For purposes of the Tender Offer, validly tendered Preferred Shares (or defectively tendered Preferred Shares for which we have waived such defect) will be deemed to have been accepted for purchase by us if, as and when we give oral or written notice thereof to the Depositary.

 

In the event that the Tender Offer is oversubscribed, we expect to announce the final result of the proration and to make payment for all Preferred Shares accepted for purchase within two business days after the Expiration Time.

 

If any tendered Preferred Shares are not purchased pursuant to the Tender Offer for any reason, including due to proration, such Preferred Shares will be credited to the account maintained at DTC from which such Preferred Shares were delivered, promptly following the Expiration Time or termination of the Tender Offer.

 

We reserve the right to transfer or assign, in whole at any time or in part from time to time, to one or more of our affiliates, the right to purchase Preferred Shares tendered pursuant to the Tender Offer, but any such transfer or assignment will not relieve us of our obligations under the Tender Offer or prejudice the rights of tendering Holders to receive the Purchase Price pursuant to the Tender Offer.

 

PROCEDURES FOR TENDERING PREFERRED SHARES

 

Holders will not be eligible to receive the Purchase Price for tendered Preferred Shares unless they validly tender their Preferred Shares pursuant to the Tender Offer at or prior to the Expiration Time, subject to proration in the event the Tender Offer is oversubscribed.

 

Delivery of Preferred Shares through DTC and any acceptance of an Agent’s Message transmitted through ATOP is at the risk of the person tendering Preferred Shares and, except as otherwise provided in the Letter of Transmittal, delivery will be deemed made only when actually received by the Depositary.  We have not provided guaranteed delivery provisions in connection with the Tender Offer.

 

Tender of Preferred Shares.  The tender by a Holder of Preferred Shares (and subsequent acceptance of such tender by us) will constitute a binding agreement between such Holder and us in accordance with the terms and subject to the conditions set forth in this Offer to Purchase and in the Letter of Transmittal.

 

Tender of Preferred Shares Held Through a Custodian.  Any beneficial owner whose Preferred Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and that wishes to tender Preferred Shares should contact its nominee promptly and instruct such nominee to tender Preferred Shares on such beneficial owner’s behalf.

 

 

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Tender of Preferred Shares Held Through DTC.  To tender Preferred Shares that are held through DTC, DTC participants may electronically transmit their acceptance through ATOP (and thereby tender Preferred Shares), for which the transaction will be eligible.  Upon receipt of such participant’s acceptance through ATOP, DTC will confirm the acceptance and send an Agent’s Message to the Depositary for its acceptance.  Delivery of tendered Preferred Shares must be made to the Depositary pursuant to the book-entry delivery procedures set forth below.

 

Unless the Preferred Shares being tendered are deposited with the Depositary at or prior to the Expiration Time (accompanied by a properly transmitted Agent’s Message), we may, at our option, treat such tender as defective for purposes of the right to receive the Purchase Price.  Payment for the Preferred Shares will be made only against deposit of the tendered Preferred Shares.

 

Book-Entry Delivery Procedures.  The Depositary will establish accounts with respect to the Preferred Shares at DTC for purposes of the Tender Offer within two business days after the date of this Offer to Purchase, and any financial institution that is a participant in DTC may make book-entry delivery of Preferred Shares by causing DTC to transfer such Preferred Shares into the Depositary’s account in accordance with DTC’s procedures for such transfer.  However, although delivery of Preferred Shares may be effected through book-entry transfer into the Depositary’s account at DTC, an Agent’s Message must, in any case, be transmitted to, and received by, the Depositary at or prior to the Expiration Time in connection with the tender of suc h Preferred Shares.  Delivery of documents to DTC does not constitute delivery to the Depositary.  The confirmation of a book-entry transfer into the Depositary’s account at DTC as described above is referred to in this Offer to Purchase as a “Book-Entry Confirmation.” The term “Agent’s Message” means a message transmitted by DTC to, and received by, the Depositary and forming a part of the Book-Entry Confirmation, which states that DTC has received an express acknowledgment from each participant in DTC that is tendering the Preferred Shares that are the subject of such Book-Entry Confirmation, that such participants have received the Offer Documents and agree to be bound by the terms of the Tender Offer as set forth in the Offer Documents and that we may enforce such agreement against such participants.

 

Notwithstanding any other provision hereof, payment of the Purchase Price for Preferred Shares tendered and accepted for purchase pursuant to the Tender Offer will, in all cases, be made only after receipt by the Depositary of Book-Entry Confirmation of the transfer of such Preferred Shares into the Depositary’s account at DTC as described above, and a properly transmitted Agent’s Message.

