VRSN » Topics » PROCEDURE FOR DELIVERY OF SHARES:

This excerpt taken from the VRSN 10-K filed Mar 13, 2006.

PROCEDURE FOR DELIVERY OF SHARES:

 

Delivery of Refund Shares:

If Buyer elects for Seller to satisfy its payment obligation of the Settlement Amount by delivering Refund Shares, then on the Valuation Date, a Settlement Balance shall be established with an initial balance equal to the Settlement Amount. On a Trading Day after the Settlement Date chosen by Seller, Seller shall commence purchasing Shares for delivery to Issuer (such Shares, “Refund Shares”) which transactions shall be in compliance with Rule 10b-18 under the Exchange Act. At the end of each Trading Day on which Seller purchases Refund Shares, Seller shall reduce the Settlement Balance by the aggregate market value of the Shares purchased on such Trading Day. Seller shall deliver the Refund Shares for each Trading day to Buyer on the third Exchange Business Day after the relevant Trading Day. Seller shall continue


Reference Number CCEGK5-1/  

Account Number: 3315851

 

  Page 5
 

purchasing Refund Shares (in compliance with Rule 10b-18 under the Exchange Act) until the Settlement Balance has been reduced to zero.

 

Delivery of Payment Shares

If Buyer elects to satisfy its payment obligation of the Settlement Amount by delivering Payment Shares, then on the Valuation Date a Settlement Balance shall be created with an initial balance equal to the absolute value of the Settlement Amount. On the Settlement Date, Buyer shall deliver to Seller a number of shares (such shares, “Payment Shares”) rounded up to the nearest whole number equal to the absolute value of the Settlement Balance divided by the Private Placement Value (as defined below). Following the delivery of Payment Shares or any Make-Whole Payment Shares (as defined below), Seller shall sell all such Payment Shares or Make-Whole Payment Shares in a commercially reasonable manner. At the end of each Trading Day upon which sales have been made, the Settlement Balance shall be reduced by an amount equal to the aggregate proceeds received by Seller upon the sale of such Payment Shares or Make-Whole Payment Shares. If, on any Trading Day, all Payment Shares and Make-Whole Payment Shares have been sold and the Settlement Balance has not been reduced to zero, the Company shall (i) deliver to Seller or as directed by Seller on the third Exchange Business Day after such Trading Day an additional number of Shares (the “Make-Whole Payment Shares”, which once delivered, shall be considered to be Payment Shares) equal to (x) the Settlement Balance as of such Trading Day divided by (y) the Private Placement Value or (ii) promptly deliver to Seller cash in an amount equal to the then remaining Settlement Balance. This provision shall be applied successively until either the Settlement Balance is reduced to zero or the aggregate number of Payment Shares and Make-Whole Payment Shares equals the Share Cap (as defined below). Seller can only elect to deliver Payment Shares or Make-Whole Payment Shares if the Conditions to Delivery of Payment Shares are met on each day during the period from and including the Valuation Date to and including the date upon which the relevant Settlement Balance is reduced to zero. If the Settlement Balance is zero and not all the Payment Shares or Make-Whole Payment Shares have been sold to satisfy the Settlement Balance, then Seller shall promptly return the remaining the Payment Shares and/or Make-Whole Payment Shares to Buyer.

 

Share Adjustments:

 

Method of Adjustment:

Calculation Agent Adjustment


Reference Number CCEGK5-1/   Account Number: 3315851   Page 6

 

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