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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 13-1024020
(State of Incorporation or Organization) (I.R.S. Employer Identification no.)
1271 Avenue of the Americas
New York, New York 10020
(Address of Principal Executive Offices) (Zip Code)
If this Form relates to the If this Form relates to the
registration of a class of securities registration of a class of securities
pursuant to Section 12(b) of the pursuant to Section 12(g) of the
Exchange Act and is effective Exchange Act and is effective
pursuant to General Instruction pursuant to General Instruction
A.(c), please check the following A.(d), please check the following
box. [X] box. [ ]
Securities Act registration statement file number to which this form relates:
333-109384
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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Series A Mandatory Convertible New York Stock Exchange
Preferred Stock, no par value,
liquidation preference $50.00
per share
Securities to be registered pursuant to Section 12(g) of the Act: None.
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Item 1. Description of Registrant's Securities to be Registered.
The Interpublic Group of Companies, Inc. (the "Registrant")
registers hereunder its Series A Mandatory Convertible Preferred Stock (the
"Preferred Stock"). A general description of the Preferred Stock may be found on
page 31 of the prospectus forming part of the Registrant's Amendment No. 1 to
Form S-3 Registration Statement (Registration No. 333-109384), filed with the
Securities and Exchange Commission (the "Commission") and declared effective on
November 20, 2003. In addition, a detailed description of the Preferred Stock
may be found under the heading "Description of Series A Mandatory Convertible
Preferred Stock" beginning on page S-21 of the preliminary prospectus
supplement, subject to completion, dated December 9, 2003 (Registration No.
333-109384), which description is hereby incorporated herein by reference and
made part of this registration statement in its entirety. The Registrant also
incorporates by reference its contemplated future filing of the final prospectus
supplement pursuant to Rule 424(b).
Item 2. Exhibits.
The following exhibits are filed as part of this registration
statement:
3.1 Restated Certificate of Incorporation of the Registrant, filed
as Exhibit 3(i) to the Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 2003, is incorporated
herein by reference.
3.2 Bylaws of the Registrant, amended as of July 31, 2003, filed
as Exhibit 3(ii) to the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 2003, is incorporated
herein by reference.
4.1* Form of Certificate of Designations of Series A Mandatory
Convertible Preferred Stock of the Registrant.
99(A) Preliminary Prospectus Supplement, subject to completion,
dated December 9, 2003, is incorporated herein by reference to
the Registrant's filing under Rule 424(b) with the Commission
on December 10, 2003 (Registration No. 333-109384).
99(B) Registration Statement on Form S-3 (Registration No.
333-109384), as amended by Amendment No. 1 to the Registration
Statement on Form S-3, filed with the Commission and declared
effective on November 20, 2003, is incorporated herein by
reference.
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* Form of Certificate of Designations of Series A Mandatory Convertible
Preferred Stock is filed herewith. The executed Certificate of Designations
of Series A Mandatory Convertible Preferred Stock will be filed as an
exhibit to a Current Report on Form 8-K filed under the Securities Exchange
Act of 1934, as amended, and incorporated herein by reference.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
The Interpublic Group of Companies, Inc.
(Registrant)
Date: December 12, 2003 By: /s/ Nicholas J. Camera
------------------------------------
Name: Nicholas J. Camera
Title: Senior Vice President,
General Counsel and Secretary
EXHIBIT INDEX
Exhibit No. Description of Exhibit
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3.1 Restated Certificate of Incorporation of the
Registrant, filed as Exhibit 3(i) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 2003, is incorporated herein by
reference.
3.2 Bylaws of the Registrant, amended as of July 31, 2003,
filed as Exhibit 3(ii) to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30,
2003, is incorporated herein by reference.
4.1* Form of Certificate of Designations of Series A
Mandatory Convertible Preferred Stock of the
Registrant.
99(A) Preliminary Prospectus Supplement, subject to
completion, dated December 9, 2003, is incorporated
herein by reference to the Registrant's filing under
Rule 424(b) with the Commission on December 10, 2003
(Registration No. 333-109384).
99(B) Registration Statement on Form S-3 (Registration No.
333-109384), as amended by Amendment No. 1 to the
Registration Statement on Form S-3, filed with the
Commission and declared effective on November 20, 2003,
is incorporated herein by reference.
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* Form of Certificate of Designations of Series A Mandatory Convertible
Preferred Stock is filed herewith. The executed Certificate of Designations
of Series A Mandatory Convertible Preferred Stock will be filed as an
exhibit to a Current Report on Form 8-K filed under the Securities Exchange
Act of 1934, as amended, and incorporated herein by reference.
Exhibit 4.1
FORM OF CERTIFICATE OF DESIGNATIONS OF
[ ]% SERIES A MANDATORY CONVERTIBLE PREFERRED STOCK
OF THE INTERPUBLIC GROUP OF COMPANIES, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The Interpublic Group of Companies, Inc., a Delaware corporation (the
"Company"), certifies that pursuant to the authority contained in Article 4 of
its Restated Certificate of Incorporation, as amended (the "Restated Certificate
of Incorporation"), and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware (the "DGCL"), the Pricing
Committee designated by the Board of Directors of the Company (the "Board of
Directors") by resolution adopted by unanimous written consent, pursuant to
Section 141(f) of the DGCL, on December [ ], 2003, duly approved and adopted the
following resolution, which resolution remains in full force and effect on the
date hereof:
RESOLVED, that pursuant to the authority vested in the Pricing
Committee by the Board of Directors, and in the Board of Directors by
the Restated Certificate of Incorporation, the Pricing Committee
designated by the Board of Directors does hereby designate, create,
authorize and provide for the issue of a series of the Company's
preferred stock without par value, with a liquidation preference of
$50.00 per share plus an amount equal to the sum of all accumulated
and unpaid dividends, subject to adjustment as provided in Section
12(ii) hereof (the "Liquidation Preference"), which shall be
designated as [ ]% Series A Mandatory Convertible Preferred Stock (the
"Series A Mandatory Convertible Preferred Stock") consisting of
7,475,000 shares, no shares of which have heretofore been issued by
the Company, having the following powers, designations, preferences
and relative, participating, optional and other special rights, and
qualifications, limitations and restrictions thereof:
Section 1. Ranking. The Series A Mandatory Convertible Preferred Stock
shall rank, with respect to payment of dividends and distribution of assets upon
the liquidation, winding-up or dissolution of the Company, (i) senior to the
common stock, par value $0.10 per share, of the Company (the "Common Stock"),
whether now outstanding or hereafter issued, and to each other class or series
of stock of the Company (including any series of preferred stock established
after December [ ], 2003 by the Board of Directors) the terms of which do not
expressly provide that such class or series will rank senior to or pari passu
with the Series A Mandatory Convertible Preferred Stock as to payment of
dividends and distribution of assets upon the liquidation, winding-up or
dissolution of the Company (collectively referred to as "Junior Securities");
(ii) pari passu with each class or series of stock of the Company, the terms of
which expressly provide that such class or series will rank pari passu with the
Series A Mandatory Convertible Preferred Stock as to payment of dividends and
distribution of assets upon the liquidation, winding-up or dissolution of the
Company (collectively referred to as "Parity Securities"); and (iii) junior to
each other class or series of stock of the Company, the terms of which expressly
provide that such class or series will rank senior to the Series A Mandatory
Convertible Preferred Stock as to payment of dividends and distribution of
assets upon the liquidation, winding-up or dissolution of the Company
(collectively referred to as "Senior Securities"). The Company's ability to
issue capital stock that ranks senior to its Series A Mandatory Convertible
Preferred Stock shall be subject to the provisions of Section 4 herein.
Section 2. Dividends.
