eTrade 2005 Annual Report Download - page 261

Common Stock (subject to Section5.08) equal to the Settlement Rate unless an Early Settlement, a Cash Merger Early Settlement or a
Termination Event with respect to the Units of which such Purchase Contract is a part shall have occurred. The “
Settlement Rate
” is
equal to:
(i) If the Applicable Market Value is greater than or equal to $21.8160 (the “
Threshold Appreciation Price
”), 1.1459 shares of Common
Stock per Purchase Contract (the “
Minimum Settlement Rate
”);
(ii) if the Applicable Market Value is less than the Threshold Appreciation Price but greater than $18.00 (the “
Reference Price
”), the
number of shares of Common Stock per Purchase Contract having a value (based on the Applicable Market Value) equal to the Stated
Amount;
(iii) if the Applicable Market Value is less than or equal to the Reference Price, 1.3889 shares of Common Stock per Purchase Contract
(the “
Maximum Settlement Rate
”);
in each case subject to adjustment as provided in Section5.04 (and in each case rounded upward or downward to the nearest
1/10,000th of a share).
The “
Applicable Market Value
” means the average of the Closing Price per share of Common Stock on each of the 20 consecutive
Trading Days ending on the third Trading Day immediately preceding the Purchase Contract Settlement Date, subject to adjustment as
set forth under Section5.04 hereof.
The “
Closing Price
” per share of Common Stock on any date of determination means:
(i) the closing sale price as of the close of the principal trading session (or, if no closing sale price is reported, the reported last sale
price) per share on the New York Stock Exchange, Inc. (the “
NYSE
”) on such date; or
(ii) if the Common Stock is not listed for trading on the NYSE on any such date, the closing sale price (or, if no closing sale price is
reported, the reported last sale price) per share as reported in the composite transactions for the principal United States securities
exchange on which the Common Stock is so listed; or
(iii) if the Common Stock is not so listed on a United States national or regional securities exchange, the closing sale price (or, if no
closing sale price is reported, the reported last sale price) per share as reported by The Nasdaq National Market; or
(iv) if the Common Stock is not so reported by the Nasdaq National Market, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar organization; or
(v) if the bid price referred to in clause (iv)above is not available, the average of the mid-point of the last bid and ask prices of the
Common Stock on such date from at least three nationally recognized independent investment banking firms retained by the Company
for purposes of determining the Closing Price.
34

2006. EDGAR Online, Inc.