CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus and the documents incorporated by reference herein and therein contain
"forward-looking statements" (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning the Company and other matters. These statements may discuss goals,
intentions, and expectations as to future plans, trends, events, dividends, results of operations, or financial condition, or otherwise, based on current beliefs of the management of the Company as
well as assumptions made by, and information currently available to, such management. Forward-looking statements may be accompanied by words such as "aim," "anticipate," "believe," "plan," "could,"
"would," "should," "shall," "continue," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "will," "possible," "potential," "predict," "project" or the negative or other
variations of them. These forward-looking statements speak only as of the date on which such statements are made and are subject to various risks and uncertainties, many of which are outside the
Company's control. Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may differ materially from those
predicted in the forward-looking statements and from past results, performance, or achievements. Therefore, you should not place undue reliance on such statements. Factors that could cause actual
results to differ materially from those in the forward-looking statements include (but are not limited to):
-
•
-
the possibility that the Company will be unable to pay future dividends to shareholders or that the amount of such dividends may be less than
anticipated;
-
•
-
the possibility that the Company may not obtain its anticipated financial results in one or more future periods;
-
•
-
reduction in customer spending;
-
•
-
a slowdown in customer payments and changes in customer demand for products and services as a result of changing economic conditions or
otherwise;
-
•
-
unanticipated changes relating to competitive factors in the industries in which the Company operates;
-
•
-
the Company's ability to hire and retain key personnel;
-
•
-
the Company's ability to attract new customers and retain existing customers in the manner anticipated;
-
•
-
reliance on and integration of information technology systems;
-
•
-
changes in legislation or governmental regulations affecting the Company;
-
•
-
international, national or local economic, social or political conditions that could adversely affect IGT PLC or its customers;
-
•
-
conditions in the credit markets;
-
•
-
risks associated with assumptions the Company makes in connection with its critical accounting estimates;
-
•
-
the resolution of pending and potential future legal, regulatory or tax proceedings and investigations; and
-
•
-
the Company's international operations, which are subject to the risks of currency fluctuations and foreign exchange controls.
The
foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect IGT PLC's business,
including those described in
S-4
Table of Contents
IGT PLC's
Annual Report on Form 20-F for the fiscal year ended December 31, 2017 and other documents filed from time to time with the SEC, which are available on the SEC website
at www.sec.gov and on the investor relations section of IGT PLC's website at www.IGT.com. The contents of such websites are not incorporated into this prospectus supplement.
Except
as required under applicable law, IGT PLC does not assume any obligation to update the forward-looking statements. Nothing in this prospectus supplement, the accompanying
prospectus and the documents that are referenced and which have been incorporated by reference herein and therein is intended, or is to be construed, as a profit forecast or to be interpreted to mean
that earnings per IGT PLC share for the current or any future financial years will necessarily match or exceed the historical published earnings per IGT PLC share, as applicable. All
forward-looking statements contained in this prospectus supplement, the accompanying prospectus and the documents that are referenced and which have been incorporated by reference herein and therein
are qualified in their entirety by this cautionary statement.
S-5
Table of Contents
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights certain information contained elsewhere in this prospectus supplement, the accompanying
prospectus or the documents that are incorporated by reference herein and therein. You should read this entire prospectus supplement, the accompanying prospectus and the documents incorporated by
reference herein and therein, including the section entitled "Risk Factors" in this prospectus supplement, the accompanying prospectus and in our Annual Report on Form 20-F for the fiscal year
ended December 31, 2017 and in other reports we file with the SEC, before deciding whether to invest in our ordinary shares. In addition, this prospectus supplement and the accompanying
prospectus and the documents incorporated by reference herein and therein include forward-looking information that involves risks and uncertainties. See "Cautionary Statement Regarding Forward-Looking
Statements."
The Company
International Game Technology PLC, a public limited company incorporated under the laws of England and Wales ("IGT PLC"), has its
corporate headquarters in London, England. IGT PLC is the successor to GTECH S.p.A., a
società per azioni
incorporated
under the laws of Italy ("GTECH"), and the sole stockholder of International Game Technology, a Nevada corporation ("IGT"). IGT PLC, together with its consolidated subsidiaries, has principal
operating facilities in Providence, Rhode Island; Las Vegas, Nevada; and Rome, Italy.
On
April 7, 2015, IGT PLC became the successor to GTECH, when GTECH acquired IGT through the merger of GTECH with and into IGT PLC (the "Holdco Merger") and the
merger of Georgia Worldwide Corporation, a Nevada corporation and a wholly-owned subsidiary of IGT PLC ("Sub"), with and into IGT (the "Subsidiary Merger" and, together with the Holdco Merger,
the "Mergers"), all pursuant to the terms of the Agreement and Plan of Merger, dated as of July 15, 2014, as amended on September 23, 2014, by and among GTECH, IGT PLC, Sub, IGT,
and, solely with respect to Section 5.02(a) and Article VIII thereof, GTECH Corporation. In this prospectus supplement, unless otherwise specified, the terms "we," "us" and "our," and
the "Company" refer to IGT PLC together with its consolidated subsidiaries or, for periods of or points in time prior to the completion of the Holdco Merger, to GTECH together with its
consolidated subsidiaries, or any one or more of them, as the context may require.
Recent Developments
On April 7, 2018, the third anniversary of the completion of the Mergers, each shareholder that maintained its ownership of our ordinary
shares continuously from and after the completion of the Mergers became entitled, upon election, to direct the voting rights with respect to one special voting share of $0.000001 (each a "Special
Voting Share") per ordinary share held for such period, provided that such shareholder met certain conditions. In addition, from and after April 7, 2018, any shareholder who held (or may in the
future hold) ordinary shares continuously for a three-year period became (or will become) entitled to participate in the loyalty plan with respect to such ordinary shares and to exercise its rights to
direct the voting with respect to the Special Voting Shares associated with such ordinary shares. De Agostini has elected to exercise its rights to participate in the loyalty plan with respect to all
of its owned ordinary shares. As of May 18, 2018, there were 203,904,990 ordinary shares outstanding and De Agostini held 103,422,324 ordinary shares. De Agostini has elected to participate in
the loyalty plan with respect to all of our ordinary shares held by it, effective as of May 25, 2018. As a result, on May 25, 2018, De Agostini will have the right to direct the voting
with respect to 103,422,324 Special Voting Shares. No other shareholder has elected to participate in the loyalty plan as of the date hereof. Therefore, as of May 25, 2018, De Agostini's
effective voting interest will be approximately 67.30% of the total voting power. If De Agostini pledges any of our ordinary shares to secure its obligations under the variable forward transaction, De
Agostini will lose its right to direct the voting of the number of Special Voting Shares corresponding to the number of pledged ordinary shares.
S-6
Table of Contents
The
Company was recently informed of findings by the State of Washington's Office of Financial Management with respect to an investigation into potential ethics violations by Washington
state lottery employees who may have received items of value from various vendors, including employees of the Company, beyond allowable limits. As a result, the Company has begun an internal
investigation. For more information, see the Company's Report of Foreign Private Issuer on Form 6-K filed with the SEC on May 21, 2018 (the third such Report on Form 6-K filed by the Company on May
21, 2018).
Selling Shareholder
Immediately prior to the completion of the Mergers on April 7, 2015, De Agostini held 93,349,318 ordinary shares of GTECH, equal to
approximately 53.30% of GTECH's then-outstanding ordinary share capital, and its wholly-owned subsidiary, DeA Partecipazioni S.p.A., held 10,073,006 shares of GTECH, equal to approximately
5.75% of GTECH's then-outstanding ordinary share capital, resulting in a consolidated ownership of approximately 59.05% of GTECH's then-outstanding share capital. In connection with the Mergers, IGT
issued 198,526,804 ordinary shares, which was the primary cause of the decrease in the percent of ordinary shares owned by De Agostini. Effective January 1, 2018, DeA
Partecipazioni S.p.A. merged into De Agostini, resulting in the transfer of ownership of 10,073,006 ordinary shares from DeA Partecipazioni S.p.A. to De Agostini. Through its voting
power, De Agostini has the ability to determine the outcome of certain decisions submitted to a vote of our shareholders, including approval of annual dividends, the election and removal of directors,
mergers or other business combinations, the acquisition or disposition of assets and issuances of equity and the incurrence of indebtedness.
S-7
Table of Contents
The Offering
|
|
|
|
|
Selling Shareholder
|
|
De Agostini S.p.A.
|
|
Ordinary Shares Offered
|
|
We have been advised that to establish its initial hedge position with respect to the variable forward transaction, the
counterparty or its affiliates will borrow from third-party stock lenders 13,200,000 ordinary shares (the "underwritten shares") and will sell the underwritten shares in an underwritten public offering (the "offering") through Credit Suisse
Securities (USA) LLC, acting as the underwriter. The underwriter proposes to offer the underwritten shares in the offering from time to time in one or more transactions, in block sales, on the NYSE, in the over-the-counter market or in
negotiated transactions, at market prices prevailing at the time of sale or at negotiated prices.
|
|
|
|
This prospectus supplement also relates to an additional 4,800,000 of our ordinary shares, which we have been advised are
also being borrowed by the counterparty or its affiliates from third-party stock lenders. We have been advised that the counterparty or its affiliates or their agents expect to sell these additional ordinary shares, from time to time, in block sales,
on the NYSE, in the over-the-counter market or in negotiated transactions, at market prices prevailing at the time of sale or at negotiated prices. These additional ordinary shares will not be included in the offering. Notwithstanding the foregoing,
subject to satisfying the specified gaming-related regulatory and other conditions, De Agostini may pledge some of our ordinary shares held by it to secure its obligations under the variable forward transaction and, after that pledge, De Agostini may
obtain prepayment from the counterparty of the purchase price for the ordinary shares underlying the variable forward transaction. We have been advised by the counterparty that it expects that, over the same period when the counterparty or its
affiliates or their agents sell these additional ordinary shares, the counterparty or its affiliates or their agents will purchase an approximately equal number of ordinary shares in the open market.
|
|
|
|
See "Plan of Distribution."
|
|
Ordinary Shares Outstanding Before and After the Offering
|
|
203,904,990 shares as of May 18, 2018
|
|
Listing
|
|
Our ordinary shares are listed on the NYSE under the symbol "IGT."
|
S-8
Table of Contents
|
|
|
|
|
Use of proceeds
|
|
Neither we nor De Agostini will receive any of the proceeds from the sale of ordinary shares in the offering. Notwithstanding the foregoing,
subject to satisfying the specified gaming-related regulatory and other conditions, De Agostini may pledge some of our ordinary shares held by it to secure its obligations under the variable forward transaction and, after that pledge, De Agostini may
obtain prepayment from the counterparty of the purchase price for the ordinary shares underlying the variable forward transaction.
|
|
Lock-Up
|
|
We and De Agostini have agreed with the underwriter, subject to certain customary exceptions and except for the sales by De
Agostini described in "Plan of Distribution," not to dispose of or hedge any of our ordinary shares during the period from the date of the underwriting agreement until the date that is 60 days thereafter, except with the prior written consent of
the underwriter. The foregoing does not, however, apply to any employee benefit plans. See "Plan of Distribution."
|
|
Dividend Policy
|
|
IGT PLC paid interim cash dividends on its ordinary shares during each of 2016, 2017 and 2018 but has not implemented a
formal policy on dividends.
|
|
Variable Forward Transaction
|
|
We are not party to the variable forward transaction.
|
|
|
|
We have been advised that De Agostini is entering into a variable forward transaction with the counterparty relating to
18,000,000 of our ordinary shares that has economic characteristics similar to a collar.
|
|
|
|
Subject to satisfying specified gaming-related regulatory and other conditions, De Agostini may pledge some of our ordinary
shares held by it to secure its obligations under the variable forward transaction and, after that pledge, De Agostini may request prepayment of the purchase price for the ordinary shares underlying the variable forward transaction.
|
S-9
Table of Contents
|
|
|
|
|
|
|
Settlement of the variable forward transaction will occur in multiple tranches that are scheduled to mature over a period commencing on or
about four years from May 2018. The variable forward transaction will be settled for any tranche at De Agostini's election either (i) in cash, or (ii) by physical delivery if certain gaming-related regulatory and other conditions are
satisfied. If there has been no prior prepayment, De Agostini will receive from the counterparty an amount equal to an agreed floor price multiplied by the number of ordinary shares underlying the tranche. Upon a cash settlement, De Agostini will be
required to pay the cash equivalent of a number of ordinary shares to be determined pursuant to a formula specified in the agreement documenting the variable forward transaction based on the volume-weighted average price per share and agreed floor
and cap prices. If De Agostini elects physical settlement, then it may elect to deliver either a number of ordinary shares based on the specified formula, or all the ordinary shares underlying the tranche; in the latter case, the counterparty may owe
De Agostini an additional or increased payment.
|
|
|
|
We have been advised that the sale of the shares by the counterparty or its affiliates in the offering will establish its
initial hedge position with respect to the variable forward transaction, and that the counterparty or its affiliates may modify their hedge positions by buying or selling our ordinary shares or engaging in derivatives or other transactions from time
to time thereafter during the term of the variable forward transaction. The effect of the variable forward transaction, including any purchases and sales of our ordinary shares by the counterparty and its affiliates or agents, which may include the
underwriter, to establish or modify the counterparty's hedge positions from time to time during the term of the variable forward transaction, may variously have a positive, negative or neutral impact on the market price of our ordinary shares,
depending on market conditions at such times.
|
S-10
Table of Contents
|
|
|
|
|
|
|
We have been advised that upon the early termination of the variable forward transaction (in whole or in part) or upon the cash settlement
of the variable forward transaction (in whole or in part) at maturity, the counterparty or its affiliates or their agents may purchase a number of our ordinary shares in secondary market transactions to return our ordinary shares to stock lenders to
unwind the counterparty's hedge positions, and such purchases may have the effect of increasing, or limiting a decrease in, the market price of our ordinary shares during the relevant unwind period. In addition, we have been advised that, if De
Agostini has satisfied the conditions for physical settlement and elects to physically settle the variable forward transaction (in whole or in part) at maturity, depending on the market price of our ordinary shares at the time of physical settlement
and the type of physical settlement elected, the counterparty or its affiliates or their agents may purchase or sell our ordinary shares in secondary market transactions to establish, modify or, in some cases, unwind the counterparty's hedge
positions and such purchases or sales may have a positive, negative or neutral impact on the market price of our ordinary shares, depending on market conditions at such time.
|
|
|
|
See "Plan of Distribution" and "Risk Factors" for more information.
|
|
Risk factors
|
|
You should carefully read and consider the information set forth under "Risk Factors" on page S-11 of this prospectus
supplement and any risk factors described in the documents we incorporate by reference, as well as all the other information set forth in this prospectus supplement, the accompanying prospectus and in the documents we incorporate by reference herein
and therein, before investing in our ordinary shares.
|
|
Underwriter
|
|
Credit Suisse Securities (USA) LLC
|
S-11
Table of Contents
RISK FACTORS
Investing in our ordinary shares involves significant risks. Before you invest in our ordinary shares, in addition to the other information
contained in this prospectus supplement and the accompanying prospectus, you should carefully consider the risk factors described under "Risk Factors" in our most recent Annual Report on
Form 20-F, and in any updates to those risk factors set forth in our reports on Form 6-K incorporated by reference herein, together with all of the other information appearing or
incorporated by reference in this prospectus supplement and the accompanying prospectus, in light of your particular investment objectives and financial circumstances. See "Where You Can Find
Additional Information and Incorporation by Reference." These risks are not the only risks that we face. Our business, financial condition and results of operations could also be affected by
additional factors that are not presently known to us or that we currently do not consider to be material.
Risks Related to the Offering
The market price of our ordinary shares may decline after the offering.
The price per share of ordinary shares sold in the offering may be more or less than the market price of our ordinary shares on the date the
offering is consummated. If the purchase price is greater than the market price at the time of sale, purchasers may experience an immediate decline in the market value of the ordinary shares purchased
in the offering. If the actual purchase price is less than the market price for the ordinary shares, some purchasers in the offering may be inclined to immediately sell ordinary shares to attempt to
realize a profit. Any such sales, depending on the volume and timing, could cause the price of our ordinary shares to decline. Additionally, because stock prices generally fluctuate over time, there
is no assurance that purchasers of our ordinary shares in the offering will be able to sell shares after the offering at a price that is equal to or greater than the actual purchase price. Purchasers
should consider these possibilities in determining whether to purchase shares in the offering and the timing of any sales of ordinary shares.
There may be future sales or other dilution of our equity, which may adversely affect the market price of our
ordinary shares.
