Caremark to Redeem Its Convertible Subordinated Debentures; Receives Credit Facility Amendment On Stock Repurchases.Business Editors BIRMINGHAM, Ala.--(BUSINESS WIRE)--Sept. 13, 2002 Caremark Rx  The introduction to this article may be too long. Please help improve the introduction by moving some material from it into the body of the article according to the suggestions at , Inc. (NYSE NYSESee: New York Stock Exchange : CMX CMX Corel Presentation Exchange (file extension) CMX Cisco Mobile Exchange CMX Cloaca Maxima (sewage system of ancient Rome; Finnish rock band) CMX Crisis Management Exercise ), today announced that it intends to redeem all of its outstanding 7% convertible subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before due 2029, which are held by Caremark Rx Capital Trust I. The redemption date Redemption date The date on which a bond matures or is redeemed. redemption date The date on which a debt security is scheduled to be redeemed by the issuer. The redemption date is the scheduled maturity date or, if applicable, a call date. will be October 15, 2002. Upon this redemption, the trust will be required to redeem on the same date all of its outstanding 7% shared preference redeemable preferred securities, $50 liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy amount per security, and its common securities. The redemption price Redemption price See: Call price redemption price 1. The price at which an open-end investment company will buy back its shares from the owners. In most cases, the redemption price is the net asset value per share. 2. for each trust security, $50 liquidation amount per security, will be $52 plus accrued and unpaid distributions to the redemption date. The holders of the trust securities may elect to convert their trust securities into shares of common stock of the Company at any time prior to 5:00 p.m., New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. time, on October 11, 2002. Trust securities validly submitted for conversion will be converted into shares of common stock at the current conversion rate of 6.7125 shares of common stock per trust security (which is equivalent to a conversion price of $7.4488 per share of common stock). Fractional shares Fractional share Stocks amounting to less than one full share, usually resulting from splits, acquisitions, exchanges, or dividend reinvestment programs. fractional share Less than one share of stock, that is, one-third or one-half a share. will be paid in cash. The Company will pay an aggregate redemption price of $208 million to redeem all of the outstanding debentures. If all holders of outstanding trust securities elect to convert their trust securities, the Company will issue an aggregate of 26.9 million shares of its common stock. These shares are already reflected in the Company's outstanding shares for purposes of calculating its earnings per share. Caremark Rx, Inc. also announced that it recently amended its credit facility to permit repurchases of its common stock in an amount not to exceed $150 million. Prior to the amendment, the credit facility limited stock repurchases to an aggregate of $150 million, not to exceed $50 million in any year. The $50 million annual limitation was removed in the amendment. "The conversion further strengthens our balance sheet and enhances our cash flow in the future while the amendment to the credit agreement gives us more flexibility to deploy our cash as we move into 2003," stated Mac Crawford, Chairman of the Board and Chief Executive Officer of Caremark Rx, Inc. About Caremark Rx, Inc. Caremark is a leading pharmaceutical services company providing comprehensive drug benefit services to over 1,200 health plan sponsors and holding contracts to serve approximately 24 million participants throughout the U.S. Caremark's clients include managed care organizations, insurance companies, corporate health plans, unions, government agencies, and other funded benefit plans. The company operates a national retail pharmacy network with over 55,000 participating pharmacies, three state-of-the-art mail service pharmacies, the industry's only FDA-regulated repackaging plant and 21 specialized therapeutic mail service pharmacies for delivery of advanced medications to individuals with chronic or genetic diseases and disorders. Additional information about Caremark Rx is available on the World Wide Web at www.caremarkrx.com. |
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