ADTN 8-K
ADTRAN Holdings, Inc. (ADTN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement
Sixth Amendment to the Wells Fargo Credit Agreement
On September 16, 2025, ADTRAN Holdings, Inc. (the “Company”), the Company’s wholly-owned direct subsidiary, Adtran, Inc. (the “U.S. Borrower”), the Company’s non-wholly-owned direct subsidiary, Adtran Networks SE (the “German Borrower”), the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (the “Administrative Agent”), entered into the Sixth Amendment and Consent to Credit Agreement (“Amendment No. 6”), which amends that certain Credit Agreement, dated as of July 18, 2022, by and among the Company, the U.S. Borrower, the Administrative Agent and the lenders party thereto (the “Original Wells Fargo Credit Agreement”), as amended by the First Amendment to the Wells Fargo Credit Agreement, dated August 9, 2023 (“Amendment No. 1”), the Second Amendment to the Wells Fargo Credit Agreement, dated January 16, 2024 (“Amendment No. 2”), the Third Amendment to the Wells Fargo Credit Agreement, dated March 12, 2024 (“Amendment No. 3”), the Fourth Amendment to the Wells Fargo Credit Agreement, dated June 4, 2024 (“Amendment No. 4”), and the Fifth Amendment to the Wells Fargo Credit Agreement, dated May 6, 2025 (“Amendment No. 5” and, collectively with Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5 and Amendment No. 6, the “Wells Fargo Credit Agreement Amendments”; and the Original Wells Fargo Credit Agreement, as amended by the Wells Fargo Credit Agreement Amendments, the “Amended Wells Fargo Credit Agreement”). Amendment No. 6, among other things, (i) provides for a consent from the lenders to the issuance by the Company of new unsecured convertible indebtedness in an amount not to exceed $230,000,000, notwithstanding the cap on the amount of Permitted Convertible Indebtedness (as defined in the Amended Wells Fargo Credit Agreement) the Company is permitted to incur, (ii) requires that the net cash proceeds of the new unsecured convertible indebtedness be used to (a) repay outstanding revolving credit loans under the Amended Wells Fargo Credit Agreement, (b) pay fees, costs, and expenses related to Amendment No. 6 and the issuance of the new unsecured convertible indebtedness (including, for the avoidance of doubt, payment of the premium for the capped call transactions described below) and (c) cash collateralize the obligations of the Company and its subsidiaries under the Amended Wells Fargo Credit Agreement (with such cash only being permitted to be withdrawn for the purpose of financing the purchase of additional outstanding shares of Equity Interests (as defined in the Amended Wells Fargo Credit Agreement) of the German Borrower that were not owned by the Company and its subsidiaries as of August 9, 2023 pursuant to Section 5, paragraph 1 of that certain Domination and Profit and Loss Transfer Agreement, between the Company, as the controlling company, and the German Borrower, which was executed on December 1, 2022 and became effective on January 16, 2023), and (iii) after the prepayment contemplated in the foregoing clause (ii)(a) and the provision of cash collateral contemplated in the foregoing clause (ii)(c), amends provisions governing the subline facility to provide that future prepayments in respect of borrowings under the subline facility will no longer permanently reduce the commitments in respect of the subline facility.
The above description of Amendment No. 6 is a summary and is not complete. A copy of Amendment No. 6 is filed as Exhibit 10.1 to this Current Report on Form 8-K, and the above summary is qualified by reference to the terms of Amendment No. 6 set forth in such Exhibit.
Item 8.01. Other Events.
Convertible Senior Notes Offering
On September 17, 2025, ADTRAN Holdings, Inc. (the “Company”) issued a press release announcing the pricing of its upsized offering (the “Offering”) of $175.0 million aggregate principal amount of convertible senior notes due 2030 (the “Notes”), and the related grant to the initial purchasers of the Notes of an option to purchase up to an additional $26.25 million aggregate principal amount of the Notes in the Offering. The Notes will be sold to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The closing of the Offering is expected to occur on or about September 19, 2025, subject to customary closing conditions.
The Notes will be the Company’s senior, unsecured obligations and will be (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness, (ii) senior in right of payment to the Company’s existing and future indebtedness, if any, that is expressly subordinated to the Notes, (iii) effectively subordinated to the Company’s existing and future secured indebtedness (including indebtedness under the Amended Wells Fargo Credit Agreement), to the extent of the value of the collateral securing such indebtedness, and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries.
The Notes will not be registered under the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act or any applicable state securities laws. The Company intends to use the net proceeds from the Offering to fund the cost of entering into capped call transactions as described below. Following such use, the Company intends to use the net proceeds from the Offering to repay approximately $152.8 million of the outstanding borrowings of Adtran, Inc. under the Amended Wells Fargo Credit Agreement and pay fees and expenses associated with Amendment No. 6. If the initial purchasers exercise their option to purchase additional Notes, then the Company intends to use a portion of the additional net proceeds to fund the cost of entering into additional capped call transactions. Following such use, the Company intends to use the net proceeds from the offering of the additional Notes to repay additional borrowings of Adtran, Inc. under the Wells Fargo Credit Agreement and any remaining net proceeds will be used to cash collateralize the obligations of the
Company and its subsidiaries under the Wells Fargo Credit Agreement (with such cash only being permitted to be withdrawn for the purpose of financing the purchase of additional shares of Equity Interests (as defined in the Wells Fargo Credit Agreement) of Adtran Networks SE).
There can be no assurance that the issuance and sale of the Notes will be consummated. Additional details are discussed in the associated Launch Press Release and Pricing Press Release (each as defined below).
Capped Call Transactions
On September 16, 2025, in connection with the pricing of the Notes, the Company entered into privately negotiated capped call transactions with one of the initial purchasers or its affiliate and certain other financial institutions. The capped call transactions are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of the Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the capped call transactions will initially be approximately $15.51 per share of the Company’s common stock, which represents a premium of approximately 75% over the last reported sale price of the Company’s common stock of $8.86 per share on September 16, 2025, and is subject to certain adjustments under the terms of the capped call transactions.
The capped call transactions are separate transactions, each between the Company and the applicable counterparty, and are not part of the terms of the Notes and will not affect any holder’s rights under the Notes. Holders of the Notes will not have any rights with respect to the capped call transactions.
The above description of the capped call transactions is a summary and is not complete. A copy of the form of the capped call confirmations is filed as Exhibit 10.2 to this Current Report on Form 8-K, and the above summary is qualified by reference to the terms of the confirmations set forth in such Exhibit.
Launch Press Release
On September 15, 2025, the Company issued a press release announcing the commencement of the Offering (the “Launch Press Release”). A copy of the Launch Press Release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Pricing Press Release
On September 17, 2025, the Company issued a press release announcing the upsize and pricing of the Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act (the “Pricing Press Release”). A copy of the Pricing Press Release is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in this Current Report on Form 8-K does not constitute an offer to sell or a solicitation of an offer to buy any of the Notes or any other securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which the offer, solicitation or sale is unlawful. The Notes have not been and will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Forward-Looking Statements
This Current Report on Form 8-K, including the information and documents incorporated by reference herein, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. All statements contained in this press release other than statements of historical or current fact, including statements regarding our future operating results and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “would,” “will,” “may,” “might,” “could,” “should,” “can,” “future,” “assume,” “plan,” “seek,” “predict,” “potential,” “objective,” “expect,” “target,” “project,” “outlook,” “forecast” and similar expressions identify forward-looking statements. We caution you that any forward-looking statements made by us or on our behalf are subject to uncertainties and other factors that could affect the accuracy of such statements. Forward-looking statements are based on management’s current expectations, as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, and because they also relate to the future, they are likewise subject to inherent uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. The risks that could affect our financial performance or could cause actual results to differ materially from those expressed or implied in our forward-looking statements contained in this Current Report on Form 8-K include, but are not limited to: (i) risks related to our financial results and company success; (ii) risks related to our control environment; (iii) risks related to the telecommunications industry; (iv) risks related to the Company’s stock price; (v) risks related to the regulatory environments in which we do business; (vi) risks related to the capped call transactions described above, the offering and the Notes; and (vii) other risks set forth in the Company’s public filings made with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K/A for the year ended December 31, 2024 and its Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2025. You should not rely upon forward-looking statements as predictions of future events.
