eTrade 2005 Annual Report Download - page 269

(ii) In case the Company shall issue rights, warrants or options, other than pursuant to any dividend reinvestment plans or share
purchase plans, to all holders of its Common Stock entitling them, for a period expiring within 45 days after the record date for the
determination of shareholders entitled to receive such rights, warrants or options, to subscribe for or purchase shares of Common
Stock at a price per share less than the Current Market Price per share of Common Stock on the date of announcement of such
issuance, each Fixed Settlement Rate in effect at the close of business on the date of such announcement shall be increased by
multiplying such Fixed Settlement Rate by a fraction of which:
(A) the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date of such
announcement
plus
the number of shares of Common Stock so offered for subscription or purchase; and
(B) the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date of such
announcement
plus
the number of shares of Common Stock that the aggregate offering price of the total number of shares of Common
Stock so offered for subscription or purchase in the manner described in this Section5.04(a)(ii) would purchase at the Current Market
Price on the date of such announcement,
such increase in each Fixed Settlement Rate to become effective immediately after the opening of business on the Business Day
following the date of such announcement. The Company agrees that it shall notify the Purchase Contract Agent if any issuance of
such rights, warrants or options is cancelled or not completed following the announcement thereof and each Fixed Settlement Rate
shall thereupon immediately be readjusted to the Fixed Settlement Rate that would then be in effect if such issuance had not been
declared. For the purposes of this clause (ii), the number of shares of Common Stock at any time outstanding shall not include shares
held in the treasury of the Company but shall include any shares issuable in respect of any scrip certificates issued in lieu of fractions
of shares of Common Stock. The Company agrees that it shall not issue any such rights, warrants or options in respect of shares of
Common Stock held in the treasury of the Company.
(iii) In case outstanding shares of Common Stock shall be subdivided or split into a greater number of shares of Common Stock, each
Fixed Settlement Rate in effect at the close of business on the day preceding the day upon which such subdivision or split becomes
effective shall be proportionately increased, and, conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, each Fixed Settlement Rate in effect at the close of business on the day preceding
the day upon which such combination becomes effective shall be proportionately decreased, such increase or decrease, as the case
may be, to become effective immediately at the opening of business on the Business Day following the day upon which such
subdivision, split or combination becomes effective.
(iv) (w)In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including shares of capital stock, securities, cash and property but excluding any rights, warrants or options
referred to in Section5.04(a)(ii) above, any dividend or distribution paid exclusively in cash and any dividend or distribution referred to
in Section5.04(a)(i)
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2006. EDGAR Online, Inc.