We are not restricted from issuing additional ordinary shares, subject to the underwriting agreement entered into with the underwriter in
connection with the offering, including any securities that are convertible into or exchangeable for, or that represent the right to receive, ordinary shares or any substantially similar securities.
The market price of our ordinary shares could decline as a result of sales of a large number of our ordinary shares in the market after the offering, by us, De Agostini or other of our shareholders,
or the perception that such sales could occur.
The effect of the borrowing of our ordinary shares in connection with the variable forward transaction, and
the sales of our ordinary shares by the counterparty or its affiliates or agents to establish, modify or, in some cases, unwind the counterparty's hedge positions in connection with the variable
forward transaction, may have a negative effect on the market price of our ordinary shares.
We have been advised that the counterparty will borrow from third-party stock lenders an aggregate amount of 18,000,000 ordinary shares, which
ordinary shares are being offered pursuant to this prospectus supplement. We have been advised by the counterparty that it or its affiliates or their agents intend to establish the counterparty's
initial hedge position in respect of the variable forward transaction by establishing a short position in our ordinary shares through an underwritten public offering under this prospectus supplement
of an aggregate amount of 13,200,000 ordinary shares the counterparty has borrowed from third-party stock lenders. The establishment of such short positions could have the effect of decreasing, or
limiting an increase in, the market price of our ordinary shares. The effect of the variable forward transaction, including any purchases and sales of our ordinary shares
S-12
Table of Contents
by
the counterparty and its affiliates or agents, which may include the underwriter, to establish or modify the counterparty's hedge positions from time to time during the term of the variable forward
transaction, may variously have a positive, negative or neutral impact on the market price of our ordinary shares, depending on market conditions at such times.
We
have been advised that upon early the termination of the variable forward transaction (in whole or in part) or upon the cash settlement of the variable forward transaction (in whole
or in part) at maturity, the counterparty or its affiliates or their agents may purchase a number of our ordinary shares in secondary market transactions to return our ordinary shares to stock lenders
to unwind the counterparty's hedge positions, and such purchases may have the effect of increasing, or limiting a decrease in, the market price of our ordinary shares during the relevant unwind
period. In addition, we have been advised that if De Agostini has satisfied the conditions for physical settlement and elects to physically settle the variable forward transaction (in whole or in
part) at maturity, depending on the market price of our ordinary shares at the time of physical settlement and the type of physical settlement elected, the counterparty or its affiliates or their
agents may purchase or sell our ordinary shares in secondary market transactions to establish, modify or, in some cases, unwind the counterparty's hedge positions in connection with the variable
forward transaction and such purchases or sales may have a positive, negative or neutral impact on the market price of our ordinary shares, depending on market conditions at such time. See "Plan of
Distribution" for more information.
Risks Related to Our Capital Structure
The concentrated voting power held by De Agostini and loyalty plan may limit another shareholder's ability to
acquire a controlling interest, change our management or strategy or otherwise exercise influence over us.
The loyalty plan set forth in our Articles of Association became effective on April 7, 2018. Under the loyalty plan, each shareholder
that maintains its ownership of our ordinary shares continuously for at least three (3) years will be entitled, upon election, to direct the voting rights with respect to one special voting
share per ordinary share held for such period, provided that such shareholder meets certain conditions. As a result of the loyalty plan, a relatively large proportion of our voting power could be
concentrated in a relatively small number of shareholders who would have significant influence over us.
De
Agostini has elected to exercise its rights to participate in the loyalty plan with respect to all of the ordinary shares held by it, effective as of May 25, 2018.
De Agostini currently holds 103,422,324 ordinary shares as of May 18, 2018. As of May 25, 2018, De Agostini will also have the right to direct the voting with respect to
103,422,324 Special Voting Shares. No other shareholder has elected to participate in the loyalty plan as of the date hereof. Therefore, as of May 25, 2018, De Agostini's effective voting
interest will be approximately 67.30% of the total voting power.
If
any such ordinary shares held by De Agostini are sold, disposed of, transferred, pledged or subjected to any lien, fixed or floating charge or other encumbrance (including in
connection with the variable forward transaction), De Agostini will cease to have the right to direct the voting with respect to the Special Voting Shares associated with those ordinary shares and De
Agostini's proportionate voting interest would decrease. However, if any other shareholder withdraws his or her ordinary shares from the register with respect to the Special Voting Shares (the
"Loyalty Register") or otherwise loses the right to direct the voting with respect to any Special Voting Shares, De Agostini's effective voting interest would increase. De Agostini may make decisions
with which other shareholders may disagree, including, among other things, delaying, discouraging or preventing a change of control of IGT PLC or a potential merger, consolidation, tender
offer, takeover or other business combination and may also prevent or discourage shareholders' initiatives aimed at changes in our management.
S-13
Table of Contents
USE OF PROCEEDS
Neither we nor De Agostini will receive any proceeds from the sale of the ordinary shares being offered hereby. Notwithstanding the foregoing,
subject to satisfying the specified gaming-related regulatory and other conditions, De Agostini may pledge some of our ordinary shares held by it to secure its obligations under the variable forward
transaction and, after that pledge, De Agostini may obtain prepayment from the counterparty of the purchase price for the ordinary shares underlying the variable forward transaction.
S-14
Table of Contents
CAPITALIZATION AND INDEBTEDNESS
The following table sets forth our cash and cash equivalents, capitalization and indebtedness as of as of March 31, 2018.
|
|
|
|
|
|
($ in thousands)
|
|
As of
March 31, 2018
|
|
|
Cash and cash equivalents
|
|
$
|
569,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt(1)
|
|
|
8,094,239
|
|
|
Redeemable non-controlling interests
|
|
|
377,243
|
|
|
Total equity
|
|
|
2,319,292
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
|
10,790,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
For
additional information regarding the Company's indebtedness, please refer to note 5 to the Company's unaudited condensed consolidated financial statements
contained in the Company's Report of Foreign Private Issuer on Form 6-K filed with the SEC on May 21, 2018 (the third such Report on Form 6-K filed by the Company on May 21,
2018), and to notes 12 and 13 to the Company's audited consolidated financial statements contained in the Company's Annual Report on Form 20-F for the fiscal year ended
December 31, 2017, filed with the SEC on March 15, 2018.
S-15
Table of Contents
PRICE RANGE OF ORDINARY SHARES AND DISTRIBUTIONS
As of May 18, 2018, the total number of ordinary shares outstanding was 203,904,990, of which 103,422,324 ordinary shares were held by De
Agostini. Our ordinary shares began trading on the NYSE on April 7, 2015. Our ordinary shares are traded on the NYSE under the symbol "IGT."
The
following table sets forth, for the periods indicated, the high and low sales prices for our ordinary shares, as reported by the NYSE. The last reported sale price of our ordinary
shares on the NYSE on May 18, 2018 was $30.41 per ordinary share.
|
|
|
|
|
|
|
|
|
|
|
High
|
|
Low
|
|
|
Year ended December 31, 2017
|
|
$
|
29.36
|
|
$
|
17.25
|
|
|
Year ended December 31, 2016
|
|
$
|
32.07
|
|
$
|
12.48
|
|
|
Year ended December 31, 2015(1)
|
|
$
|
21.23
|
|
$
|
14.34
|
|
|
Second quarter 2018 (through May 18, 2018)
|
|
$
|
31.00
|
|
$
|
25.30
|
|
|
First quarter 2018
|
|
$
|
30.82
|
|
$
|
25.10
|
|
|
Fourth quarter 2017
|
|
$
|
29.36
|
|
$
|
22.34
|
|
|
Third quarter 2017
|
|
$
|
24.92
|
|
$
|
17.92
|
|
|
Second quarter 2017
|
|
$
|
23.98
|
|
$
|
17.25
|
|
|
First quarter 2017
|
|
$
|
28.15
|
|
$
|
23.01
|
|
|
Fourth quarter 2016
|
|
$
|
32.07
|
|
$
|
22.95
|
|
|
Third quarter 2016
|
|
$
|
24.95
|
|
$
|
17.83
|
|
|
Second quarter 2016
|
|
$
|
19.91
|
|
$
|
16.65
|
|
|
First quarter 2016
|
|
$
|
18.37
|
|
$
|
12.48
|
|
|
Month ended May 2018 (through May 18, 2018)
|
|
$
|
31.00
|
|
$
|
27.27
|
|
|
Month ended April 30, 2018
|
|
$
|
28.49
|
|
$
|
25.30
|
|
|
Month ended March 31, 2018
|
|
$
|
30.82
|
|
$
|
25.95
|
|
|
Month ended February 28, 2018
|
|
$
|
29.89
|
|
$
|
25.10
|
|
|
Month ended January 31, 2018
|
|
$
|
29.51
|
|
$
|
26.41
|
|
|
Month ended December 31, 2017
|
|
$
|
28.29
|
|
$
|
25.82
|
|
-
(1)
-
For
the period from April 7, 2015 through December 31, 2015.
S-16
Table of Contents
SELLING SHAREHOLDER
Although De Agostini is deemed to be the selling shareholder under this prospectus supplement, its ownership of our ordinary shares will not be
reduced by the transactions described in this prospectus supplement unless it is entitled to and elects to physically settle the variable forward transaction.
The
following table sets forth, as of the date of this prospectus supplement, the number of ordinary shares and percentage of outstanding ordinary shares beneficially owned by De
Agostini prior to the offering, the number of ordinary shares offered in the offering and the number of ordinary shares and percentage of outstanding ordinary shares to be beneficially owned by it
after the offering. The table is based on information provided to us by De Agostini.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
Total Voting
Power
Owned Prior
to the
Offering(3)
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary Shares
Owned Prior to the
Offering
|
|
|
|
Ordinary Shares
Owned After the
Offering(4)
|
|
Percentage of
Total Voting
Power Owned
After the
Offering(5)(6)
|
|
|
|
Number of
Ordinary Shares
Offered in the
Offering(4)
|
|
|
Name of Selling Shareholder
|
|
Number
|
|
Percentage(2)
|
|
Number
|
|
Percentage(2)
|
|
|
De Agostini S.p.A.(1)
|
|
103,422,324
|
|
|
50.72
|
%
|
|
67.30
|
%
|
|
18,000,000
|
|
|
85,422,324
|
|
|
41.89
|
%
|
|
59.04
|
%
|
-
(1)
-
The
address of both De Agostini's principal business and principal office is 15, Via Giovanni da Verrazano, 28100 Novara, Italy.
-
(2)
-
For
purposes of this table, information as to the percentage of ordinary shares beneficially owned is calculated based on 203,904,990 ordinary shares outstanding as
of May 18, 2018.
-
(3)
-
For
purposes of this table, information as to the percentage of total voting power held by De Agostini is calculated based on 203,904,990 ordinary shares outstanding
as of May 18, 2018, and 103,422,324 Special Voting Shares associated with ordinary shares registered in the Loyalty Register as of May 25, 2018, all of which are held by De Agostini.
-
(4)
-
For
purposes of this table, the number of ordinary shares offered in the offering includes the 13,200,000 ordinary shares relating to the underwritten public
offering and the additional 4,800,000 ordinary shares being borrowed by the counterparty or its affiliates from third-party stock lenders.
-
(5)
-
The
calculations in these columns assume that De Agostini will sell or transfer all of our ordinary shares offered in the offering pursuant to a pledge and physical
settlement of the variable forward transaction and will not acquire any additional ordinary shares. There is no obligation, and no assurance, that De Agostini will sell, pledge or transfer any or all
of such ordinary shares.
-
(6)
-
For
purposes of this table, information as to the percentage of total voting power held by De Agostini is calculated based on 203,904,990 ordinary shares outstanding
as of May 18, 2018, and 85,422,324 Special Voting Shares associated with ordinary shares registered in the Loyalty Register as of May 29, 2018, all of which are held by De Agostini.
S-17
Table of Contents
TAX CONSIDERATIONS
Certain tax considerations relating to an investment in our ordinary shares are set forth under the heading "Taxation" in our Annual Report on
Form 20-F for the fiscal year ended December 31, 2017, filed with the SEC on March 15, 2018, and such tax considerations set forth under the headings "Material U.K. Tax
Considerations" and "Material Italian Tax Considerations" are incorporated by reference herein.
S-18
Table of Contents
PLAN OF DISTRIBUTION
We
have been advised that De Agostini is entering into a variable forward transaction with the counterparty relating to 18,000,000 of our ordinary shares that has economic
characteristics similar to a collar. Subject to satisfying the specified gaming-related regulatory and other conditions, De Agostini may pledge some of our ordinary shares held by it to secure its
obligations under the variable forward transaction and, after that pledge, De Agostini may obtain prepayment from the counterparty of the purchase price for the ordinary shares underlying the variable
forward transaction. In such case, the transaction will have economic characteristics similar to a collar and loan. De Agostini will retain the ability to direct the voting of any pledged ordinary
shares during the term of the transaction, absent default.
Settlement
of the variable forward transaction will occur in multiple tranches that are scheduled to mature over a period commencing on or about four years from May 2018. The variable
forward transaction will be settled for any tranche at De Agostini's election either (i) in cash, or (ii) by physical delivery if certain gaming-related regulatory and other conditions
are satisfied. If there has been no prior prepayment, De Agostini will receive from the counterparty an amount equal to an agreed floor price multiplied by the number of ordinary shares underlying the
tranche. Upon a cash settlement, De Agostini will be required to pay the cash equivalent of a number of ordinary shares to be determined pursuant to a formula specified in the variable forward
transaction based on the volume-weighted
average price per share and agreed floor and cap prices. If De Agostini elects physical settlement, then it may elect to deliver either a number of ordinary shares based on the specified formula, or
all the ordinary shares underlying the tranche; in the latter case, the counterparty may owe De Agostini an additional or increased payment.
We
have been advised that, to establish its initial hedge position with respect to the variable forward transaction, the counterparty (or its affiliates) will borrow 13,200,000 ordinary
shares from third-party stock lenders (the "underwritten shares") and will sell the underwritten shares in an underwritten public offering (the "offering") through Credit Suisse Securities
(USA) LLC, acting as the underwriter, and that the counterparty or its affiliates may modify the counterparty's hedge positions by buying or selling our ordinary shares or engaging in
derivatives or other transactions with respect to our ordinary shares from time to time thereafter during the term of the variable forward transaction.
This
prospectus supplement also relates to an additional 4,800,000 of our ordinary shares, which we have been advised are also being borrowed by the counterparty or its affiliates from
third-party stock lenders. We have been advised that the counterparty or its affiliates or their agents expect to sell these additional ordinary shares, from time to time, in block sales, on the NYSE,
in the over-the-counter market or in negotiated transactions, at market prices prevailing at the time of sale or at negotiated prices. See "Underwriting—Additional offering by the
counterparty or its affiliates" below for more information. These additional ordinary shares will not be included in the offering. We have been advised by the counterparty that it expects that, over
the same period when the counterparty or its affiliates or their agents sell these additional ordinary shares, the counterparty or its affiliates or their agents will purchase an approximately equal
number of ordinary shares in the open market.
The
effect of the variable forward transaction, including any purchases and sales of our ordinary shares by the counterparty and its affiliates or their agents, which may include the
underwriter, to establish or modify the counterparty's hedge positions from time to time during the term of the variable forward transaction, may variously have a positive, negative or neutral impact
on the market price of our ordinary shares, depending on market conditions at such times.
We
have been advised that upon the early termination of the variable forward transaction (in whole or in part) or upon the cash settlement of the variable forward transaction (in whole
or in part) at maturity, the counterparty or its affiliates or their agents may purchase a number of our ordinary
S-19
Table of Contents
shares
in secondary market transactions to return our ordinary shares to stock lenders to unwind the counterparty's hedge positions, and such purchases may have the effect of increasing, or limiting a
decrease in, the market price of our ordinary shares during the relevant unwind period. In addition, we have been advised that, if De Agostini has satisfied the conditions for physical settlement and
elects to
physically settle the variable forward transaction (in whole or in part) at maturity, depending on the market price of our ordinary shares at the time of physical settlement and the type of physical
settlement elected, the counterparty or its affiliates or their agents may purchase or sell our ordinary shares in secondary market transactions to establish, modify or, in some cases, unwind the
counterparty's hedge positions and such purchases or sales may have a positive, negative or neutral impact on the market price of our ordinary shares, depending on market conditions at such time. See
"The Offering—Variable Forward Transaction" and "Risk Factors—The effect of the borrowing of our ordinary shares in connection with the variable forward transaction, and the
sales of our ordinary shares by the counterparty or its affiliates or agents to establish, modify or, in some cases, unwind the counterparty's hedge positions in connection with the variable forward
transaction, may have a negative effect on the market price of our ordinary shares" for more information.