(i) General. Dividends on the Series A Mandatory Convertible Preferred
Stock shall be payable quarterly, when, as and if declared by the Board of
Directors or a duly authorized committee thereof, out of the assets of the
Company legally available therefor, on the 15th calendar day (or the following
Business Day, as defined below, if the 15th is not a Business Day) of March,
June, September and December of each year (each such date being referred to
herein as a "Dividend Payment Date") at the annual rate of $[ ] per share,
subject to adjustment as provided in Section 12(ii). The initial dividend on the
Series A Mandatory Convertible Preferred Stock for the dividend period
commencing on December [ ], 2003, to but excluding March 15, 2004, will be $[ ]
per share, and shall be payable, when, as and if declared, on March 15, 2004.
The dividend on the Series A Mandatory Convertible Preferred Stock for each
subsequent dividend period shall be $[ ] per share. The amount of dividends
payable on each share of Series A Mandatory Convertible Preferred Stock for each
full quarterly period thereafter shall be computed by dividing the annual
dividend rate by four. The amount of dividends payable for any other period that
is shorter or longer than a full quarterly dividend period will be computed on
the basis of a 360-day year consisting of twelve 30-day months.
A dividend period with respect to a Dividend Payment Date is the period
commencing on the preceding Dividend Payment Date or, if none, the date of issue
and ending on the day immediately prior to the next Dividend Payment Date.
Dividends payable, when, as and if declared, on a Dividend Payment Date shall be
payable to Holders (as defined below) of record as they appear on the stock
books of the Company on the later of (i) the close of business on the first
calendar day (or the following Business Day if such first calendar day is not a
Business Day) of the calendar month in which the applicable Dividend Payment
Date falls and (ii) the close of business on the day on which the Board of
Directors or a duly authorized committee thereof declares the dividend payable
(each, a "Dividend Record Date").
Dividends on the Series A Mandatory Convertible Preferred Stock shall
be cumulative if the Company fails to declare one or more dividends on the
Series A Mandatory Convertible Preferred Stock in any amount, whether or not
there are assets of the Company legally available for the payment of such
dividends in whole or in part.
The Company may pay dividends, at its sole option, (a) in cash, (b) by
delivering shares of Common Stock to the Transfer Agent (as defined below) on
behalf of the Holders, to be sold on the Holders' behalf for cash or (c) any
combination thereof (other than dividends payable in connection with a
provisional conversion at the option of the Company, as set forth in Section 6
herein, which dividends the Company must pay in cash). By and upon acquiring the
Series A Mandatory Convertible Preferred Stock, each Holder is deemed to appoint
the Transfer Agent as such Holder's agent for any such sale, and the Transfer
Agent shall serve as a designated agent of the Holders in making any such sales.
To pay dividends in shares of Common Stock, the Company must deliver to the
Transfer Agent a number of shares of Common Stock which, when sold by the
Transfer Agent on the Holders' behalf, will result in net cash proceeds to be
distributed to the Holders in an amount equal to the cash dividend otherwise
payable to the Holders.
If the Company pays dividends in shares of Common Stock by delivering
them to the Transfer Agent, those shares shall be owned beneficially by the
Holders upon delivery to the Transfer Agent, and the Transfer Agent shall hold
those shares and the net cash proceeds from the sale of those shares for the
exclusive benefit of the Holders until the Dividend Payment Date, or such other
date as is fixed by the Board of Directors or a duly authorized committee
thereof pursuant to the terms and conditions set forth in the last paragraph of
this Section 2(i), at which time the portion of such net cash proceeds equal to
the non-cash component of the declared dividend of the Series A Mandatory
Convertible Preferred Stock shall be distributed to the Holders entitled thereto
and, subject to the following paragraph, any remainder shall continue to be held
by the Transfer Agent for the exclusive benefit of the Holders and pooled with
the net cash proceeds from future sales of Common Stock delivered to the
Transfer Agent pursuant to this paragraph.
Holders shall not be entitled to any dividend, whether payable in cash,
property or stock, in excess of the then-applicable full dividends calculated
pursuant to this Section 2(i) (including accumulated dividends, if any) on
shares of Series A Mandatory Convertible Preferred Stock. No interest or sum of
money in lieu of interest shall be payable in respect of any dividend or payment
which may be in arrears. Any balance of dividends payable on shares of Series A
Mandatory Convertible Preferred Stock in cash, property or stock in excess of
the then-applicable full dividends calculated pursuant to this Section 2(i)
(including accumulated dividends, if any) shall be repaid, together with any
interest or other earnings thereon, to the Company.
Dividends in arrears on the Series A Mandatory Convertible Preferred
Stock not declared for payment or not paid on any Dividend Payment Date may be
declared by the Board of Directors or a duly authorized committee thereof and
paid on any date fixed by the Board of Directors or a duly authorized committee
thereof, whether or not a Dividend Payment Date, to the Holders of record as
they appear on the stock register of the Company on a record date selected by
the Board of Directors or a duly authorized committee thereof, which shall (i)
not precede the date the Board of Directors or an authorized committee thereof
declares the dividend payable and (ii) not be more than 60 days prior to the
date the dividend is paid.
(ii) In order to pay dividends on any Dividend Payment Date, or such
other date as is fixed by the Board of Directors or a duly authorized committee
thereof pursuant to the terms and conditions set forth in the last paragraph of
Section 2(i) hereof, in shares of Common Stock, (a) the shares of Common Stock
delivered to the Transfer Agent shall have been duly authorized, (b) the Company
shall have provided to the Transfer Agent an effective registration statement
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder (the "Securities Act"), permitting the immediate sale of the shares
of Common Stock in the public market, (c) the shares of Common Stock, once
purchased by the purchasers thereof, shall be validly issued, fully paid and
non-assessable and (d) such shares shall have been registered under the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, if required, and shall be listed or admitted for trading on each
United States securities exchange on which the Common Stock is then listed.
(iii) Payment Restrictions. The Company may not declare or pay any
dividend or make any distribution of assets (other than dividends paid or other
distributions made in Junior Securities) on, whether in cash, property or
otherwise, or redeem, purchase or otherwise acquire (except upon conversion or
exchange for Junior Securities), pay or make available any monies for a sinking
fund for, Junior Securities, unless all accumulated and unpaid dividends on the
Series A Mandatory Convertible Preferred Stock for all prior dividend periods
and the full quarterly dividend on the Series A Mandatory Convertible Preferred
Stock for the current dividend period have been or contemporaneously are
declared and paid or, in the case of dividends payable in whole or in part in
cash, declared and set apart for payment.
Unless all accumulated and unpaid dividends on the Series A Mandatory
Convertible Preferred Stock for all prior dividend periods and the full
quarterly dividend on the Series A Mandatory Convertible Preferred Stock for the
current dividend period have been or contemporaneously are declared and paid or,
in the case of dividends payable in whole or in part in cash, declared and set
apart for payment, the Company may not redeem, purchase or otherwise acquire
Parity Securities (except upon conversion into or exchange for other Parity
Securities or Junior Securities, so long as (i) such other Parity Securities
contain terms and conditions (including, without limitation, with respect to the
payment of dividends, dividend rates, liquidation preferences, voting and
representation rights, payment restrictions, antidilution rights, change of
control rights, covenants, remedies and conversion and redemption rights) that
are not materially less favorable, taken as a whole, to the Company or to the
Holders than those contained in the Parity Securities that are converted into or
exchanged for such other Parity Securities, (ii) the aggregate amount of the
liquidation preference of such other Parity Securities does not exceed the
aggregate amount of the liquidation preference, plus accumulated and unpaid
dividends, of the Parity Securities that are converted into or exchanged for
such other Parity Securities and (iii) the aggregate number of shares of Common
Stock issuable upon conversion, redemption or exchange of such other Parity
Securities does not exceed the aggregate number of shares of Common Stock
issuable upon conversion, redemption or exchange of the Parity Securities that
are converted into or exchanged for such other Parity Securities).
Section 3. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company, the Holders
shall be entitled to receive out of the assets of the Company available for
distribution to stockholders, before any distribution of assets is made on the
Common Stock or any other Junior Securities, $50.00 per share, subject to
adjustment as provided in Section 12(ii) hereof, plus an amount equal to the sum
of all accumulated and unpaid dividends (whether or not declared) for the
then-current dividend period and all dividend periods prior thereto.
