This excerpt taken from the IPG DEF 14A filed Apr 30, 2009.
Upon the occurrence of a "corporate transaction" that affects the Common Stock such that an adjustment is required to preserve, or to prevent enlargement of, the benefits or potential benefits available under the Plan, the Committee shall, in such manner as the Committee deems equitable, adjust any or all of (i) the number and kind of shares that thereafter may be made the subject of awards, (ii) the number and kind of shares that are subject to outstanding awards, and (iii) the grant, exercise, or conversion price of any award. In addition, the Committee may make provisions for a cash payment (in lieu of stock) to a participant or other person holding an outstanding award. A "corporate transaction" is defined by the Plan to mean, in general, any stock split, stock dividend, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares, warrants or rights offering to purchase Common Stock at a price substantially below fair market value, or other similar event.
This excerpt taken from the IPG 8-K filed Sep 14, 2007.
Note 2: Adjustments
Adjustments primarily were made to conform Lintas consolidated financial statements which were prepared in accordance with Indian GAAP to U.S. GAAP. The Company prepared a reconciliation of net profit and shareholders funds prepared in accordance with Indian GAAP to Lintas comparable financial measures calculated and presented in accordance with U.S. GAAP. The reconciling items were as follows:
Lease Amortization Lintas has lease payments related to various operating leases that have scheduled rent increases associated with them. Under U.S. GAAP, an adjustment was recorded so that the effects of those scheduled rent increases were recognized by the lessee on a straight-line basis over the lease term.
Fringe Tax Benefits An adjustment was recorded to reclassify these costs as office & general expenses as they are classified after provision for current tax under Indian GAAP.
Investments An adjustment was recorded to adjust the current investments to fair value because under Indian GAAP current investments are stated at cost or fair value, whichever is lower and long-term investments are carried at cost.
Equity Investments Lintas has joint ventures which are consolidated for Indian GAAP purposes. An adjustment was recorded to comply with equity method accounting under U.S. GAAP, which primarily affected revenue and operating expenses.
Undistributed Profits An adjustment was recorded in accordance with Accounting Principles Board Opinion No. 23, Accounting for Income Taxes Special Areas, to record deferred taxes on undistributed profits as the transfer of these earnings from Lintass subsidiaries and joint ventures to the parent company in India is relatively certain.
Minority Interest An adjustment was recorded for minority interest related to the adjustment to undistributed profits related to investments in entities where Lintas is a minority owner.
Adjustments were also made to conform Lintas consolidated financial statements with the Companys policies related to depreciation of fixed assets and provision for doubtful accounts and for certain other pro forma adjustments related to equity in net income of Lintas and amortization of intangible assets.