We
are not party to the variable forward transaction and will not be issuing or selling any ordinary shares pursuant to the transaction or receiving any proceeds from the sales of the
ordinary shares in the offering.
S-20
Table of Contents
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting agreement among IGT PLC, De Agostini, the counterparty and
Credit Suisse Securities (USA) LLC, the underwriter in the offering, dated May 22, 2018, the counterparty has agreed to sell to the underwriter and the underwriter has agreed to purchase
from the counterparty, an aggregate of 13,200,000 of our ordinary shares at a price of $28.25 per share (gross of a 3% underwriting commission), which will result in $372,900,000 of proceeds, before
underwriting commissions and expenses, to the counterparty.
The
underwriting agreement provides that the underwriter is obligated to purchase all of the relevant ordinary shares in the offering if any are purchased.
The
underwriter proposes to offer the underwritten shares from time to time for sale in one or more transactions, in block sales, on the NYSE, in the over-the-counter market or in
negotiated transactions, at market prices prevailing at the time of sale or at negotiated prices, subject to receipt and acceptance and subject to the underwriter's right to reject any order in whole
or in part. In connection with the
sale of the underwritten shares, the underwriter may be deemed to have received compensation in the form of underwriting discounts. The underwriter may effect such transactions by selling ordinary
shares to or through dealers and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriter and/or purchasers of our ordinary shares for whom they
may act as agents or to whom they may sell as principal.
We
have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Securities and Exchange Commission a registration
statement under the Securities Act of 1933 (the "Securities Act") relating to, any of our ordinary shares or securities convertible into or exchangeable or exercisable for any of our ordinary shares,
or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of Credit Suisse Securities (USA) LLC for a period of 60 days
after the date of this prospectus supplement, except issuances pursuant to any employee plan, benefit or compensation arrangement or employment agreement.
Our
officers and directors have agreed that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of our ordinary shares or securities
convertible into or exchangeable or exercisable for any of our ordinary shares, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that
transfers, in whole or in part, any of the economic consequences of ownership of our ordinary shares, whether any of these transactions are to be settled by delivery of our ordinary shares or other
securities, in cash or otherwise, or publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement,
without, in each case, the prior written consent of Credit Suisse Securities (USA) LLC for a period of 60 days after the date of the underwriting agreement, subject to certain
exceptions.
International
Game Technology, a Nevada corporation and our wholly-owned subsidiary, De Agostini and the counterparty have agreed to indemnify the underwriter and certain of its
controlling persons against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriter may be required to make in respect of those
liabilities.
In
connection with the offering the underwriter may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with
Regulation M under the Exchange Act.
-
•
-
Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.
-
•
-
Over-allotment involves sales by the underwriter of shares in excess of the number of shares the underwriter are obligated to purchase, which
creates a syndicate short position.
S-21
Table of Contents
-
•
-
Syndicate covering transactions involve purchases of the ordinary shares in the open market after the distribution has been completed to cover
syndicate short positions. A short position is more likely to be created if the underwriter is concerned that there could be downward pressure on the price of the ordinary shares in the open market
after pricing that could adversely affect investors who purchase in the offering.
-
•
-
Penalty bids permit the underwriter to reclaim a selling concession from a syndicate member when the ordinary shares originally sold by the
syndicate member is purchased in a stabilizing transaction or a syndicate covering transaction to cover syndicate short positions.
These
stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our ordinary shares or preventing or
retarding a decline in the market price of the ordinary shares. As a result the price of our ordinary shares may be higher than the price that might otherwise exist in the open market. These
transactions may be effected on the NYSE, in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.
A
prospectus supplement in electronic format may be made available on the web sites maintained by the underwriter, or selling group members, if any, participating in the offering and the
underwriter may distribute prospectus supplements electronically. The underwriter may agree to allocate a number of shares to selling group members for sale to their online brokerage account holders.
Internet distributions will be allocated by the underwriter and selling group members that will make internet distributions on the same basis as other allocations.
We
estimate that our share of the expenses for the offering will be approximately $3,067,770.
Conflicts of Interest
The underwriter and its affiliates are full-service financial institutions engaged in various activities, which may include securities trading,
commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriter and its affiliates
have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for us, for which they received or will receive customary fees and
expenses.
In
addition, in the ordinary course of their business activities, the underwriter and its affiliates may make or hold a broad array of investments and actively trade debt and equity
securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. These investments and securities
activities may involve securities and/or instruments of ours or our affiliates. The underwriter and its affiliates may also make investment recommendations and/or publish or express independent
research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Additional offering by the counterparty or its affiliates
Additionally, we have been advised that the counterparty or its affiliates or agents will offer for sale an aggregate amount of 4,800,000 of our
ordinary shares using this prospectus supplement. The additional ordinary shares will not be included in the offering.
We
have been advised that the counterparty or its affiliates or agents propose to offer the additional ordinary shares from time to time after the offering, in block sales, on the NYSE,
in the over-the-counter market or in negotiated transactions, at market prices prevailing at the time of sale or at negotiated prices. In connection with the sale of these shares, we have been advised
that the counterparty or its affiliates or such agents may effect such transactions by selling the ordinary shares
S-22
Table of Contents
to
or through dealers, and these dealers may receive compensation in the form of discounts, concessions or commissions from those affiliates and/or from purchasers of shares for whom the dealers may
act as agents or to whom they may sell as principals. We have been advised by the counterparty that it expects that, over the same period that the counterparty or its affiliates or such agents sell
the additional ordinary shares, the counterparty or its affiliates or their agents expect to purchase an approximately equal number of ordinary shares in the open market.
Selling restrictions
Notice to Canadian Residents
The distribution of this prospectus supplement in Canada is being made only in the provinces of Ontario, Quebec, Alberta and British Columbia on
a private placement basis exempt from the requirement that we and De Agostini prepare and file a prospectus with the securities regulatory authorities in each province where trades of these
ordinary shares are made. Any resale of our ordinary shares in Canada must be made under applicable securities laws which may vary depending on the relevant jurisdiction, and which may require resales
to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Canadian purchasers are advised to seek legal
advice prior to any resale of our ordinary shares.
By purchasing our ordinary shares in Canada and accepting delivery of a purchase confirmation, a purchaser is representing to us and De Agostini
and the dealer from whom the purchase confirmation is received that:
-
•
-
the purchaser is entitled under applicable provincial securities laws to purchase such shares without the benefit of a prospectus qualified
under those securities laws as it is an "accredited investor" as defined under National Instrument 45-106—
Prospectus Exemptions
,
-
•
-
the purchaser is a "permitted client" as defined in National Instrument 31-103—
Registration
Requirements, Exemptions and Ongoing Registrant Obligations
,
-
•
-
where required by law, the purchaser is purchasing as principal and not as agent, and
-
•
-
the purchaser has reviewed the text above under "—Resale Restrictions."
Canadian purchasers are hereby notified that the underwriter is relying on the exemption set out in section 3A.3 or 3A.4, if applicable,
of National Instrument 33-105—
Underwriting Conflicts
from having to provide certain conflict of interest disclosure in this
prospectus supplement.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the
offering memorandum (including any amendment thereto) such as this prospectus supplement contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the
purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. A purchaser of our ordinary shares in Canada should refer to any applicable
provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or consult with a legal advisor.
S-23
Table of Contents
All of our directors and officers as well as the experts named herein and De Agostini may be located outside of Canada and, as a result, it may
not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located
outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons
outside of Canada.
Canadian purchasers of our ordinary shares should consult their own legal and tax advisors with respect to the tax consequences of an investment
in the shares in their particular circumstances and about the eligibility of our ordinary shares for investment by the purchaser under relevant Canadian legislation.
Notice to prospective investors in the European Economic Area
In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a "Relevant Member State"),
with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant Implementation Date"), none of our shares have been offered or
will be offered to the public in that Relevant Member State prior to the publication of a prospectus in relation to such shares which has been approved by the competent authority in that Relevant
Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in the Relevant Member State, all in accordance with the Prospectus Directive,
except that with effect from and including the Relevant Implementation Date, the offering may be made to the public in that Relevant Member State at any time under the following exemptions, if they
are implemented in the Relevant Member State:
-
•
-
to any legal entity which is a "qualified investor" as defined in the Prospectus Directive;
-
•
-
to fewer than 100 or, if the Relevant Member State has implemented provisions of the relevant amending directive (2010/73/EU), 150 natural or
legal persons (other than "qualified investors" as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant dealer or
dealers nominated by us for any such offer; or
-
•
-
in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided
that no such offer of shares shall require us or the underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive, or supplement a prospectus pursuant to
Article 16 of the Prospectus Directive.
For
the purposes of this provision, the expression an "
offer of shares to the public
" in relation to any shares in any Relevant Member
State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or
subscribe the shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression "Prospectus Directive" means Directive
2003/71/EC (and amendments thereto, including Directive 2010/73/EU), and includes any relevant implementing measure in the Relevant Member State.
This
European Economic Area selling restriction is in addition to any other selling restrictions set out below.
S-24
Table of Contents
Notice to prospective investors in Hong Kong
The ordinary shares may not be offered or sold in Hong Kong by means of any document other than (i) to "professional investors" as
defined in the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) (the "SFO") and any rules made thereunder; or (ii) in circumstances which do not constitute an offer to the public
within the meaning of the Companies (Winding up and Miscellaneous Provisions) Ordinance (Cap. 32, Laws of Hong Kong) (the "CO"); or (iii) in other circumstances which do not result in the
document being a "prospectus" as defined in the CO. No advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of
issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under
the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" as defined in the SFO and any
rules made thereunder.
Notice to prospective investors in Singapore
This prospectus supplement has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus
supplement and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares
be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor
under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to
Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.
Where
the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
-
•
-
a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold
investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
-
•
-
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an
individual who is an accredited investor,
shares,
debentures and units of shares and debentures of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within six months after
that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:
-
•
-
to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2)
of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust
are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or
other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;
-
•
-
where no consideration is or will be given for the transfer; or
-
•
-
where the transfer is by operation of law.
S-25
Table of Contents
Notice to prospective investors in Switzerland
This prospectus supplement is not intended to constitute an offer or solicitation to purchase or invest in the shares described herein. The
shares may not be publicly offered, sold or advertised, directly or indirectly, in, into or from Switzerland and will not be listed on the SIX Swiss Exchange or on any other exchange or regulated
trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the shares constitutes a prospectus as such term is understood pursuant to
article 652a or article 1156 of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange or any other regulated trading
facility in Switzerland, and neither this document nor any other offering or marketing material relating to the shares may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this document nor any other offering or marketing material relating to the offering, nor the Company nor the shares have been or will be filed with or approved by any Swiss regulatory
authority. The shares are not subject to the supervision by any Swiss regulatory authority, e.g., the Swiss Financial Markets Supervisory Authority (FINMA), and investors in the shares will not
benefit from protection or supervision by such authority.
Notice to prospective investors in the United Kingdom
This prospectus supplement is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or
(ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth
companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant
persons"). The shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such shares will be engaged in only with, relevant persons. Any person
who is not a relevant person should not act or rely on this document or any of its contents.
S-26
Table of Contents
EXPENSES
The following table sets forth the estimated expenses (other than underwriting discounts and commissions or agency fees and other items
constituting underwriters' or agents' compensation, if any) expected to be incurred by us in connection with the offering. All of the following expenses are expected to be paid by IGT PLC. De
Agostini has agreed to reimburse IGT PLC for all of the following expenses except for the fees and expenses incurred by IGT PLC in connection with the evaluation of the offering and the variable
forward transaction by the Audit Committee of the Board of Directors of IGT PLC (which non-reimbursable fees and expenses we estimate will amount to $600,000).
|
|
|
|
|
|
|
Expenses
|
|
Amount
|
|
|
SEC registration fee
|
|
$
|
62,770.41
|
|
|
Printing and engraving expenses
|
|
$
|
500,000.00
|
|
|
Legal fees and expenses
|
|
$
|
2,085,000.00
|
|
|
Accounting fees and expenses
|
|
$
|
105,000.00
|
|
|
Miscellaneous costs
|
|
$
|
315,000.00
|
|
|
Total
|
|
$
|
3,067,770.41
|
|
S-27
Table of Contents
LEGAL MATTERS
Certain legal matters in connection with the ordinary shares offered hereby will be passed upon for us by Wachtell, Lipton, Rosen & Katz,
New York, New York and Macfarlanes LLP, London, England. Certain legal matters relating to the offering and the variable forward transaction will be passed upon for the underwriter by Cleary
Gottlieb Steen & Hamilton LLP, New York, New York and for De Agostini by Shearman & Sterling LLP, New York, New York.
EXPERTS
The financial statements and management's assessment of the effectiveness of internal control over financial reporting (which is included in
Management's Report on Internal Control over Financial Reporting) incorporated in this Prospectus by reference to the Annual Report on Form 20-F of International Game Technology PLC for
the year ended December 31, 2017 and the audited historical financial statements of International Game Technology and management's assessment of the effectiveness of internal control over
financial reporting included on page 99 of International Game Technology's Annual Report on Form 10-K for the fiscal year ended September 27, 2014 have been so incorporated in
reliance on the reports (the report related to International Game Technology PLC contains an explanatory paragraph relating the Company's restatement of its financial statements as described in
Note 1 to the financial statements and also contains an adverse opinion on the effectiveness of internal control over financial reporting) of PricewaterhouseCoopers LLP, an independent
registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
S-28
Table of Contents
PROSPECTUS
INTERNATIONAL GAME TECHNOLOGY PLC
Ordinary Shares
Options
Warrants
Rights
Units
We or any selling securityholder may from time to time, in one or more offerings, offer and sell ordinary shares, as well as options, warrants or
rights to purchase ordinary shares and units described in this prospectus. Throughout this prospectus, we refer to the ordinary shares, the options, warrants and rights to purchase ordinary shares and
units collectively as the "securities."
From
the date of this prospectus, we or any selling securityholder may offer and sell these securities from time to time in amounts, at prices and on terms determined by market
conditions at the time of the offering. This prospectus describes only the general terms of these securities and the general manner in which we or a selling securityholder will offer and sell these
securities. The specific term of any securities we or a selling securityholder offer and sell will be included in a supplement to this prospectus. We or any selling securityholder may sell or
otherwise transfer the securities directly or
alternatively through underwriters, broker-dealers or agents. A prospectus supplement will describe the specific manner in which we or any selling securityholder will offer and sell the securities and
also may add, update or change information contained in this prospectus. The names of any underwriters and the specific terms of a plan of distribution will be stated in such a prospectus supplement.
We will not receive any proceeds from the sale of the securities by any selling securityholders.
Our
ordinary shares are listed on the New York Stock Exchange (the "NYSE") under the symbol "IGT." The last reported closing price of our ordinary shares on the NYSE on May 18,
2018 was $30.41 per share. We will provide information in the related prospectus supplement for the trading market, if any, for any securities that may be offered.
Neither
the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
Investing in our securities involves risks. Please carefully consider the risk factors described under "Risk Factors" on page 3 of this
prospectus and the "Risk Factors" section in any applicable prospectus supplement, for a discussion of the factors you should consider carefully before deciding to purchase our
securities.
The date of this prospectus is May 21, 2018.
Table of Contents
TABLE OF CONTENTS
Table of Contents
ABOUT THIS PROSPECTUS
This prospectus is part of a shelf registration statement that we have filed with the U.S. Securities and Exchange Commission (the "SEC") using
a "shelf" registration process. Under this shelf registration process, we or any selling securityholder may over time, in one or more offerings, offer and sell any combination of the securities
described in this prospectus and in an accompanying prospectus supplement, if required. No limit exists on the aggregate amount of the securities we or any selling securityholder may sell pursuant to
the registration statement to which this prospectus forms a part.
This
prospectus provides you with a general description of the securities we or any selling securityholder may offer and sell. Each time we or a selling securityholder offer and sell our
securities using this prospectus, if and to the extent necessary, we will provide a prospectus supplement that will contain specific information about the terms of that offering, including the number
of securities being offered, the manner of distribution, the identity of the selling securityholder(s), the identity of any
underwriters or other counterparties and other specific material terms related to the offering. Such prospectus supplement may also add, update or change information contained in this prospectus. To
the extent that any statement made in any prospectus supplement is inconsistent with statements made in this prospectus, the statements made in this prospectus will be deemed modified or superseded by
those made in such prospectus supplement. You should read both this prospectus and any prospectus supplement together.
