eTrade 2005 Annual Report Download - page 273

such adjustment to each Fixed Settlement Rate to become effective immediately prior to the opening of business on the Business Day
following the Expiration Time. If the Company is obligated to purchase shares pursuant to any such tender or exchange offer, but the
Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, each
Fixed Settlement Rate shall again be adjusted to be the Fixed Settlement Rate that would then be in effect if such tender or exchange
offer had not been made.
(vii) The reclassification of Common Stock into securities including securities other than Common Stock (other than any
reclassification upon a Reorganization Event to which Section5.04(b) applies) shall be deemed to involve:
(A) a distribution of such securities other than Common Stock to all holders of Common Stock (and the effective date of such
reclassification shall be deemed to be “the date fixed for the determination of shareholders entitled to receive such distribution” and
the “date fixed for such determination” within the meaning of paragraph (iv)of this Section); and
(B) a subdivision, split or combination, as the case may be, of the number of shares of Common Stock outstanding immediately prior to
such reclassification into the number of shares of Common Stock outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be “the day upon which such subdivision or split becomes effective” or “the day upon which such
combination becomes effective”, as the case may be, and “the day upon which such subdivision, split or combination becomes
effective” within the meaning of this Section5.04(a)(iii).
(viii) [Reserved.]
(ix) All adjustments to each Fixed Settlement Rate shall be calculated to the nearest 1/10,000th of a share of Common Stock (or if there
is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). If any adjustments are made to each Fixed Settlement Rate
pursuant to this Section5.04(a), an adjustment shall also be made to the Applicable Market Value solely to determine which of clauses
(i), (ii)or (iii)of the definition of Settlement Rate in Section5.01(a) will apply on the Purchase Contract Settlement Date or any Cash
Merger Early Settlement Date. Such adjustment shall be made by multiplying the Applicable Market Value by the Adjustment Factor.
The “Adjustment Factor” means, initially, a fraction the numerator of which shall be the Maximum Settlement Rate immediately after the
first adjustment to each Fixed Settlement Rate pursuant to this Section5.04(a) and the denominator of which shall be the Maximum
Settlement Rate immediately prior to such adjustment. Each time an adjustment is required to be made to each Fixed Settlement Rate
pursuant to this Section5.04(a), the Adjustment Factor shall be multiplied by a fraction the numerator of which shall be the Maximum
Settlement Rate immediately after such adjustment to each Fixed Settlement Rate pursuant to this Section5.04(a) and the denominator
of which shall be
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