eTrade 2005 Annual Report Download - page 270

above) (any of the foregoing hereinafter in this Section5.04(a)(iv) called the “
Distributed Property
”), each Fixed Settlement Rate in
effect at the close of business on the date fixed for the determination of shareholders entitled to receive such distribution shall be
adjusted by multiplying each Fixed Settlement Rate by a fraction of which:
(A) the numerator shall be such Current Market Price per share of Common Stock; and
(B) the denominator shall be the Current Market Price per share of Common Stock on the date fixed for such determination less the then
fair market value of the portion of the assets or evidences of indebtedness so distributed applicable to one share of Common Stock (as
determined by the Board of Directors, whose determination shall be conclusive and the basis for which shall be described in a Board
Resolution),
such adjustment to each Fixed Settlement Rate to become effective at the opening of business on the Business Day following the date
fixed for the determination of shareholders entitled to receive such distribution;
provided
that if the fair market value of the Distributed
Property applicable to one share of Common Stock is equal to or greater than the Current Market Price on the date fixed for the
determination of stockholders entitled to receive such distribution, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder shall have the right to receive upon settlement the amount of Distributed Property such Holder would have
received had such Holder settled each Purchase Contract on the date fixed for such determination as if the Purchase Contract
Settlement Date were such date fixed for such determination. In any case in which this Section5.04(a)(iv) is applicable, Section5.04(a)(ii)
shall not be applicable. In the event that such dividend or distribution is not so paid or made, each Fixed Settlement Rate shall again be
adjusted to be the Fixed Settlement Rate that would then be in effect if such dividend or distribution had not been declared.
(x) Notwithstanding the foregoing, if the Distributed Property distributed by the Company to all holders of its Common Stock consist
of capital stock of, or similar equity interests in, a Subsidiary or other business unit of the Company, clause (w)above shall not apply
and instead each Fixed Settlement Rate shall be increased so that each Fixed Settlement Rate shall be equal to the rate determined by
multiplying each such rate in effect immediately prior to the close of business on the record date with respect to such distribution by a
fraction of which,
(C) the numerator shall be the sum of (A)the average of the Closing Prices of the Common Stock for the ten (10)consecutive Trading
Days commencing on and including the fifth Trading Day after the date on which “ex-dividend trading” commences for such dividend
or distribution on the New York Stock Exchange, the Nasdaq National Market or such other national or regional exchange or market on
which such securities are then listed or quoted (the “
Ex-Dividend Date
”)
plus
(B)the average Closing Prices of the securities
distributed in respect of each share of Common Stock for the ten (10)consecutive Trading Days commencing on and including the fifth
Trading Day after the Ex-Dividend Date; and
(D) the denominator shall be the average of the Closing Prices of the Common Stock for the ten (10)consecutive Trading Days
commencing on and including the fifth Trading Day after the Ex-Dividend Date,
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