Item 3.02 Unregistered Sales of Equity Securities.
On July 8, 2022, Visa Inc. ("Visa" or the "Company") announced that it will
release approximately $3.5 billion from its Series B and Series C Convertible
Participating Preferred Stock ("Series B Preferred Stock" and "Series C
Preferred Stock," respectively, and collectively, "Preferred Stock") in
connection with the second mandatory release assessment on June 21, 2022, the
sixth anniversary of the Visa Europe acquisition transaction and the issuance of
the Preferred Stock. As required by the Litigation Management Deed ("LMD")
entered into at the time of the transaction, at each release assessment, Visa,
in consultation with the Litigation Management Committee comprising
representatives of former Visa Europe members ("LMC"), performs a conservative
assessment of the ongoing risk of liability to Visa and its subsidiaries arising
from certain existing and potential litigation relating to the setting of
multilateral interchange fee rates in the Visa Europe territory. Visa and the
LMC have followed the procedures identified in the LMD, and the second release
amount is now final.
The release will result in a downward adjustment of the Class A Common
Equivalent Number (as defined in the certificates of designations ("CODs") for
the Preferred Stock), and a partial conversion of the Preferred Stock into
Series A Convertible Participating Preferred Stock ("Series A Preferred Stock")
in accordance with the applicable COD, each of which was filed as an exhibit to
Visa's Annual Report on Form 10-K for the fiscal year ended September 30, 2021.
The adjustments were calculated in accordance with the CODs using the
volume-weighted average price for Visa's Class A Common Stock over the 10-day
trading period from June 6, 2022 through June 17, 2022.
Effective July 29, 2022 (the "Effective Date"), the Liability Coverage Reduction
Amount (as defined in the CODs), Conversion Adjustment (as defined in the CODs)
and new Class A Common Equivalent Number for each series of Preferred Stock will
be updated as follows:
a.Series B Preferred Stock: A Liability Coverage Reduction Amount of
approximately $1.5 billion, which will result in a Conversion Adjustment of
3.084 and reduce the Class A Common Equivalent Number for the Series B Preferred
Stock from 6.055 to 2.971; and
b.Series C Preferred Stock: A Liability Coverage Reduction Amount of
approximately $2.0 billion, which will result in a Conversion Adjustment of
3.179 and reduce the Class A Common Equivalent Number for the Series C Preferred
Stock from 6.824 to 3.645.
On the Effective Date, the Company will issue approximately 176,853 shares of
Series A Preferred Stock, subject to adjustment to account for fractional
shares, to holders of record of Preferred Stock as of July 22, 2022. Each holder
of Preferred Stock will receive a number of shares of Series A Preferred Stock
equal to the applicable Conversion Adjustment per share of Preferred Stock,
divided by 100. The Company will pay cash in lieu of issuing fractional shares
of Series A Preferred Stock. Each share of Series A Preferred Stock will be
automatically converted into 100 shares of Class A Common Stock in connection
with a sale to a person eligible to hold Class A Common Stock in accordance with
Visa's certificate of incorporation.
The Series A Preferred Stock issued in connection with the release, and the
Class A Common Stock issued in connection with any sale of Series A Preferred
Stock to a person eligible to hold Class A Common Stock, will be issued in
reliance on the exemption from the registration requirements of the Securities
Act of 1933 set forth in Section 3(a)(9) thereof.
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