A corporate action is any event that results in a material change to a company and affects its stakeholders.

The ranks of stakeholders include shareholders, both common and preferred, as well as bondholders. A major factor that determines how a
corporate action is processed is whether it is mandatory or discretionary. In a mandatory action, the shareholder has no option or ability to take
action or influence the timing of the event. The event will take place, and the shareholder has no choice, such as in a stock split. In a discretionary
(or voluntary) action, the shareholder has an option to have his/her holdings affected. In short, the event may or may not happen and/or the holder
can elect to participate or not, such as in a tender offer.

A corporate action is any event which results in material changes to a stock. In its strictest sense the term refers to any event which affects the
number of shares in issue. This would include events such as takeovers, bonus issues, rights issues and consolidations. These actions will generally
change the number or percentage of a company's shares you hold. In practice a corporate action will refer to a much broader spectrum of activities
undertaken by companies and which have a significant influence on its shareholders. This can include name changes, dividends, liquidations and
more. A corporate action will usually be decided upon by the company's board of directors, and will usually require approval by the company's
shareholders.

Companies that earn a profit can do one of three things: pay that profit out to shareholders, reinvest it in the business through expansion, debt
reduction or share repurchases, or both.
When a portion of the profit is paid out to shareholders, the payment is known as a dividend.

Dividends must be declared (i.e., approved) by a company’s Board of Directors each time they are paid. There are three important dates to
remember regarding dividends.

Declaration date: The declaration date is the day the Board of Director’s announces their intention to pay a dividend. On this day, the company
creates a liability on its books; it now owes the money to the stockholders. On the declaration date, the Board will also announce a date of record
and a payment date.

Date of record: This date is also known as “ex-dividend” date. It is the day upon which the stockholders of record are entitled to the upcoming
dividend payment. According to Barron’s, a stock will usually begin trading ex-dividend or ex-rights the fourth business day before the payment
date. In other words, only the owners of the shares on or before that date will receive the dividend. If you purchased shares of Coca-Cola after the
ex-dividend date, you would not receive its upcoming dividend payment; the investor from whom you purchased your shares would.

Payment date: This is the date the dividend will actually be given to the shareholders of company.

A vast majority of dividends are paid four times a year on a quarterly basis. This means that when an investor sees that Coca-Cola pays an $0.88
dividend, he will actually receive $0.22 per share four times a year. Some companies, such as McDonald’s, pay dividends on an annual basis.

A corporate action is an event initiated by a public company that affects the securities (equity or debt) issued by the company. Some corporate
actions such as a dividend (for equity securities) or coupon payment (for debt securities (bond (finance))) may have a direct financial impact on the
shareholders or bondholders; another example is a call (early redemption) of a debt security. Other corporate actions such as stock split may have
an indirect impact, as the increased liquidity of shares may cause the price of the stock to rise. Some corporate actions such as name change have
no direct financial impact on the shareholders. Corporate actions are typically agreed upon by a company's board of directors and authorized by the
shareholders. Some examples are stock splits, dividends, mergers and acquisitions, rights issues and spin offs.

Purpose

The primary reasons for companies to use corporate actions are:

Return profits to shareholders: Cash dividends are a classic example where a public company declares a dividend to be paid on each outstanding
share. Bonus is another case where the shareholder is rewarded. In a stricter sense the Bonus issue should not impact the share price but in reality,
in rare cases, it does and results in an overall increase in value.

Influence the share price: If the price of a stock is too high or too low, the liquidity of the stock suffers. Stocks priced too high will not be
affordable to all investors and stocks priced too low may be de-listed. Corporate actions such as stock splits or reverse stock splits increase or
decrease the number of outstanding shares to decrease or increase the stock price respectively. Buybacks are another example of influencing the
stock price where a corporation buys back shares from the market in an attempt to reduce the number of outstanding shares thereby increasing the
price.

Corporate Restructuring: Corporations re-structure in order to increase their profitability. Mergers are an example of a corporate action where
two companies that are competitive or complementary come together to increase profitability. Spinoffs are an example of a corporate action where
a company breaks itself up in order to focus on its core competencies.

