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Iconix Brand Group, Inc. Announces Pricing Of $350 Million Private Offering Of 1.50% Convertible Senior Subordinated Notes And $69 Million Common Stock Repurchase

Prior to December 15, 2017, the notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the business day preceding the maturity date of the notes. The notes will be convertible at an initial conversion rate of 32.4052 shares of Iconix common stock per $1,000 principal amount of the notes, which is equivalent to an initial conversion price of approximately $30.86, which represents an approximately 32.5% conversion premium to the last reported sale price of $23.29 per share of Iconix common stock on the NASDAQ on March 12, 2013. In addition, following certain corporate transactions that occur prior to the maturity date, Iconix will, in certain circumstances, increase the conversion rate for a holder that elects to convert its notes in connection with such corporate transaction. Upon any conversion, Iconix's conversion obligation will be settled in cash up to the principal amount and, to the extent of any excess over the principal amount, in shares of Iconix common stock, or, if Iconix so elects, cash.

In connection with the offering of the notes, Iconix has entered into a privately negotiated convertible note hedge transaction with an affiliate of the initial purchaser of the notes (the "hedge counterparty"). The convertible note hedge transaction will cover, subject to customary anti-dilution adjustments, the number of shares of Iconix common stock that will initially underlie the notes. Iconix has also entered into a separate privately negotiated warrant transaction with the hedge counterparty relating to the same number of shares of Iconix common stock. The strike price of the warrant transaction will initially be $35.5173 per share, which represents an approximately 52.5% premium to the last reported sale price of Iconix common stock on the NASDAQ on March 12, 2013. In addition, if the initial purchaser exercises its over-allotment option to purchase additional notes, Iconix expects to sell additional warrants and to use a portion of the proceeds from the sale of the additional notes and from the sale of the corresponding additional warrants to enter into an additional convertible note hedge transaction. The convertible note hedge transaction is expected to reduce the potential dilution with respect to Iconix common stock upon conversion of the notes. However, the warrant transaction will have a dilutive effect with respect to Iconix common stock to the extent that the market price per share of Iconix common stock exceeds the applicable strike price of the warrants on any expiration date of the warrants.

In connection with establishing its initial hedge of the convertible note hedge transaction and warrant transaction and concurrently with, or shortly after, the pricing of the notes, the hedge counterparty or its affiliate expects to purchase Iconix common stock in open market transactions and/or privately negotiated transactions and/or enter into various cash-settled derivative transactions with respect to Iconix common stock. In addition, the hedge counterparty or its affiliate may modify its hedge position by entering into or unwinding various derivative transactions with respect to Iconix common stock and/or by purchasing or selling Iconix common stock in open market transactions and/or privately negotiated transactions following the pricing of the notes from time to time (and are likely to do so during any conversion period related to a conversion of notes). Any of these hedging activities could also increase, decrease or prevent a decline in, the market price of Iconix common stock.

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