Neither the sale of all or substantially all of the property or
business of the Company (other than in connection with the voluntary or
involuntary liquidation, dissolution or winding up of the Company), nor the
merger, conversion or consolidation of the Company into or with any other
Person, nor the merger, conversion or consolidation of any other Person into or
with the Company shall constitute a voluntary or involuntary liquidation,
dissolution or winding up of the Company for the purposes of the foregoing
paragraph. After the payment to the Holders of the full preferential amounts
provided for above, the Holders as such shall have no right or claim to any of
the remaining assets of the Company.
In the event the assets of the Company available for distribution to
the Holders upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company shall be insufficient to pay in full all amounts to
which such Holders are entitled as provided above, no such distribution shall be
made on account of any other stock of the Company ranking pari passu with the
Series A Mandatory Convertible Preferred Stock as to the distribution of assets
upon such liquidation, dissolution or winding up, unless a pro rata distribution
is made on the Series A Mandatory Convertible Preferred Stock and such other
stock of the Company, with the amount allocable to each series of such stock
determined on the basis of the aggregate liquidation preference of the
outstanding shares of each series and distributions to the shares of each series
being made on a pro rata basis.
Section 4. Voting Rights.
(i) The Holders shall have no voting rights, except as set forth below
or as expressly required by applicable state law. In exercising any such vote,
each outstanding share of Series A Mandatory Convertible Preferred Stock shall
be entitled to one vote.
(ii) So long as any Series A Mandatory Convertible Preferred Stock is
outstanding, in addition to any other vote of stockholders of the Company
required under applicable law or the Restated Certificate of Incorporation, the
affirmative vote or consent of the Holders of at least 66 2/3% of the
outstanding shares of the Series A Mandatory Convertible Preferred Stock will be
required (a) for any amendment by merger, consolidation or otherwise, of the
Restated Certificate of Incorporation if the amendment would alter or change the
powers, preferences, privileges or rights of the shares of the Series A
Mandatory Convertible Preferred Stock so as to affect them adversely, (b) to
issue, authorize or increase the authorized amount of, or issue or authorize any
obligation or security convertible into or evidencing a right to purchase, by
merger, consolidation or otherwise, any class or series of stock ranking senior
to the Series A Mandatory Convertible Preferred Stock as to payment of dividends
and distribution of assets upon the liquidation, winding-up or dissolution of
the Company, or (c) to reclassify by merger, consolidation or otherwise, any
authorized stock of the Company into any class or series of stock, or any
obligation or security convertible into or evidencing a right to purchase any
class or series of stock, ranking senior to the Series A Mandatory Convertible
Preferred Stock as to payment of dividends or distribution of assets upon the
liquidation, winding-up or dissolution of the Company; provided that no such
vote shall be required for the Company to issue, authorize or increase the
authorized amount of, or issue or authorize any obligation or security
convertible into or evidencing a right to purchase, any class or series of stock
ranking pari passu with or junior to the Series A Mandatory Convertible
Preferred Stock as to payment of dividends or distribution of assets upon the
liquidation, winding-up or dissolution of the Company.
(iii) If and whenever six full quarterly dividends, whether or not
consecutive, payable on any series of preferred stock of the Company, including
our Series A Mandatory Convertible Preferred Stock, are not paid, the number of
directors constituting the Board of Directors will be increased by two and the
holders of all series of the preferred stock of the Company (including the
Series A Mandatory Convertible Preferred Stock) then outstanding, voting
together as a class, shall have a right to elect those additional directors to
the Board of Directors until all accumulated and unpaid dividends on the
cumulative preferred stock of the Company have been paid in full or, with
respect to any series of non-cumulative preferred stock, until non-cumulative
dividends have been paid regularly for at least a year. To exercise this right,
any holder of any series of the Company's preferred stock then outstanding,
including the Series A Mandatory Convertible Preferred Stock, may by written
notice request that the Company call a special meeting of the holders of the
Company's preferred stock for the purpose of electing the additional directors
and, if such non-payment of dividends is continuing, the Company shall call such
meeting within 35 days of the date of such written request. If the Company fails
to call such a meeting upon request, any holder at such time of any series of
the Company's preferred stock then outstanding, including the Series A Mandatory
Convertible Preferred Stock, may call a meeting. Upon payment of all accumulated
and unpaid dividends on the cumulative preferred stock of the Company or, in the
case of any series of non-cumulative preferred stock, upon such time when
non-cumulative dividends have been paid regularly for at least a year, the
holders of the Company's preferred stock then outstanding will no longer have
the right to vote on directors and the term of office of each director so
elected will terminate and the number of directors will, without further action,
be reduced by two.
(iv) In any case where the Holders are entitled to vote as a class with
holders of Parity Securities, each holder shall be entitled to one vote for each
share of such preferred stock (including the Series A Mandatory Convertible
Preferred Stock) held by such holder. In any case where the Holders are entitled
to vote as a class, each Holder shall be entitled to one vote for each share of
the Series A Mandatory Convertible Preferred Stock held by such Holder.
Section 5. Automatic Conversion. Each share of Series A Mandatory
Convertible Preferred Stock will automatically convert (unless previously
converted at the option of the Company in accordance with Section 6 or at the
option of the Holder in accordance with Section 7, or a Merger Early Settlement
has occurred in accordance with Section 8), on December 15, 2006 (the
"Conversion Date"), into a number of newly issued shares of Common Stock equal
to the Conversion Rate (as defined below). The Holders on the Conversion Date
shall have the right to receive a dividend payment of cash, shares of Common
Stock, or any combination thereof, as the Company determines in its sole
discretion, in an amount equal to any accumulated and unpaid dividends on the
Series A Mandatory Convertible Preferred Stock as of the Conversion Date (other
than previously declared dividends on the Series A Mandatory Convertible
Preferred Stock payable to a Holder of record as of a prior date), whether or
not declared, out of legally available assets of the Company. To the extent the
Company has such assets available and pays some or all of such dividend in
shares of Common Stock, the number of shares of Common Stock issuable to a
Holder in respect of such accumulated and unpaid dividends shall equal the
amount of accumulated and unpaid dividends on the Series A Mandatory Convertible
Preferred Stock on the Conversion Date that the Company determines to pay in
shares of Common Stock divided by the Current Market Price (as defined below).
In the event the Company elects to pay some or all of the dividend in shares of
Common Stock, the Company shall notify the Holders of shares of Series A
Mandatory Convertible Preferred Stock whether the dividend will be payable in
full in shares of Common Stock or any combination of cash and shares of Common
Stock, and shall specify such combination in such notice, at least 10 days prior
to the Conversion Date.
Dividends on the shares of Series A Mandatory Convertible Preferred
Stock shall cease to accrue and such shares of Series A Mandatory Convertible
Preferred Stock shall cease to be outstanding on the Conversion Date. The
Company shall make such arrangements as it deems appropriate for the issuance of
certificates, if any, representing shares of Common Stock (both for purposes of
the automatic conversion of shares of Series A Mandatory Convertible Preferred
Stock and for purposes of any dividend payment by the Company of shares of
Common Stock in respect of accumulated and unpaid dividends on the Series A
Mandatory Convertible Preferred Stock) and for any payment of cash in respect of
accumulated and unpaid dividends on the Series A Mandatory Convertible Preferred
Stock or cash in lieu of fractional shares, if any, in exchange for and
contingent upon the surrender of certificates representing the shares of Series
A Mandatory Convertible Preferred Stock (if such shares are held in certificated
form), and the Company may defer the payment of dividends on such shares of
Common Stock and the voting thereof until, and make such payment and voting
contingent upon, the surrender of such certificates representing the shares of
Series A Mandatory Convertible Preferred Stock, provided that the Company shall
give the Holders such notice of any such actions as the Company deems
appropriate and upon such surrender such Holders shall be entitled to receive
such dividends declared and paid on such shares of Common Stock subsequent to
the Conversion Date. Amounts payable in cash in respect of the shares of Series
A Mandatory Convertible Preferred Stock or in respect of such shares of Common
Stock shall not bear interest.