Impact

As a beneficial owner, the impact of a corporate event (action) is usually measured in terms of its impact to securities and/or cash positions;
consequently corporate action events can be categorized as follows:

Benefits: The events that result in an increase to the position holder’s securities or cash position, without altering the underlying security; example
can be cited of, a bonus issue, which is a Mandatory With Options Action/Event.

Re-Organisations: The events re-shape or re-structure the beneficial owners underlying securities position, at times, also allowing a combination
of cash pay out. Example can be cited of Equity Restructure, Conversion, Subscription, etc.

Types

Corporate actions are classified as voluntary, mandatory and mandatory with choice corporate actions.

Mandatory Corporate Action: A mandatory corporate action is an event initiated by the corporation by the board of directors that affects all
shareholders. Participation of shareholders is mandatory for these corporate actions. An example of a mandatory corporate action is cash dividend.
All holders are entitled to receive the dividend payments, and a shareholder does not need to do anything to get the dividend. Other examples of
mandatory corporate actions include stock splits, mergers, pre-refunding, return of capital, bonus issue, asset ID change, pari-passu and spinoffs.
Strictly speaking the word mandatory is not appropriate because the share holder person doesn't do anything. In all the cases cited above the
shareholder is just a passive beneficiary of these actions. There is nothing the Share holder has to do or does in a Mandatory Corporate Action.

Voluntary Corporate Action: A voluntary corporate action is an action where the shareholders elect to participate in the action. A response is
required by the corporation to process the action. An example of a voluntary corporate action is a tender offer. A corporation may request share
holders to tender their shares at a pre-determined price. The shareholder may or may not participate in the tender offer. Shareholders send their
responses to the corporation's agents, and the corporation will send the proceeds of the action to the shareholders who elect to participate.

Sometimes a voluntary corporate action may give the option of how to get the proceeds of the action. For example in case of a cash or stock
dividend option, the shareholder can elect to take the proceeds of the dividend either as cash or additional shares of the corporation. (these are
commonly known as Mandatory Events with Options, as a dividend is mandatory but a shareholder has the option to elect for the cash or to re-
invest their cash dividend into the shares) Other types of Voluntary actions include rights issue, making buyback offers to the share holders while
delisting the company from the stock exchange etc.

Mandatory with Choice Corporate Action: This corporate action is a mandatory corporate action where share holders are given a chance to
choose among several options. An example is cash or stock dividend option with one of the options as default. Share holders may or may not
submit their elections. In case a share holder does not submit the election, the default option will be applied.

The table below contains all of the voluntary corporate action transactions that can be recorded for a Stock. Click any of the links to view the
procedure for entering the selected transaction.

Transaction Description

Use this transaction to manually record a voluntary corporate action exchange for a stock.
Exchange

Reorganization Use this transaction to manually record a voluntary corporate action reorganization for a stock. A reorganization plan is
used to restructure a company facing bankruptcy and to repair it financially.

Merger Use this transaction to manually record a voluntary corporate action merger for a stock. A merger is the joining of two or
more corporations into a single corporation.

Conversion Use this transaction to manually record a voluntary corporate action conversion for a stock. This occurs when a
convertible security is exchanged for stock.

Tender Offer Use this transaction to manually record a voluntary corporate action tender offer for a stock. A tender offer occurs when a
company offers to buy shares at a higher price than the current market price.

Definition: Bonus issue -

A company will use a bonus issue to convert cash reserves into share capital. The process is an accounting procedure used to convert profits which
the company has retained into share capital.

This is achieved by creating a number of new shares and then giving them to existing shareholders. Shareholders do not have to pay for these
shares because the cash which has been converted into share capital already belongs to shareholders.

The effect of a bonus issue is to increase the number of shares in issue and as a result reduce the price per share. Companies often use a bonus
issue as a way of reducing the price per share to increase liquidity of the stock.

