IHOP 2012 Annual Report Download - page 105

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specifically designated as junior to the Series B Convertible Preferred Stock, with respect to the payment of dividends and
distributions, in a liquidation, dissolution or winding up, and upon any other distribution of the Company's assets; and (ii) on a
parity with all other series of preferred stock, including the Series A Perpetual Preferred Stock, with respect to the payment of
dividends and distributions, in a liquidation, dissolution or winding up, and upon any other distribution of the Company's assets.
Each share of Series B Convertible Preferred Stock had an initial stated value of $1,000, that increased at the rate of 6.0%
per annum, compounded quarterly, commencing on the issue date of such share of Series B Convertible Preferred Stock to and
including the earlier of (i) the date of liquidation, dissolution or winding up or the redemption of such share, or (ii) the date such
share is converted into the Company's common stock. The stated value of a share as so accreted as of any date is referred to as the
accreted value of the share as of that date. Shares of Series B Convertible Preferred Stock could have been redeemed by the
Company, in whole or in part at the Company's option, on or after the fourth anniversary of the issue date, at a redemption price
equal to the accreted value as of the applicable redemption date, subject to the terms set forth in the Certificate of Designations
for the Series B Convertible Preferred Stock ("the "Series B Certificate of Designations"). The Series B Convertible Preferred
Stock entitled the holders thereof to receive certain dividends and distributions to the extent that any dividends or distributions
paid on the Company's common stock exceeded the annual accretion on the Series B Convertible Preferred Stock. Holders of
Series B Convertible Preferred Stock were entitled to vote on all matters (including the election of directors) submitted to the
holders of the Company's common stock, as a single class with the holders of the Company's common stock, with each share of
Series B Convertible Preferred Stock having one vote per share of the Company's common stock then issuable upon conversion
of such share of Series B Convertible Preferred Stock.
At any time and from time to time, any holder of Series B Convertible Preferred Stock could convert all or any portion of
the Series B Convertible Stock held by such holder into a number of shares of the Company's common stock computed by
multiplying (i) each $1,000 of aggregate accreted value of the shares to be converted by (ii) the conversion rate then in effect
(which initially is 14.44878 shares of common stock per $1,000 of accreted value, but subject to customary anti-dilution
adjustments).
The Company also entered into a registration rights agreement, dated as of November 29, 2007, with Chilton pursuant to
which the Company granted Chilton certain registration rights with respect to the shares of Series B Convertible Preferred Stock
issued to Chilton and the shares of common stock issuable upon conversion.
In January 2011, 100 shares of Series B Convertible Preferred Stock with an accreted value of approximately $120,000
were converted by the holder into 1,737 shares of the Company's common stock. On November 29, 2012, the fifth anniversary of
the issue date, the remaining 34,900 outstanding shares of Series B Convertible Preferred Stock, with an accreted value of
approximately $47.0 million, were automatically converted into 679,168 shares of the Company's common stock.
On December 14, 2012, the Company filed a Certificate of Elimination of the Series B Convertible Preferred Stock with the
Secretary of State of the State of Delaware to eliminate its Series B Convertible Preferred Stock. The Certificate of Elimination,
effective upon filing, had the effect of eliminating from the Corporation’s Restated Certificate of Incorporation, as amended, all
matters set forth in the Certificate of Designations of the Series B Preferred Stock with respect to such series, which was previously
filed by the Corporation with the Secretary of State on November 29, 2007.
Share Repurchase Program
In August 2011, the Board of Directors approved the repurchase of up to $45 million of the Company's common stock.
Under the program, the Company may repurchase shares on an opportunistic basis from time to time in open market transactions
and in privately negotiated transactions based on business, market, applicable legal requirements, and other considerations. The
repurchase program does not require the repurchase of a specific number of shares and may be terminated at any time. During the
year ended December 31, 2012, the Company did not repurchase any shares of its common stock pursuant to the share repurchase
program. As of December 31, 2012, the Company has repurchased 534,101 shares of stock for $21.2 million, an average price of
$39.64 per share, under the share repurchase program.
Dividends
There were no dividends declared or paid on common shares in 2012, 2011 or 2010. Payment of dividends is subject to
limitations under our Credit Agreement. We evaluate dividend payments on common stock within the context of our overall capital
allocation strategy with our Board of Directors on an ongoing basis, giving consideration to our current and forecast earnings,
financial condition, cash requirements, limitations under the Credit Agreement and other factors.
DineEquity, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
14. Preferred Stock and Stockholders' Equity (Continued)