Section 6. Provisional Conversion at the Option of the Company.
(i) Prior to the Conversion Date, the Company may, at its option, cause
the conversion of all, but not less than all, the shares of Series A Mandatory
Convertible Preferred Stock then outstanding for shares of Common Stock at a
rate of [ ] shares of Common Stock for each share of Series A Mandatory
Convertible Preferred Stock (the "Provisional Conversion Rate"), subject to
adjustment as set forth in Section 9(ii) below (as though references in Section
9(ii) to the Conversion Rate were replaced with references to the Provisional
Conversion Rate); provided that the Closing Price of the Common Stock has
exceeded 150% of $[ ], or $[ ] (the "Threshold Appreciation Price"), for at
least 20 Trading Days (as defined below) within a period of 30 consecutive
Trading Days ending on the Trading Day prior to the date on which the Company
notifies the Holders (pursuant to paragraph (ii) below) that it is exercising
its option to cause the conversion of the Series A Mandatory Convertible
Preferred Stock pursuant to this Section 6 (the "Provisional Conversion Notice
Date"). The Company shall be able to cause this conversion only if, in addition
to issuing the Holders shares of Common Stock as described above, the Company
pays the Holders in cash (a) an amount equal to any accumulated and unpaid
dividends on the shares of Series A Mandatory Convertible Preferred Stock then
outstanding, whether or not declared, and (b) the present value of all remaining
dividend payments on the shares of Series A Mandatory Convertible Preferred
Stock then outstanding, through and including December 15, 2006, in each case,
out of legally available assets of the Company. The present value of the
remaining dividend payments will be computed using a discount rate equal to the
Treasury Yield (as defined below).
(ii) A written notice (the "Provisional Conversion Notice") shall be
sent by or on behalf of the Company, by first class mail, postage prepaid, to
the Holders of record as they appear on the stock register of the Company on the
Provisional Conversion Notice Date (a) notifying such Holders of the election of
the Company to convert and of the Provisional Conversion Date (as defined
below), which date shall be not less than 30 days nor more than 60 days after
the Provisional Conversion Notice Date, and (b) stating the Corporate Trust
Office (as defined below) of the Transfer Agent at which the shares of Series A
Mandatory Convertible Preferred Stock called for conversion shall, upon
presentation and surrender of the certificate(s) (if such shares are held in
certificated form) evidencing such shares, be converted, and the Provisional
Conversion Rate to be applied thereto.
(iii) The Company shall deliver to the Transfer Agent irrevocable
written instructions authorizing the Transfer Agent, on behalf and at the
expense of the Company, to cause the Provisional Conversion Notice to be duly
mailed as soon as practicable after receipt of such irrevocable instructions
from the Company and in accordance with the above provisions. The shares of
Common Stock to be issued upon conversion of the Series A Mandatory Convertible
Preferred Stock pursuant to this Section 6 and all funds necessary for the
payment in cash of (a) any accumulated and unpaid dividends on the shares of
Series A Mandatory Convertible Preferred Stock then outstanding, whether or not
declared, and (b) the present value of all remaining dividend payments on the
shares of Series A Mandatory Convertible Preferred Stock then outstanding
through and including December 15, 2006, shall be deposited with the Transfer
Agent in trust at least one Business Day prior to the Provisional Conversion
Date, for the pro rata benefit of the Holders of record as they appear on the
stock register of the Company, so as to be and continue to be available
therefor. Neither failure to mail such Provisional Conversion Notice to one or
more such Holders nor any defect in such Provisional Conversion Notice shall
affect the sufficiency of the proceedings for conversion as to other Holders.
(iv) If a Provisional Conversion Notice shall have been given as
hereinbefore provided, then each Holder shall be entitled to all preferences and
relative, participating, optional and other special rights accorded by this
Certificate of Designations until and including the Provisional Conversion Date.
From and after the Provisional Conversion Date, upon delivery by the Company of
the Common Stock and payment of the funds to the Transfer Agent as described in
paragraph (iii) above, the Series A Mandatory Convertible Preferred Stock shall
no longer be deemed to be outstanding, and all rights of such Holders shall
cease and terminate, except the right of the Holders, upon surrender of
certificates therefor, to receive Common Stock and any amounts to be paid
hereunder.
(v) The deposit of monies in trust with the Transfer Agent shall be
irrevocable except that the Company shall be entitled to receive from the
Transfer Agent the interest or other earnings, if any, earned on any monies so
deposited in trust, and the Holders shall have no claim to such interest or
other earnings, and any balance of monies so deposited by the Company and
unclaimed by the Holders entitled thereto at the expiration of two years from
the Provisional Conversion Date shall be repaid, together with any interest or
other earnings thereon, to the Company, and after any such repayment, the
Holders of the shares entitled to the funds so repaid to the Company, shall look
only to the Company for such payment without interest.
Section 7. Conversion at the Option of the Holder.
(i) Shares of Series A Mandatory Convertible Preferred Stock are
convertible, in whole or in part, at the option of the Holders thereof
("Optional Conversion"), at any time prior to the Conversion Date, into shares
of Common Stock at a rate of [ ] shares of Common Stock for each share of Series
A Mandatory Convertible Preferred Stock (the "Optional Conversion Rate"),
subject to adjustment as set forth in Section 9(ii) below (as though references
in Section 9(ii) to the Conversion Rate were replaced with references to the
Optional Conversion Rate).
(ii) Optional Conversion of shares of Series A Mandatory Convertible
Preferred Stock may be effected by delivering certificates evidencing such
shares (if such shares are held in certificated form), together with written
notice of conversion and a proper assignment of such certificates to the Company
or in blank (and, if applicable, payment of an amount equal to the dividend
payable on such shares pursuant to paragraph (iii) below), to the Corporate
Trust Office of the Transfer Agent for the Series A Mandatory Convertible
Preferred Stock or to any other office or agency maintained by the Company for
that purpose. Each Optional Conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the foregoing
requirements shall have been satisfied.
(iii) Holders of shares of Series A Mandatory Convertible Preferred
Stock at the close of business on a Dividend Record Date shall be entitled to
receive any dividend payable on such shares on the corresponding Dividend
Payment Date (if such dividend has been declared) notwithstanding the Optional
Conversion of such shares following such Dividend Record Rate and prior to such
Dividend Payment Date. However, any shares of Series A Mandatory Convertible
Preferred Stock surrendered for Optional Conversion after the close of business
on a Dividend Record Date and before the opening of business on the
corresponding Dividend Payment Date must be accompanied by payment in cash of an
amount equal to the dividend payable on such shares on such Dividend Payment
Date. Except as provided above, upon any Optional Conversion of shares of Series
A Mandatory Convertible Preferred Stock, the Company shall make no payment or
allowance for unpaid preferred dividends, whether or not in arrears, on such
shares of Series A Mandatory Convertible Preferred Stock as to which Optional
Conversion has been effected or for dividends or distributions on the shares of
Common Stock issued upon such Optional Conversion.
Section 8. Early Settlement Upon Cash Merger.
(i) In the event of a merger or consolidation of the Company of the
type described in Section 9(iii)(a) in which the Common Stock outstanding
immediately prior to such merger or consolidation is exchanged for consideration
consisting of at least 30% cash or cash equivalents (any such event a "Cash
Merger"), then the Company (or the successor to the Company hereunder) shall be
required to offer all Holders of shares of Series A Mandatory Convertible
Preferred Stock that remain outstanding after the date of the Cash Merger (if
any) the right to convert their shares of Series A Mandatory Convertible
Preferred Stock prior to the Conversion Date ("Merger Early Settlement") as
provided herein. On or before the fifth Business Day after the consummation of a
Cash Merger, the Company or, at the request and expense of the Company, the
Transfer Agent, shall give all Holders notice of the occurrence of the Cash
Merger and of the right of Merger Early Settlement arising as a result thereof.