We have based the forward-looking statements contained in this Current Report on Form 8-K primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results and prospects.
Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make in this Current Report on Form 8-K. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur. Actual results, events or circumstances could differ materially and adversely from those described or anticipated in the forward-looking statements.
You are further cautioned not to place undue reliance on these forward-looking statements made in this Current Report on Form 8-K because they speak only of our views as of the date that the statements were made. We undertake no obligation to update any forward-looking statements made in this Current Report on Form 8-K to reflect events or circumstances after the date of this Current Report on Form 8-K or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit Number |
Description |
10.1 |
Sixth Amendment and Consent to Credit Agreement, dated as of September 16, 2025 |
10.2 |
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99.1 |
Launch Press Release of ADTRAN Holdings, Inc., dated September 15, 2025 |
99.2 |
Pricing Press Release of ADTRAN Holdings, Inc., dated September 17, 2025 |
104 |
Cover Page Interactive Data File – the cover page iXBRL tags are embedded within the Inline XBRL document |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ADTRAN Holdings, Inc. |
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Date: |
September 17, 2025 |
By: |
/s/ Timothy Santo |
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Name: Timothy Santo |
Exhibit 10.1
EXECUTION VERSION
SIXTH AMENDMENT AND CONSENT TO CREDIT AGREEMENT
SIXTH AMENDMENT AND CONSENT TO CREDIT AGREEMENT (this “Amendment”), dated as of September 16, 2025, among ADTRAN, INC., a Delaware corporation (the “US Borrower”), ADTRAN NETWORKS SE, a European stock corporation incorporated under the law of the European Union and Germany (“ADVA”), ADTRAN HOLDINGS, INC., a Delaware corporation (“Holdings”), the Lenders (as defined below) party hereto (constituting the Required Lenders) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent (the “Administrative Agent”). Unless otherwise indicated, all capitalized terms used herein and not otherwise defined herein shall have the respective meanings provided such terms in the Credit Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the US Borrower, ADVA, Holdings, the lenders party thereto (such lenders party thereto as of the date hereof, the “Lenders”), the Administrative Agent and the other parties thereto have entered into that certain Credit Agreement, dated as of July 18, 2022 (as amended or otherwise modified prior to the date hereof, the “Existing Credit Agreement”; the Existing Credit Agreement, as amended by this Amendment, the “Credit Agreement”);
WHEREAS, the US Borrower and ADVA have informed the Administrative Agent and the Lenders that Holdings intends to issue unsecured convertible indebtedness pursuant to that certain Indenture, to be dated on or about September 19, 2025, by and between Holdings and U.S. Bank Trust Company, National Association in an amount not to exceed $230,000,000 (the “2025 Convertible Debt Issuance”), which exceeds the amount of Permitted Convertible Indebtedness permitted to be incurred pursuant to Section 9.1(r) of the Credit, the Net Cash Proceeds of which shall be used (a) to repay all outstanding Revolving Credit Loans of the US Borrower, together with accrued interest and other obligations thereon (the “Sixth Amendment Prepayment”), (b) for payment of fees, costs and expenses related to this amendment and to the 2025 Convertible Debt Issuance (including, for the avoidance of doubt, payment of the premium for any related Permitted Bond Hedge Transaction) and (c) to the extent of the excess after giving effect to the payments contemplated by clauses (a) and (b), to pledge and deposit with, or deliver to the Administrative Agent, for the benefit of the Lenders, cash or deposit account balances in the applicable Currency, to secure all Obligations (the “Sixth Amendment Cash Collateral”), which Sixth Amendment Cash Collateral may be used by the Borrower from time to time to consummate any Share Repurchase (as defined below) (the uses of proceeds described in the foregoing clauses (a) through (c), the “Permitted Uses”); and
WHEREAS, the US Borrower and ADVA have requested, and subject to the terms and conditions set forth herein, the Administrative Agent and the Lenders party hereto (the “Consenting Lenders”) have agreed, to amend the Existing Credit Agreement and consent to the 2025 Convertible Debt Issuance, as more specifically set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
(a) Section 1.1 of the Existing Credit Agreement is hereby amended to delete the definition of “German Commitment Reduction Threshold” in its entirety; and
(b) Section 2.5(b) of the Existing Credit Agreement is hereby amended and restated in its entirety to read as follows:
“[Reserved]”
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For purposes of determining compliance with the conditions specified in this Section 3, each Lender that has signed this Amendment shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Amendment Effective Date specifying its objection thereto.
Any failure by the US Borrower or Holdings to comply with any of the foregoing requirements of this Section 4 shall constitute an immediate Event of Default.
(b) after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing;
(c) it has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Amendment and each of the other Loan Documents executed on the Amendment Effective Date in connection herewith to which it is a party in accordance with their respective terms; and
(d) this Amendment and each other Loan Document executed on the Amendment Effective Date in connection herewith has been duly executed and delivered by the duly authorized officers of each Credit Party that is a party thereto, and each such document constitutes the legal, valid and binding
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obligation of each such Credit Party, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal Debtor Relief Laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies.
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[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Amendment as of the date first above written.
ADTRAN, INC., as US Borrower
By: /s/ Timothy Santo
Name: Timothy Santo
Title: President and Chief Financial Officer
ADTRAN NETWORKS SE, as German Borrower
By: /s/ Thomas Richard Stanton
Name: Thomas Richard Stanton
Title: Chief Executive Officer
By: /s/ Dr. Christoph Glingener
Name: Dr. Christoph Glingener
Title: Member of the executive board
ADTRAN HOLDINGS, INC., as Holdings
By: /s/ Timothy Santo
Name: Timothy Santo
Title: Senior Vice President, Chief Financial Officer, Secretary and Treasurer
By: /s/ Thomas Richard Stanton
Name: Thomas Richard Stanton
Title: Chief Executive Officer
ADTRAN, INC.
Sixth Amendment to Credit Agreement
Signature Page
wells fargo bank, national association, as Administrative Agent, Swingline Lender, an Issuing Lender and a Lender
By: /s/Patrick McGovern
Name: Patrick McGovern
Title: Senior Vice President
ADTRAN, INC.
Sixth Amendment to Credit Agreement
Signature Page
BANK OF AMERICA, N.A., as a Lender
By: /s/ Thomas M. Paulk
Name: Thomas M. Paulk
Title: Senior Vice President
ADTRAN, INC.
Sixth Amendment to Credit Agreement
Signature Page
FIRST HORIZON BANK, as a Lender
By: /s/ Brian Daniels
Name: Brian Daniels
Title: Senior Vice President
ADTRAN, INC.
Sixth Amendment to Credit Agreement
Signature Page
CITIBANK, N.A., as a Lender
By: /s/ Patrick Welden
Name: Patrick Welden
Title: Vice President, as authorized
ADTRAN, INC.