For example under a bonus issue each shareholder could be issued with two new shares for each share they hold. Although the shareholders' funds
have not changed there would now be three times as many shares in issue. This means that the share price would be reduced by a factor of three.
As a result a shareholder who held 100 shares worth £15 each would after the bonus issue hold 300 shares worth £5 each. Therefore although the
number of shares in issue and price of each share has changed the total value of the company and each individual shareholding has not.

Definition: Consolidation -

A consolidation is used by a company to reduce the number of shares in issue. Shareholders will be given a reduced number of shares but each
share will now be worth more. This will typically result in the new shares having a higher nominal value.
For example a company may consolidate its shares on a basis of one new share for every ten existing shares. This means that if you held 2000
ordinary 10p shares then you would now hold 200 ordinary £1 shares.

The market price per share will rise accordingly to reflect that each share is now worth a larger part of the company. In our example, if the share
price closed at 35p on the date of the consolidation then you would expect the shares to commence trading at around £3.50. Normal market
fluctuations mean that the share price will probably not open at exactly ten times the previous day's closing price.

Definition: Conversion -

A conversion gives the opportunity to convert one class of shares into another class. A common example would be the opportunity to convert a
holding of convertible loan stock into ordinary shares.

When a conversion opportunity arises the company will give a conversion ratio, for example you may be offered one ordinary share for every five
convertible loan stock. If you decide to proceed then your existing holding will be replaced by the new shares on the conversion date.

Unlike warrants there is not usually any cost to convert your convertible stock into the new line of ordinary shares.

Definition: Delisting -

A delisting is when a company no longer wishes to maintain its listing on that certain exchange, usually as a result of the administrative costs being
high in relation to the trades being executed.

Once a company has delisted (providing it is not listed on another exchange) it can become very difficult to trade in the stock and in some cases it
may not be able to trade at all. On occasions, companies set up a matched bargain facility where they will try to match buyers and sellers, however
this process may take several weeks or months to complete due to the lack of liquidity. The price is often unknown and in some cases can be an
unrealistic figure.

Definition: Demerger -

A Demerger is when a company is split to create two or more separately listed companies.

Shareholders receive shares in a new company (or companies) while usually retaining shares in the original company. An example would be the
British Telecommunications demerger where shareholders were given new shares in MMO2 plc which represented the mobile phone arm of the
company's business.

The price per share of the original company will be reduced to reflect the part of the business which has been demerged. The value which has been
removed from the original company will be the value of the shares in the new company.

Sometimes the original company will also be renamed after the demerger. In the above example British Telecommunications PLC was
subsequently renamed BT Group PLC. The original company after the split may not necessarily represent the larger part of the company before the
split.

Definition: Exercise of warrants -

Warrants give the holder the right to buy ordinary shares in the company at a set price and at a future date.

Warrants will have an exercise price. This is the price which you must pay in order to convert a warrant into an ordinary share. Converting
warrants into ordinary shares is known as exercising the warrants. Usually one warrant can be exercised to give one ordinary share however there
are some exceptions where you may need to exercise several warrants to receive one ordinary share.

Usually, warrants will have one or more exercise dates which are the dates on which you can exercise your warrants, these are usually fixed dates
in each year (for example 1 June & 1 December). Usually warrants have a final exercise date which is the last date you can exercise the warrants.
After this date the warrants are cancelled however if you fail to exercise them you may still receive a cash payment if the warrants have a value on
this date.

Exercising a warrant will sometimes cost more than buying the ordinary shares in the market. Companies may give warrants to current
shareholders in a corporate action, with an exercise price which is higher than the current market price. For example ordinary shares may be
trading at 30p whereas the warrants have an exercise price of 50p. In this case there is no point in exercising warrants unless the share price rises
above 50p as it is cheaper to buy the shares in the market. It is also important to bear in mind the value of the warrants that will be given up when
exercising. Companies do this so that current shareholders are rewarded if the company does well in the future and the share prices rises above the
exercise price by the exercise date.

Warrants can usually be traded in the market meaning that you can sell your warrants as an alternative to exercising them.