The Company shall also deliver a copy of such notice to the Transfer Agent. Each
such notice shall contain:
(a) the date, which shall be not less than 20 nor more than 30
calendar days after the date of such notice, on which the Merger Early
Settlement will be effected (the "Merger Early Settlement Date");
(b) the date, which shall be on or one Business Day prior to
the Merger Early Settlement Date, by which the Merger Early Settlement
right must be exercised;
(c) the Conversion Rate in effect immediately before such Cash
Merger and the kind and amount of securities, cash and other property
receivable by the Holder upon conversion of its shares of Series A
Mandatory Convertible Preferred Stock pursuant to Section 9(iii); and
(d) the instructions a Holder must follow to exercise the
Merger Early Settlement right.
(ii) To exercise a Merger Early Settlement right, a Holder shall
deliver to the Transfer Agent at the Corporate Trust Office by 5:00 p.m., New
York City time on or before the date by which the Merger Settlement right must
be exercised as specified in the notice, the certificate(s) (if such shares are
held in certificated form) evidencing the shares of Series A Mandatory
Convertible Preferred Stock with respect to which the Merger Early Settlement
right is being exercised duly endorsed for transfer to the Company or in blank
with a written notice to the Company stating the Holder's intention to convert
early in connection with the Cash Merger and providing the Company with payment
instructions.
(iii) On the Merger Early Settlement Date, the Company shall deliver or
cause to be delivered the kind and amount of cash, securities or other property
to be received by such exercising Holder determined by assuming the Holder had
converted the shares of Series A Mandatory Convertible Preferred Stock for which
such Merger Early Settlement right was exercised into Common Stock immediately
before the Cash Merger at the Conversion Rate in effect at such time (as
adjusted pursuant to Section 9(ii)).
(iv) Upon a Merger Early Settlement, the Transfer Agent shall, in
accordance with the instructions provided by the Holder thereof on the notice
provided to the Company as set forth in paragraph (ii) above, deliver to the
Holder such cash, securities or other property issuable upon such Merger Early
Settlement together with payment in lieu of any fractional shares, as provided
herein.
(v) In the event that Merger Early Settlement is effected with respect
to shares of Series A Mandatory Convertible Preferred Stock representing less
than all the shares of Series A Mandatory Convertible Preferred Stock held by a
Holder, upon such Merger Early Settlement the Company (or the successor to the
Company hereunder) shall execute and the Transfer Agent shall authenticate,
countersign and deliver to the Holder thereof, at the expense of the Company, a
certificate evidencing the shares as to which Merger Early Settlement was not
effected.
(vi) If the Holder does not elect to exercise its Merger Early
Settlement right pursuant to this Section 8, in lieu of shares of Common Stock,
the Company shall deliver on the Conversion Date, at the Conversion Rate in
effect on such date, the net cash, securities or other property for which the
Common Stock was exchangeable in connection with the Cash Merger.
Section 9. Definition of Conversion Rate; Anti-dilution Adjustments.
(i) Subject to the immediately following sentence, the "Conversion
Rate" is equal to, (a) if the Applicable Market Value (as defined below) is
greater than or equal to the Threshold Appreciation Price, [ ] shares of Common
Stock per share of Series A Mandatory Convertible Preferred Stock, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price, but is
greater than $[ ], $50.00 (the "Stated Amount") divided by the Applicable Market
Value, and (c) if the Applicable Market Value is equal to or less than $[ ], [ ]
shares of Common Stock per share of Series A Mandatory Convertible Preferred
Stock, in each case subject to adjustment as provided in Section 9(ii) (and in
each case rounded upward or downward to the nearest 1/10,000th of a share). In
each of the clauses in the immediately preceding sentence, the Conversion Rate
in respect of a conversion pursuant to Section 5 shall be increased by an amount
equal to any accumulated and unpaid dividends on the Series A Mandatory
Convertible Preferred Stock on the Conversion Date (taking into account any
payment of such dividends on the Conversion Date) divided by the Current Market
Price.
(ii) In connection with the Conversion Rate as set forth in Section
9(i), the formula for determining the Conversion Rate and the number of shares
of Common Stock to be delivered on the Conversion Date upon conversion as set
forth in Sections 6, 7 or 8 shall be subject to the following adjustments:
(a) Stock Dividends. In case the Company shall pay or make a
dividend or other distribution on the Common Stock in Common Stock, the
Conversion Rate, as in effect at the opening of business on the day
following the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution shall be increased by
dividing such Conversion Rate by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business
on the day following the date fixed for such determination.
(b) Stock Purchase Rights. In case the Company shall issue to
all holders of its Common Stock (such issuance not being available on
an equivalent basis to Holders of the shares of Series A Mandatory
Convertible Preferred Stock upon conversion) options, warrants or other
rights, entitling them to subscribe for or purchase shares of Common
Stock for a period expiring within 60 days from the date of issuance of
such option, warrants or other rights at a price per share of Common
Stock less than the Current Market Price on the date fixed for the
determination of stockholders entitled to receive such rights, options,
warrants or securities (other than pursuant to a dividend reinvestment,
share purchase or similar plan), the Conversion Rate in effect at the
opening of business on the day following the date fixed for such
determination shall be increased by dividing such Conversion Rate by a
fraction, the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock which the
aggregate consideration expected to be received by the Company upon the
exercise, conversion or exchange of such rights, options, warrants or
securities (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a Board
Resolution) would purchase at such Current Market Price and the
denominator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, either directly or indirectly, such increase
to become effective immediately after the opening of business on the
day following the date fixed for such determination.
(c) Stock Splits; Reverse Splits; and Combinations. In case
outstanding shares of Common Stock shall be subdivided, split or
reclassified into a greater number of shares of Common Stock, the
Conversion Rate in effect at the opening of business on the day
following the day upon which such subdivision, split or
reclassification becomes effective shall be proportionately increased,
and, conversely, in case outstanding shares of Common Stock shall each
be combined or reclassified into a smaller number of shares of Common
Stock, the Conversion Rate in effect at the opening of business on the
day following the day upon which such combination or reclassification
becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such
subdivision, split, reclassification or combination becomes effective.
(d) Debt, Asset or Security Distributions. (1) In case the
Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness, assets or securities
(but excluding any options, warrants or other rights referred to in
paragraph (b) of this Section 9(ii), any dividend or distribution paid
exclusively in cash and any dividend, shares of capital stock of any
class or series, or similar equity interests, of or relating to a
subsidiary or other business unit in the case of a Spin-Off (as defined
below) referred to in the next subparagraph, or dividend or
distribution referred to in paragraph (a) of this Section 9(ii)), the
Conversion Rate shall be increased by dividing the Conversion Rate in
effect immediately prior to the close of business on the date fixed for
the determination of stockholders entitled to receive such distribution
by a fraction, the numerator of which shall be the Current Market Price
on the date fixed for such determination less the then fair market
value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution)
of the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock and the denominator
of which shall be such Current Market Price, such adjustment to become
effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled
to receive such distribution. In any case in which this subparagraph
(d)(1) is applicable, subparagraph (d)(2) of this Section 9(ii) shall
not be applicable.
(2) In the case of a Spin-Off, the Conversion Rate in effect
immediately before the close of business on the record date fixed for
determination of stockholders entitled to receive that distribution
will be increased by multiplying the Conversion Rate by a fraction, the
numerator of which is the Current Market Price plus the Fair Market
Value (as defined below) of the portion of those shares of Capital
Stock or similar equity interests so distributed applicable to one
share of Common Stock and the denominator of which is the Current
Market Price. Any adjustment to the Conversion Rate under this
subparagraph (d)(2) will occur on the date that is the earlier of (A)
the 10th Trading Day from, and including, the effective date of the
Spin-Off and (B) the date of the securities being offered in the
Initial Public Offering (as defined below) of the Spin-Off, if that
Initial Public Offering is effected simultaneously with the Spin-Off.
