial statements, schedule and
managements assessment have been incorporated herein by
reference in reliance upon such reports given on the authority
of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You can inspect, read and
copy these reports, proxy statements and other information at
the public reference facilities the SEC maintains at
100 F Street, N.E., Washington D.C. 20549.
We make available free of charge at www.emdeon.com (in the
About Emdeon section) copies of materials we file
with, or furnish to, the SEC, including our Annual Reports on
Form 10-K,
Quarterly Reports on
Form 10-Q, Current
Reports on
Form 8-K, and
amendments to those reports, as soon as reasonably practicable
after we electronically file such materials with, or furnish
them to, the SEC. The information on our Web site is not a part
of this offering memorandum.
You can also obtain copies of these materials at prescribed
rates by writing to the Public Reference Section of the SEC at
100 F Street, N.E., Washington D.C. 20549. You can obtain
information on the operation of the public reference facilities
by calling the SEC at
1-800-SEC-0330. The SEC
also maintains a Web site at http://www.sec.gov that makes
available reports, proxy statements and other information
regarding issuers that file electronically with it.
61
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference the
information we file with them into this prospectus, which means
that we can disclose important information to you by referring
you to those documents and those documents will be considered
part of this prospectus. Information that we file later with the
SEC will automatically update and supersede the previously filed
information. We incorporate by reference the documents listed
below and any future filings (excluding any information
furnished pursuant to Item 2.02, Item 7.01 or
disclosures made in accordance with Regulation FD on
Item 8.01 in any current report on Form 8-K or
pursuant to any other applicable SEC rule) made with the SEC
under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 (i) after the date of the filing of
this registration statement and (ii) until this offering
has been completed.
|
|
|
Our SEC Filings |
|
Period Covered or Date of Filing |
|
|
|
Annual Report on Form 10-K
|
|
Year ended December 31, 2004; filed on March 16, 2005,
as amended on May 2, 2005 |
Quarterly Report on Form 10-Q
|
|
Filed on May 10, 2005 |
Quarterly Report on Form 10-Q
|
|
Filed on August 9, 2005 |
Quarterly Report on Form 10-Q
|
|
Filed on November 11, 2005 |
Current Report on Form 8-K
|
|
Filed on March 22, 2005 |
Current Report on Form 8-K
|
|
Filed on April 1, 2005 |
Current Report on Form 8-K
|
|
Filed on April 28, 2005 |
Current Report on Form 8-K
|
|
Filed on May 2, 2005, as amended on June 2, 2005 and
June 3, 2005 |
Current Report on Form 8-K
|
|
Filed on May 3, 2005 |
Current Report on Form 8-K
|
|
Filed on May 13, 2005 |
Current Report on Form 8-K
|
|
Filed on July 14, 2005, as amended on July 19, 2005 |
Current Report on Form 8-K
|
|
Filed on July 27, 2005 |
Current Report on Form 8-K
|
|
Filed on August 4, 2005 |
Current Report on Form 8-K
|
|
Filed on August 5, 2005 |
Current Report on Form 8-K
|
|
Filed on August 30, 2005, as amended on November 9,
2005 |
Current Report on Form 8-K
|
|
Filed on September 30, 2005 |
Current Report on Form 8-K
|
|
Filed on October 19, 2005 |
Current Report on Form 8-K
|
|
Filed on November 3, 2005 |
Current Report on Form 8-K
|
|
Filed on November 17, 2005 |
Current Report on Form 8-K
|
|
Filed on November 18, 2005 |
Current Report on Form 8-K
|
|
Filed on November 23, 2005 |
Current Report on Form 8-K
|
|
Filed on November 28, 2005 |
Current Report on Form 8-K
|
|
Filed on December 16, 2005 |
Definitive Proxy Statement
|
|
Filed on August 15, 2005 |
All subsequent documents filed by us under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934
|
|
After the date of this offering memorandum and prior to the
completion of this offering |
Any statement contained in a document incorporated by reference,
or deemed to be incorporated by reference, in this prospectus
shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is
incorporated by reference in this offering memorandum modifies
or supersedes such statement. Any such
62
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
prospectus. Statements contained in this prospectus as to the
contents of any contract or other document referred to in this
prospectus do not purport to be complete, and where reference is
made to the particular provisions of such contract or other
document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other
document.