Definition: Liquidation -
Liquidation occurs when a company is unable to continue trading. This is usually because it can no longer raise the necessary funds to cover its
debts and liabilities and is unable to obtain any external financial backing.

A receiver is appointed to take over the running of the company. It is the receiver's job to find the best way of recovering money owed to creditors.
The company may be sold as a going concern or it may be forced to go into liquidation.

Liquidation means that the receiver will sell the company's assets and then distribute the proceeds to those who are owed money. There is a set
order of priority for how the money will be distributed. The receiver will take their fee first with money owed to the government and banks being
among the next to be paid. Unfortunately shareholders come near the bottom of the list and there is often little or no money left for ordinary
shareholders.

This process can take several years however shareholders may eventually recover some of their investment. If there is no money for shareholders
then eventually the Inland Revenue will declare the company's shares as being of nil value. If a company's shares are declared as being of nil value,
shareholders can usually use this as a capital loss to offset against other capital gains that may have been accrued.

Definition: Name change -

This is when a company announces that it will be changing its name. The name change itself does not affect the number of shares you hold or the
value of the shares, however a name change may sometimes occur at the same time as another corporate action which could affect your holding.

Open offer -

An open offer (also known as an entitlement issue) is an offer by a company to its shareholders to buy new shares in the company at a fixed price.
Companies use open offers as a way of raising funds.

Shareholders are usually offered an entitlement to buy a set number of shares in proportion to the number they currently hold. For example you
may be offered one new share for every four that you currently hold. Shares will often be offered at a discounted price to the market. For example
if the shares are trading at £1 per share in the market you may be entitled to buy shares at 90p each.

An open offer is similar to a rights issue however shareholders are not allocated nil paid shares instead shareholders are given an entitlement to buy
new shares. This entitlement cannot be traded on the market and so unlike a rights issue you cannot sell your open offer entitlement. In turn, if you
do not take up the entitlement then you will not receive a lapsed payment.

Sometimes a company will give the option to make an excess application. This means that you can apply for more new shares than given in your
entitlement. Companies do this so that if some shareholders decide not to take up their entitlement other shareholders can have more new shares.
This way the company can still raise the same amount of money from the open offer. If the company receives excess applications for more shares
than it wishes to sell, they will scale back these excess applications accordingly.

Redemption -

A redemption opportunity gives holders of stocks such as loan notes or 'B' shares the option to have their holding redeemed and receive cash in
place of the stock.

Most redeemable shares have a nominal value which is the amount per share which will be paid upon redemption. For some stocks there will be set
dates when you can redeem your shares whereas others will be redeemed at the company's discretion.

Return of capital -

In a return of capital a company makes a cash payment to all shareholders of a proportion of the value of their shares. It may be that the company
has excess cash which it is not intending to use and so shareholders are paid this cash.

For example shares in a company may be worth £5 each however the company decides to make a payment of 50p per share to shareholders.
Afterwards the value of each share will be 50p lower than previously. This is similar to a dividend payment and will sometimes be called a special
dividend.

A return of capital may be made along with a consolidation. This can result in shareholders receiving a cash payment per share but then receiving a
reduced number of shares. This is done so that the reduced number of shares can trade at the same price in the market as before. For example you
may hold 100 shares worth £5 each. The company makes a payment of £1 per share meaning that your shares are now worth £4 each. The
company then makes a four for five consolidation, and so your 100 shares worth £4 each (total value £400) become 80 shares worth £5 each (to
keep total value still £400).

Sometimes a return of capital will be made by an issue of new shares, often called 'B' shares, which are worth the amount of money the company is
looking to return. The company will then exchange the 'B' shares for cash. This may be immediate or you may have the option to retain the 'B'
shares and receive the cash at a later date, normally in the following tax year.
Rights issue -

A rights issue is when a company offers its current shareholders the right to buy new shares in the company at a discount to the market price.
Companies use rights issues as a way of raising funds.