You
should only rely on the information contained in this prospectus, any prospectus supplement and the documents incorporated by reference herein and therein. We have not authorized
anyone to provide you with different information. This prospectus may only be used where it is legal to sell these securities.
The
information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of the prospectus or any sale of
the securities. Additional information, including our financial statements and the notes thereto, is incorporated in this prospectus by reference to our reports filed with the SEC. Before you invest
in our securities, you should carefully read this prospectus, including the "Risk Factors," any prospectus supplement, the information incorporated by reference in this prospectus and any prospectus
supplement (including the documents described under the heading "Where You Can Find Additional Information" in both this prospectus and any prospectus supplement) and any additional information you
may need to make your investment decision.
1
Table of Contents
ABOUT THE COMPANY
Overview
International Game Technology PLC, a public limited company incorporated under the laws of England and Wales ("IGT PLC"), has its
corporate headquarters in London, England.
IGT PLC is the successor to GTECH S.p.A., a
società per azioni
incorporated under the laws of Italy ("GTECH"), and the sole
stockholder of International Game Technology, a Nevada corporation ("IGT"). IGT PLC, together with its consolidated subsidiaries, has principal operating facilities in Providence, Rhode Island;
Las Vegas, Nevada; and Rome, Italy.
On
April 7, 2015, GTECH acquired IGT through the merger of GTECH with and into IGT PLC (the "Holdco Merger"), and the merger of Georgia Worldwide Corporation, a Nevada
corporation and a wholly owned subsidiary of IGT PLC with and into IGT (the "Subsidiary Merger" and, together with the Holdco Merger, the "Mergers").
In
this prospectus, unless otherwise specified, the terms "we," "us" and "our," and the "Company" refer to IGT PLC and its consolidated subsidiaries or, for periods of or points
in time prior to the completion of the Holdco Merger, to GTECH together with its consolidated subsidiaries, or any one or more of them, as the context may require.
The
Company is a leading commercial operator and provider of technology in the regulated worldwide gaming markets that operates and provides a full range of services and leading-edge
technology products across all gaming markets, including lotteries, machine gaming, sports betting and interactive gaming. The Company also provides high-volume processing of commercial transactions.
The Company's state-of-the-art information technology platforms and software enable distribution of its products and services through land-based systems, Internet and mobile devices.
The
Company is organized into four business segments, which are supported by corporate shared services: North America Gaming and Interactive, North America Lottery, International and
Italy. Research and development and manufacturing are centralized in North America. The Company had over 12,000 employees at December 31, 2017.
IGT PLC's
principal office is located at Marble Arch House, Second Floor, 66 Seymour Street, London W1H 5BT, England, telephone number +44 (0) 207 535
3200. The Company's agent for service in the United States is The Corporation Trust Company of Nevada, 701 S. Carson Street—Suite 200, Carson City, Nevada 89701 (telephone number:
+1 518 433 4740).
Trademarks
We have proprietary rights to trademarks used in the information included or incorporated by reference into this prospectus, which are important
to our business, many of which are registered under applicable intellectual property laws. Solely for convenience, trademarks and trade names referred to in the information included or incorporated by
reference in this prospectus may
appear without the "®" or "™" symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent possible under applicable
law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply
a relationship with, or endorsement or sponsorship of us by, any other companies. Each trademark, trade name or service mark of any other company appearing in this prospectus is the property of its
respective holder.
2
Table of Contents
RISK FACTORS
Before making a decision to invest in our securities, you should carefully consider the risks described below and under "Risk Factors" in any
prospectus supplement and in our most recent Annual Report on Form 20-F, and in any updates to those risk factors set forth in our reports on Form 6-K incorporated by reference herein,
together with all of the other information appearing or incorporated by reference in this prospectus and any prospectus supplement, in light of your particular investment objectives and financial
circumstances. The occurrence of one or more of those risk factors could adversely impact our business, financial condition or results of operations. When we offer and sell any securities pursuant to
a prospectus supplement, we may include additional risk factors relevant to such securities in the prospectus supplement.
The market price of our ordinary shares may fluctuate significantly, and you could lose all or part of your
investment.
The market price of our ordinary shares may be influenced by many factors, some of which are beyond our control and could result in significant
fluctuations, including: (i) the failure of securities and industry analysts to cover our ordinary shares, changes in financial estimates by analysts or any failure by us to meet or exceed any
of these estimates; (ii) actual or anticipated variations in our operating results; (iii) announcements by us or our competitors of significant contracts or acquisitions; (iv) the
recruitment or departure of key personnel; (v) regulatory and litigation developments; (vi) developments in our industry; (vii) future sales of our ordinary shares; and
(viii) investor perceptions of us and the industry in which we operate.
In
addition, the stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of
particular companies affected. These broad market fluctuations may materially harm the market price of our ordinary shares, regardless of our operating performance. In the past, following periods of
volatility in the market price of certain companies' securities, securities class action litigation has been instituted against these companies. If any such litigation is instituted against us, it
could materially adversely affect our business, results of operations and financial condition.
Sales of substantial amounts of our ordinary shares in the public market, or the perception that these sales
may occur, could cause the market price of our ordinary shares to decline.
Sales of substantial amounts of our ordinary shares in the public market, or the perception that these sales may occur, could cause the market
price of our ordinary shares to decline. This could also impair our ability to raise additional capital through the sale of our equity securities. In addition, the sale of our ordinary shares by our
executives, directors and major shareholders in the public market, or the perception that such sales may occur, could cause the market price of our ordinary shares to decline. We have authority to
allot up to 1.85 billion ordinary shares with a $0.10 per share nominal value. We may issue ordinary shares or other securities from time to time as consideration for, or to finance, future
acquisitions and investments or for other capital needs. We cannot predict the size of future issuances of our ordinary shares or the effect, if any, that future sales and issuances of shares would
have on the market price of our ordinary shares. If any such acquisition or investment is significant, the number of ordinary shares or the number or aggregate principal amount, as the case may be, of
other securities that we may issue may in turn be substantial and may result in additional dilution to our shareholders.
3
Table of Contents
Our future efforts to raise capital could be dilutive to our shareholders and could cause our ordinary share
price to decline.
If we raise additional funds by issuing additional ordinary shares or debt securities convertible into ordinary shares, dilution to our
shareholders could result. A failure to obtain adequate funds may affect our ability to make acquisitions or development of new products, and may have a material adverse effect on our business and
financial condition.
If securities or industry analysts do not publish research or reports or publish unfavorable research about
our business, our ordinary share price and trading volume could decline.
The market for our ordinary shares depends in part on the research and reports that securities or industry analysts publish about us, our
business or our industry. We may have limited research coverage by securities and industry analysts. If no significant securities or industry analysts cover our ordinary shares, the trading price for
our ordinary shares could be negatively affected. In the event that one or more of the securities or industry analysts who cover our ordinary shares lower their recommendation with respect to our
ordinary shares, our ordinary share price could decline. If one or more of the securities or industry analysts ceases to cover our ordinary shares or fail to publish regular reports on our ordinary
shares, interest in our ordinary shares could decrease, which could cause our ordinary share price or trading volume to decline.
As a "foreign private issuer" under the laws of the United States, we are exempt from certain rules under the
U.S. securities laws and are permitted to file less information with the SEC than U.S. companies.
As a "foreign private issuer," we are exempt from certain rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that
impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, our executives, directors and principal shareholders
are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of
our ordinary shares. Moreover, we are not
required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. In addition, we are not
required to comply with Regulation FD, which restricts the selective disclosure of material information.
If
we were to lose our "foreign private issuer" status, we would no longer be exempt from certain provisions of the U.S. securities laws, we would be required to commence reporting on
forms required of U.S. companies, and we could incur increased compliance and other costs, among other consequences.
The rights of our shareholders may differ from the typical rights of stockholders of a Delaware corporation.
We are incorporated under the laws of England and Wales. The rights of our shareholders are governed by English law, including the provisions of
the U.K. Companies Act 2006, as amended (the "CA 2006"), and by our articles of association. These rights differ in certain respects from the typical rights of stockholders of a Delaware corporation.
The principal differences are set forth below under "Description of Share Capital—Differences in Corporate Law."
Provisions in the U.K. City Code on Takeovers and Mergers may have anti-takeover effects that could
discourage an acquisition of us by others, even if an acquisition would be beneficial to our shareholders.
The U.K. City Code on Takeovers and Mergers, or the Takeover Code, applies to, among other things, an offer for a public company whose
registered office is in the United Kingdom and whose securities are not admitted to trading on a regulated market in the United Kingdom if the company is
4
Table of Contents
considered
by the Panel on Takeovers and Mergers, or the Takeover Panel, to have its place of central management and control in the United Kingdom. This is known as the "residency test." The test for
central management and control under the Takeover Code is different from that used by the U.K. tax authorities. Under the Takeover Code, the Takeover Panel will determine whether we have our place of
central management and control in the United Kingdom by looking at various factors, including the structure of our board of directors, the functions of the directors and where they are resident.
If
at the time of a takeover offer the Takeover Panel determines that we have our place of central management and control in the United Kingdom, we would be subject to a number of rules
and restrictions, including but not limited to the following: (1) our ability to enter into deal protection arrangements with a bidder would be extremely limited; (2) we may not, without
the approval of our shareholders, be able to perform certain actions that could have the effect of frustrating an offer, such as issuing shares or carrying out acquisitions or disposals; and
(3) we would be obliged to provide equality of information to all bona fide competing bidders.
We are subject to the new EU data protection regulation, which creates a range of new compliance obligations
and significantly increases financial penalties for non-compliance, and any violation of such regulation could adversely affect our business, reputation, results of operations and financial condition.
We are required to comply with the General Data Protection Regulation ("GDPR"), which is enforceable beginning May 25, 2018, in relation
to the processing of certain personal data. Although the GDPR incorporates a number of basic principles from existing European Union law, it also imposes new obligations on companies that receive or
process personal data within the territorial scope of the GDPR and introduces new rights for individuals whose data has been processed. The GDPR significantly increases financial penalties for
noncompliance, including fines of up to four percent (4%) of global annual revenue for the preceding financial year or €20 million (whichever is greater) for the most serious
violations. Whilst the GDPR harmonizes to a significant extent the data protection laws of Member States, there is some flexibility for Member States to impose their own rules or requirements.
Therefore the exact scope of the changes to each Member State's data protection laws is not yet fully known and how the GDPR will be applied in practice remains uncertain.
The
implementation of the GDPR may require substantial amendments to our procedures and policies, and these changes could impact our business by increasing its operational and compliance
costs. For example, we may be required to implement new technical and organizational measures to protect data from unauthorized access, revise our mechanisms of obtaining consent from EU data
subjects, offer new controls to EU users with respect to their data (including by enabling them to exercise their rights to erasure and data portability) and devote additional resources to violation
notification. There is also a potential risk that we will be subject to litigation, investigations, increased fines, reputational harm and other liabilities should our practices be found or perceived
to be not compliant with the GDPR (or other future or current laws and regulations).
Pre-emption rights for U.S. and other non-U.K. shareholders may be unavailable.
In the case of certain increases in our issued share capital, under English law, existing shareholders are entitled to pre-emption rights to
subscribe for such shares, unless shareholders
dis-apply such rights by a special resolution at a shareholders' meeting. U.S. holders of ordinary shares in U.K. companies are customarily excluded from exercising any such pre-emption rights they
may have, unless a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), is effective with respect to those rights, or an exemption from the registration
requirements thereunder is available. We cannot assure U.S. holders that any exemption from the registration requirements of the Securities Act or applicable non-U.S. securities laws would be
available to enable U.S. or other non-U.K. shareholders to exercise such pre-emption rights or, if available, that we will utilize any such exemption.
5
Table of Contents
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated in it by reference contain "forward-looking statements" (including within the meaning of the
Private Securities Litigation Reform Act of 1995) concerning the Company and other matters. These statements may discuss goals, intentions, and expectations as to future plans, trends, events,
dividends, results of operations, or financial condition, or otherwise, based on current beliefs of the management of the Company as well as assumptions made by, and information currently available
to, such management. Forward-looking statements may be accompanied by words such as "aim," "anticipate," "believe," "plan," "could," "would," "should," "shall," "continue," "estimate," "expect,"
"forecast," "future," "guidance," "intend," "may," "will," "possible," "potential," "predict," "project" or the negative or other variations of them. These forward-looking statements speak only as of
the date on which such statements are made and are subject to various risks and uncertainties, many of which are outside the Company's control. Should one or more of these risks or uncertainties
materialize, or should any of the underlying assumptions prove incorrect, actual results may differ materially from those predicted in the forward-looking statements and from past results,
performance, or achievements. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking
statements include (but are not limited to):
-
•
-
the possibility that the Company will be unable to pay future dividends to shareholders or that the amount of such dividends may be less than
anticipated;
-
•
-
the possibility that the Company may not achieve its anticipated financial results in one or more future periods;
-
•
-
reductions in customer spending;
-
•
-
a slowdown in customer payments and changes in customer demand for products and services as a result of changing economic conditions or
otherwise;
-
•
-
unanticipated changes relating to competitive factors in the industries in which the Company operates;
-
•
-
the Company's ability to hire and retain key personnel;
-
•
-
the Company's ability to attract new customers and retain existing customers in the manner anticipated;
-
•
-
reliance on and integration of information technology systems;
-
•
-
changes in legislation or governmental regulations affecting the Company;
-
•
-
international, national or local economic, social or political conditions that could adversely affect the Company or its customers;
-
•
-
conditions in the credit markets;
-
•
-
risks associated with assumptions the Company makes in connection with its critical accounting estimates;
-
•
-
the resolution of pending and potential future legal, regulatory or tax proceedings and investigations; and
-
•
-
the Company's international operations, which are subject to the risks of currency fluctuations and foreign exchange controls.
6
Table of Contents
The
foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect IGT PLC's business,
including those described in IGT PLC's Annual Report on Form 20-F for the fiscal year ended December 31, 2017 and other documents filed from time to time with the SEC. Except as
required under applicable law, IGT PLC does not assume any obligation to update these forward-looking statements. Nothing in this prospectus and the documents incorporated in it by reference is
intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per IGT PLC share for the current or any future financial years will necessarily match or exceed
the historical published earnings per IGT PLC share, as applicable. All forward-looking statements contained in this prospectus and the documents incorporated in it by reference are qualified
in their entirety by this cautionary statement.
7
Table of Contents
USE OF PROCEEDS
Except as otherwise provided in an applicable prospectus supplement, we will use the net proceeds we receive from the sale of the securities
covered by this prospectus for general corporate purposes, including repayment of debt, acquisitions, capital expenditures and working capital. Except as otherwise provided in any prospectus
supplement, we will not receive any proceeds from the sale of securities by any selling securityholders.
8
Table of Contents
SELLING SECURITYHOLDERS
Information about selling securityholders, where applicable, will be set forth in a prospectus supplement, in an amendment to the registration
statement of which this prospectus forms a part, or in filings we make with the SEC that are incorporated by reference. Selling securityholders may own securities on the date of this prospectus
or acquired hereafter.
9
Table of Contents
DESCRIPTION OF SHARE CAPITAL
This section of the prospectus includes a description of our issued share capital, summarizes certain provisions of our
articles of association (the "Articles") and the applicable laws of England and Wales and highlights certain differences in corporate laws in England and Wales and the United States. The description
of our Articles is based upon, and is qualified by reference to, the Articles. This summary is not complete. You should read the full text of the Articles, which is filed as an exhibit to the
registration statement of which this prospectus forms a part.
Issued Share Capital
The Company has three classes of shares, comprising ordinary shares of $0.10 each; special voting shares of $0.000001 each (the "Special Voting
Shares"); and sterling non-voting shares of £1.00 each (the "Sterling Non-Voting Shares").
Our
issued share capital as of May 18, 2018 (the most recent practicable date prior to the date of this prospectus) was 203,904,990 fully paid ordinary shares with a nominal value
$0.10 per share,
203,904,990 Special Voting Shares and 50,000 Sterling Non-Voting Shares. We currently have no deferred shares in our issued share capital.
Memorandum and Articles of Association
IGT PLC is a public limited company registered in England and Wales under company number 09127533. Its objects are unrestricted,
in line with the default position under the CA 2006.