Sixth Amendment to Credit Agreement
Signature Page
HSBC BANK USA, N.A., as a Lender
By: /s/ Ketak Sampat
Name: Ketak Sampat
Title: Senior Vice President
ADTRAN, INC.
Sixth Amendment to Credit Agreement
Signature Page
Exhibit 10.2
(Bidding Form)
[DEALER]1
[ ], 2025
To: ADTRAN Holdings, Inc.
901 Explorer Boulevard
Huntsville, Alabama 35806
Attention: Timothy Santo
Telephone No.: [email protected]
Re: [Base][Additional] Call Option Transaction
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the call option transaction entered into between [DEALER] (“Dealer”)[, represented by [AGENT] (“Agent”),] and ADTRAN Holdings, Inc. (“Counterparty”) as of the Trade Date specified below (the “Transaction”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below. Each party further agrees that this Confirmation together with the Agreement (as defined below) evidence a complete binding agreement between Counterparty and Dealer as to the subject matter and terms of the Transaction to which this Confirmation relates, and shall supersede all prior or contemporaneous written or oral communications with respect thereto.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc. (“ISDA”) are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms used herein are based on terms that are defined in the Offering Memorandum dated [ ], 2025 (the “Offering Memorandum”) relating to the [ ]% Convertible Senior Notes due 2030 (as originally issued by Counterparty, the “Convertible Notes” and each USD 1,000 principal amount of Convertible Notes, a “Convertible Note”) issued by Counterparty in an aggregate initial principal amount of USD [150,000,000] (as increased by [up to]2 an aggregate principal amount of USD [22,500,000] [if and to the extent that]3[pursuant to the exercise by]4 the Initial Purchasers (as defined herein) [exercise]5[of]6 their option to purchase additional Convertible Notes pursuant to the Purchase Agreement (as defined herein)) pursuant to an Indenture [to be]7 dated [ ], 2025 between Counterparty and [U.S. Bank Trust Company, National Association], as trustee (the “Indenture”). In the event of any inconsistency between the terms defined in the Offering Memorandum, the Indenture and this Confirmation, this Confirmation shall govern. The parties acknowledge that this Confirmation is entered into on the date hereof with the understanding that (i) definitions set forth in the Indenture which are also defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred to herein will conform to the descriptions thereof in the Offering Memorandum. If any such definitions in the Indenture or any such sections of the Indenture differ from the descriptions thereof in the Offering Memorandum, the descriptions thereof in the Offering Memorandum will govern for purposes of this Confirmation. The parties further acknowledge that the Indenture section numbers used herein are based on the [draft of the Indenture last reviewed by Dealer as of the date of this Confirmation, and if any such section numbers are changed in the Indenture as executed, the parties will amend this Confirmation in good faith to preserve the intent of the parties]8[Indenture as executed]9. Subject to the foregoing, references to the Indenture herein are references to the Indenture as in effect on the date of its execution, and if the
1 Include Dealer name, address and, if applicable, logo.
2 Include in the Base Call Option Confirmation.
3 Include in the Base Call Option Confirmation.
4 Include in the Additional Call Option Confirmation.
5 Include in the Base Call Option Confirmation.
6 Include in the Additional Call Option Confirmation.
7 Insert if Indenture is not completed at the time of the Confirmation.
8 Include in the Base Call Option Confirmation. Include in the Additional Call Option Confirmation if it is executed before closing of the base deal.
9 Include in the Additional Call Option Confirmation, but only if the Additional Call Option Confirmation is executed after closing of the base deal.
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Indenture is amended or supplemented following such date (other than any amendment or supplement (x) pursuant to Section 8.01(I) of the Indenture that, as determined by the Calculation Agent, conforms the Indenture to the description of Convertible Notes in the Offering Memorandum or (y) pursuant to Section 5.09 of the Indenture, subject, in the case of this clause (y), to the second paragraph under “Method of Adjustment” in Section 3), any such amendment or supplement will be disregarded for purposes of this Confirmation unless the parties agree otherwise in writing.
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
General Terms.
Trade Date: [ ], 2025
Effective Date: The closing date of the [initial]10 issuance of the Convertible Notes [issued pursuant to the option to purchase additional Convertible Notes exercised on the date hereof]11, subject to Section 9(v) of this Confirmation.
Option Style: “European”, as described under “Procedures for Exercise” below.
Option Type: Call
Buyer: Counterparty
Seller: Dealer
Shares: The common stock of Counterparty, par value USD 0.01 per share (Exchange symbol “ADTN”).
10 Include in the Base Call Option Confirmation.
11 Include in the Additional Call Option Confirmation.
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Number of Options: [ ]12. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by Counterparty. In no event will the Number of Options be less than zero.
Applicable Percentage: [ ]%
Option Entitlement: A number equal to the product of the Applicable Percentage and [ ]13.
Strike Price: USD [ ]
Cap Price: USD [ ]
Premium: USD [ ]
Premium Payment Date: The Effective Date
Exchange: The Nasdaq Global Select Market
Related Exchange(s): All Exchanges
Excluded Provisions: Section 5.06(A) and Section 5.07 of the Indenture.
Procedures for Exercise.
Conversion Date: With respect to any conversion of a Convertible Note, the date on which the “Holder” (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Section 5.02 of the Indenture.
Early Conversion: (x) Any conversion of Convertible Notes with a Conversion Date occurring prior to the Free Convertibility Date or (y) any conversion of a Convertible Note in respect of which the “Holder” (as such term is defined in the Indenture) of such Convertible Note would be entitled to an increase in the “Conversion Rate” (as defined in the Indenture) pursuant to Section 5.07 of the Indenture; provided that, in no event shall an Early Conversion be deemed to occur with respect to any surrender of a Convertible Note for conversion in respect of which Counterparty has elected to designate a financial institution for exchange in lieu of conversion of such Convertible Note pursuant to Section 5.08 of the Indenture.
Free Convertibility Date: [June 15], 203014
Expiration Time: The Valuation Time
Expiration Date: [September 15], 203015.
12 For the Base Call Option Confirmation, this is equal to the number of Convertible Notes in principal amount of $1,000 initially issued on the closing date for the Convertible Notes. For the Additional Call Option Confirmation, this is equal to the number of additional Convertible Notes in principal amount of $1,000.
13 Insert the initial Conversion Rate for the Convertible Notes.
14 To match the free convertibility date specified in the Convertible Notes.
15 To match the Maturity Date of the Convertible Notes.
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Multiple Exercise: Applicable, as described under “Automatic Exercise” below.
Automatic Exercise: Applicable; and means that notwithstanding anything herein or in Section 3.4 of the Equity Definitions to the contrary, unless Counterparty notifies Dealer in writing prior to 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the Expiration Date that it does not wish Automatic Exercise to occur, all Options then outstanding as of 9:00 a.m. (New York City time) on the Expiration Date will be deemed to be automatically exercised; provided that no such Automatic Exercise pursuant to this paragraph will occur if the Relevant Price for each Valid Day during the Settlement Averaging Period is less than or equal to the Strike Price.
Notice of Final Settlement Method: Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, in order to elect a Settlement Method other than Net Share Settlement, Counterparty must notify Dealer in writing (which, for the avoidance of doubt, may be by email) before 5:00 p.m. (New York City time) on the Free Convertibility Date specifying (1) the Relevant Settlement Method elected by Counterparty, and (2) if the elected Relevant Settlement Method is Combination Settlement, a fixed amount of cash (which amount must be greater than USD 1,000) elected by Counterparty (the “Specified Cash Amount”); provided that (a) Counterparty must make a single irrevocable election for all Options and (b) if Counterparty is electing Cash Settlement or Combination Settlement, such Settlement Method Election shall be effective only if Counterparty represents and warrants to Dealer in writing on the date of such Settlement Method Election that (i) Counterparty is not in possession of any material non-public information regarding Counterparty or the Shares, and (ii) such election is being made in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws.