Shareholders are usually offered the right to buy a set number of shares in proportion to the number they currently hold. For example you may be
offered one new share for every four that you currently hold. Each share will be offered at a discounted price to the market. For example if the
shares are trading at £1 per share in the market you may be offered the right to buy shares at 90p each.

The rights themselves can be traded in the market, they are known as nil paid shares (or nil paid rights). Any sale or purchase of nil paid shares in
the market will be subject to the usual commission charges.

If you decide to take up your right to buy new shares then the nil paid shares can be converted into ordinary shares at the take up price. In our
above examples if you held 400 ordinary shares then on a basis of one new share for every four held you would be issued with 100 nil paid shares.
If the option to take up these rights was 90p per share then it would cost £90 to convert the 100 nil paid shares into 100 ordinary shares. This
would give you a new holding of 500 ordinary shares (your original holding of 400 shares plus your 100 new shares from the rights issue).

Shareholders also have the option to 'swallow tail' their rights. This involves selling a number of rights in the open market to generate enough
proceeds to cover the cost of taking up the remaining rights. Using the above example, if you had 100 nil paid shares worth 25p each, you could
sell 87 nil paid shares to generate £21.75, after our £10 flat rate commission charge you would be left with £11.75 which is enough to take up 13
Rights without investing any further cash.

If you do nothing then the offer will lapse on the deadline for elections. If the nil paid shares had a value when the right lapsed then you should
receive a lapsed cash payment approximately equal to this value.

Tender offer -

A tender offer is a cash offer to all shareholders for their shares. Often this is used when a company wants to buy back some of their own shares.

The company will usually be looking to buy back a certain number of their shares and will ask shareholders if they would like to offer their shares
for tender. This may be at a fixed price or it may be at a price calculated by the companys net asset value on a given date.

Sometimes shareholders are given the option to choose a price within a range. The company will then look at the offers and set a strike price,
everybody who has offered their shares on or below this price will have tendered their shares. All shareholders will receive the strike price even if
their original offer was lower than this.

The number of shares that can be tendered will vary. There may be a set number which are guaranteed to be tendered, known as the basic
entitlement. You may be able to offer more shares however your offer may be scaled back depending on how many people have decided to
participate. In the case where a strike price is set, a lower original offer is more likely to be completed in full.

Scheme of arrangement -

A scheme of arrangement is similar to a takeover, and is when one company attempts to buy the entire share capital of another company.

A scheme of arrangement usually occurs when an agreed bid between a buyer and seller is reached. This has to be agreed in court and is put to
shareholders to vote. If the court meeting is passed and shareholders holding 75% or more of the issued shares vote in favour of the resolutions
then the buying scheme of arrangement will go ahead. If shareholders holding less than 75% of the shares in issue vote in favour of the resolutions
at the meeting then the scheme of arrangement will fail and no further action will be taken.

If the scheme becomes effective and all resolutions are passed then the buying company will obtain 100% of the shares in issue regardless of
whether a shareholder voted in favour, against or not at all.

Shareholders usually receive the proceeds (cash, stock, or both) 14 days after the scheme of arrangement becomes effective.

Subdivision -

A subdivision is the opposite of a consolidation with the number of shares in issue being increased by a set ratio. In turn the nominal value of the
shares and the market price per share of the shares will decrease by the same ratio.

A company will split each ordinary share into a set number of new ordinary shares, for example a shareholder may receive five new ordinary
shares for one existing ordinary share. The nominal value of the shares will also be adjusted and in a five for one subdivision, if the shares were
ordinary 50p shares then they would become ordinary 10p shares.
The market price per share will decrease to reflect that each share is worth a smaller part of the company. For example, before the subdivision each
ordinary 50p share might have been worth £1, and after the five for one subdivision they would have a value of 20 pence (subject to normal market
movements).

Takeover -

A takeover (also sometimes known as a merger) is when one company attempts to buy the entire share capital of another company. Takeovers can
be agreed / recommended by the target company or can be hostile.