 

Backup U.S. Federal Income Tax Withholding.  To prevent backup U.S. federal income tax withholding, a tendering Holder of Preferred Shares must (i) provide the Depositary with such Holder’s correct taxpayer identification number and certify that such Holder is not subject to backup U.S. federal income tax withholding by completing the Substitute Form W-9 included in the Letter of Transmittal or (ii) otherwise establish a basis for exemption from backup withholding.  See “Certain United States Federal Income Tax Consequences.”

 

Determination of Validity.  All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tendered Preferred Shares pursuant to any of the procedures described above will be determined by us in our sole discretion, which determination will be final and binding.  We expressly reserve the right, in our sole discretion, subject to applicable law, to reject any or all tenders of any Preferred Shares determined by us not to be in proper form or if the acceptance for purchase of, or payment for, such Preferred Shares may, in the opinion of our counsel, be unlawful.  We also reserve the right, subject to applicable law, to waive or amend any of the conditions to the Tender Offer or to waive, in our sole discretion, any defect or irregularity in any tender of Preferred Shares of any particular Holder, whether or not similar defects or irregularities are waived in the case of other Holders.  A waiver of any defect or irregularity with respect to the tender of Preferred Shares by a Holder will not constitute a waiver of the same or any other defect or irregularity with respect to the tender of any other Preferred Shares.  Our interpretation of the terms and conditions of the Tender Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding.  None of the Company, the Dealer Managers, the Information Agent and Depositary or any other person will be under any duty to give notification of any defects or irregularities in tenders or will incur any liability for failure to give any such notification.  If we waive our right to reject a defective tender of Preferred Shares, the Holder will be eligibl e to receive payment of the Purchase Price for such tendered Preferred Shares.

 

 

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No alternative, conditional or contingent tenders of Preferred Shares will be accepted.  A tendering Holder, by electronically transmitting its acceptance through DTC’s ATOP, waives all rights to receive notice of acceptance of such Holder’s Preferred Shares for purchase.

 

WITHDRAWAL OF TENDERS

 

Tenders of Preferred Shares may be validly withdrawn at any time at or prior to the Expiration Time.  Tendered Preferred Shares may not be withdrawn subsequent to the Expiration Time, provided, however, that tenders of Preferred Shares may be validly withdrawn if the Tender Offer is terminated without any Preferred Shares being purchased thereunder.  In the event of a termination of the Tender Offer, the Preferred Shares tendered pursuant to the Tender Offer will be promptly returned to the tendering Holders.

 

If we make a material change in the terms of the Tender Offer or the information concerning the Tender Offer, we will publicly announce such changes or information or disseminate additional offering materials and extend the Tender Offer to the extent required by law.  If the Tender Offer is amended at or prior to the Expiration Time in a material manner, we will promptly disclose such amendment and, if necessary, extend the Tender Offer for a period deemed by us to be adequate and in compliance with applicable law to permit Holders to withdraw their Preferred Shares.  If the consideration to be paid in the Tender Offer is increased or decreased, the Maximum Payment Amount or the number of Preferred Shares subject to the Tender Offer is increased or decreased or the pricing formula, minimum Purchase Price or maximum Pu rchase Price is changed, if required by applicable law, the Tender Offer will remain open at least ten business days from the date we first give notice to Holders of such Preferred Shares, by public announcement or otherwise, of such change, increase or decrease.  In addition, we may, if we deem appropriate, extend the Tender Offer for any other reason.

 

Any termination, extension or amendment of the Tender Offer will be followed promptly by public announcement thereof, the announcement in the case of an extension of the Tender Offer to be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Time.  Without limiting the manner in which any public announcement may be made, we will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release through Business Wire or Dow Jones News Service.

 

For a withdrawal of tendered Preferred Shares to be valid, a written or facsimile transmission notice of withdrawal must be received by the Depositary at or prior to the Expiration Time, by mail, fax or hand delivery at its address or facsimile number set forth on the back cover of this Offer to Purchase or by a properly transmitted “Request Message” through ATOP.  Any such notice of withdrawal must (i) specify the name of the person who tendered the Preferred Shares to be withdrawn, (ii) contain the description of the Preferred Shares to be withdrawn and the aggregate liquidation preference represented by such Preferred Shares and (iii) unless transmitted through ATOP, be signed by the Holder of such Preferred Shares in the same manner as the original signatu re on the Agent’s Message by which such Preferred Shares were tendered, or be accompanied by (a) documents of transfer sufficient to have the applicable transfer agent for the Preferred Shares register the transfer of the Preferred Shares into the name of the person withdrawing such Preferred Shares and (b) a properly completed irrevocable proxy authorizing such person to effect such withdrawal on behalf of such Holder.  If the Preferred Shares to be withdrawn have been delivered or otherwise identified to the Depositary, a signed notice of withdrawal is effective immediately upon receipt by the Depositary of written or facsimile notice of such withdrawal even if physical release of such Preferred Shares is not yet effected, provided such notice is received at or prior to the Expiration Time.