(e) Cash Distributions. In case the Company shall, by dividend
or otherwise, make distributions to all holders of its Common Stock
exclusively in cash (excluding any cash that is distributed in a
Reorganization Event to which Section 9(iii) applies or as part of a
distribution referred to in paragraph (d) of this Section 9(ii))
immediately after the close of business on such date for determination,
the Conversion Rate shall be increased by multiplying the Conversion
Rate in effect immediately prior to the close of business on the date
fixed for determination of the stockholders entitled to receive such
distribution by a fraction, (A) the numerator of which shall be equal
to the Current Market Price on the date fixed for such determination
and (B) the denominator of which shall be equal to the Current Market
Price on the date fixed for such determination less the per share
amount of the distribution.
(f) Tender Offers. In case that a tender or exchange offer
made by the Company or any subsidiary of the Company for all or any
portion of the Common Stock shall expire and such tender or exchange
offer (as amended through the expiration thereof) shall require the
payment to stockholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of Purchased
Shares (as defined below)) of an aggregate consideration having a fair
market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a Board
Resolution) per share of the Common Stock that exceeds the closing
price of the Common Stock on the Trading Day next succeeding the last
date on which tenders or exchanges may be made pursuant to such tender
or exchange offer, then, immediately prior to the opening of business
on the day after the date of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or exchange offer
(as amended through the expiration thereof), the Conversion Rate shall
be increased by dividing the Conversion Rate immediately prior to the
close of business on the date of the Expiration Time by a fraction (A)
the numerator of which shall be equal to (x) the product of (I) the
Current Market Price on the date of the Expiration Time and (II) the
number of shares of Common Stock outstanding (including any tendered
shares) on the date of the Expiration Time less (y) the amount of cash
plus the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders pursuant to the tender or
exchange offer (assuming the acceptance, up to any maximum specified in
the terms of the tender or exchange offer, of Purchased Shares), and
(B) the denominator of which shall be equal to the product of (x) the
Current Market Price on the date of the Expiration Time and (y) the
number of shares of Common Stock outstanding (including any tendered
shares) on the date of the Expiration Time less the number of all
shares validly tendered, not withdrawn and accepted for payment on the
date of the Expiration Time (such validly tendered shares, up to any
such maximum, being referred to as the "Purchased Shares").
(g) Calculation of Adjustments. All adjustments to the
Conversion Rate shall be calculated to the nearest 1/10,000th of a
share of Common Stock (or if there is not a nearest 1/10,000th of a
share to the next lower 1/10,000th of a share). No adjustment in the
Conversion Rate shall be required unless such adjustment would require
an increase or decrease of at least one percent therein; provided, that
any adjustments which by reason of this subparagraph are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. If an adjustment is made to the Conversion Rate
pursuant to paragraph (a), (b), (c), (d), (e), (f) or (h) of this
Section 9(ii), an adjustment shall also be made to the Applicable
Market Value solely to determine which of clauses (a), (b) or (c) of
the definition of Conversion Rate set forth in Section 9(i) will apply
on the Conversion Date. Such adjustment shall be made by multiplying
the Applicable Market Value by a fraction, the numerator of which shall
be the Conversion Rate immediately before such adjustment and the
denominator of which shall be the Conversion Rate immediately after
such adjustment pursuant to paragraph (a), (b), (c), (d), (e), (f) or
(h) of this Section 9(ii); provided, that if such adjustment to the
Conversion Rate is required to be made pursuant to the occurrence of
any of the events contemplated by paragraph (a), (b), (c), (d), (e),
(f) or (h) of this Section 9(ii) during the period taken into
consideration for determining the Applicable Market Value, appropriate
and customary adjustments shall be made to the Conversion Rate.
(h) Increase of Conversion Rate. The Company may make such
increases in the Conversion Rate, in addition to those required by this
Section 9(ii), as the Board of Directors considers advisable in order
to avoid or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or issuance
of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes or for any other reasons.
(i) Notice of Adjustment. As soon as practicable after the
Conversion Rate is adjusted in accordance with this Section 9(ii), the
Company shall: (1) forthwith compute the Conversion Rate in accordance
with this Section 9(ii) and prepare and transmit to the Transfer Agent
an Officer's Certificate (as defined below) setting forth the
Conversion Rate, the method of calculation thereof in reasonable
detail, and the facts requiring such adjustment and upon which such
adjustment is based; and (2) provide a written notice to the Holders of
the occurrence of such event and a statement setting forth in
reasonable detail the method by which the adjustment to the Conversion
Rate was determined and setting forth the adjusted Conversion Rate.
(iii) In the event of:
(a) any consolidation or merger of the Company with or into
another Person or of another Person with or into the Company; or
(b) any sale, transfer, lease or conveyance to another Person
of the property of the Company as an entirety or substantially as an
entirety; or
(c) any reclassification (other than a reclassification to
which paragraph (c) of Section 9(ii) applies),
(any such event, a "Reorganization Event"), each share of Series A Mandatory
Convertible Preferred Stock prior to such Reorganization Event shall, after such
Reorganization Event, be converted into the right to receive the kind and amount
of securities, cash and other property receivable in such Reorganization Event
(without any interest thereon, and without any right to dividends or
distribution thereon which have a record date that is prior to the date of the
Reorganization Event) per share of Series A Mandatory Convertible Preferred
Stock by a holder of Common Stock that (1) is not a Person with which the
Company consolidated or into which the Company merged or which merged into the
Company or to which such sale or transfer was made, as the case may be (any such
Person, a "Constituent Person"), or an Affiliate (as defined below) of a
Constituent Person to the extent such Reorganization Event provides for
different treatment of Common Stock held by Affiliates of the Company and
non-Affiliates, and (2) has failed to exercise the rights of election, if any,
as to the kind or amount of securities, cash and other property receivable upon
such Reorganization Event (provided that if the kind or amount of securities,
cash and other property receivable upon such Reorganization Event is not the
same for each share of Common Stock held immediately prior to such
Reorganization Event by other than a Constituent Person or an Affiliate thereof
and in respect of which such rights of election shall not have been exercised
("Non-electing Share"), then for the purpose of this Section 9(iii) the kind and
amount of securities, cash and other property receivable upon such
Reorganization Event by each Non-electing Share shall be deemed to be the kind
and amount so receivable per share by a plurality of the Non-electing Shares).
On the Conversion Date, the Conversion Rate then in effect shall be applied to
the value or amount on the Conversion Date of such securities, cash or other
property.
In the event of such a Reorganization Event, the Person formed by such
consolidation, or merger or the Person which acquires the assets of the Company
shall execute and deliver to the Transfer Agent an agreement supplemental hereto
providing that the Holder of each share of Series A Mandatory Convertible
Preferred Stock that remains outstanding after the Reorganization Event (if any)
shall have the rights provided by this Section 9(iii). Such supplemental
agreement shall provide for adjustments which, for events subsequent to the
effective date of such supplemental agreement, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 9. The above
provisions of this Section 9(iii) shall similarly apply to successive
Reorganization Events.
(iv) No adjustment to the Conversion Rate need be made if Holders may
participate in the transaction that would otherwise give rise to an adjustment,
so long as the distributed assets or securities the Holders would receive upon
conversion of the Series A Mandatory Convertible Preferred Stock, if
convertible, exchangeable, or exercisable, are convertible, exchangeable or
exercisable, as applicable, without any loss of rights or privileges for a
period of at least 60 days following conversion of the Series A Mandatory
Convertible Preferred Stock.
The applicable Conversion Rate shall not be adjusted:
(a) upon the issuance of any shares of the Common Stock
pursuant to any present or future plan providing for the reinvestment
of dividends or interest payable on the Company's securities and the
investment of additional optional amounts in shares of Common Stock
under any plan;
(b) upon the issuance of any shares of the Common Stock or
options or rights to purchase those shares pursuant to any present or
future employee, director or consultant benefit plan or program of or
assumed by the Company or any of its subsidiaries;
(c) upon the issuance of any shares of the Common Stock
pursuant to any option, warrant, right or exercisable, exchangeable or
convertible security outstanding as of the date shares of the Series A
Mandatory Convertible Preferred Stock were first issued;
(d) for a change in the par value or no par value of the
Common Stock;
(e) if, as a result, on conversion shares of Common Stock
would be issued at a discount to their par value; or
(f) for accumulated and unpaid dividends.