A takeover is automatically triggered when a single party owns 30% or more of a company, that party is forced to make an offer for all remaining
shares. Shareholders will be contacted with the terms of the offer which may give options to receive cash and / or shares for their existing holding.
This offer will have a time limit for acceptances.

If the bidder is able to obtain acceptances to acquire more than 50% of the company's shares, they can declare the bid 'unconditional'. The bidder
can now take control of the company with a majority shareholding. Shareholders who have not yet accepted the offer will have a further
opportunity to accept.

If the bidder is able to obtain acceptances for 90% of the company's shares then they can force all remaining shareholders to sell their shares. The
remaining shareholders must accept the offer once this level of acceptances has been reached.

The bidding party can make the offer conditional, for example on receiving a certain percentage of acceptances, and can back out of the bid if these
conditions are not met. The bidder may also decide to increase the offer if they are unable to secure the required number of acceptances. If the bid
is increased then shareholders who have already accepted a previous bid will automatically receive the increased offer.

Once the offer is declared 'wholly unconditional' (successful), the relevant proceeds being either cash, new stock, or both will be credited to your
account with 14 calendar days.

A list of Corporate Actions Events / Corporate Actions Types

Mandatory Events:

Assimilation:
Absorption of a new issue of stock into the parent security where the original shares did not fully rank pari passu with the parent shares. After
the event, the assimilated shares rank pari passu with the parent.
Acquisition:
A company adopting a growth strategy can use several means in order to seize control of other companies.
Bankruptcy:
The Company announces bankruptcy protection and the legal proceedings start in which it will be decided what pay-outs will be paid to
stakeholders.
Bonus Issue:
Shareholders are awarded additional securities (shares, rights or warrants) free of payment. The nominal value of shares does not change.
Bonus Rights:
Distribution of rights which provide existing shareholders the privilege to subscribe to additional shares at a discounted rate. This corporate
action has similar features to a bonus and rights issue.
Cash Dividend:
The Company pays out a cash amount to distribute its profits to shareholders.
Class Action:
A lawsuit is being made against the company (usually by a large group of shareholders or by a representative person or organization) that may
result in a payment to the shareholders.
Delisting:
The company announces that it securities will no longer be listed on a stock exchange and that they will be booked out.
De-merger:
One company de-merges itself into 2 or more companies. The shares of the old company are booked out and the shares of the new companies
will be booked in according to a set ratio.
General Announcement:
An event used by the company to notify its shareholders of any events that take place. This event type is used to communicate several types of
information to the shareholders.
Initial Public Offering (IPO):
This is the first corporate actions event in the history of any company. The first time that a company gets listed on a stock exchange is
regarded
as an event in itself. Underwriters will try to get as many buyers for the newly listed shares for a price as high as possible. Any shares they can
not sell will be bought by the underwriters.
Liquidation:
Liquidation proceedings consist of a distribution of cash and/or assets. Debt may be paid in order of priority based on preferred claims to
assets
specified by the security e.g. ordinary shares versus preferred shares.
Mandatory Exchange / Mandatory Conversion:
Conversion of securities (generally convertible bonds or preferred shares) into a set number of other forms of securities (usually common
shares).
Merger:
Merger of 2 or more companies into one new company. The shares of the old companies are consequently exchanged into shares in the new
company according to a set ratio.
Name Change:
Name changes are normally proposed and approved at the Company’s General meeting. This has no effect on the capital and shareholder’s of
the company.
Par Value Change:
Similar to stock splits where the share nominal value is changed which normally results in a change in the number of shares held.
Scheme of Arrangement:
Occurs when a parent company takes over its subsidiaries and distributes proceeds to its shareholders.
Scrip Dividend:
The UK version of an optional dividend. No stock dividends / coupons are issued but the shareholder can elect to receive either cash or new
shares based on the ratio or by the net dividend divided by the re-investment price. The default is always cash.
Scrip Issue:
Shareholders are awarded additional securities (shares, rights or warrants) free of payment. The nominal value of shares does not change
Spin-off:
A distribution of subsidiary stock to the shareholders of the parent corporation without having cost to the shareholder of the parent issue.
Stock Dividend:
Almost identical to bonus issues where additional shares in either the same or different stock is issued to shareholders of the underlying stock.
Stock Split:
A stock split is a division of the company shares into ‘X’ number of new shares with a nominal value of ‘1/X’ of the original share. For
example a ‘BMW’ 2 for 1 stock split, where a BMW share par value decreases to EUR 0.50 from EUR 1.00, whilst the number of share
doubles. The total value of the outstanding shares remains the same
Other Event:
Any event that does not fit any of the other descriptions.
Return of Capital:
A cash amount will be paid to investors in combination with a nominal value change of the shares.
Reverse Stock Split:
The number of outstanding shares of the company gets reduced by an ‘X’ number while the nominal value of the shares increases by ‘X’. For
example a ‘BMW' 1 for 2 reverse stock split, where the BMW shares’ nominal value increases from EUR 0.50 to EUR 1.00. The total value of
the outstanding shares remains the same. ...reverse split...

