Corporate Actions

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. Also referred to as funging of shares. 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 organisation) 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 Companys General meeting. This has no effect on the capital and shareholders of the company. ...name change... 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 reinvestment 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.
...spin-off...

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.

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. ...proxy
voting...

Buy-back program (BIDS) / Repurchase Offer Offer by the issuing company to existing shareholders to repurchase the companys 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. ...tender offer... Voluntary Exchange / Optional Conversion Offer to exchange shares of security A into cash or into Security B

BONDS: Conversion of convertible bonds Convertible bonds are being converted in the underlying shares Coupon Payment - interest payment The issuer of the bond pays interst according to the terms and conditions of the bond, ie interest rate and intervals of payment. Early Redemption The issuer of the bond repays the nominal prior to the maturity date of the bond, normally with accrued interest.

Lottery (also known as a drawing) The issuer redeems selected holdings before the maturity date of the bond (early redemption).

Partial Redemption The issuer of the bond repays part of the nominal prior to maturity, normally with accrued interest. Final Redemption The issuer of the bond repays the nominal of the bond, normally with accrued interest.

DERIVATIVES: Optional Put An event in which the holder of the put options has the option to exercise the put option in order to sell the underlying security at a given price.

Warrant Exercise An event in which the holder of the warrants has the option to exercise the warrant in accordance with the terms and conditions of the warrant. Warrant Expiry An event that notifies the holder of the warrant that the warrant is about to expire and the holder of the warrant is given the option to exercise the warrant.

Warrant Issue Per share an amount of warrants is issued according to a specific ratio. The warrant can entitle to sell or buy the underlying security at a given price within a given timeframe.