Blind Mellon The conversion cap is on the preferred shares part of the debt. It only caps some of the shares going to the debt holders. The extra shares that the AAMRQ common are receiving are coming from the shares that the debt holders are not getting due to the share price increase. So if there is a cap on the preferred shares then there is a partial cap on the AAMRQ shares.
Below are the two sections that talk about where they get the excess shares due to the cap and how they treat those shares. 1.148 is how they calculate the shares that AAMRQ shareholders will receive at each distribution. In that description we see
"less (ii) the Shares in Excess of Cap" this is where they remove the shares that are in excess of the cap from the shares that AAMRQ would receive.
I have a formula from stoxxer on yahoo that worked on distribution 1 and 2 and I have broken out the preferred with the cap and the non-preferred debt. If we stay at $37 it shows between .182 and .1836.
1.148 Market-Based Old Equity Allocation means, with respect to any
Mandatory Conversion Date, the aggregate number of shares of New Common
Stock that New AAG shall ratably distribute (or reserve for distribution) to the
holders of Allowed AMR Equity Interests on such Mandatory Conversion Date,
or as soon thereafter as reasonably practicable, in an aggregate amount equal to (i)
the product of (a) 25% of the difference between the New Common Stock
Allocation and the Initial Old Equity Allocation, multiplied by (b) the amount (if
any) by which the VWAP for such Mandatory Conversion Date exceeds the
Value Hurdle Price, all as multiplied by (c) the reciprocal of such VWAP, less (ii)
the Shares in Excess of Cap for such Mandatory Conversion Date; provided,
however, that in no event shall the number of shares distributed and/or reserved as
described in this Section 1.148 with respect to any Mandatory Conversion Date
(x) be less than zero or (y) be equal to or greater than the number of shares that
result in the aggregate number of shares of New Common Stock that are issuable
pursuant to the Plan, including those that are or may become issuable upon
conversion of shares of New Mandatorily Convertible Preferred Stock issued
under the Plan, exceeding the Maximum Plan Shares.
1.147 Mandatory Shares in Excess of Cap means, with respect to any
Mandatory Conversion Date with respect to which 96.5% of the VWAP
calculated with respect to such Mandatory Conversion Date exceeds the Preferred
Conversion Cap, a number of shares of New Common Stock equal to (i) the
number of shares of New Common Stock issued upon the conversion of all shares
of New Mandatorily Convertible Preferred Stock that are converted on the
Mandatory Conversion Date, less (ii) the number of shares of New Common
Stock that would have been issued pursuant to the conversion of all shares of New
Mandatorily Convertible Preferred Stock that are converted on the Mandatory
Conversion Date if the Conversion Price (as defined in the Certificate of
Designations) was not subject to the Preferred Conversion Cap, which, for
purposes of this clause (ii) shall be a number of shares of New Common Stock
equal to the quotient of (x) the aggregate Stated Value of all shares of New
Mandatorily Convertible Preferred Stock that are converted with respect to such
Mandatory Conversion Date, divided by (y) 96.5% of the VWAP with respect to
such Mandatory Conversion Date. In no event shall the Mandatory Shares in
Excess of Cap for any Mandatory Conversion Date be less than zero.
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