You may request a copy of each document incorporated by
reference in this prospectus at no cost by writing or calling us
at the following address or telephone number:
Emdeon Corporation
669 River Drive, Center 2
Elmwood Park, New Jersey 07407
Tel: (201) 414-2002
Attn: Investor Relations
Exhibits to a document will not be provided unless they are
specifically incorporated by reference in that document.
The information in this prospectus may not contain all of the
information that may be important to you. You should read the
entire prospectus, as well as the documents incorporated by
reference in this prospectus, before making an investment
decision.
63
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
|
|
Item 14. |
Other Expenses of Issuance and Distribution. |
The following table sets forth the estimated expenses in
connection with the offering described in this registration
statement. All expenses, except the SEC registration fee, are
estimated.
|
|
|
|
|
|
Securities and Exchange Commission registration fee
|
|
$ |
32,100 |
|
Printing
|
|
$ |
20,000 |
|
Legal fees and expenses
|
|
$ |
100,000 |
|
Accountants fees
|
|
$ |
30,000 |
|
Miscellaneous expenses
|
|
$ |
10,000 |
|
|
|
|
|
|
Total
|
|
$ |
192,100 |
|
|
|
|
|
|
|
Item 15. |
Indemnification of Directors and Officers. |
Section 145 of the Delaware General Corporation Law
provides that a corporation may indemnify any person who was or
is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason
of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of
another corporation, partnership or other enterprise, against
all expenses (including attorneys fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred
by them in connection with such action, suit or proceeding if he
or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interest of the
corporation and, with respect to any criminal action or
proceeding, if he or she had no reasonable cause to believe
their conduct was unlawful. Section 145 further provides
that a corporation similarly may indemnify any such person
serving in any such capacity who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation
to procure a judgment in its favor, against expenses (including
attorneys fees) actually and reasonably incurred in
connection with the defense or settlement of the action or suit
if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification may
be made against expenses in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable to the corporation, unless and only to the extent that
the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
Our certificate of incorporation and by-laws provide that we
shall, to the maximum extent permitted under Delaware law,
indemnify any director or officer of the corporation who is or
was made a party to any action or proceeding by reason of the
fact that he or she is or was an agent of the corporation,
against liability incurred in connection with such action or
proceeding. We have entered into agreements with our directors,
executive officers and some of our other officers implementing
such indemnification and setting forth certain procedures that
will apply in the event of a claim for indemnification or for
advancement of expenses thereunder. In addition, our certificate
of incorporation limits, to the fullest extent permitted by
Delaware law, the liability of directors for monetary damages
for breach of fiduciary duty. We may also purchase and maintain
insurance policies insuring our directors and officers against
certain liabilities they may incur in their capacity as
directors and officers.
The exhibits to this registration statement are listed on the
exhibit index, which appears elsewhere herein and is
incorporated herein by reference.
II-1
|
|
|
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement: |
|
|
|
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933; |
|
|
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the
Calculation of Registration Fee table in the
effective registration statement; |
|
|
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement; |
Provided, however, that paragraphs (1)(i), (1)(ii)
and (1)(iii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Commission
by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement, or
is contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrants
annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plans annual report pursuant
to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) That, for the purpose of determining liability under
the Securities Act of 1933 to any purchaser:
(A) Each prospectus filed by a Registrant pursuant to
Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was
deemed part of and included in the registration
statement; and
(B) Each prospectus required to be filed pursuant to
Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii) or
(x) for the purpose of providing the information required
by Section 10(a) of the Securities Act of 1933 shall be
deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first
used after effectiveness or the date of the first contract of
sale of securities in the offering described in the prospectus.
As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such
date shall be deemed to be a new effective date of the
registration statement relating to the securities in the
registration
II-2
statement to which the prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however,
that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or
made in any such document immediately prior to such effective
date.