Section 10. Definitions.
(i) "Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
(ii) The "Applicable Market Value" means the average of the Closing
Price per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Conversion Date.
(iii) "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
(iv) "Business Day" means any day other than a Saturday or Sunday or
any other day on which banks in The City of New York are authorized or required
by law or executive order to close.
(v) "Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents however designated of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such Person and any rights (other than debt securities convertible
or exchangeable into an equity interest), warrants or options to acquire an
equity interest in such Person.
(vi) The "Closing Price" of the Common Stock or any securities
distributed in a Spin-Off, as the case may be, on any date of determination
means the closing sale price (or, if no closing sale price is reported, the last
reported sale price) per share on the New York Stock Exchange ("NYSE") on such
date or, if such security is not listed for trading on NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which such security is so listed or quoted, or if such
security is not so listed or quoted on a United States national or regional
securities exchange, as reported by the Nasdaq stock market, or, if such
security is not so reported, the last quoted bid price for the such security in
the over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market value
of such security on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the Company.
(vii) "Corporate Trust Office" means the principal corporate trust
office of the Transfer Agent at which, at any particular time, its corporate
trust business shall be administered.
(viii) "Current Market Price" means (a) on any day the average of the
Closing Prices of the Common Stock for the five consecutive Trading Days
preceding the earlier of the day preceding the day in question and the day
before the "ex date" with respect to the issuance or distribution requiring
computation, (b) in the case of any Spin-Off that is effected simultaneously
with an Initial Public Offering of the securities being distributed in the
Spin-Off, the Closing Price of the Common Stock on the Trading Day on which the
initial public offering price of the securities being distributed in the
Spin-Off is determined, and (c) in the case of any other Spin-Off, the average
of the Closing Prices of the Common Stock over the first 10 Trading Days after
the effective date of such Spin-Off. For purposes of this paragraph, the term
"ex date," when used with respect to any issuance or distribution, shall mean
the first date on which the Common Stock trades in a regular way on the NYSE or
other principal U.S. securities exchange or quotation system on which the Common
Stock is listed or quoted at such time, without the right to receive such
issuance or distribution.
(ix) "Fair Market Value" means (a) in the case of any Spin-Off that is
effected simultaneously with an Initial Public Offering of the securities being
distributed in the Spin-Off, the initial public offering price of those
securities, and (b) in the case of any other Spin-Off, the average of the
Closing Prices of the securities being distributed in the Spin-Off over the
first 10 Trading Days after the effective date of such Spin-Off.
(x) "Holder" means the Person in whose name a share of Series A
Mandatory Convertible Preferred Stock is registered.
(xi) "Initial Public Offering" means the first time securities of the
same class or type as the securities being distributed in the Spin-Off are
offered to the public for cash.
(xii) "Officer" means the Chairman of the Board and President, any Vice
President, the Chief Financial Officer, the Chief Accounting Officer, the
Treasurer, any Assistant Treasurer, the Controller, any Assistant Controller,
the Secretary or any Assistant Secretary of the Company.
(xiii) "Officer's Certificate" means a certificate signed by two
Officers.
(xiv) "Person" means any individual, corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
(xv) "Provisional Conversion Date" means the date fixed for conversion
of shares of Series A Mandatory Convertible Preferred Stock for shares of Common
Stock pursuant to Section 6 above or, if the Company shall default in the cash
payment of (a) an amount equal to any accumulated and unpaid dividends on the
shares of Series A Mandatory Convertible Preferred Stock then outstanding ,
whether or not declared, and (b) the present value of all remaining dividend
payments on the shares of Series A Mandatory Convertible Preferred Stock then
outstanding, through and including December 15, 2006, in connection with such
conversion on such date, the date the Company actually makes such payment.
(xvi) "Spin-Off" means payment of a dividend or other distribution of
shares of capital stock of any class or series, or similar equity interests, of
or relating to a subsidiary or other business unit of the Company.
(xvii) "Subsidiary" means, with respect to any Person, (a) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (b) any partnership (1) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of such Person
or (2) the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
(xviii) "Trading Day" means a day during which trading in securities
generally occurs on the New York Stock Exchange or, if the Common Stock or any
security distributed in a Spin-Off, as the case may be, is not listed on the New
York Stock Exchange, on the principal other U.S. national or regional securities
exchange on which the Common Stock or any security distributed in a Spin-Off, as
the case may be, is then listed or, if the Common Stock or any security
distributed in a Spin-Off, as the case may be, is not listed on a U.S. national
or regional securities exchange, as reported by the National Association of
Securities Dealers Automated Quotation System or, if the Common Stock or any
security distributed in a Spin-Off, as the case may be, is not so reported, on
the principal other market on which the Common Stock or any security distributed
in a Spin-Off, as the case may be, then traded. No day on which the Common Stock
or any security distributed in a Spin-Off, as the case may be, experiences any
of the following, however, will count as a Trading Day:
a) any suspension of or limitation imposed on trading of the Common
Stock or any security distributed in a Spin-Off, as the case may be,
on any U.S. national or regional securities exchange or association
or over-the-counter market;
b) any event (other than an event listed in subsection c) below) that
disrupts or impairs the ability of market participants in general to
(i) effect transactions in or obtain market values for the Common
Stock or any security distributed in a Spin-Off, as the case may be,
on any relevant U.S. national or regional securities exchange or
association or over-the-counter market, or (ii) effect transactions
in or obtain market values for, futures or options contracts
relating to the Common Stock or any security distributed in a
Spin-Off, as the case may be, on any relevant U.S. national or
regional securities exchange or association or over-the-counter
market; or
c) any relevant U.S. national or regional securities exchange or
association or over-the-counter market on which the Common Stock or
any security distributed in a Spin-Off, as the case may be, trades
closes on any exchange business day prior to its scheduled closing
time unless such earlier closing time is announced by the exchange
at least one hour prior to the earlier of (i) the actual closing
time for the regular trading session on such exchange and (ii) the
submission deadline for orders to be entered into the exchange for
execution on such business day.
(xix) "Treasury Yield" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15 (519) which has become publicly available at least two Business Days prior
to the Provisional Conversion Date (or, if such Statistical Release is no longer
published, any publicly available source for similar market data)) most nearly
equal to the then remaining term to December 15, 2006, provided, however, that
if the then remaining term to December 15, 2006 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given, except
that if the then-remaining term to December 15, 2006 is less than one year, the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
(xx) "Transfer Agent" means Mellon Investor Services LLC unless and
until a successor is selected by the Company, and then such successor.
Section 11. Fractional Shares.
No fractional shares of Common Stock shall be issued to Holders. In
lieu of any fraction of a share of Common Stock which would otherwise be
issuable in respect of the aggregate number of shares of the Series A Mandatory
Convertible Preferred Stock surrendered by the same Holder upon a conversion as
described in Sections 5, 6(i), 7(i) or 8(i) or which would otherwise be issuable
in respect of a stock dividend payment upon a conversion as described in Section
5, such Holder shall have the right to receive an amount in cash (computed to
the nearest cent) equal to the same fraction of (a) in the case of Section 5,
the Current Market Price or (b) in the case of Sections 6(i), 7(i) or 8(i), the
Closing Price of the Common Stock determined as of the second Trading Day
immediately preceding the effective date of conversion. If more than one share
of Series A Mandatory Convertible Preferred Stock shall be surrendered for
conversion at one time by or for the same Holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate number of shares of the Series A Mandatory Convertible Preferred
Stock so surrendered.
Section 12. Miscellaneous.
(i) Procedures for conversion of shares of Series A Mandatory
Convertible Preferred Stock, in accordance with Sections 5, 6, 7 or 8, not held
in certificated form will be governed by arrangements among the depositary of
the shares of Series A Mandatory Convertible Preferred Stock, its participants
and persons that may hold beneficial interests through such participants
designed to permit settlement without the physical movement of certificates.
