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share of the Sun preferred stock covered by the stock warrants
issued to CV was converted into 15 shares of Sun common stock.
Consequently, for each of the two stock warrants, CV had the
contingent right to purchase 150,000 shares of Sun common stock.
The first warrant to purchase Sun common stock (at a price
of $8 per share, derived by dividing the original exercise price
of $120 per share of series F preferred stock by 15,
corresponding to the 15-to-1 conversion ratio referred to above)
became exercisable in the fourth quarter of Sun’s 1986 fiscal
year (i.e., April through June 1986) and was exercised on
November 24, 1986. On that date, CV sold its rights to the first
warrant to an underwriter, who then exercised the first warrant.
The closing sale price of Sun common stock as reported in the
NASDAQ National Market System on November 24, 1986, was $19.375
per share, or $11.375 per share greater than the $8-per-share
exercise price.
During January 1987, the second warrant became exercisable
by CV (at a price of $10 per share, derived by dividing the
original exercise price of $150 per share of series F preferred
stock by 15, corresponding to the 15-to-1 conversion ratio
referred to above). CV sold its rights to the second warrant
(the "second warrant") to an underwriter on March 12, 1987. The
closing sale price of Sun common stock as reported in the NASDAQ
National Market System on March 11, 1987, was $31.375 per share,
$21.375 greater than CV’s $10-per-share exercise price. CV
received a net amount of $3,002,750 in proceeds from sale of the
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