Except as otherwise provided in the Articles, a director may not vote on or be counted in the quorum in relation to a resolution of the
directors or committee of the directors concerning a matter in which he or she has a direct or indirect interest which is, to his or her knowledge, a material interest (otherwise than by virtue of his
or her interest in shares, debentures or other securities of or otherwise in or through IGT PLC), but this prohibition does not apply to any interest arising only because a resolution concerns
any of the following matters:
-
•
-
the giving of a guarantee, security or indemnity in respect of money lent or obligations incurred by him or her or any other person at the
request of or for the benefit of IGT PLC or any of its subsidiary undertakings;
-
•
-
the giving of a guarantee, security or indemnity in respect of a debt or obligation of IGT PLC or any of its subsidiary undertakings for
which the director has assumed responsibility in whole or in part, either alone or jointly with others, under a guarantee or indemnity or by the giving of security;
-
•
-
a transaction or arrangement concerning an offer of shares, debentures or other securities of IGT PLC or any of its subsidiary
undertakings for subscription or purchase, in which offer he or she is or may be entitled to participate as a holder of securities or in the underwriting or sub-underwriting of which he or she is to
participate;
-
•
-
a transaction or arrangement to which IGT PLC is or is to be a party concerning another company (including a subsidiary undertaking of
IGT PLC) in which he, she or any person connected with him or her is interested (directly or indirectly) whether as an officer, shareholder, creditor or otherwise (a "relevant company"), if he
or she and any persons connected with him or her do not to his or her knowledge hold an interest in shares (as that term is used in sections 820 to 825 of the CA 2006) representing one percent
(1%) or more of
10
Table of Contents
The directors may exercise all the powers of IGT PLC to borrow money and to mortgage or charge all or part of the undertaking, property
and assets (present or future) and uncalled capital of IGT PLC and, subject to the CA 2006, to issue debentures and other securities, whether outright or as collateral security for a debt,
liability or obligation of IGT PLC or of a third party.
A director need not hold shares in IGT PLC to qualify to serve as a director.
There is no age limit applicable to directors in the Articles, but the CA 2006 requires that a director must be at least 16 years old.
For as long as IGT PLC's ordinary shares are listed on the NYSE, IGT PLC will comply with all NYSE corporate governance standards
set forth in Section 3 of the NYSE Listed
Company Manual applicable to non-controlled domestic U.S. issuers, regardless of whether the Company is a foreign private issuer.
Subject to the CA 2006 and the Articles, IGT PLC may by ordinary resolution declare a dividend on IGT PLC ordinary shares, and the
Board may decide to pay an interim dividend to holders of IGT PLC ordinary shares in accordance with their respective rights and interests in IGT PLC, and may fix the time and date for
payment of such dividend. Under English law, dividends may only be paid out of distributable reserves, defined as accumulated realized profits not previously utilized by distribution or capitalization
less accumulated realized losses to the extent not previously written off in a reduction or reorganization of capital duly made, and not out of share capital, which includes the share premium account.
The
Special Voting Shares and Sterling Non-Voting Shares do not entitle their holders to dividends.
If
12 years have passed from the date on which a dividend or other sum from IGT PLC became due for payment and the distribution recipient has not claimed it, the
distribution recipient is no longer entitled to that dividend or other sum and it ceases to remain owing by IGT PLC.
Subject
to the CA 2006, the Articles also permit a scrip dividend scheme under which the directors may, with the prior authority of an ordinary resolution of IGT PLC, allot to
those holders of a particular class of shares who have elected to receive them further shares of that class or ordinary
11
Table of Contents
shares
in either case credited as fully paid instead of cash in respect of all or part of a dividend or dividends specified by the resolution.
Subject to any rights or restrictions as to voting attached to any class of shares and subject to disenfranchisement in the event of non-payment
of any call or other sum due and payable in respect of any shares not fully paid, the voting rights of shareholders of IGT PLC in a general meeting are as follows:
-
1.
-
On
a show of hands,
-
a.
-
the
IGT PLC shareholder who (being an individual) is present in person or (being a corporation) is present by a duly authorized corporate representative at a
general meeting of IGT PLC will have one vote; and
-
b.
-
every
person present who has been appointed by a shareholder entitled to vote on the resolution as a proxy will have one vote, except where:
-
i.
-
that
proxy has been appointed by more than one shareholder entitled to vote on the resolution; and
-
ii.
-
the
proxy has been instructed:
-
A.
-
by
one or more of those shareholders to vote for the resolution and by one or more of those shareholders to vote against the resolution; or
-
B.
-
by
one or more of those shareholders to vote in the same way on the resolution (whether for or against) and one or more of those shareholders has permitted the proxy
discretion as to how to vote, in which case, the proxy has one vote for and one vote against the resolution; and
-
2.
-
on
a poll taken at a meeting, every qualifying shareholder present and entitled to vote on the resolution has one vote for every IGT PLC ordinary share of
which he, she or it is the holder, and 0.9995 votes for every Special Voting Share held by the relevant shareholder for which he, she or it is entitled under the terms of IGT PLC's loyalty
voting structure to direct the exercise of the vote.
Under
the Articles, a poll on a resolution may be demanded by the chairman of a meeting, the directors, five (5) or more people having the right to vote on the resolution or a
shareholder or shareholders (or their corporate representatives or duly appointed proxies) having not less than 10% of either the total voting rights or the total paid up share capital of shares which
confer a right to vote. Such persons may demand the poll both in advance of, and during, a general meeting, either before or immediately after a show of hands on a resolution.
In
the case of joint holders, only the vote of the senior holder who votes (or any proxy duly appointed by him or her) may be counted by IGT PLC.
Subject
to the CA 2006, the necessary quorum for a general shareholder meeting is the shareholders who together represent at least a majority of the voting rights of all the shareholders
entitled to vote at the meeting, present in person, by corporate representative or by proxy, except that if IGT PLC only has one shareholder entitled to attend and vote at the general meeting,
one shareholder present in person, by corporate representative or by proxy at the meeting and entitled to vote is a quorum. If a meeting is adjourned for lack of quorum, the quorum of the adjourned
meeting will be one shareholder present in person, by corporate representative or by proxy.
The
Sterling Non-Voting Shares carry no voting rights (except where required by law).
12
Table of Contents
On a return of capital of IGT PLC on a winding up or otherwise, the holders of IGT PLC ordinary shares will share equally, on a
share for share basis, in IGT PLC's assets available for distribution, except that:
-
•
-
the holders of the Special Voting Shares will be entitled to receive out of the assets of IGT PLC available for distribution to its
shareholders the sum of, in aggregate, U.S. $1.00;
-
•
-
the holders of any deferred shares will be entitled to receive out of the assets of IGT PLC available for distribution to its
shareholders the sum of, in aggregate, U.S. $1.00; and
-
•
-
the holders of the Sterling Non-Voting Shares will be entitled to receive out of the assets of IGT PLC available for distribution to its
shareholders the sum of, in aggregate, £1.00,
but
in no case will any of such holders be entitled to any further participation in the assets of IGT PLC.
The IGT PLC ordinary shares are not redeemable.
The
Special Voting Shares may be redeemed by IGT PLC for nil consideration in certain circumstances (as set out in the Articles).
The
Sterling Non-Voting Shares may be redeemed by IGT PLC for nil consideration at any time (as set out in the Articles).
None of the shares in IGT PLC is subject to any sinking fund provision under the Articles or as a matter of English law.
No holder of any share in IGT PLC is liable to make additional contributions of capital in respect of its shares beyond any total sum
unpaid on its shares.
There are no provisions discriminating against a shareholder because of his or her ownership of a particular number of shares.
Except as regards the loyalty plan connected with IGT PLC's Special Voting Shares (see below under the heading "Loyalty
Plan—Termination of the Plan"), any special rights attached to any shares in the capital of IGT PLC may (unless otherwise provided by the terms of issue of the shares of that class)
be varied or abrogated, either while IGT PLC is a going concern or during or in contemplation of a winding up, with the consent in writing of those entitled to attend and vote at general
meetings of IGT PLC representing 75% of the voting rights attaching to the IGT PLC ordinary shares and the Special Voting Shares, in aggregate, which may be exercised at such meetings,
or with the sanction of 75% of those votes attaching to IGT PLC ordinary shares and the Special Voting Shares, in aggregate, cast on a special resolution proposed at a separate general meeting
of all those entitled to attend and vote at general meetings of IGT PLC, but not otherwise.
13
Table of Contents
A
resolution to vary any class rights relating to the giving, variation, revocation or renewal of any authority of the directors to allot shares or relating to a reduction of
IGT PLC's capital may only be varied or abrogated in accordance with the CA 2006 but not otherwise.
The
rights attached to a class of shares are not, unless otherwise expressly provided for in the rights attaching to those shares, deemed to be varied by the creation, allotment or issue
of further shares ranking
pari passu
with or subsequent to them or by the purchase or redemption by IGT PLC of its own shares in accordance with
the CA 2006.
The Board has the power to call a general meeting of shareholders at any time. The Board shall determine whether a general meeting (including an
annual general meeting) is to be held as a physical general meeting or an electronic general meeting. In addition, the Board must convene such a meeting if it has received requests to do so from
shareholders representing at least five percent (5%) of the paid up share capital of IGT PLC as carries voting rights at general meetings in accordance with section 303 of the CA 2006.
An
annual general meeting must be called by not less than 21 clear days' notice (
i.e.
, excluding the date of receipt or deemed receipt of
the notice and the date of the meeting itself). All other general meetings will be called by not less than 14 clear days' notice. A general meeting may be called by shorter notice if it is agreed to
by a majority in number of the shareholders having the right to attend and vote at the meeting, being a majority who together hold not less than 95% in nominal value of the shares giving that right.
The
notice of a general meeting will be given to the shareholders (other than any who, under the provisions of the Articles or the terms of allotment or issue of shares, are not entitled
to receive notice), to the Board, to the beneficial owners nominated to enjoy information rights under the CA 2006, and to the auditors. The shareholders entitled to receive notice of a general
meeting are those on the register at the close of business on a day determined by the directors. Under English law, IGT PLC is required to hold an annual general meeting within six
(6) months from the day following its accounting reference date and, subject to the foregoing, the meeting may be held at a time and place (whether physical or electronic) determined by the
Board whether within or outside of the U.K.
The
notice of general meeting must specify a time (which must not be more than 48 hours, excluding any part of a day that is not a working day, before the time fixed for the
meeting) by which a person must be entered on the share register to have the right to attend or vote at the meeting. Only such persons or their duly appointed proxies have the right to attend and vote
at the meeting of shareholders.
There are no limitations imposed by the Articles or the applicable laws of England and Wales on the rights to own shares, including the right of
non-residents or foreign persons to hold or vote the shares of IGT PLC, other than limitations that would generally apply to all shareholders.
There is no specific provision in the Articles that directly would have an effect of delaying, deferring or preventing a change in control of
IGT PLC and that would operate only with respect to a merger, acquisition or corporate restructuring involving IGT PLC or any of its subsidiaries. However, De Agostini S.p.A's
significant ownership interest in IGT PLC and the loyalty voting structure may make it more difficult for a third party to acquire, or attempt to acquire, control of IGT PLC. As a result
of the loyalty voting structure, it is possible that a relatively large portion of the voting power of
14
Table of Contents
IGT PLC
could be concentrated in a relatively small number of holders who would have significant influence over IGT PLC. Such shareholders participating in the loyalty voting structure
could reduce the likelihood of change of control transactions that may otherwise benefit holders of IGT PLC ordinary shares.
Under article 60 of the Articles, shareholders must comply with the notification obligations to IGT PLC contained in
Chapter 5 (Vote Holder and Issuer Notification Rules) of the Disclosure Guidance and Transparency Rules sourcebook ("DTR") (including, without limitation, the provisions of DTR 5.1.2) as if
IGT PLC were an issuer whose home member state is in the United
Kingdom, except that the obligation arises if the percentage of voting rights reaches, exceeds or falls below one percent (1%) and each one percent threshold thereafter (up or down) up to 100%.
In effect, this means that a shareholder must notify IGT PLC if the percentage of voting rights in IGT PLC it holds reaches one percent (1%) and crosses any one percent threshold
thereafter (up or down).
Section 793
of the CA 2006 gives IGT PLC the power to require persons whom it knows have, or whom it has reasonable cause to believe have, or within the previous three
(3) years have had, any ownership interest in any IGT PLC shares to disclose specified information regarding those shares. Failure to provide the information requested within the
prescribed period (or knowingly or recklessly providing materially false information) after the date the notice is sent can result in criminal or civil sanctions being imposed against the person in
default.
Under
the Articles, if any shareholder, or any other person appearing to be interested in IGT PLC shares held by such shareholder, fails to give IGT PLC the information
required by a section 793 notice within the prescribed period from the date of service of the section 793 notice, then the Board may withdraw voting and certain other rights, place
restrictions on the rights to receive dividends and transfer such shares (including any shares allotted or issued after the date of the section 793 notice in respect of those shares).
The Articles authorize IGT PLC to purchase its own shares of any class, on the terms of any buyback contract approved by the shareholders
(or otherwise as may be permitted by the CA 2006), provided that:
-
1.
-
the
maximum aggregate number of IGT PLC ordinary shares authorized to be purchased equals 20% of the total issued ordinary shares on April 7, 2015
(subject to adjustments for consolidation or division);
-
2.
-
the
maximum price that may be paid to purchase an IGT PLC ordinary share is 105% of the average market value of an ordinary share for the five business days
prior to the day the purchase is made (subject to any further price restrictions contained in any buyback contract);
-
3.
-
the
maximum aggregate number of Special Voting Shares authorized to be purchased will equal 20% of the total issued Special Voting Shares on April 7, 2015
(subject to adjustments for consolidation or division); and
-
4.
-
the
maximum price that may be paid to purchase a Special Voting Share is its nominal value.
These
provisions are more restrictive than required under English law: an English company is not required to set limits in its articles of association on the maximum aggregate number or
price paid for the repurchase of its shares.
The
Articles authorize the directors, for a period of up to five (5) years from the date of the shareholder resolution granting them authority (which resolution was passed on
March 13, 2015), to
15
Table of Contents
allot
shares in IGT PLC, or to grant rights to subscribe for or to convert any security into shares in IGT PLC, up to an aggregate nominal amount
(
i.e.
, par value) of U.S. $185,000,000.
The
Articles authorize the directors, for a period of up to five (5) years from the date of the shareholder resolution granting them authority (which resolution was passed on
March 13, 2015), to exclude pre-emption rights in respect of such issuances up to an aggregate nominal amount (i.e., par value) of U.S. $185,000,000.
These
provisions are more restrictive than required under English law: an English company is not required to set limits in its articles of association on the maximum amounts for
allotment of shares or exclusion of pre-emption rights.
IGT PLC has implemented a loyalty plan connected with its Special Voting Shares (the "Loyalty Plan"), the purpose of which is to reward
long-term ownership of IGT PLC ordinary shares and promote stability of the IGT PLC shareholder base by granting long-term IGT PLC shareholders, subject to certain terms and
conditions, with the equivalent of 1.9995 votes for each IGT PLC ordinary share that they hold.
Each Special Voting Share carries 0.9995 votes. The Special Voting Shares and IGT PLC ordinary shares will be treated as if they are a
single class of shares and not divided into separate classes for voting purposes (except upon a resolution in respect of any proposed termination of the Loyalty Plan).
The
Special Voting Shares have only minimal economic entitlements. Such economic entitlements are designed to comply with English law but are immaterial for investors.
The number of Special Voting Shares in issue equals the number of IGT PLC ordinary shares in issue. A nominee appointed by IGT PLC
(the "Nominee"), which is currently Computershare Company Nominees Limited, holds the Special Voting Shares on behalf of the shareholders of IGT PLC as a whole, and will exercise the voting
rights attached to those shares in accordance with the Articles.
To become entitled to elect to participate in the Loyalty Plan, a person must maintain ownership in accordance with the terms and conditions of
the Loyalty Plan for a continuous period of three (3) years or more (an "Eligible Person"). This means that no person, other than the Nominee, was entitled to exercise any rights in Special
Voting Shares until at least April 7, 2018, the third anniversary of the Mergers.
An
Eligible Person may elect to participate in the Loyalty Plan by submitting a validly completed and signed election form (an "Election Form") to IGT PLC's designated agent (the
"Agent").
Upon
receipt of a valid Election Form, the Agent will register the relevant IGT PLC ordinary shares in a separate register—the "Loyalty Register."
For
so long as the IGT PLC ordinary shares of an Eligible Person who has elected to participate in the Loyalty Plan (a "Participant") remain in the Loyalty Register, they may not
be sold, disposed of, transferred, subjected to any grant of interest, pledged or subjected to any lien, fixed or floating charge or other encumbrance, except in very limited circumstances.