Without limiting the generality of the foregoing, Counterparty acknowledges its responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act (as defined below) and the rules and regulations thereunder, in respect of any election of a settlement method with respect to the Convertible Notes and the Relevant Settlement Method.
Valuation Time: At the close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its commercially reasonable discretion.
Market Disruption Event: Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following:
“‘Market Disruption Event’ means, with respect to any date, the occurrence or existence, during the one-half hour
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period ending at the scheduled close of trading on such date on the principal U.S. national or regional securities exchange or other market on which the Shares are listed for trading or trade, of any material suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant exchange or otherwise) in the Shares or in any options contracts or futures contracts relating to the Shares.”
VWAP Market Disruption Event: With respect to any date (i) the failure by the principal U.S. national or regional securities exchange on which the Shares are then listed, or, if the Shares are not then listed on a U.S. national or regional securities exchange, the principal other market on which the Shares are then traded, to open for trading during its regular trading session on such date; or (ii) the occurrence or existence, for more than one half-hour period in the aggregate, of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant exchange or otherwise) in the Shares or in any options contracts or futures contracts relating to the Shares, and such suspension or limitation occurs or exists at any time before 1:00 p.m., New York City time, on such date.
Settlement Terms.
Settlement Method: For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement Method, but only if Counterparty shall have delivered to Dealer a valid Notice of Final Settlement Method as set forth above for such Option.
Relevant Settlement Method: Net Share Settlement, Combination Settlement or Cash Settlement, as specified by Counterparty in the Notice of Final Settlement Method.
Net Share Settlement: If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the “Net Share Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) (a) the Daily Option Value for such Valid Day, divided by (b) the Relevant Price on such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period.
Dealer will pay cash in lieu of delivering any fractional Shares to be delivered with respect to any Net Share Settlement Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period.
Combination Settlement: If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay
5
or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option:
(i) cash (the “Combination Settlement Cash Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (A) an amount (the “Daily Combination Settlement Cash Amount”) equal to the lesser of (1) the product of (x) the Applicable Percentage and (y) the Specified Cash Amount minus USD 1,000 and (2) the Daily Option Value for such Valid Day, divided by (B) the number of Valid Days in the Settlement Averaging Period; provided that if the calculation in clause (A) above results in zero or a negative number for any Valid Day, the Daily Combination Settlement Cash Amount for such Valid Day shall be deemed to be zero; and
(ii) Shares (the “Combination Settlement Share Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of a number of Shares for such Valid Day (the “Daily Combination Settlement Share Amount”) equal to (A) (1) the Daily Option Value on such Valid Day minus the Daily Combination Settlement Cash Amount for such Valid Day, divided by (2) the Relevant Price on such Valid Day, divided by (B) the number of Valid Days in the Settlement Averaging Period; provided that if the calculation in sub-clause (A)(1) above results in zero or a negative number for any Valid Day, the Daily Combination Settlement Share Amount for such Valid Day shall be deemed to be zero.
Dealer will pay cash in lieu of delivering any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period.
Cash Settlement: If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an amount of cash (the “Cash Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period.
Daily Option Value: For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) (A) the lesser of the Relevant Price on such Valid Day and the Cap Price, less (B) the Strike Price on such Valid Day; provided that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero.
6
Valid Day: Any day on which (i) trading in the Shares generally occurs on the principal U.S. national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Shares are then traded; and (ii) there is no VWAP Market Disruption Event. If the Shares are not so listed or traded, then “Valid Day” means a Business Day.
Scheduled Valid Day: Any day that is scheduled to be a Valid Trading Day on the principal U.S. national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Shares are then traded.
Valid Trading Day: Any day on which (i) trading in the Shares generally occurs on the principal U.S. national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Shares are then traded; and (ii) there is no Market Disruption Event. If the Shares are not so listed or traded, then “Valid Trading Day” means a Business Day.
Business Day: Any day other than a Saturday, a Sunday or any day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.
Relevant Price: On any Valid Day, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “ADTN <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Valid Day (or if such volume-weighted average price is unavailable at such time, the market value of one Share on such Valid Day, as determined by the Calculation Agent in a commercially reasonable manner using, if practicable, a volume-weighted average method). The Relevant Price will be determined without regard to after-hours trading or any other trading outside of the regular trading session.
Settlement Averaging Period: For any Option and regardless of the Settlement Method applicable to such Option, the [45] consecutive Valid Days commencing on, and including, the [46]th Scheduled Valid Day immediately prior to the Expiration Date.
Settlement Date: For any Option, the second Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option.
Settlement Currency: USD
Other Applicable Provisions: The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable, except that all
7
references in such provisions to “Physically-settled” shall be read as references to “Share Settled”. “Share Settled” in relation to any Option means that Net Share Settlement or Combination Settlement is applicable to that Option.
Representation and Agreement: Notwithstanding anything to the contrary in the Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty shall be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be “restricted securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)).
Adjustments applicable to the Transaction:
Potential Adjustment Events: Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would result in an adjustment under the Indenture to the “Conversion Rate” or the composition of a “Reference Property Unit” or to any “Last Reported Sale Price,” “Daily VWAP,” “Daily Conversion Value,” “Daily Cash Amount” or “Daily Share Amount” (each as defined in the Indenture). For the avoidance of doubt, Dealer shall not have any delivery or payment obligation hereunder, and except as set forth in Section 9(x), no adjustment shall be made to the terms of the Transaction, on account of (x) any distribution of cash, property or securities by Counterparty to holders of the Convertible Notes (upon conversion or otherwise) or (y) any other transaction in which holders of the Convertible Notes are entitled to participate, in each case, in lieu of an adjustment under the Indenture of the type referred to in the immediately preceding sentence (including, without limitation, pursuant to the proviso in the first paragraph of Section 5.05(A)(iii)(1) of the Indenture or the proviso in the first paragraph of Section 5.05(A)(iv) of the Indenture).
Method of Adjustment: Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent shall make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided that the parties agree that (x) open market Share repurchases at prevailing market prices shall not be considered Potential Adjustment Events to the extent that, after giving effect to all such open market Share repurchases, the aggregate number of Shares repurchased in such open market Share
8
repurchases during the term of the Transaction would not exceed 25% of the number of Shares outstanding as of the Trade Date, as determined by the Calculation Agent and as adjusted by the Calculation Agent to account for any subdivision or combination with respect to the Shares, and (y) Share repurchases through a dealer pursuant to accelerated share repurchases, forward contracts or similar transactions that are entered into at prevailing market prices and in accordance with customary market terms for transactions of such type to repurchase the Shares shall not be considered Potential Adjustment Events to the extent that, after giving effect to such transactions, the aggregate number of Shares repurchased during the term of the Transaction pursuant to all transactions described in this proviso would not exceed 20% of the number of Shares outstanding as of the Trade Date, as determined by the Calculation Agent and as adjusted by the Calculation Agent to account for any subdivision or combination with respect to the Shares. For the avoidance of doubt, any purchase by the Counterparty of shares of ADVA Optical Networking SE (“ADVA”) in connection with the Domination and Profit and Loss Transfer Agreement, dated December 1, 2022 between the Counterparty and ADVA shall not be considered a Potential Adjustment Event.