That, for the purpose of determining liability of a Registrant
under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities, each undersigned Registrant
undertakes that in a primary offering of securities of an
undersigned Registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following
communications, the undersigned Registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
|
|
|
(i) Any preliminary prospectus or prospectus of an
undersigned Registrant relating to the offering required to be
filed pursuant to Rule 424; |
|
|
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of an undersigned Registrant or used or
referred to by an undersigned Registrant; |
|
|
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
an undersigned Registrant or its securities provided by or on
behalf of an undersigned Registrant; and |
|
|
(iv) Any other communication that is an offer in the
offering made by an undersigned Registrant to the purchaser. |
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3 and has duly caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly
authorized in Elmwood Park, New Jersey.
|
|
|
|
Title: |
Executive Vice President and |
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Andrew C. Corbin, Lewis
H. Leicher and Charles A. Mele as his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution for him and in his name, place and stead, in any
and all capacities, to sign and file (1) any and all
amendments (including post-effective amendments) to this
Registration Statement, with all exhibits thereto, and other
documents in connection therewith, (2) any and all
prospectus supplements to this Registration Statement, with all
exhibits thereto, and other documents in connection therewith
and (3) a registration statement, and any and all
amendments thereto, relating to the offering covered hereby
filed pursuant to Rule 462(b) under the Securities Act,
with the Commission, granting unto each said attorney-in-fact
and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all
that each said attorney-in-fact, agent or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
|
|
|
|
|
|
|
Signature |
|
Title |
|
Date |
|
|
|
|
|
|
/s/ Kevin M. Cameron
Kevin
M. Cameron |
|
Chief Executive Officer
(Principal executive officer)
and Director |
|
December 19, 2005 |
|
/s/ Andrew C. Corbin
Andrew
C. Corbin |
|
Executive Vice President and Chief Financial Officer
(Principal financial
and accounting officer) |
|
December 19, 2005 |
|
/s/ Mark J.
Adler, M.D.
Mark
J. Adler, M.D. |
|
Director |
|
December 19, 2005 |
|
/s/ Paul A. Brooke
Paul
A. Brooke |
|
Director |
|
December 19, 2005 |
II-4
|
|
|
|
|
|
|
Signature |
|
Title |
|
Date |
|
|
|
|
|
|
/s/ Neil F. Dimick
Neil
F. Dimick |
|
Director |
|
December 19, 2005 |
|
/s/ James V. Manning
James
V. Manning |
|
Director |
|
December 19, 2005 |
|
/s/ Herman Sarkowsky
Herman
Sarkowsky |
|
Director |
|
December 19, 2005 |
|
/s/ Joseph E. Smith
Joseph
E. Smith |
|
Director |
|
December 19, 2005 |
|
/s/ Martin J. Wygod
Martin
J. Wygod |
|
Director |
|
December 19, 2005 |
II-5
EXHIBIT INDEX
|
|
|
|
|
Exhibit |
|
|
No. |
|
|
|
|
|
|
4 |
.1 |
|
Indenture between Emdeon Corporation (f/k/a WebMD Corporation)
and The Bank of New York, dated as of August 30, 2005
(incorporated by reference to Exhibit 4.1 to Emdeon
Corporations Current Report on Form 8-K/A filed with
the Securities and Exchange Commission on November 9, 2005) |
|
4 |
.2 |
|
Registration Rights Agreement between Emdeon Corporation (f/k/a
WebMD Corporation) and The Bank of New York, dated as of
August 30, 2005 (incorporated by reference to
Exhibit 4.2 to Emdeon Corporations Current Report on
Form 8-K/A filed with the Securities and Exchange
Commission on November 9, 2005) |
|
4 |
.3 |
|
Form of
31/8
Convertible Note due September 1, 2025 (included in
Exhibit 4.1) |
|
4 |
.4 |
|
Specimen Common Stock certificate (incorporated by reference to
Exhibit 4.1 to Emdeon Corporations Annual Report on
Form 10-K for the year ended December 31, 2000) |
|
5 |
.1 |
|
Opinion of Shearman & Sterling LLP |
|
12 |
.1 |
|
Computation of Earnings to Fixed Charges |
|
23 |
.1 |
|
Consent of Ernst & Young LLP |
|
23 |
.2 |
|
Consent of Shearman & Sterling LLP (included in
Exhibit 5.1) |
|
24 |
.1 |
|
Power of Attorney (included on signature pages to this
registration statement) |
|
25 |
|
|
Statement of Eligibility of Trustee on Form T-1 |