OCC a écrit :
#35405
DATE: OCTOBER 16, 2014
SUBJECT: ADJUSTED SEARS HOLDINGS CORPORATION - FURTHER ADJUSTMENT
ADJUSTED OPTION SYMBOL: SHLD1/1SHLD1
DATE: 10/17/14
Adjusted Sears Holdings Corporation (SHLD) options were adjusted on April 7, 2014. The new deliverable became 1) 100 Sears Holdings Corporation (SHLD) Common Shares, 2) 30 Lands’ End, Inc. (LE) Common Shares, and 3) $2.36 Cash (See OCC Information Memo #34494).
Sears Holdings Corporation (SHLD) has declared a Rights distribution to Sears Holdings Corporation Shareholders, as described below:
RIGHTS: One (1) Right entitles the holder to purchase 0.375643 of a share of Sears Canada Inc. (SRSC)
PRICE: $9.50 per whole SRSC share
DISTRIBUTION
RATIO: One transferable Right per each SHLD Common Share
RECORD DATE: October 16, 2014
EXPIRATION: 5:00 p.m. New York City time on November 7, 2014, unless extended
SUBSCRIPTION
AGENT: Computershare, Inc.
GUARANTY PERIOD: Unknown
Adjusted SHLD1/1SHLD1 options must be further adjusted to reflect the Rights Distribution as described below.
CONTRACT ADJUSTMENT
EFFECTIVE DATE: October 17, 2014
OPTION SYMBOLS: SHLD1 remains SHLD1
1SHLD1 remains 1SHLD1
CONTRACT
MULTIPLIER: 1
STRIKE DIVISOR: 1
MULTIPLIER: 100 (e.g., a premium of 1.50 yields $150; a strike of 30 yields $3,000.00)
NEW DELIVERABLE
PER CONTRACT: 1) 100 Sears Holdings Corporation (SHLD) Common Shares
2) 30 Lands’ End (LE) Common Shares
3) $2.36 Cash
4) 100 Sears Holdings Corporation Rights (SHLDR)
CUSIP: SHLD: 812350106
LE: 51509F105
SHLDR: 812350130
SETTLEMENT
The SHLD and SHLDR components of the SHLD1/1SHLD1 exercise/assignment activity will settle through National Securities Clearing Corporation (NSCC). The cash amount will be settled by OCC.
NOTE: It is anticipated that the Rights will be suspended from trade on NASDAQ on November 5, 2014. The Rights are expected to expire on November 7, 2014. The SHLDR component of adjusted options SHLD1/1SHLD1 will remain a part of the SHLD1/1SHLD1 deliverable until the Rights have expired. Once the expiration of the Rights has been confirmed, the SHLDR component will be removed from the SHLD1/1SHLD1 deliverable. This change to the deliverables is expected to be effective on November 10, 2014.
PRICING
The underlying price for SHLD1/1SHLD1 will be determined as follows:
SHLD1 = SHLD + 0.30 (LE) + 0.0236 + SHLDR
FURTHER CONTRACT ADJUSTMENT
When the Rights expire, further adjusted SHLD1/1SHLD1 options will be further adjusted to no longer call for the delivery of the Rights. No adjustment will be made to the adjusted contracts to compensate for any in-the-money value the SHLD Rights may have at the time of their expiration.
EXERCISE CONSIDERATIONS
The Rights are anticipated to be suspended from trading on November 5, 2014 and expire on November 7, 2014. Call option holders who wish to exercise their adjusted options to obtain the Rights for subsequent exercise, sale or other purposes bear sole responsibility for determining when to exercise their options as well as complying with all terms and conditions of the Rights offering applicable to Rights exercise or delivery. It is unknown if provisions for guaranteed delivery are available.
DELIVERY SETTLEMENT AND PROTECT PROVISIONS
Option contracts which are exercised, and physically-settled security Futures contracts which mature, will require the settlement of all component securities included in the contract deliverable at the time of the option contract exercise, including rights, warrants, or similar instruments. Additional entitlements (such as due bills, eligibility to participate in tender offers, elections, etc.) may also automatically attach to securities deliverable upon option exercise. Conversely, exercised calls and or matured Futures contracts may be unable to realize the benefit of securities or entitlements not associated to the contract deliverable at the time of the option exercise or Option contract maturity.
Except in unusual cases, securities deliverable as a result of equity option exercises and or Option contract maturity are settled through National Securities Clearing Corporation (NSCC).
Rights and obligations of Members with respect to securities settling at NSCC as a result of an option exercise/assignment are governed by the rules of NSCC. NSCC has its own rules which enable purchasers of securities to protect themselves for value which may be lost if timely delivery is not made to them of securities subject to specific deadlines, such as the expiration of a tender offer, rights offering, election, or similar event. These rules are generally called protect or liability notice procedures, and are intended to protect purchasers by binding the delivering parties to liability if such value is lost because timely delivery is not effected. Purchasers of securities must observe the rules and procedures of NSCC to avail themselves of such protect provisions of NSCC. Questions regarding these provisions should be addressed to NSCC.
SPECIAL RISKS
Call Holders/ Put Writers
As a result of the adjustment described above, the Rights will be part of the further adjusted SHLD1/1SHLD1 options deliverable, but only until the Rights expire, after which time they will be dropped from the deliverable of the option contract. When the Rights expire and are dropped from the deliverable of the option contract, any value the Rights may have had will no longer be associated with the option contract. As a result, holders of in-the-money calls may be disadvantaged unless they exercise in sufficient time to obtain the Rights. After the Rights expire and are dropped from the deliverable of the option contract, holders of short put positions who are assigned will be required to purchase SHLD stock whose value may have been substantially diminished by the Rights distribution.
Uncovered Short Obligations
Holders of assigned calls or exercised puts, and holders of short positions in physically-settled security Futures at maturity who do not possess the underlying security at the time of assignment or exercise are subject to special risk. Suspension of trading of the underlying security, inability to borrow the security, or similar events may preclude the possibility of effecting timely delivery, thereby exposing persons with an obligation to deliver to liability if timely delivery is not effected (See Delivery Settlement and Protect Provisions above).
DISCLAIMER
This Information Memo provides an unofficial summary of the terms of corporate events affecting listed options or futures prepared for the convenience of market participants. OCC accepts no responsibility for the accuracy or completeness of the summary, particularly for information which may be relevant to investment decisions. Option or futures investors should independently ascertain and evaluate all information concerning this corporate event(s).
The determination to adjust options and the nature of any adjustment is made by a panel of The OCC Securities Committee pursuant to OCC By-Laws, Article VI, Sections 11 and 11A. The adjustment panel is comprised of representatives from OCC and each exchange which trades the affected option. The determination to adjust futures and the nature of any adjustment is made by OCC pursuant to OCC By-Laws, Article XII, Sections 3, 4, or 4A, as applicable. For both options and futures, each adjustment decision is made on a case by case basis. Adjustment decisions are based on information available at the time and are subject to change as additional information becomes available or if there are material changes to the terms of the corporate event(s) occasioning the adjustment.
ALL CLEARING MEMBERS ARE REQUESTED TO IMMEDIATELY ADVISE ALL BRANCH OFFICES AND CORRESPONDENTS ON THE ABOVE.
For questions regarding this memo, call Investor Services at 1-888-678-4667 or email [email protected]. Clearing Members may contact Member Services at 1-800-544-6091 or, within Canada, at 1-800-424-7320, or email [email protected].
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