GameStop 2006 Annual Report Download - page 101

19. Repurchase of Equity Securities
In March 2003, the Historical GameStop Board of Directors authorized a common stock repurchase program
for the purchase of up to $50,000 of Historical GameStop’s common shares. Historical GameStop was authorized to
repurchase shares from time to time in the open market or through privately negotiated transactions, depending on
prevailing market conditions and other factors. During the 52 weeks ended January 29, 2005, Historical GameStop
repurchased 1,918 shares at an average share price of $7.82. From the inception of this repurchase program through
January 29, 2005, Historical GameStop repurchased 6,526 shares at an average share price of $7.66, totaling
$50,000, and, as of January 29, 2005, had no amount remaining available for purchases under this repurchase
program. The repurchased shares were held in treasury until the consummation of the mergers, at which time they
were retired.
In October 2004, the Board of Directors of Historical GameStop authorized a repurchase of Historical
GameStop’s Class B common stock held by Barnes & Noble. Historical GameStop repurchased 12,214 shares of
common stock at a price equal to $9.13 per share for aggregate consideration before expenses of $111,520. The
repurchased shares were immediately retired.
20. Shareholders’ Equity
On February 7, 2007, following approval by a majority of the Class B common stockholders in a Special
Meeting of the Company’s Class B common stockholders, all outstanding Class B common shares were converted
into Class A common shares on a one-for-one basis. In addition, on February 9, 2007, the Board of Directors of the
Company authorized a two-for-one stock split, effected by a one-for-one stock dividend to stockholders of record at
the close of business on February 20, 2007, paid on March 16, 2007.
The holders of Class A common stock are entitled to one vote per on all matters to be voted on by stockholders.
Holders of Class A common stock will share in any dividend declared by the board of directors, subject to any
preferential rights of any outstanding preferred stock. In the event of our liquidation, dissolution or winding up, all
holders of common stock are entitled to share ratably in any assets available for distribution to holders of shares of
common stock after payment in full of any amounts required to be paid to holders of preferred stock.
In connection with the mergers, the Company adopted a rights agreement substantially similar to the rights
agreement adopted by Historical GameStop. Under the Company’s rights agreement, one right (a “Right”) is
attached to each outstanding share of the Company’s common stock. Each Right entitles the holder to purchase from
the Company one one-thousandth of a share of a series of preferred stock, designated as Series A Junior
Participating Preferred Stock (the “Series A Preferred Stock”), at a price of $100.00 per one one-thousandth of
a share. The Rights will be exercisable only if a person or group acquires 15% or more of the voting power of the
Company’s outstanding common stock or announces a tender offer or exchange offer, the consummation of which
would result in such person or group owning 15% or more of the voting power of the Company’s outstanding
common stock.
If a person or group acquires 15% or more of the voting power of the Company’s outstanding common stock,
each Right will entitle a holder (other than such person or any member of such group) to purchase, at the Right’s
then current exercise price, a number of shares of common stock having a market value of twice the exercise price of
the Right. In addition, if the Company is acquired in a merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold at any time after the Rights have become exercisable, each
Right will entitle its holder to purchase, at the Right’s then current exercise price, a number of the acquiring
company’s common shares having a market value at that time of twice the exercise price of the Right. Furthermore,
at any time after a person or group acquires 15% or more of the voting power of the outstanding common stock of
the Company but prior to the acquisition of 50% of such voting power, the Board of Directors may, at its option,
exchange part or all of the Rights (other than Rights held by the acquiring person or group) at an exchange rate of
one one-thousandth of a share of Series A Preferred Stock or one share of the Company’s common stock for each
Right.
F-33
GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)