| Item 3.02 | Unregistered Sales of Equity Securities. |
On November 4, 2021, CME Group Inc. (“CME Group”) issued and sold in a private placement to Google LLC (“Google”), an affiliate of Alphabet Inc., 4,584,020 shares of Series G Non-Voting Convertible Preferred Stock for an aggregate purchase price of approximately $1 billion in cash. CME Group plans to use the funds received in the transaction for general corporate purposes and to support its broader technology transformation project.
The issuance and sale of the shares of Series G Non-Voting Convertible Preferred Stock to Google was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933 (the “Securities Act”). In connection with such issuance and sale, Google represented to CME Group that it is an “accredited investor,” as defined in Rule 501 under the Securities Act, and that it was acquiring the Series G Non-Voting Convertible Preferred Stock solely for investment with no intention to distribute any of the purchased Series G Non-Voting Convertible Preferred Stock to any person. Appropriate legends will be affixed to any certificates or other instruments evidencing shares of the Series G Non-Voting Convertible Preferred Stock or shares of CME Group’s Class A Common Stock, par value $.01 per share (the “Common Stock”), issued upon conversion of Series G Non-Voting Convertible Preferred Stock into Common Stock.
The information set forth in Item 5.03 of this report is incorporated by reference in this Item 3.02.
| Item 3.03 | Material Modification to Rights of Security Holders. |
The information set forth in Item 5.03 of this report is incorporated by reference in this Item 3.03.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Certificate of Designations of Series G Non-Voting Convertible Preferred Stock
On November 4, 2021, CME Group filed with the Secretary of State of the State of Delaware a certificate of designations designating the Series G Non-Voting Convertible Preferred Stock (the “Certificate of Designations”) and establishing the powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of the shares of Series G Non-Voting Convertible Preferred Stock. The Certificate of Designations became effective upon filing.
The Series G Non-Voting Convertible Preferred Stock ranks on a parity basis with the Common Stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The holders of the Series G Non-Voting Convertible Preferred Stock are entitled to participate, on an as-converted basis, in any dividends declared and paid or distributions on the Common Stock, provided that, in the case of such a dividend or distribution payable in the form of Common Stock, a holder may elect to receive such dividend or distribution in the form of additional shares of Series G Non-Voting Convertible Preferred Stock, subject to CME Group’s right to pay such dividend or distribution to such holder in cash in lieu of such additional shares of Series G Non-Voting Convertible Preferred Stock.
Each holder of Series G Non-Voting Convertible Preferred Stock has the right at any time, at such holder’s option, to convert all of such holder’s shares into Common Stock at a specified conversion rate, which is initially one share of Common Stock per share of Series G Non-Voting Convertible Preferred Stock and is subject to adjustment for any subdivision or combination of the shares of Common Stock. If such a conversion would be subject to premerger notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), the conversion will be effected only as to the number of shares the conversion of which would not be subject to such premerger notification, and conversion of such holder’s remaining shares of Series G Non-Voting Convertible Preferred Stock will be effected after the expiration or early termination of any waiting period under the HSR Act.
In the event of any reclassification or merger or other similar business combination of CME Group with or into another person, in each case, pursuant to which at least a majority of the Common Stock is changed or converted into, or exchanged for, cash, securities or other property of CME Group or another person; any transfer to another Person of all or a majority of the property and assets of CME Group, in each case pursuant to which the Common Stock is converted into cash, securities or other property; or any statutory exchange of securities of CME Group with another person (other than in connection with a merger or acquisition) or reclassification, recapitalization or reorganization of the Common Stock into other securities, the Series G Non-Voting Convertible Preferred Stock will, immediately prior to consummation of such event, convert automatically into Common Stock at the then-applicable conversion rate, provided that a holder of Series G Non-Voting Convertible Preferred Stock subject to
