The special stock dividend is expected to be payable on May 11, 2001 to Adaptec stockholders of record on April 30, 2001, and will mark the completion of Roxio’s spinoff from Adaptec. The trading of the common stock of Roxio on the Nasdaq National Market is expected to begin on May 14, 2001 under the ticker symbol ROXI. The declaration and payment of the dividend is contingent upon Roxio’s registration statement on Form 10 being declared effective by the Securities and Exchange Commission and compliance with applicable federal and state securities laws.
Roxio is a leading provider of digital media software solutions enabling individuals to create, manage and move audio, video, photos and data onto recordable compact discs. Roxio’s CD burning software, Easy CD Creator for Windows and Toast for the Macintosh, is the best selling CD burning software in the world. As an independent company, Adaptec believes that Roxio, under the leadership of a dedicated senior management team, will be better able to focus on its core business of developing software to enable the consumer to create and enjoy digital content. The new independent company will also enhance its ability to pursue strategic opportunities including the expansion of its product offerings for music, video, photo and data.
Adaptec holders of record will receive a pro-rata distribution of Roxio common stock based on the number of Adaptec and Roxio shares outstanding on April 30, the record date, and a cash payment in lieu of any fractional shares. There were 98,565,191 shares of Adaptec common stock outstanding at December 31, 2000, and there will be 16,500,000 shares of Roxio common stock outstanding as of the record date.
Adaptec expects to receive an opinion from its tax advisors that the dividend will be tax-free for federal income tax purposes to Adaptec and its stockholders, except for cash received by stockholders instead of fractional shares.
The conversion ratio applicable to Adaptec’s 4 3/4 percent Convertible Subordinated Notes due 2004 is expected to be adjusted in connection with the proposed distribution of Roxio shares to Adaptec stockholders. The conversion ratio adjustment will be determined according to a formula set forth in the Indenture governing the Notes, and will be based on the fair market value of the Roxio stock and the average sales price per share of Adaptec common stock over a period of trading days preceding the record date.