16
Table of Contents
The Nominee will exercise the votes attaching to the Special Voting Shares held by it from time to time at a general meeting or a class meeting:
(a) in respect of any Special Voting Shares associated with IGT PLC ordinary shares registered in the Loyalty Register, in accordance with the directions of the Participant; and
(b) in respect of all other Special Voting Shares, in the same percentage as the outcome of the vote of any general meeting (taking into account any votes exercised pursuant to (a)
above).
The
Participant in the Loyalty Plan must direct the exercise by the Nominee of voting rights attaching to the Special Voting Shares associated with those ordinary shares in the same
manner as that Participant exercises the votes attaching to those ordinary shares. The proxy or voting instruction form in respect of a Participant's IGT PLC ordinary shares entered in the
Loyalty Register will contain an instruction and authorization in favor of the Nominee to exercise the votes attaching to the Special Voting Shares associated with those ordinary shares in the same
manner as that Participant exercises the votes attaching to those ordinary shares.
If, at any time and for any reason, one or more IGT PLC ordinary shares are withdrawn from the Loyalty Register, or any IGT PLC
ordinary shares in the Loyalty Register are sold, disposed of, transferred, subjected to any grant of interest, pledged or subjected to any lien, fixed or floating charge or other encumbrance, the
Special Voting Shares associated with those IGT PLC ordinary shares will cease to confer on the Participant any voting rights (or any other rights) in connection with those Special Voting
Shares and such person will cease to be a Participant in respect of those Special Voting Shares, unless one of the exceptions under the Loyalty Plan applies.
A
Participant may request the withdrawal of their IGT PLC ordinary shares from the Loyalty Register at any time by submitting a validly completed withdrawal form to the Agent. The
Agent will endeavor to release the IGT PLC ordinary shares from the Loyalty Register within three business days thereafter. Upon withdrawal from the Loyalty Register, such ordinary shares will
be freely transferable. From the date on which the withdrawal form is processed by the Agent, the relevant shareholder will be considered to have waived their rights in respect of the relevant Special
Voting Shares.
The Loyalty Plan may be terminated at any time with immediate effect by a resolution passed on a poll taken at a general meeting with the
approval of members representing 75% or more of the total voting rights attaching to the IGT PLC ordinary shares of members who, being entitled to vote on that resolution, do so in person or by
proxy. For the avoidance of doubt, the votes attaching to the Special Voting Shares will not be exercisable upon such resolution.
The Special Voting Shares may not be transferred, except in exceptional circumstances,
e.g.
, for
transfers between Loyalty Plan nominees.
Special Voting Shares may only be purchased or redeemed by IGT PLC in limited circumstances, including to reduce the number of Special
Voting Shares held by the Nominee to align the aggregate number of IGT PLC ordinary shares and Special Voting Shares in issue from time to time, upon termination of the Loyalty Plan or pursuant
to an off-market purchase arrangement. Special Voting Shares may be redeemed for nil consideration and repurchased for (depending on the circumstances) nil consideration or their nominal value.
17
Table of Contents
Differences in Corporate Law
We are incorporated under the laws of England and Wales. The applicable provisions of the CA 2006 differ from laws applicable to U.S.
corporations and their shareholders. Set forth below is a summary of certain differences between the provisions of the CA 2006 applicable to us and the Delaware General Corporation Law relating to
shareholders' rights and protections. This summary is not intended to be a complete discussion of the respective rights and it is qualified in its entirety by reference to English law and Delaware
law.
|
|
|
|
|
|
|
|
England and Wales
|
|
Delaware
|
|
Number of Directors
|
|
Under the CA 2006, a public limited company must have at least two (2) directors and the number of directors may be fixed by or in the manner provided in a company's articles of association.
|
|
Under Delaware law, a corporation must have at least one (1) director and the number of directors shall be fixed by or in the manner provided in the bylaws.
|
|
Removal of Directors
|
|
Under the CA 2006, shareholders may remove a director without cause by an ordinary resolution (which is passed by a simple majority of
those voting in person or by proxy at a general meeting) irrespective of any provisions of any service contract the director has with the company, provided at least 28 clear days' notice of the resolution has been given to the company. On receipt of
notice of an intended resolution to remove a director, the company must forthwith send a copy of the notice to the director concerned. Certain other procedural requirements under the CA 2006 must also be followed such as allowing the director to
make representations against his or her removal either at the meeting or in writing.
|
|
Under Delaware law, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors, except (a) unless the certificate of incorporation provides otherwise, in the case of a corporation whose board of directors is classified, shareholders may effect such removal only for
cause, or (b) in the case of a corporation having cumulative voting, if less than the entire board of directors is to be removed, no director may be removed without cause if the votes cast against his or her removal would be sufficient to elect
him or her if then cumulatively voted at an election of the entire board of directors, or, if there are classes of directors, at an election of the class of directors of which he or she is a part.
|
|
Vacancies on the Board of Directors
|
|
Under English law, the procedure by which directors, other than a company's initial directors, are appointed is generally set out in a
company's articles of association, provided that where two (2) or more persons are appointed as directors of a public limited company by resolution of the shareholders, resolutions appointing each director must be voted on individually, unless a
resolution allowing a single vote has first been unanimously approved by the meeting.
|
|
Under Delaware law, vacancies and newly created directorships may be filled by a majority of the directors then in office (even though less
than a quorum) or by a sole remaining director unless (a) otherwise provided in the certificate of incorporation or by-laws of the corporation or (b) the certificate of incorporation directs that a particular class of stock is to elect such
director, in which case a majority of the other directors elected by such class, or a sole remaining director elected by such class, will fill such vacancy.
|
|
Annual General Meeting
|
|
Under the CA 2006, a public limited company must hold an annual general meeting in each six-month period following the company's annual
accounting reference date.
|
|
Under Delaware law, the annual meeting of stockholders shall be held at such place, on such date and at such time as may be designated from
time to time by the board of directors or as provided in the certificate of incorporation or by the bylaws.
|
18
Table of Contents
|
|
|
|
|
|
|
|
England and Wales
|
|
Delaware
|
|
General Meeting
|
|
Under the CA 2006, a general meeting of the shareholders of a public limited company may be called by the directors.
Shareholders holding at least five percent (5%)
of the paid-up capital of the company carrying voting rights at general meetings can require the directors to call a general meeting and, if the directors fail to do so within a certain period, may themselves convene a general meeting.
|
|
Under Delaware law, special meetings of the stockholders may be called by the board of directors or by such person or persons as may be authorized by the
certificate of incorporation or by the bylaws.
|
|
Notice of General Meetings
|
|
Under the CA 2006, at least 21 clear days' notice must be given for an annual general meeting of a public limited company whose shares are
not traded on an European Economic Area ("EEA") regulated market. Subject to a company's articles of association providing for a longer period, at least 14 clear days' notice is required for any other general meeting of a public limited company whose
shares are not traded on an EEA regulated market. In addition, certain matters, such as the removal of directors or auditors, require special notice, which is at least 28 clear days' notice. The shareholders of a public limited company whose shares
are not traded on an EEA regulated market may in all cases consent to a shorter notice period, the proportion of shareholders' consent required being 100% of those entitled to attend and vote in the case of an annual general meeting of such a company
and, in the case of any other general meeting of such a company, a majority in number of the members having a right to attend and vote at the meeting, being a majority who together hold not less than 95% in nominal value of the shares giving a right
to attend and vote at the meeting.
|
|
Under Delaware law, unless otherwise provided in the certificate of incorporation or bylaws, written notice of any meeting of the
stockholders must be given to each stockholder entitled to vote at the meeting not less than ten nor more than 60 days before the date of the meeting and shall specify the place, date, hour, and purpose or purposes of the meeting.
|
|
Proxy
|
|
Under the CA 2006, at any meeting of shareholders, a shareholder may designate another person to attend, speak and vote at the meeting on
their behalf by proxy.
|
|
Under Delaware law, at any meeting of stockholders, a stockholder may designate another person to act for such stockholder by proxy, but no
such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A director of a Delaware corporation may not issue a proxy representing the director's voting rights as a
director.
|
19
Table of Contents
|
|
|
|
|
|
|
|
England and Wales
|
|
Delaware
|
|
Pre-emptive Rights
|
|
Under the CA 2006, "equity securities," being (i) shares in the company other than shares that, with respect to dividends and capital, carry a right to
participate only up to a specified amount in a distribution ("ordinary shares") or (ii) rights to subscribe for, or to convert securities into, ordinary shares, proposed to be allotted for cash must be offered first to the existing equity
shareholders in the company in proportion to the respective nominal value of their holdings, unless an exception applies or a special resolution to the contrary has been passed by shareholders in a general meeting or the articles of association
provide otherwise, in each case in accordance with the provisions of the CA 2006.
|
|
Under Delaware law, shareholders have no preemptive rights to subscribe to additional issues of stock or to any security convertible into such stock unless,
and except to the extent that, such rights are expressly provided for in the certificate of incorporation.
|
|
Authority to Allot
|
|
Under the CA 2006 the directors of a company must not allot shares or grant rights to subscribe for or to convert any security into shares
unless an exception applies or an ordinary resolution to the contrary has been passed by shareholders in a general meeting or the articles of association provide otherwise, in each case in accordance with the provisions of the
CA 2006.
|
|
Under Delaware law, if a corporation's certificate of incorporation so provides, the board of directors has the power to authorize the
issuance of stock. It may authorize capital stock to be issued for consideration consisting of cash, any tangible or intangible property or any benefit to the corporation or any combination thereof. It may determine the amount of such consideration
by approving a formula. In the absence of actual fraud in the transaction, the judgment of the directors as to the value of such consideration is conclusive.
|
20
Table of Contents
|
|
|
|
|
|
|
|
England and Wales
|
|
Delaware
|
|
Liability of Directors and Officers
|
|
Under the CA 2006, any provision, whether contained in a company's articles of association or any contract or otherwise, that purports to exempt a director of a company, to any extent, from any liability that would otherwise attach to him or her in
connection with any negligence, default, breach of duty or breach of trust in relation to the company is void.
Any provision by which a company directly or indirectly
provides an indemnity, to any extent, for a director of the company or of an associated company against any liability attaching to him or her in connection with any negligence, default, breach of duty or breach of trust in relation to the company of
which he or she is a director is also void except as permitted by the CA 2006, which provides exceptions for the company to (a) purchase and maintain insurance against such liability; (b) provide a "qualifying third party indemnity" (being
an indemnity against liability incurred by the director to a person other than the company or an associated company, provided that it is not an indemnity against (x) any liability of the director to pay (i) a fine imposed in criminal
proceedings or (ii) a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature or (y) any liability incurred by the director (i) in defending criminal
proceedings in which he or she is convicted, (ii) in defending civil proceedings brought by the company, or an associated company, in which judgment is given against him or her or (iii) in connection with an application for relief in which
the court refuses to grant him or her relief; and (c) provide a "qualifying pension scheme indemnity" (being an indemnity against liability incurred in connection with the company's activities as trustee of an occupational pension plan, provided
that the provision is not an indemnity against any liability: (i) of the director to pay a fine imposed in criminal proceedings, (ii) of the director to pay a sum payable to a regulatory authority by way of a penalty in respect of
non-compliance with any requirement of a regulatory nature or (iii) incurred by the director in defending criminal proceedings in which he or she is convicted).
|
|
Under Delaware law, a corporation's certificate of incorporation may include a provision eliminating or limiting the personal liability of a director to the corporation and its stockholders for damages arising from a breach of fiduciary duty as a
director. However, no provision can limit the liability of a director for:
•
any breach of the director's duty of loyalty to the corporation or its
stockholders;
•
acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
•
intentional or
negligent payment of unlawful dividends or stock purchases or redemptions; or
•
any transaction from which the director derives an improper personal
benefit.
|
21
Table of Contents
|
|
|
|
|
|
|
|
England and Wales
|
|
Delaware
|
|
Voting Rights
|
|
Shareholder votes generally take place on a show of hands, unless a poll is required or demanded. Under the CA 2006, a poll may be demanded by (a) not fewer than five (5) shareholders having the right to vote on the resolution;
(b) any shareholder(s) representing not less than 10% of the total voting rights of all the shareholders having the right to vote on the resolution; or (c) any shareholder(s) holding shares in the company conferring a right to vote on the
resolution being shares on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all the shares conferring that right.
Under the CA
2006, an ordinary resolution is passed on a show of hands if it is approved by a simple majority (more than 50%) of the votes cast by shareholders present (in person or by proxy) and entitled to vote. If a poll is demanded, an ordinary resolution is
passed if it is approved by shareholders representing a simple majority of the total voting rights of shareholders present, in person or by proxy, who, being entitled to vote, vote on the resolution. Under CA 2006, a special resolution is passed on a
show of hands if it is approved by a majority of not less than 75% of the votes cast by shareholders present (in person or by proxy) and entitled to vote. If a poll is demanded, a special resolution is passed if it is approved by shareholders
representing not less than 75% of the total voting rights of shareholders present, in person or by proxy, who, being entitled to vote, vote on the resolution.
|
|
Under Delaware law, unless otherwise provided in the certificate of incorporation, each stockholder is entitled to one vote for each share of capital stock
held by such stockholder.
|
|
|
|
|
|
|
|
Shareholder Vote on Certain Transactions
|
|
The CA 2006 provides for schemes of arrangement, which are arrangements or compromises between a company and any class of shareholders or creditors that are used in certain types of reconstructions, amalgamations, capital reorganizations or
takeovers. These arrangements require:
•
the approval at a shareholders' or creditors' meeting convened by order of the court, of a majority in number of shareholders or creditors
representing 75% in value of the capital held by, or debt owed to, the class of shareholders or creditors present and voting, either in person or by proxy; and
•
the approval of the court.
|
|
Generally, under Delaware law, unless the certificate of incorporation provides for the vote of a larger portion of the stock, completion of a merger, consolidation, sale, lease or exchange of all or substantially all of a corporation's assets or
dissolution requires:
•
the approval of the board of directors; and
•
approval by the vote of the holders of a majority of the outstanding
stock or, if the certificate of incorporation provides for more or less than one vote per share, a majority of the votes of the outstanding stock of a corporation entitled to vote on the matter.
|
22
Table of Contents
|
|
|
|
|
|
|
|
England and Wales
|
|
Delaware
|
|
Standard of Conduct of Directors
|
|
Under the CA 2006, a director owes various statutory and fiduciary duties to the company, including:
•
to act in the way he or she considers, in good faith, would be most
likely to promote the success of the company for the benefit of its members as a whole;
•
to avoid a situation in which he or she has, or can have, a direct or
indirect interest that conflicts, or possibly may conflict, with the interests of the company;
•
to act in accordance with the company's constitution and only exercise
his or her powers for the purposes for which they are conferred;
•
to exercise independent judgment;
•
to exercise reasonable care, skill and diligence;
•
not to accept benefits from a third party conferred by reason of his or
her being a director or doing, or not doing, anything as a director; and
•
to declare any interest that he or she has, whether directly or
indirectly, in a proposed or existing transaction or arrangement with the company.
|
|
Delaware law does not contain specific provisions setting forth the standard of conduct of a director. The scope of the fiduciary duties of directors is generally determined by the courts of the State of Delaware. In general, directors have a duty
to act without self-interest, on a well-informed basis and in a manner they reasonably believe to be in the best interest of the stockholders.
Directors of a Delaware
corporation owe fiduciary duties of care and loyalty to the corporation and to its shareholders. The duty of care generally requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar
circumstances. Under this duty, a director must inform himself or herself of all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he or she reasonably believes
to be in the best interests of the corporation. He must not use his or her corporate position for personal gain or advantage. In general, but subject to certain exceptions, actions of a director are presumed to have been made on an informed basis, in
good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Delaware courts have also imposed a heightened
standard of conduct upon directors of a Delaware corporation who take any action designed to defeat a threatened change in control of the corporation.
In addition, under
Delaware law, when the board of directors of a Delaware corporation approves the sale or break-up of a corporation, the board of directors may, in certain circumstances, have a duty to obtain the highest value reasonably available to the
shareholders.
|
23
Table of Contents
|
|
|
|
|
|
|
|
England and Wales
|
|
Delaware
|
|
Stockholder Suits
|
|
Generally, the company, rather than its shareholders, is the proper claimant in an action in respect of a wrong done to the company or where there is an
irregularity in the company's internal management. Notwithstanding this general position, the CA 2006 provides that (a) a court may allow a shareholder to bring a derivative claim (that is, an action in respect of and on behalf of the company)
in respect of a cause of action arising from a director's negligence, default, breach of duty or breach of trust and (b) a shareholder may bring a claim for a court order where the company's affairs have been or are being conducted in a manner
that is unfairly prejudicial to some of its shareholders or the interests of its shareholders generally.
|
|
Under Delaware law, a stockholder may initiate a derivative action to enforce a right of a corporation if the corporation fails to enforce the right itself. The complaint must:
•
state that the
plaintiff was a stockholder at the time of the transaction of which the plaintiff complains or that the plaintiffs shares thereafter devolved on the plaintiff by operation of law; and
•
allege with
particularity the efforts made by the plaintiff to obtain the action the plaintiff desires from the directors and the reasons for the plaintiff's failure to obtain the action; or
•
state the reasons
for not making the effort.