 

Any permitted withdrawal of Preferred Shares may not be rescinded.  Any Preferred Shares validly withdrawn will thereafter be deemed not validly tendered for purposes of the Tender Offer, provided, however, that withdrawn Preferred Shares may be re-tendered by again following one of the appropriate procedures described herein at any time at or prior to the Expiration Time.

 

If we extend the Tender Offer or are delayed in our acceptance for purchase of Preferred Shares or are unable to purchase Preferred Shares pursuant to the Tender Offer for any reason, then, without prejudice to our rights hereunder and subject to applicable law (including Rules 13e-4(f)(5) and 14e-1(c) under the Exchange Act, which require that an offeror pay the consideration offered or return the securities deposited by or on behalf of the investor promptly after the termination or withdrawal of a tender offer), tendered Preferred Shares may be retained by the Depositary on our behalf and may not be withdrawn, except as otherwise provided in this section.

 

 

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In addition, tendered Preferred Shares that have not been accepted for purchase may be withdrawn at any time after June 24, 2010 (40 business days after the commencement of the Tender Offer).

 

Any beneficial owner of Preferred Shares desiring to withdraw previously tendered Preferred Shares after 5:00 p.m., New York City time, on the date of the Expiration Time should make arrangements with such beneficial owner’s broker, dealer, commercial bank, trust company or other nominee to fax a notice of withdrawal to the Depositary at its facsimile number set forth on the back cover of this Offer to Purchase on behalf of such beneficial owner at or prior to the Expiration Time.

 

All determinations as to validity, form and eligibility (including time of receipt) of notices of withdrawal will be made by us, in our sole discretion, which determination will be final and binding.  None of the Company, the Dealer Managers, the Information Agent and Depositary or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal, or incur any liability for failure to give any such notification.

 

CONDITIONS TO THE TENDER OFFER

 

Notwithstanding any other provisions of the Tender Offer (or any extensions or amendments thereof) and in addition to (and not in limitation of) our right to extend or amend the Tender Offer at any time, we will not be required to accept for purchase or pay for any Preferred Shares tendered and may terminate the Tender Offer at any time and may, subject to Rule 14e-1 under the Exchange Act, postpone the acceptance of Preferred Shares tendered pursuant to the Tender Offer or delay the payment for Preferred Shares accepted for purchase, if, immediately prior to such time as any Preferred Shares are accepted for purchase pursuant to the Tender Offer, the Offer Conditions have not been satisfied.

 

The “Offer Conditions” mean the following:

 

·

any statute, rule, regulation, judgment, order, stay, decree, executive order or injunction is promulgated, proposed, entered, enforced, enacted, issued or deemed applicable to the Tender Offer by any domestic or foreign federal or state governmental authority or court, or regulatory or administrative agency or instrumentality, or any third person, which (i) would reasonably be expected to prohibit, or make illegal the acceptance for purchase, payment for or purchase of some or all of the Preferred Shares or the consummation of the Tender Offer, (ii) would reasonably be expected to result in a delay in or restrict our ability or render us unable to accept for purchase, pay for or purchase some or all of the Preferred Shares, (iii) would reasonably be expected to impose or con firm material limitations on the scope, validity or effectiveness of our ability to acquire or hold or to exercise full rights of ownership of the Preferred Shares, or (iv) is, or is reasonably likely to be, materially adverse to the business, operations, properties, condition (financial or otherwise), assets, liabilities or prospects of us and our subsidiaries, taken as a whole;

 

·

(i) any general suspension of, or limitation on prices for, trading in securities in the United States securities or financial markets, or any setting of minimum purchase prices for trading on such markets, or any suspension of trading of any securities of us or of one of our affiliates on any exchange or in the over-the-counter market, (ii) any banking moratorium or suspension of payments declared by U.S. federal or New York authorities, (iii) any major disruption of settlements of securities or clearance services in the United States, (iv) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by the U.S. Congress or any other national or international calamity or emergency if, in our sole judgment, the e ffect of any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with the Tender Offer, (v) any significant adverse change in the trading prices of the Company’s Common Stock on the New York Stock Exchange, or the Preferred Shares or on the Company’s debt securities listed below (the “Debt Securities”) on the over-the-counter markets, (vi) a material impairment in the trading market for equity securities that could, in our reasonable judgment, affect the Tender Offer, (vii) any limitation (whether or not mandatory) by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, on (or other event that, in our reasonable judgment, might affect) the extension of credit by banks or other lending institutions, or (viii) in the case of any of the foregoing existing at the time of the commencement of the Tender Offer, a material acceleration or worsening thereof;

 

 

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·

any threatened or pending action, proceeding or counterclaim brought by any domestic or foreign federal or state governmental, regulatory or administrative agency or authority, court, legislative body, commission or third party (i) challenging the acquisition by us of the Preferred Shares or otherwise seeking to restrain or prohibit the consummation of the Tender Offer or otherwise seeking to obtain any damages as a result thereof, (ii) otherwise materially adversely affecting our ability to successfully complete the Tender Offer or (iii) that is, or is reasonably likely to be, materially adverse to the business, operations, properties, condition (financial or otherwise), assets, liabilities or prospects of us and our subsidiaries, taken as a whole;