Notwithstanding the foregoing and “Consequences of Merger Events / Tender Offers” below:
(i) if the Calculation Agent in good faith disagrees with any adjustment to the Convertible Notes that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant to Section 5.05(H) of the Indenture, Section 5.09 of the Indenture or any supplemental indenture entered into thereunder or in connection with any proportional adjustment or the determination of the fair value of any securities, property, rights or other assets), then in each such case, the Calculation Agent will, in good faith and in a commercially reasonable manner, determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction in a commercially reasonable manner;
(ii) in connection with any Potential Adjustment Event as a result of an event or condition set forth in Section 5.05(A)(ii) of the Indenture or Section 5.05(A)(iii)(1) of the Indenture where, in either case, the period for determining “Y” (as such term is used in Section 5.05(A)(ii) of the Indenture) or “SP” (as such term is used in Section 5.05(A)(iii)(1) of the Indenture), as the case may be, begins before Counterparty has publicly announced the event or condition giving rise to
9
such Potential Adjustment Event, then the Calculation Agent shall, in good faith and in a commercially reasonable manner, have the right to adjust any variable relevant to the exercise, settlement or payment for the Transaction as appropriate to reflect the costs (including, but not limited to, hedging mismatches and market losses) and expenses incurred by Dealer in connection with its hedging activities, with such adjustments made assuming that Dealer maintains commercially reasonable hedge positions, as a result of such event or condition not having been publicly announced prior to the beginning of such period; and
(iii) if any Potential Adjustment Event is declared and (a) the event or condition giving rise to such Potential Adjustment Event is subsequently amended, modified, cancelled or abandoned, (b) the “Conversion Rate” (as defined in the Indenture) is otherwise not adjusted at the time or in the manner contemplated by the relevant Dilution Adjustment Provision based on such declaration or (c) the “Conversion Rate” (as defined in the Indenture) is adjusted as a result of such Potential Adjustment Event and subsequently re-adjusted (each of clauses (a), (b) and (c), a “Potential Adjustment Event Change”) then, in each case, the Calculation Agent shall, in good faith and in a commercially reasonable manner, have the right to adjust any variable relevant to the exercise, settlement or payment for the Transaction as appropriate to reflect the costs (including, but not limited to, hedging mismatches and market losses) and expenses incurred by Dealer in connection with its hedging activities, with such adjustments made assuming that Dealer maintains commercially reasonable hedge positions, as a result of such Potential Adjustment Event Change.
Dilution Adjustment Provisions: Sections 5.05(A)(i), (ii), (iii), (iv) and (v) and Section 5.05(H) of the Indenture.
Extraordinary Events applicable to the Transaction:
Merger Events: Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in the definition of “Common Stock Change Event” in Section 5.09(A) of the Indenture.
Tender Offers: Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 5.05(A)(v) of the Indenture.
10
Consequences of Merger Events/
Tender Offers: Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction, subject to the second paragraph under “Method of Adjustment”; provided, however, that such adjustment shall be made without regard to any adjustment to the “Conversion Rate” (as defined in the Indenture) pursuant to any Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction following such Merger Event or Tender Offer will not be a corporation organized under the laws of the United States, any State thereof or the District of Columbia, then, in either case, Cancellation and Payment (Calculation Agent Determination) may apply at Dealer’s reasonable election; provided further that, for the avoidance of doubt, adjustments shall be made pursuant to the provisions set forth above regardless of whether any Merger Event or Tender Offer gives rise to an Early Conversion.
Consequences of Announcement Events: Modified Calculation Agent Adjustment as set forth in Section 12.3(d) of the Equity Definitions; provided that, in respect of an Announcement Event, (w) references to “Tender Offer” shall be replaced by references to “Announcement Event” and references to “Tender Offer Date” shall be replaced by references to “date of such Announcement Event”, (x) the phrase “exercise, settlement, payment or any other terms of the Transaction (including, without limitation, the spread)” shall be replaced with the phrase “Cap Price (provided that in no event shall the Cap Price be less than the Strike Price)”, (y) the phrases “whether within a commercially reasonable (as determined by the Calculation Agent) period of time prior to or after the Announcement Event,” shall be inserted prior to the word “which” in the seventh line, and (z) for the avoidance of doubt, the Calculation Agent shall, in good faith and in a commercially reasonable manner, determine whether the relevant Announcement Event has had an economic effect on the Transaction (and, if so, shall adjust the Cap Price accordingly) on one or more occasions on or after the date of the Announcement Event up to, and including, the Expiration Date, any Early Termination Date and/or any other date of cancellation, it being understood that (i) any adjustment in respect of an Announcement Event shall take into account any earlier adjustment relating to the same Announcement Event and (ii) in
11
making any adjustment the Calculation Agent shall take into account volatility, liquidity or other factors before and after such Announcement Event. An Announcement Event shall be an “Extraordinary Event” for purposes of the Equity Definitions, to which Article 12 of the Equity Definitions is applicable.
Announcement Event: (i) The public announcement by Issuer, any affiliate of Issuer, any agent of Issuer or any Valid Third Party Entity (any such person or entity, a “Relevant Party”) of (x) any transaction or event that, if completed, would constitute a Merger Event or Tender Offer, (y) any potential acquisition or disposition by Issuer and/or its subsidiaries where the aggregate consideration exceeds 35% of the market capitalization of Issuer as of the date of such announcement (an “Acquisition Transaction”) or (z) the intention to enter into a Merger Event or Tender Offer or an Acquisition Transaction, (ii) the public announcement by Issuer of an intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, a Merger Event or Tender Offer or an Acquisition Transaction or (iii) any subsequent public announcement by a Relevant Party of a change to a transaction or intention that is the subject of an announcement of the type described in clause (i) or (ii) of this sentence (including, without limitation, a new announcement, whether or not by the same party, relating to such a transaction or intention or the announcement of a withdrawal from, or the abandonment or discontinuation of, such a transaction or intention), as determined by the Calculation Agent. For the avoidance of doubt, the occurrence of an Announcement Event with respect to any transaction or intention shall not preclude the occurrence of a later Announcement Event with respect to such transaction or intention. For purposes of this definition of “Announcement Event,” (A) “Merger Event” shall mean such term as defined under Section 12.1(b) of the Equity Definitions (but, for the avoidance of doubt, the remainder of the definition of “Merger Event” in Section 12.1(b) of the Equity Definitions following the definition of “Reverse Merger” therein shall be disregarded) and (B) “Tender Offer” shall mean such term as defined under Section 12.1(d) of the Equity Definitions; provided that (1) Section 12.1(d) of the Equity Definitions is hereby amended by (x) replacing “10%” with “20%” in the third line thereof and (y) replacing the words “voting shares of the Issuer” in the fourth line thereof with the word “Shares” and (2) Section 12.1(e) of the Equity Definitions is hereby amended by replacing the words “voting shares” in the first line thereof with the word “Shares”.
Valid Third Party Entity: In respect of any transaction or event, any third party (or affiliate or agent thereof) that has a bona fide intent to enter into or consummate such transaction or event (it being understood and agreed that in determining, in a commercially reasonable manner, whether such third party has such a bona fide intent, the Calculation Agent shall take
12
into consideration whether the relevant announcement by such party has had a material economic effect on the Shares and/or options on the Shares).
Nationalization, Insolvency or Delisting: Cancellation and Payment (Calculation Agent Determination); provided that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange.
Additional Disruption Events:
Change in Law: Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) replacing the word “Shares” where it appears in clause (X) thereof with the words “Hedge Position” and (iii) replacing the parenthetical beginning after the word “regulation” in the second line thereof with the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption, effectiveness or promulgation of new regulations authorized or mandated by existing statute)”.
