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A list of Corporate Actions Events / Corporate Actions Types

EQUITIES:

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

assimilation

Acquisition

A company adopting a growth strategy, can use several means in order to seize

control of other

Acquisition

Bankruptcy The company announces bankruptcy protection and the legal proceedings start in

which it will be decided what pay-outs will be paid to

bankruptcy

Bonus Issue

Shareholders are awarded additional securities (shares, rights or warrants) free of

payment.The nominal value of shares does not

bonus issue

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

dividend

cash

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

delisting

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

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 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

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 dividend

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

Other Event Any event that does not fit any of the other descriptions.

stock split

Return of Capital

A cash amount will be paid to investors in combination with a nominal value change

of the

return of capital

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

split

reverse

For more detailed info on reverse split check: www.reverse-split.com.

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

proxy voting

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

rights issue

For more detailed info on rights issues check: www.rightsissue.net.

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)

takeover

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

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.

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