2.4.0.8112 - Disclosure - Series B Preferred Stocktruefalsefalse1false falsefalseeol_PE11654---1310-Q0007_STD_181_20130630_0http://www.sec.gov/CIK0001024732duration2013-01-01T00:00:002013-06-30T00:00:001false 4us-gaap_PreferredStockTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00<div> <table style="BORDER-COLLAPSE:COLLAPSE" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="4%" valign="top" align="left">4.</td> <td align="left" valign="top">Series B Preferred Stock</td> </tr> </table> On January 10, 2011, the Company entered into a securities purchase agreement, with Viscaria Limited, to raise equity financing to pay a portion of the cash consideration for the acquisition of iGATE Computer. Under the securities purchase agreement, the Company agreed to sell, in a private placement, up to 480,000 shares of newly designated 8.00% Series B Convertible Participating Preferred Stock, no par value per share (the “Series B Preferred Stock”), for an aggregate purchase price of up to $480 million. On February 1, 2011 and May 9, 2011, the Company issued 210,000 shares and 120,000 shares, respectively, of the Series B Preferred Stock for a consideration of $330 million. Significant economic terms of the Series B Preferred Stock include:   <table style="BORDER-COLLAPSE:COLLAPSE" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="5%"> </td> <td width="2%" valign="top" align="left">•</td> <td width="1%" valign="top"> </td> <td align="left" valign="top"> accrues cumulative dividends at a rate of 8.00% per annum, which dividends will be added to the liquidation preference of the Series B Preferred Stock and compounded quarterly; </td> </tr> </table>   <table style="BORDER-COLLAPSE:COLLAPSE" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="5%"> </td> <td width="2%" valign="top" align="left">•</td> <td width="1%" valign="top"> </td> <td align="left" valign="top"> is entitled to participate in dividends and other distributions payable on the Company’s common stock on an as-converted basis; </td> </tr> </table>   <table style="BORDER-COLLAPSE:COLLAPSE" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="5%"> </td> <td width="2%" valign="top" align="left">•</td> <td width="1%" valign="top"> </td> <td align="left" valign="top"> provides for a holder option to convert the outstanding principal plus accrued and unpaid dividends into the Company’s common stock at any time and from time to time at an initial conversion price of $20.30 per share (which conversion price is subject to adjustment in certain circumstances such as the Company’s sale or issuance of shares of common stock is for a price per share less than the current market price of its common stock on the date of sale or issue (other than issuances under the stock option or stock ownership plans), subdivision or combination of the Company’s common stock (e.g. by stock split or stock dividend), wherein the conversion price in effect will be proportionately reduced or increased on or after such effective or record date and merger, reorganization, consolidation or sale of substantially all of the assets); </td> </tr> </table>   <table style="BORDER-COLLAPSE:COLLAPSE" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="5%"> </td> <td width="2%" valign="top" align="left">•</td> <td width="1%" valign="top"> </td> <td align="left" valign="top"> is subject to a Company option to convert the Series B Preferred Stock into common stock of the Company after 18 months from the applicable closing date if, among other things, the volume weighted average price of the Company’s common stock exceeds 205% of the then applicable conversion price for a specified period of time; </td> </tr> </table>   <table style="BORDER-COLLAPSE:COLLAPSE" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="5%"> </td> <td width="2%" valign="top" align="left">•</td> <td width="1%" valign="top"> </td> <td align="left" valign="top"> is redeemable for cash at an amount equal to the outstanding principal plus accrued and unpaid dividends upon the exercise of the holder’s put right at six years from the last occurring closing date; </td> </tr> </table>   <table style="BORDER-COLLAPSE:COLLAPSE" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="5%"> </td> <td width="2%" valign="top" align="left">•</td> <td width="1%" valign="top"> </td> <td align="left" valign="top"> provides that, if the Series B Preferred Stock is not sooner converted, such preferred stock is subject to a mandatory conversion into shares of the Company’s common stock on the date that is six years from the applicable closing date (subject to extension in limited circumstances) unless the holder exercises the put right described in the immediately preceding bullet point; and </td> </tr> </table>   <table style="BORDER-COLLAPSE:COLLAPSE" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="5%"> </td> <td width="2%" valign="top" align="left">•</td> <td width="1%" valign="top"> </td> <td align="left" valign="top"> provides the holder the right to receive, prior to any payment in respect of any junior equity securities, the greater of the outstanding principal plus accrued and unpaid dividends and the as-converted value upon liquidation of the Company or upon certain changes of control. </td> </tr> </table> The Company incurred issuance costs amounting to $3.4 million which have been netted against the proceeds received from the issuance of Series B Preferred Stock. The Series B Preferred Stock is being accreted over a period of six years. The amount accreted totaled $0.1 million each during the three months ended June 30, 2013 and 2012 and $0.2 million each during the six months ended June 30, 2013 and 2012. The Company is accruing for cumulative dividends at a rate of 8.00% per annum, compounded quarterly. The amount of dividends accrued was $7.8 million and $7.2 million during the three months ended June 30, 2013 and 2012, respectively, and $15.3 million and $14.2 million during the six months ended June 30, 2013 and 2012, respectively. As of June 30, 2013 and 2012, the shares of Series B Preferred Stock are potentially convertible into 19.5 million and 18.0 million shares of common stock, respectively. </div>falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for terms, amounts, nature of changes, rights and privileges, dividends, and other matters related to preferred stock.No definition available.false0Series B Preferred StockfalseSeries B Preferred StockUnKnownUnKnownUnKnownUnKnowntruefalsefalseSheethttp://www.igate.com/taxonomy/role/NotesToFinancialStatementsPreferredStockTextBlock11