 

·

neither the Company’s transfer agent nor any third party has objected in any respect to, or taken action or failed to take action that could, in our reasonable judgment, adversely affect the consummation of, the Tender Offer or has taken any action that challenges the validity or effectiveness of the procedures used by us in the making of the Tender Offer or the acceptance of, or payment for, the Preferred Shares;

 

·	there has not occurred, or is likely to occur, any change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls that, in our reasonable judgment, would be likely to impair materially the contemplated benefits of the Tender Offer to us;

 

·

any event or circumstance affecting the business, operations, properties, condition (financial or otherwise), assets, liabilities or prospects of us or our subsidiaries or affiliates that, in our reasonable judgment, would or might (i) prohibit, prevent, restrict or delay the consummation of the Tender Offer, (ii) make it impractical or inadvisable to proceed with the Tender Offer or (iii) be materially adverse to the business, operations, properties, condition (financial or otherwise), assets, liabilities or prospects of us and our subsidiaries, taken as a whole; or

 

·	the Weighted Average Price is not less than $5.25.

 

The relevant Debt Securities for purposes of the condition in the second bullet point listed above are as follows:

 

Series of Debt Securities:

Floating Rate Notes due 2010

7.25% Senior Unsecured Notes due 2011

6.25% Senior Unsecured Notes due 2014

10.00% Senior Unsecured Notes due 2017

4.75% Convertible Senior Notes due 2023

4.25% Convertible Senior Notes due 2023

 

The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition, and may be waived with respect to the Tender Offer at any time at or prior to the Expiration Time by us, in whole or in part.  The failure by us at any time to exercise any of the foregoing rights will not be deemed a waiver of such right and each such right will be deemed an ongoing right that may be asserted at any time and from time to time up to the Expiration Time.  Any determination made by us concerning an event, development or circumstance described or referred to above will be final and binding on all parties.

 

The Tender Offer is not conditioned on any minimum number of Preferred Shares being tendered.

 

Although we have no present plans or arrangements to do so, we reserve the right to amend, at any time, the terms of the Tender Offer.  We will give Holders proper notice of such amendments as may be required by applicable law.

 

MARKET AND TRADING INFORMATION

 

As of April 28, 2010, 525,000 Preferred Shares were outstanding.  There is no established trading market for the Preferred Shares. Quotations for securities that are not widely traded, such as the Preferred Shares, may differ from actual trading prices and should be viewed as approximations.  To the extent that the Preferred Shares are traded, prices of the Preferred Shares may fluctuate greatly depending on the trading volume and the balance between buy and sell orders.  Holders are urged to obtain current information with respect to the market prices for the Preferred Shares.

 

Our Common Stock trades on the NYSE under the symbol “IPG.” The following table sets forth on a per share basis the high and low intra-day prices on the NYSE, based upon published financial sources for our Common Stock.

 

 

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		High				Low
Fiscal Year ended December 31, 2008
Quarter ended March 31, 2008		$	9.03			$	7.22
Quarter ended June 30, 2008			10.47				7.77
Quarter ended September 30, 2008			9.69				7.09
Quarter ended December 31, 2008			7.78				2.57
Fiscal Year ended December 31, 2009
Quarter ended March 31, 2009		$	4.55			$	3.08
Quarter ended June 30, 2009			6.41				4.05
Quarter ended September 30, 2009			7.77				4.57
Quarter ended December 31, 2009			7.62				5.71
Fiscal Year ending December 31, 2010
Quarter ended March 31, 2010		$	8.87			$	6.21
Quarter ended June 30, 2010 (through April 28, 2010)		$	9.93			$	8.30

No dividend has been paid on our common stock since the fourth quarter of 2002. Our future dividend policy will be determined on a quarter-by-quarter basis and will depend on earnings, financial condition, capital requirements and other factors. Our future dividend policy may also be influenced by the terms of our credit facility and certain of our outstanding securities. Our credit facility places certain limitations on the amount of common stock dividends that we may pay in any year. The terms of our outstanding series of preferred stock limit our ability to pay dividends on our common stock unless all accumulated and unpaid dividends have been or are contemporaneously declared and paid or provision for the payment thereof has been made.

 

 

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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

 

All discussions of U.S. federal tax considerations in this document have been written to support the marketing of the Tender Offer.  Such discussions were not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding U.S. federal tax penalties.  Holders should consult their own tax advisers in determining the tax consequences to them of exchanging the Preferred Shares, including the application to their particular situation of the U.S. federal tax considerations discussed below, as well as the application of state, local, foreign, or other tax laws.