Failure to Deliver: Applicable
Hedging Disruption: Applicable; provided that:
(i) Section 12.9(a)(v) of the Equity Definitions is hereby amended by inserting the following two phrases at the end of such Section:
“For the avoidance of doubt, the term “equity price risk” shall be deemed to include, but shall not be limited to, stock price and volatility risk. And, for the further avoidance of doubt, any such transactions or assets referred to in phrases (A) or (B) above must be available on commercially reasonable pricing terms.”; and
(ii) Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line thereof, after the words “to terminate the Transaction”, the words “or a portion of the Transaction affected by such Hedging Disruption”.
Increased Cost of Hedging: Not Applicable
Hedging Party: For all applicable Additional Disruption Events, Dealer.
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Determining Party: For all applicable Extraordinary Events, Dealer.
Non-Reliance: Applicable
Agreements and Acknowledgments
Regarding Hedging Activities: Applicable
Additional Acknowledgments: Applicable
Hedging Adjustment: For the avoidance of doubt, whenever Hedging Party, Determining Party or the Calculation Agent makes an adjustment, calculation or determination permitted or required to be made pursuant to the terms of this Confirmation or the Equity Definitions to take into account the effect of any event (other than an adjustment, calculation or determination made by reference to the Indenture), the Calculation Agent, Determining Party or Hedging Party, as the case may be, shall make such adjustment, calculation or determination in a commercially reasonable manner and by reference to the effect of such event on Dealer assuming that Dealer maintains a commercially reasonable hedge position.
To be separately provided.
14
Account for delivery of Shares to Counterparty:
To be separately provided.
[Bank:] [ ]16
[SWIFT:] [ ]
[Bank Routing:] [ ]
[Acct Name:] [ ]
[Acct No.:] [ ]
Account for delivery of Shares from Dealer:
[ ]
ADTRAN Holdings, Inc.
901 Explorer Boulevard
Huntsville, Alabama 35806
Attention: Timothy Santo
Email: [email protected]
[ ]17
Attention: [ ]
Telephone: [ ]
Email: [ ]
[With a copy to:
[ ]
Attention: [ ]
Telephone: [ ]
Email: [ ]]
Each of the representations and warranties of Counterparty set forth in Section 1 of the Purchase Agreement (the “Purchase Agreement”) dated as of [ ], 2025, between Counterparty and Evercore Group L.L.C., as
16 Insert Dealer’s account information.
17 Insert Dealer’s notice contact information.
15
representative of the Initial Purchasers party thereto (the “Initial Purchasers”), are true and correct and are hereby deemed to be repeated to Dealer as if set forth herein. Counterparty hereby further represents and warrants to Dealer on the date hereof and on and as of the Premium Payment Date that:
16
18 Include for applicable Dealers.
17
19 Insert the number of Shares outstanding that would cause Dealer’s current position in the Shares underlying the Transaction (including the number of Shares underlying any additional transaction if the greenshoe is exercised in full, and any Shares under pre-existing call option transactions with Counterparty) to increase by 0.5%. To be based on Dealer with highest Applicable Percentage.
20 Insert the number of Shares that, if repurchased, would cause Dealer’s current position in the Shares underlying the Transaction (including the number of Shares underlying any additional transaction if the greenshoe is exercised in full, and any Shares under pre-existing call option transactions with Counterparty) to increase by a further 0.5% from the threshold for the first Repurchase Notice. To be based on Dealer with highest Applicable Percentage.
18
(A) With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(b) or any obligations under Section 9(n) or 9(s) of this Confirmation;
(B) Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (the “Code”));
(C) Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer;
(D) Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date (taking into account any additional amount required to be paid by Dealer under Section 2(d)(i)(4) of the Agreement) an amount greater than the amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment;
(E) Dealer will not, as a result of such transfer or assignment, receive from the transferee or assignee on any payment date (after accounting for amounts paid by the transferee or assignee under Section 2(d)(i)(4) of the Agreement as well as any withholding or deduction of Tax from the payment or delivery) an amount less than it would have been entitled to receive from Counterparty in the absence of such transfer or assignment except to the extent that the lower amount is due to a Change in Law occurring after the date of such transfer or assignment;
19
(F) An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment;
(G) Without limiting the generality of clause (B), the transferee or assignee shall make such Payee Tax Representations and provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and
(H) Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment.
20
21
(A) Counterparty may, within five Scheduled Trading Days of the Conversion Date for such Early Conversion, provide written notice (an “Early Conversion Notice”) to Dealer specifying the number of Convertible Notes surrendered for conversion on such Conversion Date, or, if less, the number of Convertible Notes subject to such Early Conversion that Counterparty elects to be subject to the provisions of this Section 9(i)(i) (such Convertible Notes, the “Affected Convertible Notes”), provided that no such Early Conversion Notice shall be effective unless it contains the representation by Counterparty set forth in Section 8(f) hereunder as of the date of such Early Conversion Notice, and the giving of such Early Conversion Notice shall constitute an Additional Termination Event as provided in this clause (i);
(B) upon receipt of any such Early Conversion Notice, Dealer shall designate an Exchange Business Day as an Early Termination Date (which Exchange Business Day shall be on or as promptly as reasonably practicable after the related settlement date for such Affected Convertible Notes (the “Conversion Settlement Date”)) with respect to the portion of the Transaction corresponding to a number of Options (the “Affected Number of Options”) equal to the lesser of (x) the number of Affected Convertible Notes [minus the “Affected Number of
21 Include for applicable Dealers.
22
Options” (as defined in the Base Call Option Transaction Confirmation letter agreement, dated [_____], 2025, between Dealer and Counterparty (the “Base Call Option Confirmation”)), if any, that relate to such Affected Convertible Notes]22 and (y) the Number of Options as of the Conversion Date for such Early Conversion;
(C) any payment hereunder with respect to such termination shall be calculated pursuant to Section 6 of the Agreement as if (x) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the Affected Number of Options, (y) Counterparty were the sole Affected Party with respect to such Additional Termination Event and (z) the terminated portion of the Transaction were the sole Affected Transaction;
(D) for the avoidance of doubt, in determining the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement, the Calculation Agent shall assume that (x) the relevant Early Conversion and any conversions, adjustments, agreements, payments, deliveries or acquisitions by or on behalf of Counterparty leading thereto had not occurred, (y) no adjustments to the “Conversion Rate” (as defined in the Indenture) have occurred pursuant to any Excluded Provision and (z) the corresponding Convertible Notes remain outstanding as if the circumstances related to such Early Conversion had not occurred; and
(E) the Transaction shall remain in full force and effect, except that, as of the Conversion Date for such Early Conversion, the Number of Options shall be reduced by the Affected Number of Options.
22 Include in Additional Call Option Confirmation only.
23 Include for Additional Call Option Confirmation.
23
24 Include for Additional Call Option Confirmation.
24
25
Share Termination Alternative: If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the date when the relevant Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable, in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of payment.
Share Termination Delivery Property: A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.
Share Termination Unit Price: The value to Dealer of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property.
Share Termination Delivery Unit: One Share or, if the Shares have changed into cash or any other property or the right to receive cash or any other property as the result of a Nationalization, Insolvency or Merger Event (any such cash or other property, the “Exchange Property”), a unit consisting of the type and amount of such Exchange Property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency or
26
Merger Event, as determined by the Calculation Agent.
Failure to Deliver: Applicable
Other Applicable Provisions: If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption “Representation and Agreement” in Section 2 will be applicable, except that all references in such provisions to “Physically-settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”. “Share Termination Settled” in relation to the Transaction means that Share Termination Alternative is applicable to the Transaction.