Mandatory Events with Options

Cash Stock Option

Shareholders are offered the choice to receive the dividend in cash or in additional new shares of the company (at a discount to market).
Reinvesting often carries a tax shield.
Merger with Elections:
Merger of 2 or more companies into one new company. The shares of the old companies are consequently exchanged into shares in the new
company according to a set ratio. Shareholders of both companies are offered choices regarding the securities they receive.
Spin-off with elections:
A distribution of subsidiary stock to the shareholders of the parent corporation without having cost to the shareholder of the parent issue
whereby the shareholders are offered choices regarding the resultant stock.

Voluntary Events:

AGM / EGM – proxy voting on shareholders meetings

Every publicly traded company has an annual general meeting where management presents several decisions that need shareholder approval.
The approval is given by means of voting for or against each decision. Shareholders may attend the meeting in person or vote by proxy –
electronically or by mail via their brokers and custodian.
Buy-back program (BIDS) / Repurchase Offer
Offer by the issuing company to existing shareholders to repurchase the company’s own shares or other securities convertible into shares.
This
results in a reduction in the number of outstanding shares
Dividend Reinvestment Plan (DRIP)
Similar to cash stock option. In this case however, the company first pays the cash dividend after which shareholders are offered the
possibility
to reinvest the cash dividend in new shares.
Dutch Auction:
A Dutch Auction Offer specifies a price range within which a fixed number of shares will ultimately be purchased. Shareholders are asked to
submit instructions as to what price they are willing to sell. Once all instructions have been counted, the shares of the shareholders who voted
to sell at the lowest prices will be bought untill either the fixed number of shares is reached or the upper limit of the price range is reached.
Odd lot Tender:
In case shares are tradeable in so called board lots of for example 100 shares only and a shareholder has an amount of shares that is not a
multiple of the board lot, then this additional quantity is called odd lot. An odd lot tender is an offer to shareholders with odd lots to sell the
shares in the odd lot at a given price. So for example, if the board lot is 100 and a shareholder holds 150 shares, an odd lot tender will give the
shareholder to dispose of 50 shares at a given price. The board lot of 100 will still be tradable as normal.
Rights Auction
Rights to buy new shares are being auctioned - shareholders who submit the highest prices at which they are willing to buy new shares will
get
the new shares.
Rights Issue:
Rights are issued to entitled shareholders of the underlying stock. They allow the rights holder to subscribe to additional shares of either the
same stock or another stock or convertible bond, at the predetermined rate/ratio and price (usually at a discount to the market rate). Rights are
normally tradable and can be sold/bought in the market, exercised or lapsed.
Subscription Offer:
Offer to existing shareholders to subscribe to new stock or convertible bonds
Takeover:
One company taking control over another company (usually by acquiring the majority of outstanding share voting rights)
Tender Offer:
Offer from Company A to shareholders of Company B to tender their shares to company A at a given price. The given price can be payable in
cash only, stock in Company B only or a combination of cash and stock.
Voluntary Exchange / Optional Conversion:
Offer to exchange shares of security A into cash or into Security B