Payments, transfers, deliveries, exchanges and other matters relating to
beneficial interests in global security certificates may be subject to various
policies and procedures adopted by the depositary from time to time.
(ii) The Liquidation Preference and the annual dividend rate set forth
herein each shall be subject to equitable adjustment whenever there shall occur
a stock split, combination, reclassification or other similar event involving
the Series A Mandatory Convertible Preferred Stock. Such adjustments shall be
determined in good faith by the Board of Directors and submitted by the Board of
Directors to the Transfer Agent.
(iii) For the purposes of Section 9, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock.
(iv) If the Company shall take any action affecting the Common Stock,
other than any action described in Section 9, that in the opinion of the Board
of Directors would materially adversely affect the conversion rights of the
Holders, then the Conversion Rate, the Provisional Conversion Rate and/or the
Optional Conversion Rate for the Series A Mandatory Convertible Preferred Stock
may be adjusted, to the extent permitted by law, in such manner, and at such
time, as the Board of Directors may determine to be equitable in the
circumstances.
(v) The Company covenants that it will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Common Stock for the purpose of effecting conversion of
the Series A Mandatory Convertible Preferred Stock, the full number of shares of
Common Stock deliverable upon the conversion of all outstanding shares of Series
A Mandatory Convertible Preferred Stock not theretofore converted. For purposes
of this Section 12(v), the number of shares of Common Stock that shall be
deliverable upon the conversion of all outstanding shares of Series A Mandatory
Convertible Preferred Stock shall be computed as if at the time of computation
all such outstanding shares were held by a single Holder.
(vi) The Company covenants that any shares of Common Stock issued upon
conversion of the Series A Mandatory Convertible Preferred Stock or issued in
respect of a stock dividend payment upon a conversion described in Section 5,
shall be validly issued, fully paid and non-assessable.
(vii) The Company shall use its best efforts to list the shares of
Common Stock required to be delivered upon conversion of the Series A Mandatory
Convertible Preferred Stock or upon issuance in respect of a stock dividend
payment upon a conversion described in Section 5, prior to such delivery, upon
each national securities exchange or quotation system, if any, upon which the
outstanding Common Stock is listed at the time of such delivery.
(viii) Prior to the delivery of any securities that the Company shall
be obligated to deliver upon conversion of the Series A Mandatory Convertible
Preferred Stock or upon issuance in respect of a stock dividend payment upon a
conversion described in Section 5, the Company shall use its best efforts to
comply with all federal and state laws and regulations thereunder requiring the
registration of such securities with, or any approval of or consent to the
delivery thereof by, any governmental authority.
(ix) The Company shall pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Common Stock or other securities or property upon conversion of the Series A
Mandatory Convertible Preferred Stock pursuant thereto or upon issuance in
respect of a stock dividend payment upon a conversion described in Section 5;
provided, however, that the Company shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issue or delivery of
shares of Common Stock or other securities or property in a name other than that
of the Holder of the Series A Mandatory Convertible Preferred Stock to be
converted and no such issue or delivery shall be made unless and until the
person requesting such issue or delivery has paid to the Company the amount of
any such tax or established, to the reasonable satisfaction of the Company, that
such tax has been paid or is not applicable.
(x) The Series A Mandatory Convertible Preferred Stock is not
redeemable.
(xi) The Series A Mandatory Convertible Preferred Stock is not entitled
to any preemptive or subscription rights in respect of any securities of the
Company.
(xii) Whenever possible, each provision hereof shall be interpreted in
a manner as to be effective and valid under applicable law, but if any provision
hereof is held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating or otherwise adversely affecting the remaining
provisions hereof. If a court of competent jurisdiction should determine that a
provision hereof would be valid or enforceable if a period of time were extended
or shortened or a particular percentage were increased or decreased, then such
court may make such change as shall be necessary to render the provision in
question effective and valid under applicable law.
(xiii) Series A Mandatory Convertible Preferred Stock may be issued in
fractions of a share which shall entitle the Holder, in proportion to such
Holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of Holders
of Series A Mandatory Convertible Preferred Stock.
(xiv) Subject to applicable escheat laws, any monies set aside by the
Company in respect of any payment with respect to shares of the Series A
Mandatory Convertible Preferred Stock, or dividends thereon, and unclaimed at
the end of two years from the date upon which such payment is due and payable
shall revert to the general funds of the Company, after which reversion the
Holders of such shares shall look only to the general funds of the Company for
the payment thereof. Any interest accumulated on funds so deposited shall be
paid to the Company from time to time.
(xv) Except as may otherwise be required by law, the shares of Series A
Mandatory Convertible Preferred Stock shall not have any voting powers,
preferences and relative, participating, optional or other special rights, other
than those specifically set forth in this Certificate of Designations or the
Restated Certificate of Incorporation.
(xvi) The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
(xvii) If any of the voting powers, preferences and relative,
participating, optional and other special rights of the Series A Mandatory
Convertible Preferred Stock and qualifications, limitations and restrictions
thereof set forth herein is invalid, unlawful or incapable of being enforced by
reason of any rule of law or public policy, all other voting powers, preferences
and relative, participating, optional and other special rights of Series A
Mandatory Convertible Preferred Stock and qualifications, limitations and
restrictions thereof set forth herein which can be given effect without the
invalid, unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of Series A Mandatory
Convertible Preferred Stock and qualifications, limitations and restrictions
thereof shall, nevertheless, remain in full force and effect, and no voting
powers, preferences and relative, participating, optional or other special
rights of Series A Mandatory Convertible Preferred Stock and qualifications,
limitations and restrictions thereof herein set forth shall be deemed dependent
upon any other such voting powers, preferences and relative, participating,
optional or other special rights of Series A Mandatory Convertible Preferred
Stock and qualifications, limitations and restrictions thereof unless so
expressed herein.
(xviii) Shares of Series A Mandatory Convertible Preferred Stock that
(a) have not been issued on or before [ ] or (b) have been issued and reacquired
in any manner, including shares purchased or redeemed or exchanged or converted,
shall (upon compliance with any applicable provisions of the laws of Delaware)
have the status of authorized but unissued shares of preferred stock of the
Company undesignated as to series and may be designated or redesignated and
issued or reissued, as the case may be, as part of any series of preferred stock
of the Company, provided that any issuance of such shares as Series A Mandatory
Convertible Preferred Stock must be in compliance with the terms hereof.
(xix) If any of the Series A Mandatory Convertible Preferred Stock
certificates shall be mutilated, lost, stolen or destroyed, the Company shall
issue, in exchange and in substitution for and upon cancellation of the
mutilated Series A Mandatory Convertible Preferred Stock certificate, or in lieu
of and substitution for the Series A Mandatory Convertible Preferred Stock
certificate lost, stolen or destroyed, a new Series A Mandatory Convertible
Preferred Stock certificate of like tenor and representing an equivalent amount
of shares of Series A Mandatory Convertible Preferred Stock, but only upon
receipt of evidence of such loss, theft or destruction of such Series A
Mandatory Convertible Preferred Stock certificate and indemnity, if requested,
satisfactory to the Company and the Transfer Agent. The Company is not required
to issue any certificates representing Series A Mandatory Convertible Preferred
Stock on or after the Conversion Date. In place of the delivery of a replacement
certificate following the Conversion Date, the Transfer Agent, upon delivery of
the evidence and indemnity described above, will deliver the shares of Common
Stock pursuant to the terms of the Series A Mandatory Convertible Preferred
Stock evidenced by the certificate.
IN WITNESS WHEREOF, the Company has caused this certificate to
be duly executed by Nicholas J. Camera, Senior Vice President, General Counsel
and Secretary of the Company, and attested by , its ,
this _____ day of December 2003.
INTERPUBLIC GROUP OF COMPANIES, INC.
By:
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Name: Nicholas J. Camera
Title: Senior Vice President,
General Counsel and Secretary
ATTEST:
By:
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Name:
Title: