Adaptec 2001 Annual Report Download - page 77

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In January 2000, the Company’s Board of Directors approved another tw o-for-one split of the
Company’s common stock in the form of a stock dividend that was applicable to shareholders
of record on January 31, 2000, and effective on February 14, 2000.
All references to share and per share data for all periods presented have been adjusted to give
effect to these stock dividends.
Warrants. During 1996, the Company issued a warrant to purchase 100,000 shares of common
stock at $2.31 per share to an investment banking firm in settlement for services previously
expensed. This warrant was fully exercised in August 2000.
In 1999, as a result of the Company’s acquisition of Abrizio, the Company assumed warrants to
purchase 174,580 shares of common stock at $1.66 per share. In 2000, as a result of the
Company’s acquisitions of AAN etcom, Extreme, QED and SwitchOn, the Company assumed
warrants to purchase 50,759, 63,162, 68,434 and 780 shares of common stock at $9.36, $3.06,
$5.26 and $89.76 per share, respectively. These warrants expire between October 2002 and
December 2005. In 2001, 50,759 of these warrants were cancelled. At December 31, 2001, 2000
and 1999, there were 42,138 warrants outstanding at a weighted average exercise price of $1.66,
92,897 warrants outstanding at a weighted average exercise price of $5.87 per share and 366,633
warrants outstanding at a weighted average exercise price of $3.87 per share, respectively.
Convertible Preferred Stock of QED. QED, w hich was acquired by PMC in August 2000 in a
transaction accounted for under the pooling method (see Note 2), had preferred stock
comprised of $0.001 par value per share Series A, B, C, D convertible preferred shares. At
December 31, 1999, QED had a total of 13,619,000 preferred shares outstanding. Proceeds of
these shares net of issuance costs were approximately $39.9 million. On February 1, 2000, QED
completed its initial public offering of common stock. Simultaneously with the closing of the
initial public offering, all issued and outstanding shares of QED’s convertible preferred stock
were automatically converted into 13,619,000 shares of QED common stock. All shares of
common stock of QED were exchanged for shares of PM C common stock at an exchange ratio
of 0.385 (see Note 2) per QED common share.
Exchangeable Shares. As a result of the acquisitions of Extreme and Datum, each holder of the
Extreme and Datum common stock received shares exchangeable into PM C common stock.
The shares are exchangeable, at the option of the holder, for PM C common stock on a share-for-
share basis. The exchangeable shares remain securities of the Company and entitle the holders
to dividend and other rights economically equivalent to that of PM C common stock and,
through a voting trust, to vote at shareholder meetings of the Company. A t December 31, 2001
and 2000, these shares were exchangeable into 712,000 and 1,386,000 PMC shares, respectively.
Stockholders' Rights Plan. On April 26, 2001, PM C adopted a stockholders' rights plan. Under
the rights plan, the Company issued a dividend of one right for each share of common stock of
the Company held by stockholders of record as of May 25, 2001. Each right will initially entitle
stockholders to purchase a fractional share of the Company's preferred stock for $325.
However, the rights are not immediately exercisable and will become exercisable only upon the
occurrence of certain events. Upon occurrence of these events, unless redeemed for $0.001 per
right, the rights will become exercisable by holders, other than rights held by a potential