27
25 To be 2x the observation period.
28
26 Insert for Base Call Option Confirmation.
27 Insert for Additional Call Option Confirmation.
29
28 Subject to update for specific Dealers.
29 To be updated with appropriate form(s) for each Dealer.
30 Subject to update for specific Dealers.
31 To include / be updated as appropriate for specific Dealers.
30
[Signature Pages Follow.]
31
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to [Dealer].32
Very truly yours,
[Dealer] |
|
By: |
|
Name: |
|
Title: |
|
[By: |
|
Name: |
|
Title: ]33 |
|
[[Agent], as Agent for [Dealer] |
|
By: |
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Name: |
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Title: |
|
[By: |
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Name: |
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Title: ]34] |
|
32 Include Dealer preferred signature page information, as applicable.
33 Include if Dealer requires two signatories.
34 Include if Agent requires two signatories.
[Signature Page to [Base][Additional] Capped Call Confirmation]
Accepted and confirmed
as of the Trade Date:
ADTRAN Holdings, Inc. |
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Name: |
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Title: |
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[By: |
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Name: |
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Title: ]35 |
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35 NTD: To be confirmed upon review of the resolutions whether two signatories are needed.
[Signature Page to [Base][Additional] Capped Call Confirmation]
Exhibit 99.1
ADTRAN Holdings, Inc. Announces Proposed Convertible Senior Notes Offering
HUNTSVILLE, Ala.—September 15, 2025—ADTRAN Holdings, Inc. (NASDAQ: ADTN and FSE: QH9) (the “Company”) today announced its intention to offer, subject to market and other conditions, $150,000,000 aggregate principal amount of convertible senior notes due 2030 (the “Notes”) in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The Company also expects to grant the initial purchaser of the Notes an option to purchase, for settlement within a period of 13 days from, and including, the date the Notes are first issued, up to an additional $22,500,000 principal amount of Notes.
The Notes will be senior, unsecured obligations of the Company and will accrue interest payable semi-annually in arrears and will mature on September 15, 2030, unless earlier repurchased, redeemed or converted. Noteholders will have the right to convert their Notes in certain circumstances and during specified periods. The Company will settle conversions by paying cash up to the aggregate principal amount of the Notes to be converted and paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the Notes being converted, based on the applicable conversion rate.
The Notes will be redeemable, in whole or in part (subject to certain limitations), for cash at the Company’s option at any time, and from time to time, on or after September 20, 2028 and on or before the 46th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for a specified period of time and certain other conditions are satisfied. The redemption price will be equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
The Company intends to use a portion of the net proceeds from the offering of the Notes to fund the cost of entering into the capped call transactions described below. The Company intends to use the remainder of the net proceeds from the offering of the Notes to repay a portion of outstanding borrowings under its credit agreement dated July 18, 2022, with a syndicate of lenders named therein and the other parties from time to time thereto (as amended from time to time, the “Credit Agreement”). If the initial purchaser exercises its option to purchase additional Notes, then the Company intends to use a portion of the additional net proceeds to fund the cost of entering into additional capped call transactions as described below, and the remainder to repay additional borrowings under the Credit Agreement.
In connection with the pricing of the Notes, the Company expects to enter into privately negotiated capped call transactions with the initial purchaser or one of its affiliates and/or certain other financial institutions (the “option counterparties”). The capped call transactions are expected to initially cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of shares of the Company’s common stock that will initially underlie the Notes. If the initial purchaser exercises its option to purchase additional Notes, the Company expects to enter into additional capped call transactions with the option counterparties.
The capped call transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, upon conversion of the Notes. If, however, the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.
In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to the Company’s common stock and/or purchase shares of the Company’s common stock concurrently with or shortly after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of the Company’s common stock or the Notes at that time.
In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the Company’s common stock and/or purchasing or selling the Company’s common stock or other securities of the Company in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and (x) are likely to do so following any repurchase of the Notes by the Company in connection with any fundamental change and (y) are likely to do so during any observation period related to a conversion of the Notes or following any repurchase or redemption of Notes by the Company, other than in connection with any fundamental change, if the Company elects to unwind a corresponding portion of the capped call transactions in connection with such conversion, repurchase or redemption). This activity could also cause or avoid an increase or decrease in the market price of the Company’s common stock or the Notes, which could affect the ability to convert the Notes, and, to the extent the activity occurs during any observation period related to a conversion of Notes, it could affect the amount and value of the consideration that noteholders will receive upon conversion of the Notes.
The offer and sale of the Notes and any shares of common stock issuable upon conversion of the Notes have not been, and will not be, registered under the Securities Act or any other securities laws, and the Notes and any such shares cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the Notes or any shares of common stock issuable upon conversion of the Notes, nor will there be any sale of the Notes or any such shares, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.
About The Company
ADTRAN Holdings, Inc. (NASDAQ: ADTN and FSE: QH9) is the parent company of Adtran, Inc., a leading global provider of open, disaggregated networking and communications solutions that enable voice, data, video and internet communications across any network infrastructure. From the cloud edge to the subscriber edge, Adtran empowers communications service providers around the world to manage and scale services that connect people, places and things. Adtran solutions are used by service providers, private enterprises, government organizations and millions
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of individual users worldwide. ADTRAN Holdings, Inc. is also the majority stockholder of Adtran Networks SE, formerly ADVA Optical Networking SE (“Adtran Networks”).
Forward-Looking Statements
This press release, including the information and documents incorporated by reference herein, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. All statements contained in this press release other than statements of historical or current fact, including statements regarding our future operating results and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “would,” “will,” “may,” “might,” “could,” “should,” “can,” “future,” “assume,” “plan,” “seek,” “predict,” “potential,” “objective,” “expect,” “target,” “project,” “outlook,” “forecast” and similar expressions identify forward-looking statements. We caution you that any forward-looking statements made by us or on our behalf are subject to uncertainties and other factors that could affect the accuracy of such statements. Forward-looking statements are based on management’s current expectations, as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, and because they also relate to the future, they are likewise subject to inherent uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. The risks that could affect our financial performance or could cause actual results to differ materially from those expressed or implied in our forward-looking statements contained in this press release include, but are not limited to: (i) risks related to our financial results and company success; (ii) risks related to our control environment; (iii) risks related to the telecommunications industry; (iv) risks related to the Company’s stock price; (v) risks related to the regulatory environments in which we do business; (vi) risks related to the capped call transactions described above, the offering and the Notes; and (vii) other risks set forth in the Company’s public filings made with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K/A for the year ended December 31, 2024 and its Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2025. You should not rely upon forward-looking statements as predictions of future events.
We have based the forward-looking statements contained in this press release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results and prospects. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make in this press release. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur. Actual results, events or circumstances could differ materially and adversely from those described or anticipated in the forward-looking statements.
You are further cautioned not to place undue reliance on these forward-looking statements made in this press release because they speak only of our views as of the date that the statements were made. We undertake no obligation to update any forward-looking statements made in this press
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release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.
For media
Gareth Spence
+44 1904 699 358
For investors
Peter Schuman, IRC
+1 256 963 6305
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Exhibit 99.2
ADTRAN Holdings, Inc. Prices Upsized $175.0 Million Convertible Senior Notes Offering
HUNTSVILLE, Ala.—September 17, 2025—ADTRAN Holdings, Inc. (NASDAQ: ADTN and FSE: QH9) (the “Company”) today announced the pricing of its offering of $175.0 million aggregate principal amount of 3.75% convertible senior notes due 2030 (the “Notes”) in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The offering was upsized from the previously announced offering size of $150.0 million aggregate principal amount of Notes. The issuance and sale of the Notes is scheduled to settle on September 19, 2025, subject to customary closing conditions. The Company also granted the initial purchasers of the Notes an option to purchase, for settlement within a period of 13 days from, and including, the date on which the Notes are first issued, up to an additional $26.25 million principal amount of Notes.