Additionally, the plaintiff must remain a stockholder through the duration of the derivative suit. The action cannot be dismissed or compromised
without the approval of the Delaware Court of Chancery.
|
24
Table of Contents
DESCRIPTION OF THE OPTIONS
The following description, together with the additional information we include in any applicable prospectus supplements,
summarizes the material terms and provisions of the options that we may offer under this prospectus, which may consist of options to purchase securities in one or more series. While the terms we have
summarized below will generally apply to any future options we may offer under this prospectus, we will describe the particular terms of any options that we may offer in more detail in the applicable
prospectus supplement. The terms of any options we offer under a prospectus supplement may differ from the terms we describe below.
We
may issue options to purchase our securities. We may offer and sell options separately or together with one or more additional options, warrants, rights or ordinary shares, or any
combination of those securities in the form of units, as described in the applicable prospectus supplement. If we issue options as part of a unit, the applicable prospectus supplement will specify
whether those options may be separated from the other securities in the unit, at any time or at any time before a specified date or
occurrence. The applicable prospectus supplement will also describe the following terms of any options:
-
•
-
the title of the options;
-
•
-
the offering price for the options, if any;
-
•
-
the aggregate number of the options;
-
•
-
the designation and terms of the equity securities that may be purchased upon exercise of the options;
-
•
-
if applicable, the designation and terms of the securities that the options are issued with and the number of options issued with each
security;
-
•
-
if applicable, the date from and after which the options and any securities issued with the options will be separately transferable;
-
•
-
the number of equity securities that may be purchased upon exercise of an option and the price at which such securities may be purchased upon
exercise;
-
•
-
the dates on which the right to exercise the options commence and expire;
-
•
-
if applicable, the minimum or maximum amount of the options that may be exercised at any one time;
-
•
-
the currency or currency units in which the offering price, if any, and the exercise price are payable;
-
•
-
if applicable, a discussion of material tax considerations;
-
•
-
the identity of the option agent for the options and of any other depositaries, execution or paying agents, transfer agents, registrars or
other agents;
-
•
-
anti-dilution provisions of the options, if any;
-
•
-
redemption or call provisions, if any, applicable to the options;
-
•
-
any additional terms of the options, including terms, procedures and limitations relating to the exchange and exercise of the options; and
-
•
-
any other information we think is important about the options.
Each
option will entitle the holder of the option to purchase at the exercise price set forth in the applicable prospectus supplement the number of securities being offered. Holders may
exercise options
25
Table of Contents
at
any time up to the close of business on the expiration date set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised options are void.
Holders may exercise options as set forth in the prospectus supplement relating to the options being offered.
Until
you exercise your options to purchase our securities, you will not have any rights as a holder thereof, by virtue of your ownership of the options.
The
description in the applicable prospectus supplement of any options that we may offer and sell will not necessarily be complete and will be qualified in its entirety by reference to
the applicable options agreement, if any, which will be filed with the SEC.
26
Table of Contents
DESCRIPTION OF THE WARRANTS
The following description, together with the additional information we include in any applicable prospectus supplements,
summarizes the material terms and provisions of the warrants that we may offer under this prospectus, which may consist of warrants to purchase securities in one or more series.
While the terms we have summarized below will generally apply to any future warrants we may offer under this prospectus, we will describe the particular terms of any warrants that we may offer in more
detail in the applicable prospectus supplement. The terms of any warrants we offer under a prospectus supplement may differ from the terms we describe below.
We
may issue warrants to purchase our securities. We may offer and sell warrants separately or together with one or more additional warrants, options, rights or ordinary shares, or any
combination of those securities in the form of units, as described in the applicable prospectus supplement. If we issue warrants as part of a unit, the applicable prospectus supplement will specify
whether those warrants may be separated from the other securities, at any time or at any time before a specified date or occurrence. The applicable prospectus supplement will also describe the
following terms of any warrants:
-
•
-
the specific designation and aggregate number of, and the offering price at which we will issue, the warrants;
-
•
-
the currency, currencies or currency units in which the offering price, if any, and the exercise price are payable;
-
•
-
the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may not continuously
exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants;
-
•
-
whether the warrants are to be sold separately or with other securities as parts of units;
-
•
-
whether the warrants will be issued in definitive or global form or in any combination of these forms, although, in any case, the form of a
warrant included in a unit will correspond to the form of the unit and of any security included in that unit;
-
•
-
if applicable, a discussion of material tax considerations;
-
•
-
the identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer agents, registrars or
other agents;
-
•
-
the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities exchange;
-
•
-
the designation and terms of any equity securities purchasable upon exercise of the warrants;
-
•
-
if applicable, the designation and terms of the ordinary shares with which the warrants are issued and, the number of warrants issued with each
security;
-
•
-
if applicable, the date from and after which any warrants issued as part of a unit and the related ordinary shares will be separately
transferable;
-
•
-
the number of ordinary shares purchasable upon exercise of a warrant and the price at which those shares may be purchased;
-
•
-
if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
-
•
-
information with respect to book-entry procedures, if any;
27
Table of Contents
-
•
-
the antidilution provisions of, and other provisions for changes to or adjustment in the exercise price of, the warrants, if any;
-
•
-
any redemption or call provisions;
-
•
-
any additional terms of the warrants, including terms, procedures and limitations relating to the exchange or exercise of the warrants; and
-
•
-
any other information we think is important about the warrants.
The
description in the applicable prospectus supplement of any warrants that we may offer and sell will not necessarily be complete and will be qualified in its entirety by reference to
the applicable warrant agreement, which will be filed with the SEC.
28
Table of Contents
DESCRIPTION OF THE RIGHTS
The following description, together with the additional information we include in any applicable prospectus supplements,
summarizes the material terms and provisions of the rights that we may offer under this prospectus, which may consist of rights to purchase securities in one or more series. While the terms we have
summarized below will generally apply to any future rights we may offer under this prospectus, we will describe the particular terms of any rights that we may offer in more detail in the applicable
prospectus supplement. The terms of any rights we offer under a prospectus supplement may differ from the terms we describe below.
We
may issue rights to purchase our securities. We may offer and sell rights separately or together with one or more additional rights, warrants, options or ordinary shares, or any
combination of those securities in the form of units, as described in the applicable prospectus supplement. If we issue rights as part of a unit, the accompanying prospectus supplement will specify
whether those rights may be separated from the other securities in the unit, at any time or at any time before a specified date or occurrence. The applicable prospectus supplement will also describe
the following terms of any rights:
-
•
-
the date of determining the shareholders entitled to the rights distribution;
-
•
-
the number of rights issued or to be issued to each shareholder;
-
•
-
the exercise price payable for each ordinary share or other equity security upon the exercise of the rights;
-
•
-
the number and terms of the ordinary share or other equity securities which may be purchased per each right;
-
•
-
the extent to which the rights are transferable;
-
•
-
the date on which the holder's ability to exercise the rights shall commence, and the date on which the rights shall expire;
-
•
-
the extent to which the rights may include an over-subscription privilege with respect to unsubscribed securities;
-
•
-
if applicable, the material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering of
such rights;
-
•
-
any other terms of the rights, including the terms, procedures, conditions, and limitations relating to the exchange and exercise of the
rights; and
-
•
-
any other information we think is important about the rights.
The
description in the applicable prospectus supplement of any rights that we may offer and sell will not necessarily be complete and will be qualified in its entirety by reference to
the applicable rights agreement and rights certificate, which will be filed with the SEC.
29
Table of Contents
DESCRIPTION OF THE UNITS
The following description, together with the additional information we include in any applicable prospectus supplements,
summarizes the material terms and provisions of the units that we may offer under this prospectus, which may consist of one or more of the other securities described in this prospectus in any
combination. While the terms we have summarized below will generally apply to any future units we may offer under this prospectus, we will describe the particular terms of any units that we may offer
in more detail in the applicable prospectus supplement. The terms of any units we offer under a prospectus supplement may differ from the terms we describe below.
We
may issue units consisting of one or more of the other securities described in this prospectus in any combination. The accompanying prospectus supplement will specify whether the
securities included in the unit may be separated from the other securities in the unit, at any time or at any time before a specified date or occurrence. The applicable prospectus supplement will also
describe the following terms of any units:
-
•
-
the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those
securities may be held or transferred separately;
-
•
-
any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and
-
•
-
whether the units will be issued in fully registered or global form.
The
description in the applicable prospectus supplement of any units that we may offer and sell will not necessarily be complete and will be qualified in its entirety by reference to the
applicable rights agreement and rights certificate, which will be filed with the SEC.
30
Table of Contents
TAX CONSIDERATIONS
Certain U.K. Tax Considerations
A general summary of certain U.K. tax considerations relating to the purchase, ownership and disposition of any of the securities offered by
this prospectus will be set forth in a prospectus supplement relating to the offering of those securities.
Certain U.S. Federal Income Tax Considerations
The following discussion describes certain material U.S. federal income tax considerations regarding the ownership and disposition of our
ordinary shares by a U.S. holder (as defined below). This discussion is based on U.S. federal income tax law, including the Internal Revenue Code of 1986, as amended (the "Code"), the Treasury
regulations promulgated thereunder, administrative guidance and court decisions in effect on the date hereof, all of which are subject to change, possibly with retroactive effect, and to differing
interpretations. No ruling from the Internal Revenue Service (the "IRS") has been sought with respect to any U.S. federal income tax considerations described below, and there can be no assurance that
the IRS or a court will not take a contrary position. The discussion assumes that our shareholders hold their ordinary shares as "capital assets" within the meaning of Section 1221 of the Code
(generally, property held for investment). This discussion further assumes that all items or transactions identified as debt will be respected as such for U.S. federal income tax purposes and that we
will be a resident exclusively of the U.K. for all tax purposes.
This
discussion does not constitute tax advice and does not address all aspects of U.S. federal income taxation that may be relevant to particular investors in light of their individual
circumstances, including investors subject to special tax rules, including (but not limited to):
-
•
-
banks, thrifts, mutual funds, and other financial institutions;
-
•
-
regulated investment companies;
-
•
-
real estate investment trusts;
-
•
-
traders in securities that elect to apply a mark-to-market method of accounting;
-
•
-
broker-dealers;
-
•
-
tax-exempt organizations (including private foundations) and pension funds;
-
•
-
U.S. holders who at any time own or owned (directly, indirectly, or constructively) 10% or more of our share capital (by vote or value);
-
•
-
insurance companies;
-
•
-
dealers or brokers in securities or foreign currency;
-
•
-
individual retirement and other tax-deferred accounts;
-
•
-
U.S. holders whose functional currency is not the U.S. dollar;
-
•
-
U.S. expatriates;
-
•
-
investors who are not U.S. holders;
-
•
-
"passive foreign investment companies" or "controlled foreign corporations";
-
•
-
persons subject to the alternative minimum tax;
-
•
-
U.S. holders that hold their shares as part of a straddle, hedging, conversion, wash sale, constructive sale or other integrated transaction
for U.S. federal income tax purposes;
31
Table of Contents
-
•
-
entities or arrangements treated as partnerships or pass-through entities for U.S. federal income tax purposes and any partner or investor
therein; and
-
•
-
U.S. holders that received their shares pursuant to any employee stock option or otherwise as compensation or through a tax-qualified
retirement plan.
In
addition, this discussion does not address any U.S. federal estate, gift or alternative minimum tax consequences, any tax consequences of the Medicare tax on certain investment income
pursuant to the
Health Care and Education Reconciliation Act of 2010, any considerations with respect to FATCA (which for this purpose means Sections 1471 through 1474 of the Code, the Treasury regulations
promulgated thereunder, administrative guidance, any intergovernmental agreement entered in connection therewith, and any non-U.S. laws, rules or directives implementing or relating to any of the
foregoing), or any state, local or non-U.S. tax consequences. U.S. holders are urged to consult their tax advisors regarding the U.S. federal, state, local and non-U.S. income and other tax
considerations of an investment in our ordinary shares.
Further,
this discussion does not address any U.S. federal, state, local or non-U.S. tax consequences of the receipt, ownership, disposition, or any other transaction with respect to the
Special Voting Shares (including any loss of entitlement to instruct the nominee on how to vote in respect of Special Voting Shares). U.S. holders are urged to consult their tax advisors as to the tax
consequences of the receipt, ownership, disposition, or any other transaction with respect to the Special Voting Shares.
General
For purposes of this discussion, a "U.S. holder" means a beneficial owner of our ordinary shares that is, for U.S. federal income tax
purposes:
-
•
-
an individual who is a citizen or resident of the United States;
-
•
-
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in or organized under the laws of the
United States or any state thereof or the District of Columbia;
-
•
-
an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
-
•
-
a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or
more U.S. persons have the authority to control all substantial decisions of the trust, or (2) the trust has a valid election in effect to be treated as a U.S. person for U.S. federal income
tax purposes.
If
an entity or arrangement that is treated as a partnership or pass-through entity for U.S. federal income tax purposes is a beneficial owner of our ordinary shares, the tax treatment
of an investor therein will generally depend upon the status of such investor, the activities of the entity or arrangement and certain determinations made at the investor level or the level of the
entity or arrangement. Such entities or arrangements, and investors therein, are urged to consult their tax advisors regarding their investment in our ordinary shares and the U.S. federal income tax
consequences of the ownership and disposition of their ordinary shares.
New
U.S. federal tax legislation (commonly referred to as "The Tax Cuts and Jobs Act"), enacted in December 2017, made significant changes to the Code, many of which are highly complex
and may require interpretations and implementing regulations. The expected impact of certain aspects of the legislation is unclear and subject to change. U.S. holders are urged to consult their tax
advisors regarding the application of The Tax Cuts and Jobs Act to their particular circumstances.
32
Table of Contents
Passive Foreign Investment Company Consequences
We believe that we will not be a "passive foreign investment company" for U.S. federal income tax purposes ("PFIC") for the current taxable year
and that we have not been a PFIC for prior taxable years, and we expect that we will not become a PFIC in the foreseeable future, although there can be no assurance in this regard. A foreign
corporation will be a PFIC in any taxable year in which, after taking into account the income and assets of the corporation and certain subsidiaries pursuant to applicable "look-through" rules, either
(a) at least 75% of its gross income is "passive income," or (b) at least 50% of its assets produce or are held for the production of "passive income." For this purpose, "passive income"
generally includes dividends, interest, royalties and rents, and certain other categories of income, subject to certain exceptions. The determination of whether we are a PFIC is fact-intensive and
includes ascertaining the fair market value (or, in certain circumstances, tax basis) of all of our assets on a quarterly basis and the character of each item of income we earn. This determination is
made annually and cannot be completed until the close of a taxable year. It depends upon the portion of our assets (including goodwill) and income characterized as passive under the PFIC rules, as
described above. Accordingly, it is possible that we may become a
PFIC due to changes in our income or asset composition or a decline in the market value of our equity. Because PFIC status is a fact-intensive determination, no assurance can be given that we are not,
have not been, or will not become, classified as a PFIC.
If
we are a PFIC for any taxable year, U.S. holders generally will be subject to special tax rules that could result in materially adverse U.S. federal income tax consequences. In such
event, a U.S. holder may be subject to U.S. federal income tax at the highest applicable ordinary income tax rates on (i) any "excess distribution" that we make to the U.S. holder (which
generally means any distribution paid during a taxable year to a U.S. holder that is greater than 125% of the average annual distributions paid in the three preceding taxable years or, if shorter, the
U.S. holder's holding period for the ordinary shares), or (ii) any gain realized on the disposition of our ordinary shares. In addition, a U.S. holder may be subject to an interest charge on
such tax. Furthermore, the favorable dividend tax rates that may apply to certain U.S. holders on our dividends will not apply if we are a PFIC during the taxable year in which such dividend was paid,
or the preceding taxable year. Classification as a PFIC may have other adverse tax consequences. Unless a U.S. holder makes a "qualified electing fund" or "mark-to-market" election with respect to our
ordinary shares, a U.S. holder that holds our ordinary shares during a period in which we are a PFIC will be subject to the PFIC rules for that taxable year and all subsequent taxable years in which
the U.S. holder holds our ordinary shares, even if we cease to be a PFIC.
