77 Subor dinated Convertible Notes The Company’ s Subordinated Convertible Notes were issued on December 15, 2009 in the amount of $ 429.5  million pursuant to the aforementioned exchange of fer . The notes and the common stock issuable upon conversion were registered on a Registration Statement on Form S-4, initially filed with the SEC on October 27, 2009 , as amended and as declared ef fective by the SEC on December 15, 2009 . At issuance, the Company separately accounted for the liability and equity components of the instrument, based on the Company’ s nonconvertible debt borrowing rate on the instrument’ s issuance date of 12.5% . At issuance, the liability and equity components were $ 162.9  million and $ 266.6 million, respectively . The equity component (debt discount) is being amortized to interest expense based on the ef fective interest method. There were no proceeds generated from the transaction and the Company incurred issuance fees and expenses of approximately $ 14.5  million as a result of the exchange of fer which have been proportionately allocated to the liability and equity components of the new subordinate notes due in 2029 . Additional terms have been summarized in the table below . 1.00% Senior Convertible Notes As a result of the aforementioned exchange of fer , approximately 97.8% or $ 464.4  million of the Company’ s 1.00 % Senior Convertible Notes were validly tendered. As of December 15, 2009 , there were $ 10.6  million of the 1.00 % Senior Convertible Notes outstanding. The Company’ s 1.00% Senior Convertible Notes were originally issued in September 2007 in the amount of $ 475.0  million and sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Subsequently , on April 16, 2008 , the resale of the notes and the common stock issuable upon conversion of the notes was registered on a Registration Statement on Form S-3. Beginning January 1, 2009 , as discussed in Note 2 - Summary of Significant Accounting Policies, the Company separately accounted for the liability and equity components of the instrument, retrospectively , based on the Company’ s nonconvertible debt borrowing rate on the instrument’ s issuance date of 7.5% . At issuance, the liability and equity components were $ 348.2  million and $ 126.8 million, respectively . At the exchange date December 15, 2009 , the liability and equity components were $ 389.7  million and $ 74.7 million, respectively . The equity component (debt discount) was amortized to interest expense based on the ef fective interest method. Key terms have been summarized in the table below . On October 15, 2012 , the Company repaid the $10.6 million of the 1.00% Senior Convertible Notes outstanding, which expired on October 15, 2012, and those obligations have been retired. Proceeds from the 1.00 % Senior Convertible Notes were used to partially fund the purchase price of $ 707.6  million related to the PDIC acquisition and to pay transaction costs of approximately $ 12.3 million directly related to the issuance that have been allocated to the liability and equity components in proportion to the allocation of proceeds. 0.875% Convertible Notes The Company’ s 0.875% Convertible Notes were issued in November of 2006 in the amount of $ 355.0 million. At the time of issuance, the notes and the common stock issuable upon conversion of the notes were registered on a Registration Statement on Form S-3ASR and subsequently , on September 30, 2009 , the Company filed a Renewal Registration Statement for the underlying common stock on Form S-3ASR. Beginning January 1, 2009 , as discussed in Note 2 - Summary of Significant Accounting Policies, the Company separately accounted for the liability and equity components of the instrument, retrospectively , based on the Company’ s nonconvertible debt borrowing rate on the instrument’ s issuance date of 7.35% . At issuance, the liability and equity components were $ 230.9  million and $ 124.1  million, respectively . The equity component (debt discount) is being amortized to interest expense based on the ef fective interest method. Key terms have been summarized in the table below . Concurrent with the sale of the 0.875 % Convertible Notes, the Company purchased note hedges that are designed to mitigate potential dilution from the conversion of the 0.875 % Convertible Notes in the event that the market value per share of the Company’ s common stock at the time of exercise is greater than approximately $ 50.36 . Under the note hedges that cover approximately 7,048,880 shares of the Company’ s common stock, the counterparties are required to deliver to the Company either shares of the Company’ s common stock or cash in the amount that the Company delivers to the holders of the 0.875 % Convertible Notes with respect to a conversion, calculated exclusive of shares deliverable by the Company by reason of any additional make whole premium relating to the 0.875 % Convertible Notes or by reason of any election by the Company to unilaterally increase the conversion rate as permitted by the indenture governing the 0.875 % Convertible Notes. The note hedges expire at the close of trading on November 15, 2013 , which is also the maturity date of the 0.875 % Convertible Notes, although the counterparties will have ongoing obligations with respect to 0.875 % Convertible Notes properly converted on or prior to that date as to which the counterparties have been timely notified. The Company issued warrants to counterparties that could require the Company to issue up to approximately 7,048,880 shares of the Company’ s common stock in equal installments on each of the fifteen consecutive business days beginning on and including February 13, 2014 . The strike price is $ 76.00 per share, which represents a 92.4% premium over the closing price of the Company’ s shares of common stock on November 9, 2006 . The warrants are expected to provide the Company with some protection against increases in the common stock price over the conversion price per share. T able of Contents