GameStop 2009 Annual Report Download - page 101

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 share 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 the Company’s 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 2005, the Company adopted a rights agreement under which 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.
The Company will be entitled to redeem the Rights at any time prior to the acquisition by a person or group of
15% or more of the voting power of the outstanding common stock of the Company, at a price of $.01 per Right. The
Rights will expire on October 28, 2014.
The Company has 5,000 shares of $.001 par value preferred stock authorized for issuance, of which 500 shares
have been designated by the Board of Directors as Series A Preferred Stock and reserved for issuance upon exercise
of the Rights. Each such share of Series A Preferred Stock will be nonredeemable and junior to any other series of
preferred stock the Company may issue (unless otherwise provided in the terms of such stock) and will be entitled to
a preferred dividend equal to the greater of $1.00 or one thousand times any dividend declared on the Company’s
common stock. In the event of liquidation, the holders of Series A Preferred Stock will receive a preferred
liquidation payment of $1,000.00 per share, plus an amount equal to accrued and unpaid dividends and distributions
thereon. Each share of Series A Preferred Stock will have ten thousand votes, voting together with the Company’s
common stock. However, in the event that dividends on the Series A Preferred Stock shall be in arrears in an amount
equal to six quarterly dividends thereon, holders of the Series A Preferred Stock shall have the right, voting as a
class, to elect two of the Company’s directors. In the event of any merger, consolidation or other transaction in
which the Company’s common stock is exchanged, each share of Series A Preferred Stock will be entitled to receive
one thousand times the amount and type of consideration received per share of the Company’s common stock. At
January 30, 2010, there were no shares of Series A Preferred Stock outstanding.
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GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)