eTrade 2005 Annual Report Download - page 274

the Maximum Settlement Rate immediately prior to such adjustment. Notwithstanding the foregoing, if any adjustment to each Fixed
Settlement Rate is required to be made pursuant to the occurrence of any of the events contemplated by this Section5.04(a) during the
period taken into consideration for determining the Applicable Market Value, the 20 individual Closing Prices used to determine the
Applicable Market Value shall be adjusted rather than the Applicable Market Value and the Applicable Market Value shall be
determined by (A)multiplying the Closing Prices for Trading Days prior to such adjustment to each Fixed Settlement Rate by the
Adjustment Factor in effect prior to such adjustment, (B)multiplying the Closing Prices for Trading Days following such adjustment by
the Adjustment Factor reflecting such adjustment, and (C)dividing the sum of all such adjusted Closing Prices by 20.
(x) The Company may, but shall not be required to, make such increases in each Fixed Settlement Rate, in addition to those required by
this Section5.04(a), as the Board of Directors considers to be advisable. The Company may make such a discretionary adjustment only
if it makes the same proportionate adjustment to each Fixed Settlement Rate.
(xi) With respect to any existing or future stockholder rights plan of the Company involving the issuance of preference share purchase
rights or other similar rights (the “
Rights
”) to all holders of the Common Stock, a Holder shall be entitled to receive upon settlement
of any Purchase Contract, in addition to the shares of Common Stock issuable upon settlement of such Purchase Contract, the related
Rights for the Common Stock, unless such Rights under the future stockholder rights plan have separated from the Common Stock at
the time of conversion, in which case each Fixed Settlement Rate shall be adjusted as provided in Section5.04(a)(iv) on the date such
Rights separate from the Common Stock.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
(i) In the event of:
(A) any consolidation or merger of the Company with or into another Person (other than a merger or consolidation in which the
Company is the continuing corporation and in which the shares of Common Stock outstanding immediately prior to the merger or
consolidation are not exchanged for cash, securities or other property of the Company or another corporation);
(B) any sale, transfer, lease or conveyance to another Person of the property of the Company as an entirety or substantially as an
entirety;
(C) any statutory share exchange of the Company with another Person (other than in connection with a merger or acquisition); or
(D) any liquidation, dissolution or termination of the Company other than as a result of or after the occurrence of a Termination Event
(any event described in clauses (A), (B), (C)and (D), a “
Reorganization Event
”),
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2006. EDGAR Online, Inc.