The Notes will be senior, unsecured obligations of the Company and will accrue interest at a rate of 3.75% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2026. The Notes will mature on September 15, 2030, unless earlier repurchased, redeemed or converted. Before June 15, 2030, noteholders will have the right to convert their Notes only upon the occurrence of certain events. From and after June 15, 2030, noteholders may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will settle conversions by paying cash up to the aggregate principal amount of the Notes to be converted and paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the Notes being converted, based on the applicable conversion rate(s). The initial conversion rate is 86.8206 shares of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $11.52 per share of common stock. The initial conversion price represents a premium of approximately 30% over the last reported sale price of $8.86 per share of the Company’s common stock on September 16, 2025. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events. If a “make-whole fundamental change” (as defined in the indenture for the Notes) occurs, the Company will, in certain circumstances, increase the conversion rate for a specified time for holders who convert their Notes in connection with that make-whole fundamental change.
The Notes will be redeemable, in whole or in part (subject to certain limitations on partial redemptions), for cash at the Company’s option at any time, and from time to time, on or after September 20, 2028 and on or before the 46th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for a specified period of time and certain other conditions are satisfied. The redemption price will be equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If the Company calls any or all Notes for redemption, holders of Notes called for redemption may convert their Notes during the related redemption conversion period, and any such conversion will also constitute a “make-whole fundamental change” with respect to the Notes so converted.
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If a “fundamental change” (as defined in the indenture for the Notes) occurs, then, subject to a limited exception, noteholders may require the Company to repurchase their Notes for cash. The repurchase price will be equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.
The Company estimates that the net proceeds from the offering of the Notes will be approximately $168.1 million (or approximately $193.4 million if the initial purchasers exercise their option to purchase additional Notes in full), after deducting the initial purchasers’ discounts and commissions and estimated offering expenses. The Company intends to use approximately $15.3 million of the net proceeds from the offering of the Notes to fund the cost of entering into the capped call transactions described below. Following such use, the Company intends to use the net proceeds from the offering of the Notes to repay approximately $152.8 million of the outstanding borrowings of Adtran, Inc. under its Credit Agreement, dated as of July 18, 2022, with a syndicate of lenders named therein and the other parties from time to time thereto (as amended from time to time, the “Wells Fargo Credit Agreement”) and pay fees and expenses associated with the Sixth Amendment and Consent to the Wells Fargo Credit Agreement, dated as of September 16, 2025 (the “Sixth Amendment”). If the initial purchasers exercise their option to purchase additional Notes, then the Company intends to use a portion of the additional net proceeds to fund the cost of entering into additional capped call transactions as described below. Following such use, the Company intends to use the net proceeds from the offering of the additional Notes to repay additional borrowings of Adtran, Inc. under the Wells Fargo Credit Agreement and any remaining net proceeds will be used to cash collateralize the obligations of the Company and its subsidiaries under the Wells Fargo Credit Agreement (with such cash only being permitted to be withdrawn for the purpose of financing the purchase of additional shares of Equity Interests (as defined in the Wells Fargo Credit Agreement) of Adtran Networks SE).
In connection with the pricing of the Notes, the Company entered into privately negotiated capped call transactions with one of the initial purchasers or its affiliate and certain other financial institutions (the “option counterparties”). The capped call transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of shares of the Company’s common stock that will initially underlie the Notes. If the initial purchasers exercise their option to purchase additional Notes, the Company expects to enter into additional capped call transactions with the option counterparties.
The cap price of the capped call transactions will initially be approximately $15.51 per share of the Company’s common stock, which represents a premium of approximately 75% over the last reported sale price of the Company’s common stock of $8.86 per share on September 16, 2025, and is subject to certain adjustments under the terms of the capped call transactions.
The capped call transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, upon conversion of the Notes. If, however, the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.
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In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to the Company’s common stock and/or purchase shares of the Company’s common stock concurrently with or shortly after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of the Company’s common stock or the Notes at that time.
In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the Company’s common stock and/or purchasing or selling the Company’s common stock or other securities of the Company in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and (x) are likely to do so following any repurchase of the Notes by the Company in connection with any fundamental change and (y) are likely to do so during any observation period related to a conversion of the Notes or following any repurchase or redemption of Notes by the Company, other than in connection with any fundamental change, if the Company elects to unwind a corresponding portion of the capped call transactions in connection with such conversion, repurchase or redemption). This activity could also cause or avoid an increase or decrease in the market price of the Company’s common stock or the Notes, which could affect the ability to convert the Notes, and, to the extent the activity occurs during any observation period related to a conversion of Notes, it could affect the amount and value of the consideration that noteholders will receive upon conversion of the Notes.
The offer and sale of the Notes and any shares of common stock issuable upon conversion of the Notes have not been, and will not be, registered under the Securities Act or any other securities laws, and the Notes and any such shares cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the Notes or any shares of common stock issuable upon conversion of the Notes, nor will there be any sale of the Notes or any such shares, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.
About The Company
ADTRAN Holdings, Inc. (NASDAQ: ADTN and FSE: QH9) is the parent company of Adtran, Inc., a leading global provider of open, disaggregated networking and communications solutions that enable voice, data, video and internet communications across any network infrastructure. From the cloud edge to the subscriber edge, Adtran empowers communications service providers around the world to manage and scale services that connect people, places and things. Adtran solutions are used by service providers, private enterprises, government organizations and millions of individual users worldwide. ADTRAN Holdings, Inc. is also the majority stockholder of Adtran Networks SE, formerly ADVA Optical Networking SE (“Adtran Networks”).
Forward-Looking Statements
This press release, including the information and documents incorporated by reference herein, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. All statements contained in this press release other than statements of historical or current fact, including statements regarding our future operating results and financial position, our business strategy and plans and our objectives for
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future operations, are forward-looking statements. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “would,” “will,” “may,” “might,” “could,” “should,” “can,” “future,” “assume,” “plan,” “seek,” “predict,” “potential,” “objective,” “expect,” “target,” “project,” “outlook,” “forecast” and similar expressions identify forward-looking statements. We caution you that any forward-looking statements made by us or on our behalf are subject to uncertainties and other factors that could affect the accuracy of such statements. Forward-looking statements are based on management’s current expectations, as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, and because they also relate to the future, they are likewise subject to inherent uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. The risks that could affect our financial performance or could cause actual results to differ materially from those expressed or implied in our forward-looking statements contained in this press release include, but are not limited to: (i) risks related to our financial results and company success; (ii) risks related to our control environment; (iii) risks related to the telecommunications industry; (iv) risks related to the Company’s stock price; (v) risks related to the regulatory environments in which we do business; (vi) risks related to the capped call transactions described above, the offering and the Notes; and (vii) other risks set forth in the Company’s public filings made with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K/A for the year ended December 31, 2024 and its Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2025. You should not rely upon forward-looking statements as predictions of future events.
We have based the forward-looking statements contained in this press release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results and prospects. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make in this press release. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur. Actual results, events or circumstances could differ materially and adversely from those described or anticipated in the forward-looking statements.
You are further cautioned not to place undue reliance on these forward-looking statements made in this press release because they speak only of our views as of the date that the statements were made. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.
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Published by
ADTRAN Holdings, Inc.
For media
Gareth Spence
+44 1904 699 358
For investors
Peter Schuman, IRC
+1 256 963 6305
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