 

The following discussion is a summary of certain U.S. federal income tax consequences to our shareholders of an exchange of Preferred Shares for cash pursuant to the Tender Offer.  The summary is based on laws, regulations, rulings and decisions now in effect, all of which are subject to change.  The discussion does not deal with special classes of Holders, such as dealers in securities or currencies, banks, financial institutions, insurance companies, tax-exempt organizations, partnerships and the partners therein, persons holding Preferred Shares as a position in a “straddle” or conversion transaction, or as part of a “synthetic security” or other integrated financial transaction or persons that have a functional currency other than the U.S. dollar, or persons that acquired their Preferred Sh ares through the exercise of employee stock options or otherwise as compensation.  This discussion assumes that the Preferred Shares are held as “capital assets” within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

The Company has not sought any ruling from the Internal Revenue Service (the “IRS”) with respect to the statements made and the conclusions reached in this discussion, and there can be no assurance that the IRS will agree with such statements and conclusions.   In addition, the discussion does not describe any tax consequences arising out of the laws of any state or local or foreign jurisdiction.  Accordingly, each Holder should consult its own tax advisor with regard to the Tender Offer and the application of U.S. federal income tax laws, as well as the laws of any state, local or foreign taxing jurisdictions, to its particular situation.

 

As used herein, a “U.S. Holder” means a beneficial owner of shares that is for U.S. federal income tax purposes (1) a citizen or resident of the United States, (2) a corporation or other entity taxed as a corporation created or organized in or under the laws of the United States or any political subdivision thereof, or (3) any other person subject to U.S. net income tax.  A “Non-U.S. Holder” means a beneficial owner of shares that is not a U. S. Holder.

 

U.S. Federal Income Tax Treatment of U.S. Holders

 

A sale of Preferred Shares for cash pursuant to the Tender Offer will be a taxable transaction for U. S. federal income tax purposes.  A U.S. Holder who participates in the Tender Offer will, depending on such Holder’s particular circumstances, be treated either as recognizing gain or loss from the disposition of the Preferred Shares or as receiving a distribution from us with respect to our stock.  If a broker or other paying agent is unable to determine whether sale or exchange treatment or distribution treatment should apply to a particular U.S. Holder, such paying agent may be required to report the transaction as resulting in a distribution.  In such event, a U.S. Holder that believes that sale or exchange treatment is proper should consult with its own tax advisor about how to report the transact ion on its tax return.

 

Sale or Exchange Treatment.  Under Section 302 of the Code, a sale of Preferred Shares for cash by a U.S. Holder pursuant to the Tender Offer will be treated as a “sale or exchange” of Preferred Shares for U. S. federal income tax purposes, rather than as a distribution with respect to the Preferred Shares held by the tendering U.S. Holder, only if the sale:

 

·	results in a “complete termination” of such U.S. Holder’s equity interest in us under Section 302(b)(3) of the Code,

 

·	is “substantially disproportionate” with respect to the U.S. Holder under Section 302(b)(2) of the Code, or

 

 

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·	is “not essentially equivalent to a dividend” with respect to the U.S. Holder under Section 302(b)(1) of the Code.

 

A sale of Preferred Shares by a U.S. Holder pursuant to the Tender Offer will result in a “complete termination” if, after the sale, either (1) the U.S. Holder no longer owns any of our outstanding preferred or common shares (either actually or constructively) or (2) the U.S. Holder no longer actually owns any of our outstanding preferred or ordinary shares and meets certain other requirements for avoiding the application of constructive ownership rules under the Code.  U.S. Holders wishing to satisfy the “complete termination” test through this second means should consult their own tax advisors.

 

A distribution to a U.S. Holder will be “substantially disproportionate” if the percentage of the outstanding voting shares of stock of the Company actually and constructively owned by the U.S. Holder immediately following the exchange of shares for cash pursuant to the Tender Offer (treating all shares acquired by us pursuant to the Tender Offer as not outstanding) is less than 80% of the percentage of the outstanding voting shares of the Company actually and constructively owned by the U.S. Holder immediately before the exchange (treating as outstanding all shares purchased in the Tender Offer from all shareholders).  For the purpose of applying the “substantially disproportionate” test, shares convertible into voting common shares at the option of the Holder, such as the Preferred Shares, will be coun ted as equal to the amount of voting common shares into which they are convertible.

 

A sale of Preferred Shares by a U.S. Holder pursuant to the Tender Offer will satisfy the “not essentially equivalent to a dividend” test if it results in a “meaningful reduction” of the U.S. Holder’s proportionate interest in our shares.  Whether a holder of Preferred Shares meets this test will depend on the holder of Preferred Shares’ particular facts and circumstances, as well as the relative percentage of Preferred Shares tendered by such holder and each of the other holders of Preferred Shares.  The IRS has indicated that even a small reduction in the percentage interest (by vote and value) of a shareholder whose relative interest in a publicly held corporation is minimal and who exercises no control over corporate affairs should constitute a “meaningful reduction.” ;  U.S. Holders should consult their own tax advisers as to the application of this test to their particular circumstances.

