|the $500,000,000 Notes|
The Notes will be unsecured and unsubordinated obligations of Finisar. Interest on the Notes will be paid semi-annually in arrears on June 15 and December 15 of each year, commencing June 15, 2017, at a rate of 0.50% per annum. The Notes will mature on December 15, 2036, unless earlier converted, repurchased or redeemed.
Holders may require Finisar to repurchase the Notes for cash on December 15, 2021, December 15, 2026 and December 15, 2031 at a repurchase price equal to the principal amount thereof, plus accrued and unpaid interest to, but excluding, the repurchase date. In addition, holders may require Finisar to repurchase the Notes for cash upon the occurrence of a fundamental change at a repurchase price equal to the principal amount thereof, plus accrued and unpaid interest to, but excluding, the repurchase date.
Finisar may not redeem the Notes prior to December 22, 2021. On or after December 22, 2021, Finisar may redeem for cash all or part of the Notes at a redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
Prior to June 15, 2036, the Notes will be convertible at the option of the holders only upon the occurrence of specified events, and thereafter until the close of business on the second scheduled trading day immediately preceding the maturity date, the Notes will be convertible at any time. Upon conversion, the Notes will be settled in cash, shares of Finisar's common stock or any combination thereof at Finisar's option. The initial conversion rate is 22.6388 shares of common stock per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $44.17 per share of common stock), subject to adjustment in certain circumstances. This initial conversion price represents a premium of approximately 35% relative to the last reported sale price of Finisar's common stock on December 15, 2016.