| Item 3.03. | Material Modification of Rights of Security Holders. |
As previously disclosed, on October 29, 2021, all outstanding shares of Laureate Education, Inc.’s (the “Company”) Class A common stock, par value $0.004 per share, and Class B common stock, par value $0.004 per share, automatically converted into the same number of shares of common stock, par value $0.004 per share, pursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”). No additional Class A or Class B shares will be issued following such conversion.
The conversion occurred pursuant to Article V, Section C.3 of the Certificate of Incorporation, which provided that each one share of Class A common stock and Class B common stock would convert automatically, without any further action, into one share of common stock at 5:00 p.m. New York City time on the “Final Conversion Date,” which was the first trading day falling on or after the date on which the Class B shares represent less than fifteen percent (15%) of the aggregate number of outstanding Class A and Class B shares. Following the conversion, the Company had approximately 181,382,681 shares of common stock outstanding as of October 29, 2021.
On December 13, 2021, also in accordance with Article V, Section C.3 of the Certificate of Incorporation, and as required by Section 243 of the Delaware General Corporation Law (the “DGCL”), the Company filed a certificate with the Secretary of State of the State of Delaware effecting the retirement of the shares of Class A and Class B common stock that were issued but not outstanding following the conversion (the “Certificate of Retirement”).
The conversion had the following effects, among others, on the holders of shares of Class A and Class B common stock:
Voting Power. Prior to the conversion, holders of shares of Class B common stock were entitled to cast ten votes per share and holders of shares of Class A common stock were entitled to cast one vote per share on any matter submitted to a vote of the Company’s stockholders. As a result of the conversion, all former holders of shares of Class A and Class B common stock are now holders of shares of common stock, which is entitled to only one vote per share on all matters subject to a stockholder vote with a record date on or after the date of the conversion. In addition, the provisions of the Certificate of Incorporation and Delaware law that entitled the holders of shares of Class A and Class B common stock, in certain circumstances, to separate class voting rights are no longer applicable as a result of the conversion.
Economic Interests. Because holders of shares of common stock are entitled to the same economic interests to which former holders of shares of Class A and Class B common stock were entitled before the conversion, including with regard to dividends, liquidation rights and treatment in connection with a change of control or merger transaction, the conversion had no impact on the economic interests of former holders of shares of Class A and Class B common stock.
Capitalization. The conversion had no impact on the total number of the Company’s outstanding shares of capital stock, as the shares of Class A and Class B common stock converted into an equivalent number of shares of common stock. Pursuant to Section 243 of the DGCL, the filing of the Certificate of Retirement had the effect of amending the Certificate of Incorporation such that, upon the effectiveness of the Certificate of Retirement, the Company’s total number of authorized shares of capital stock has been reduced by the number of the retired shares of Class A and Class B common stock.
Equity Incentive Plans. Upon the conversion, outstanding options, performance stock units and restricted stock units, which were denominated in shares of Class A common stock and issued under any of the Company’s equity incentive plans, remained unchanged, except that they now represent the right to receive shares of common stock.