 

As noted above, in applying the foregoing Section 302 tests, a U.S. Holder must take into account not only preferred and common shares that such U.S. Holder actually owns, but also shares that such U.S. Holder is treated as owning under constructive ownership rules.  Generally, a U.S. Holder may constructively own shares actually owned, and in some cases constructively owned, by certain related individuals and entities as well as shares that a U.S. Holder has the right to acquire by exercise of an option or warrant or by conversion or exchange of a security.

 

Contemporaneous dispositions or acquisitions of preferred or ordinary shares by a U.S. Holder or a related person may be deemed to be part of a single integrated transaction and, if so, may be taken into account in determining whether either of the Section 302 tests described above are satisfied.  A U.S. Holder should consult its own tax advisor regarding the treatment of other dispositions or acquisitions of shares that may be integrated with such U.S. Holder’s sale of Preferred Shares to the Company pursuant to this Tender Offer.

 

U.S. Holders should be aware that, because proration may occur in the Tender Offer, even if all the Preferred Shares actually and constructively owned by a U.S. Holder are tendered pursuant to the Tender Offer, fewer than all of these shares may be purchased by us. Proration may therefore affect whether the sale of Preferred Shares by a U.S. Holder pursuant to the Tender Offer will be treated as a “sale or exchange.”

 

If a U.S. Holder satisfies any of the three Section 302 tests described above, the U.S. Holder will recognize gain or loss equal to the difference between the amount of cash received and such U.S. Holder’s tax basis in the Preferred Shares tendered.  Generally, a U.S. Holder’s tax basis for the Preferred Shares will be equal to the cost of the Preferred Shares to the U.S. Holder, less any prior distributions treated as a return of capital.  Any such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the holding period of the Preferred Shares exceeds one year as of the date of the sale pursuant to the Tender Offer.  Certain limitations apply to the deductibility of capital losses by U.S. Holders.  Gain or loss must be determined separately for each bl ock of tendered Preferred Shares (i.e., Preferred Shares acquired by the U.S. Holder at the same cost in a single transaction).

 

 

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Distribution Treatment.  If a U.S. Holder does not satisfy either of the Section 302 tests described above, the sale of a U.S. Holder’s Preferred Shares pursuant to the Tender Offer will not be treated as a sale or exchange under Section 302.  Instead, the entire amount of cash received by such U.S. Holder pursuant to the Tender Offer will be treated as a distribution to the U.S. Holder with respect to such U.S. Holder’s remaining shares.  The distribution will be treated as a dividend to the extent of the U.S. Holder’s share of our current and accumulated earnings and profits, as determined under U.S. federal income tax principles.  The amount of any distribution in excess of our current and accumulated earnings and profits would be treated as a return of capital to the extent of the U.S. Holder’s tax basis in the remaining shares with respect to which the distribution is deemed received (as determined on a block-by-block basis), and any remainder will be treated as capital gain.  Any such capital gain will be long-term capital gain if the U.S. Holder has held the Preferred Shares for more than one year as of the date of sale pursuant to the Tender Offer.

 

Any payment treated as a dividend will generally constitute “qualified dividend income” for non-corporate U.S. Holders provided certain holding period requirements are met.  A dividend received by a corporate U. S. Holder may be (1) eligible for a dividends-received deduction (subject to applicable exceptions and limitations) and (2) subject to the “extraordinary dividend” provisions of Section 1059 of the Code.  Corporate Holders should consult their own tax advisors regarding (1) whether a dividends-received deduction will be available to them, and (2) the application of Section 1059 of the Code to the ownership and disposition of their Preferred Shares.

 

Any such dividend will be taxed in its entirety, without reduction for the U.S. Holder’s tax basis of the Preferred Shares exchanged.  Such tax basis will be added to the remaining shares owned by the U.S. Holder; provided that where the remaining shares owned consist of more than one class (e.g. common and preferred shares), it is unclear how to allocate such tax basis among the remaining shares. If a tendering U.S. Holder does not actually retain any shares, the basis of any tendered Preferred Shares may (depending on circumstances) be added to shares retained by a person related to such U.S. Holder or the basis may be lost.

 

U.S. Federal Income Tax Treatment of Non-U.S. Holders

 

Sale or Exchange Treatment. Gain realized by a Non-U.S. Holder on a sale of shares for cash pursuant to the Tender Offer generally will not be subject to U.S. federal income tax if the sale is treated as a “sale or exchange” pursuant to the Section 302 tests described above under “U.S. Federal Income Tax Treatment of U.S. Holders” unless (i) such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business in the United States, (and, if required by an applicable income tax treaty, is attributable to a United States “permanent establishment” maintained by the Non-U.S. Holder), or (ii) in the case of gain realized by a Non-U.S. Holder that is an individual, such Non-U.S. Holder is present in the United States for 18 3 days or more in the taxable year of the sale and certain other conditions are met.