U.S.
holders are urged to consult their tax advisors concerning the U.S. federal income tax consequences of acquiring, owning or disposing of our ordinary shares if we are or become
classified as a PFIC, including the possibility of making a qualified electing fund or mark-to-market election. The remainder of the discussion below assumes that we are not a PFIC, have not been a
PFIC and will not become a PFIC in the future.
Distributions
The gross amount of distributions with respect to our ordinary shares (including the amount of any non-U.S. withholding taxes) will be taxable
as dividends, to the extent that they are paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Such dividends will be includable in a
U.S. holder's gross income as ordinary dividend income on the day actually or constructively received by the U.S. holder. Such dividends will not be eligible for the dividends-received deduction
generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations.
33
Table of Contents
With
respect to non-corporate U.S. holders, certain dividends received from a "qualified foreign corporation" may be subject to reduced rates of U.S. federal income taxation. A non-U.S.
corporation that is eligible for the benefits of an income tax treaty with the United States that the U.S. Secretary of the Treasury determines is satisfactory and includes an information exchange
program is generally treated as a qualified foreign corporation. The U.S. Department of the Treasury and the IRS have determined that the U.K.—U.S. Income Tax Treaty is satisfactory for
this purpose and we believe that we are eligible for benefits under such treaty, although there can be no assurance that this will continue to be the case in the future. Further, a non-U.S.
corporation is treated as a qualified foreign corporation with respect to dividends paid by that corporation on shares that are readily tradable on an established securities market in the United
States. The U.S. Department of the Treasury and the IRS have determined that common stock is considered readily tradable on an established securities market if it is listed on an established
securities market in the United States, such as the NYSE. We believe our ordinary shares, which are listed on the NYSE, are considered to be readily tradable on an established securities market in the
United States, although there can be no assurance that this will continue to be the case in the future.
Non-corporate
U.S. holders that do not meet a minimum holding period requirement during which they are not protected from the risk of loss, or that elect to treat the dividend income as
"investment income" pursuant to Section 163(d)(4) of the Code, will not be eligible for the reduced rates of taxation regardless of our status as a qualified foreign corporation. In addition,
even if the minimum holding period requirement has been met, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to
positions in substantially similar or related property. U.S. holders are urged to consult their tax advisors regarding the application of these rules given their particular circumstances.
To
the extent that the amount of any distribution exceeds our current and accumulated earnings and profits for a taxable year, as determined under U.S. federal income tax principles, the
excess will first be treated as a tax-free return of capital to the extent of the U.S. holder's adjusted tax basis in our ordinary shares. To the extent the amount of the distribution exceeds the U.S.
holder's tax basis, the excess will be taxed as capital gains recognized on a sale or exchange of such ordinary shares.
Dividends
paid to a U.S. holder with respect to our ordinary shares are expected to constitute "foreign source income" and to be treated as "passive category income" for purposes of the
foreign tax credit. The rules governing the foreign tax credit are complex. U.S. holders are urged to consult their tax advisors regarding the availability of, and any limits or conditions to, the
foreign tax credit under their particular circumstances.
Sale, Exchange, or Other Taxable Disposition
For U.S. federal income tax purposes, a U.S. holder will generally recognize taxable gain or loss on the sale, exchange or other taxable
disposition of our ordinary shares in an amount equal to the difference, if any, between the amount realized on the sale, exchange, or other taxable disposition and the U.S. holder's tax basis in such
ordinary shares. Such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if such ordinary shares have been held for more than one year. Long-term capital
gain of certain non-corporate U.S. holders, including individuals, is generally taxed at reduced rates. The deduction of capital losses is subject to limitations.
Information Reporting and Backup Withholding
Certain U.S. holders with interests in "specified foreign financial assets" (including, among other assets, our ordinary shares, unless such
shares were held on such U.S. holder's behalf through certain financial institutions) may be required to file information reports with the IRS if the aggregate value of
34
Table of Contents
all
such assets exceeds certain threshold amounts. U.S. holders are urged to consult their tax advisors as to the possible obligation to file such information reports in light of their particular
circumstances.
Moreover,
information reporting generally will apply to dividends in respect of our ordinary shares and the proceeds from the sale, exchange or other disposition of our ordinary shares,
in each case, that are paid to a U.S. holder within the United States (and in certain cases, outside the United States or through certain U.S. intermediaries), unless the U.S. holder is an exempt
recipient. Backup withholding (currently at a rate of 24%) may also apply to such payments, unless the U.S. holder provides a correct taxpayer identification number, certifies as to no loss of
exemption from backup withholding by providing a properly completed IRS Form W-9 and otherwise complies with applicable requirements of the backup withholding rules, or otherwise establishes an
exemption. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules generally will be allowed as a refund or a credit against a U.S. holder's U.S. federal
income tax liability provided the required information is timely furnished to the IRS. U.S. holders are urged to consult their tax advisors
regarding the application of the U.S. information reporting and backup withholding rules to their particular circumstances.
Certain Italian Tax Considerations
A general summary of certain Italian tax considerations relating to the purchase, ownership and disposition of any of the securities offered by
this prospectus will be set forth in a prospectus supplement relating to the offering of those securities.
35
Table of Contents
PLAN OF DISTRIBUTION
We or any selling securityholder may sell our securities from time to time on a continuous or delayed basis (a) to or through
underwriters or dealers, (b) through agents, (c) directly to one or more purchasers or other persons or entities, (d) through a combination of these methods or (e) through
other means. We will identify the specific plan of distribution, including any underwriters, dealers, agents or other purchasers, persons or entities and any applicable compensation, in a prospectus
supplement or other appropriate filing.
36
Table of Contents
EXPENSES
The following table sets forth the expenses (other than underwriting discounts and commissions or agency fees and other items constituting
underwriters' or agents' compensation, if any) expected to be incurred by us in connection with a possible offering and sale of the securities registered under the registration statement of which this
prospectus forms a part.
|
|
|
|
|
|
|
Expenses
|
|
Amount
|
|
|
SEC registration fee
|
|
$
|
*
|
|
|
FINRA filing fee
|
|
$
|
**
|
|
|
Printing and engraving expenses
|
|
$
|
**
|
|
|
Legal and accounting fees and expenses
|
|
$
|
**
|
|
|
Blue sky fees and expenses
|
|
$
|
**
|
|
|
Transfer agent fees and expenses
|
|
$
|
**
|
|
|
Miscellaneous costs
|
|
$
|
**
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
*
-
We
are registering an indeterminate amount of securities under the registration statement and in accordance with Rules 456(b) and 457(r), we are deferring
payment of any registration fee until the time the securities are sold under the registration statement pursuant to a prospectus supplement.
-
**
-
To
be provided by a prospectus supplement or as an exhibit to a report on Form 6-K that is incorporated by reference into this prospectus.
37
Table of Contents
LEGAL MATTERS
Unless otherwise specified in a prospectus supplement accompanying this prospectus, certain legal matters in connection with the offerings
pursuant to this prospectus relating to U.S. law will be passed upon for us by Wachtell, Lipton, Rosen & Katz, New York, New York. The validity of the ordinary shares offered by this prospectus
and, unless otherwise specified in a prospectus supplement accompanying this prospectus, certain other legal matters in connection with the offerings pursuant to this prospectus relating to the laws
of England and Wales will be passed upon for us by Macfarlanes LLP, London, England.
38
Table of Contents
EXPERTS
The financial statements and management's assessment of the effectiveness of internal control over financial reporting (which is included in
Management's Report on Internal Control over Financial Reporting) incorporated in this Prospectus by reference to the Annual Report on Form 20-F of International Game Technology PLC for
the year ended December 31, 2017 and the audited historical financial statements of International Game Technology and management's assessment of the effectiveness of internal control over
financial reporting included on page 99 of International Game Technology's Annual Report on Form 10-K for the fiscal year ended September 27, 2014 have been so incorporated in
reliance on the reports (the report related to International Game Technology PLC contains an explanatory paragraph relating the Company's restatement of its financial statements as described in
Note 1 to the financial statements and also contains an adverse opinion on the effectiveness of internal control over financial reporting) of PricewaterhouseCoopers LLP, an independent
registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
39
Table of Contents
SERVICE OF PROCESS AND ENFORCEMENTS OF JUDGMENTS
We are incorporated under the laws of England and Wales with our registered office in England and with our principal executive offices located
in Rome, Italy, Providence, Rhode Island and Las Vegas, Nevada. A majority of our directors and senior management, and some of the experts named in this registration statement, currently reside
outside the United States. A substantial portion of its assets and the assets of these individuals are located outside the United States. As a result, it may not be possible for you to effect service
of process within the United States upon non-U.S. resident directors or upon us, or it may be difficult to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S.
securities laws against us.
We
have appointed The Corporation Trust Company of Nevada as our authorized agent upon whom process may be served in any action instituted in any U.S. federal or state court having
subject matter jurisdiction arising out of or based upon the securities offered by this prospectus.
The United States and England currently do not have a treaty providing for the reciprocal recognition and enforcement of judgments (other than
arbitration awards) in civil and commercial matters. Consequently, a final judgment for payment rendered by any federal or state court in the United States based on civil liability, whether or not
predicated solely upon U.S. federal securities laws, would not automatically be enforceable in England. To enforce any U.S. judgment in England, proceedings must be initiated by way of common law
action before a court of competent jurisdiction in England. In a common law action, an English court generally will not reinvestigate the merits of the original matter decided by a U.S. court and may
order summary judgment on the basis that there is no arguable defense to the claim for payment. The entry of an enforcement order by an English court is conditional, among other things, upon the
following:
-
•
-
the U.S. court having had jurisdiction over the original proceeding according to English conflict of laws principles;
-
•
-
the judgment being final and conclusive on the merits and being for a debt or a definite sum of money;
-
•
-
the judgment not contravening English public policy;
-
•
-
the judgment being not for a sum payable in respect of taxes or other charges of a like nature, or in respect of a fine or penalty;
-
•
-
the judgment is not arrived at by doubling, trebling or otherwise multiplying a sum assessed as compensation for the loss or damage sustained;
and
-
•
-
the judgment having not been obtained by fraud or in breach of the principles of natural justice.
Enforcement
proceedings would normally have to be required to be commenced within six (6) years of the date of the judgment. In addition, it is questionable whether an English
court would accept jurisdiction and impose civil liability if proceedings were commenced in England predicated solely upon U.S. federal securities law.
We
may comply with a U.S. judgment voluntarily, but, if we were not to do so, you would have to apply to an English court for an original judgment. Consequently, it could prove difficult
to enforce civil liabilities solely based on U.S. securities law in England. In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable in
England and English courts will not enforce a U.S. judgment for specific performance, and new proceedings relitigating the issue in the English courts would be required.
40
Table of Contents
English
shareholders should seek advice from their own counsel based on the applicable circumstances.
Enforceability in Italy of final judgments of U.S. courts obtained in actions predicated upon the civil liability provisions of the federal
securities laws of the United States is subject to certain conditions. Final enforceable and conclusive judgments rendered by U.S. courts, even if obtained by default, may not require retrial and will
be enforceable in the Republic of Italy, provided
that pursuant to article 64 of Italian Law No. 218 of May 31, 1995 (
riforma del sistema italiano di diritto internazionale
privato
), the following conditions are met:
-
•
-
the U.S. court which rendered the final judgment had jurisdiction according to Italian law principles of jurisdiction;
-
•
-
the relevant summons and complaint was appropriately served on the defendants in accordance with U.S. law and during the proceeding the
essential rights of the defendants have not been violated;
-
•
-
the parties to the proceeding appeared before the court in accordance with U.S. law or, in the event of default by the defendants, the U.S.
court declared such default in accordance with U.S. law;
-
•
-
the judgment is considered final in accordance with U.S. law;
-
•
-
there is no conflicting final judgment previously rendered by an Italian court;
-
•
-
there is no action pending in the Republic of Italy among the same parties and arising from the same facts and circumstances which commenced
prior to the action in the United States; and
-
•
-
the provisions of such judgment would not violate Italian public policy.
Italian
courts may have jurisdiction on actions based on non-Italian law or involving non-Italian individuals/entities depending on the nature of the claims brought by the relevant
shareholder and subject to the requirements set forth under the Council Regulations (EC) no. 1215/2012 of December 12, 2012 on jurisdiction and the recognition and enforcement of
judgments in civil and commercial matters.
We
may comply with a U.S. judgment voluntarily, but, if we were not to do so, you would have to apply to an Italian court for an original judgment. Consequently, it could prove difficult
to enforce civil liabilities solely based on U.S. securities law in Italy. In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable in Italy
and Italian courts are unlikely to enforce any U.S. judgments for specific performance.
Italian
shareholders should seek advice from their own counsel based on the applicable circumstances.
41
Table of Contents
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form F-3 under the Securities Act with respect to the securities offered by this
prospectus. However, as is permitted by the rules and regulations of the SEC, this prospectus, which is part of our registration statement on Form F-3, omits certain information, exhibits,
schedules and undertakings set forth in the registration statement. For further information about us, and the securities offered by this prospectus, please refer to the registration statement.
We
are subject to the reporting requirements of the Exchange Act that are applicable to a foreign private issuer. In accordance with the Exchange Act, we file reports, including Annual
Reports on Form 20-F, and other information with the SEC. We also furnish to the SEC under cover of Form 6-K material information required to be made public under the laws of England and
Wales, filed with and made public by any stock exchange or distributed by us to our shareholders.
The
registration statement of which this prospectus forms a part, including the exhibits thereto, and reports and other information filed by us with the SEC may be inspected
without charge and copied at prescribed rates at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Copies of this material are also available by mail from the
Public Reference Section of the SEC, at 100 F. Street, N.E., Washington D.C. 20549, at prescribed rates. The public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports and other information regarding issuers, such as us, that file electronically with the SEC
(http://www.sec.gov).
As
a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders and our executives, directors
and principal shareholders are exempt from the "short-swing profits" reporting and liability provisions contained in Section 16 of the Exchange Act and related Exchange Act rules. In addition,
we are not required under the Exchange Act to file periodic reports and financial statements as frequently or as promptly as U.S. domestic issuers whose securities are registered under the Exchange
Act.
42
Table of Contents
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We file annual and special reports and other information with the SEC. These filings contain important information which does not appear in this
prospectus. The SEC allows us to "incorporate by reference" information into this prospectus, which means that we can disclose important information to you by referring you to other documents which we
have filed or will file with the SEC. We are incorporating by reference in this prospectus the documents listed below and all amendments or supplements we may file to such documents, as well as any
future filings we may make with the SEC on Form 20-F, or any future reports on Form 6-K that we may file that indicate that they are incorporated by reference into this prospectus,
before the time that all of the securities offered by this prospectus have been sold or de-registered:
-
•
-
the audited consolidated statements of comprehensive income, of cash flows and of equity of International Game Technology for the year ended
September 30, 2014 and the related notes to such audited consolidated financial statements and management's assessment of the effectiveness of internal control over financial reporting
contained in International Game Technology's Annual Report on Form 10-K for the fiscal year ended September 27, 2014, filed with the SEC on November 25, 2014 (Commission File
No. 001-10684);
-
•
-
our Annual Report on Form 20-F for the fiscal year ended December 31, 2017, filed with the SEC on March 15, 2018;
-
•
-
our reports on Form 6-K furnished to the SEC on March 8, 2018 (other than Exhibits 99.1 and 99.2) and May 18, 2018;
and
-
•
-
the description of our ordinary shares found in Form 8-A as filed with the SEC on April 2, 2015 (Commission File
No. 001-36906), under the heading "Description of Registrant's Securities to be Registered" including any subsequent amendment or any report filed for the purpose of updating such description.
Any
statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of the
registration statement to the extent that a statement contained herein or in any subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of the registration statement.
We
will provide you without charge, upon your written or oral request to IGT Investor Relations by phone at (866) 296-4232 or e-mail at Investor_Relations@IGT.com, a copy of any
of the documents incorporated by reference in this prospectus, other than exhibits to such documents which are not specifically incorporated by reference into such documents.
Statements
contained in this prospectus or the documents incorporated by reference herein or therein as to the contents of any contract or other document referred to herein or therein do
not purport to be complete, and where reference is made to the particular provisions of such contract or other document, such provisions are qualified in all respects by reference to all of the
provisions of such contract or other document.
43
Table of Contents
International Game Techn... (NYSE:IGT)
Historical Stock Chart
From Mar 2024 to Apr 2024
International Game Techn... (NYSE:IGT)
Historical Stock Chart
From Apr 2023 to Apr 2024