 

Distribution Treatment; Potential Withholding Tax. If the Non-U.S. Holder does not satisfy any of the tests under Section 302 explained above, the full amount received by the Non-U.S. Holder with respect to the sale of Preferred Shares to us pursuant to the Tender Offer will be treated as a distribution to the Non-U.S. Holder with respect to the Non-U.S. Holder's Preferred Shares.  To the extent that a distribution constitutes a dividend within the principles described above for U.S. Holders, that distribution would be subject to a U.S. withholding tax at the rate of 30% (or such lower rate as may be applicable under a tax treaty) if the dividend is not effectively connected with the conduct of a trade or business in the United States by the Non-U.S. Holder (or, if an inc ome tax treaty applies, the Non-U.S. Holder does not maintain a U.S. permanent establishment).

 

In some cases, payments made to Non-U.S. Holders with respect to the Tender Offer may not be subject to U.S. withholding tax if the Non-U.S. Holder certifies that it is not a U.S. person and that it met the “complete termination,” “substantially disproportionate,” or “not essentially equivalent to a dividend” test in respect of the Tender Offer, although receipt of the full payment may be delayed until the certification is provided.  Non-U.S. Holders tendering shares held through a broker or other nominee should consult such broker or other nominee and their own tax advisors to determine the particular withholding procedures that will be applicable to them.

 

NON-U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF U.S. FEDERAL INCOME TAX WITHHOLDING, INCLUDING ELIGIBILITY FOR A WITHHOLDING TAX REDUCTION OR EXEMPTION, AND ANY RELEVANT REFUND PROCEDURE.

 

 

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Information Reporting and Backup Withholding

U.S. Holders. Payments made to tendering U.S. Holders may be subject to information reporting and backup withholding of U.S. federal income tax, currently at a rate of 28%.  Certain U.S. Holders, including corporations, are exempt from these information reporting and backup withholding tax rules.  To avoid backup withholding, U.S. Holders that do not otherwise establish an exemption should complete and return an IRS Form W-9, certifying that such Holder is a U.S. person, that the taxpayer identification number (“TIN”) provided is correct, and that such Holder is not subject to backup withholding.  The amount of any backup withholding from a Tender Offer will be allowed as a credit aga inst such U.S. Holder’s federal income tax liability and may entitle such U.S. Holder to a refund, provided that the required information is furnished to the IRS.

 

Non-U.S. Holders. In order for a Non-U.S. Holder to qualify as exempt from backup withholding, that Non-U.S. Holder must submit an IRS Form W-8BEN or W-8ECI (or in the case of certain foreign partnerships and other foreign intermediaries, Form W-8IMY), signed under penalties of perjury, attesting to that Non-U.S. Holder’s exempt status.

 

Consequences to Non-Tendering Holders

A Holder whose Preferred Shares are not purchased pursuant to the Tender Offer will not incur any U.S. federal income tax liability as a result of consummation of the Tender Offer.

 

 

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THE DEALER MANAGERS, THE INFORMATION AGENT AND THE DEPOSITARY

 

Morgan Stanley & Co. Incorporated and Citigroup Global Markets have been engaged to act as Dealer Managers in connection with the Tender Offer.  In such capacity, the Dealer Managers may contact Holders regarding the Tender Offer and may request brokers, dealers, commercial banks, trust companies and other nominees to forward this Offer to Purchase, the Letter of Transmittal and related materials to beneficial owners of Preferred Shares.

 

Citigroup Global Markets Inc. is among the joint lead arrangers and joint book managers under our credit facility, and the Dealer Managers or their respective affiliates are agents and/or lenders under our credit facility.  In addition, the Dealer Managers and their respective affiliates have provided, are currently providing and may provide in the future, financial, advisory, investment banking and general banking services to us and our affiliates, for which they have received and will receive customary fees and commissions.  From time to time in the future, the Dealer Managers may provide additional services to us and our affiliates.

 

At any given time, the Dealer Managers may trade the Preferred Shares or any of our other securities for their own account or for the accounts of their customers and, accordingly, may hold a long or short position in the Preferred Shares or any such other securities.  The Dealer Managers are not obligated to make a market for the Preferred Shares.  In addition, the Dealer Managers may tender Preferred Shares in the Tender Offer.

 

Any Holder that has questions concerning the terms of the Tender Offer may contact the Dealer Managers at their respective address and telephone numbers set forth on the back cover of this Offer to Purchase.

 

Global Bondholder Services Corporation has been appointed Information Agent for the Tender Offer.  Questions and requests for assistance or additional copies of this Offer to Purchase or the Letter of Transmittal may be directed to the Information Agent at its address and telephone numbers set forth on the back cover of this Offer to Purchase.  Holders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Tender Offer.

 

Global Bondholder Services Corporation has been appointed as Depositary for the Tender Offer.  Letters of Transmittal and all correspondence in connection with the Tender Offer should be sent or delivered by each Holder or a beneficial owner’s broker, dealer, commercial bank, trust company or other nominee to the Depositary at its address and telephone numbers set forth on the back cover of this Offer to Purchase.  Any Holder or beneficial owner that has questions concerning the procedures for tendering Preferred Shares or whose Preferred Shares have been mutilated, lost, stolen or destroyed should contact the Depositary at its address and telephone numbers set forth on the back cover of this Offer to Purchase.

 

None of the Dealer Managers, the Information Agent or the Depositary assumes any responsibility for the accuracy or completeness of the information concerning us or our affiliates or the Preferred Shares contained or referred to in this Offer to Purchase or for any failure by us to disclose events that may have occurred and may affect the significance or accuracy of such information.

 

FEES AND EXPENSES

 

We have agreed to pay the Dealer Managers a customary fee for their services in connection with the Tender Offer.  In addition, we have agreed to reimburse the Dealer Managers for their reasonable and documented out-of-pocket expenses for their services as Dealer Managers in connection with the Tender Offer.  We have also agreed to indemnify the Dealer Managers and their respective affiliates against certain liabilities under federal or state law, including liabilities under the federal securities laws, or otherwise caused by, relating to or arising out of the Tender Offer.

 

We will pay the Information Agent customary fees for its services and reimburse the Information Agent for its reasonable and documented out-of-pocket expenses in connection with the Tender Offer.  We have also agreed to indemnify the Information Agent for certain liabilities relating to or arising out of the Tender Offer.  We will pay the Depositary customary fees for its services and reimburse the Depositary for its reasonable out-of-pocket expenses in connection with the Tender Offer.  We have also agreed to indemnify the Depositary for certain liabilities relating to or arising out of the Tender Offer.

 

 

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We will pay brokerage firms and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this Offer to Purchase and related materials to the beneficial owners of Preferred Shares and in handling or forwarding tenders of Preferred Shares by their customers.

 

MISCELLANEOUS

 

We are not aware of any jurisdiction in which the making of the Tender Offer is not in compliance with applicable law.  If we become aware of any jurisdiction in which the making of the Tender Offer would not be in compliance with applicable law, we will make a good faith effort to comply with any such law or seek to have such laws declared inapplicable to the Tender Offer.  If, after such good faith effort, we cannot comply with any such law, the Tender Offer will not be made to (nor will tenders of Preferred Shares be accepted from or on behalf of) the Holders residing in such jurisdiction.  In any jurisdiction in which the securities laws or blue sky laws require the Tender Offer to be made by a licensed broker or dealer, the Tender Offer will be deemed to be made on our behalf by the Dealer Managers, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

 

Pursuant to Rule 13e-4 promulgated under the Exchange Act, we have filed a statement on Schedule TO, which contains additional information with respect to the Tender Offer.  The Schedule TO, including the exhibits and any amendments and supplements to that document, may be examined, and copies may be obtained, at the same places and in the same manner as is set forth under “Available Information and Incorporation of Documents by Reference.”

 

We are responsible for the information contained and incorporated by reference in this Offer to Purchase.  We have not authorized anyone to give you any other information, and we take no responsibility for any other information that others may give you.

 

 

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The Depositary for the Tender Offer is:

 

Global Bondholder Services Corporation

 

By Regular, Registered or Certified Mail; Hand or Overnight Delivery: 65 Broadway – Suite 404 New York, New York 10006 Attn: Corporate Actions

By Facsimile Transmission: (212) 430-3775 (for eligible institutions only) To confirm receipt of facsimile by telephone: (212) 430-3774

Any questions or requests for assistance or additional copies of this Offer to Purchase may be directed to the Information Agent at the telephone numbers and address set forth below.  A Holder of Preferred Shares may also contact the Dealer Managers at their respective telephone numbers set forth below or such Holder’s broker, dealer, commercial bank, trust company or nominee for assistance concerning the Offer.

 

The Information Agent for the Tender Offer is:

 

Global Bondholder Services Corporation

 

65 Broadway – Suite 404

New York, New York 10006

Attn: Corporate Actions

 

Banks and Brokers call: (212) 430-3774 (collect)

or

All others call Toll Free: (866) 807-2200

 

The Dealer Managers for the Tender Offer are:

 

Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 Collect: (212) 761-8663 Toll-Free: (800) 624-1808 Attention: Liability Management Group

Citigroup Global Markets Inc. 390 Greenwich Street. 4th Floor New York, New York 10013 Collect: (212) 723-6106 Collect: (212) 723-7367 Toll-Free: (800) 558-3745 Attention: Liability Management Group

 

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