SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential; for use of
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permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Ameritrade Holding Corporation
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(Name of Registrant as Specified in its Charter)
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[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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[AMERITRADE LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 12, 2002
The Annual Meeting of Stockholders of Ameritrade Holding Corporation (the
"Company") will be held at the Joslyn Art Museum, 2200 Dodge Street in Omaha,
Nebraska on Tuesday, February 12, 2002, at 9 a.m., Central Standard Time, for
the following purposes:
1) To elect Directors;
2) To ratify the appointment of Deloitte & Touche LLP as independent
auditors for the Company for the fiscal year ending September 27, 2002;
3) To vote upon a proposal to amend the Company's Restated Certificate
of Incorporation to increase the number of authorized shares of Class A
Common Stock from 270,000,000 to 370,000,000 and Class B Common Stock from
18,000,000 to 25,000,000;
4) To vote upon a proposal to amend the Company's 1996 Long-Term
Incentive Plan to increase the maximum aggregate number of shares the
Company may issue under the plan and to make other changes to the plan as
described in the accompanying Proxy Statement;
5) To vote upon a proposal to adopt the 2002 Management Incentive
Plan;
6) To transact such other business as may properly come before the
meeting or any postponement or adjournment thereof.
Only stockholders of record at the close of business on December 21, 2001
will be entitled to notice of and to vote at the meeting.
Class A Stockholders, whether or not they expect to be present at the
meeting, are requested to sign and date the enclosed proxy, which is solicited
on behalf of the Board of Directors, and return it promptly in the envelope
enclosed for that purpose. If you elected to receive the Annual Report and Proxy
Statement electronically over the Internet, you will not receive a paper proxy
card, unless you request one, and we encourage you to vote online. If you did
not elect to receive the materials through the Internet, you may still vote your
shares electronically by following the procedures described in the Company's
Proxy Statement. Any person giving a proxy has the power to revoke it at any
time prior to the meeting and Class A Stockholders who are present at the
meeting may withdraw their proxies and vote in person.
By Order of the Board of Directors
/s/ J. Peter Ricketts
J. Peter Ricketts, Secretary
Omaha, Nebraska
January , 2002
AMERITRADE HOLDING CORPORATION
4211 SOUTH 102ND STREET
OMAHA, NE 68127
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies to be voted at the 2002 Annual Meeting of Stockholders of Ameritrade
Holding Corporation (the "Company"). The 2002 Annual Meeting will be held on
February 12, 2002 at 9:00 a.m. at the Joslyn Art Museum, 2200 Dodge Street in
Omaha, Nebraska. This Proxy Statement and the accompanying proxy cards are first
being mailed to stockholders on or about January , 2002.
The Company has two classes of Common Stock, the Class A Common Stock (the
"Class A Stock") and the Class B Common Stock (the "Class B Stock" and, together
with the Class A Stock, the "Common Stock"). The accompanying proxy is solicited
from the holders of the Class A Stock (the "Class A Stockholders") on behalf of
the Board of Directors of the Company and is revocable at any time by giving
written notice of revocation to the Secretary of the Company prior to the Annual
Meeting or by filing with him prior to the Annual Meeting a later-dated proxy.
Furthermore, the Class A Stockholders who are present at the Annual Meeting may
revoke their proxies and vote in person. All shares of the Company's Class A
Stock represented by properly executed and unrevoked proxies will be voted by
the Board of Directors of the Company in accordance with the directions given
therein. Where no instructions are indicated, proxies will be voted "FOR" the
proposals set forth in this Proxy Statement for consideration at the Annual
Meeting. The Directors expect shares of the Common Stock held by executive
officers and Directors of the Company will be voted "FOR" such proposals. Such
shares, not including shares held in the names of spouses of executive officers
and Directors, represent approximately 27 percent of the Class A Stock and 50
percent of the Class B Stock, which will constitute approximately 29 percent of
the total shares of Common Stock outstanding as of December 21, 2001.
Shares of Class A Stock entitled to vote and represented by properly
executed, returned and unrevoked proxies including shares with respect to which
votes are withheld, abstentions are cast or there are broker non-votes, will be
considered present at the meeting for purposes of determining a quorum.
VOTING ELECTRONICALLY VIA THE INTERNET
Holders of Class A Stock may vote via the Internet at the www.ProxyVote.com
Web site until 11:59 p.m. Eastern Standard Time February 11, 2002. The Internet
voting procedures are designed to authenticate the stockholders' identity and to
allow stockholders to vote their shares and confirm that their instructions have
been properly recorded. If you would like to receive future stockholder
materials electronically, please enroll after you complete your voting process
at www.ProxyVote.com.
Please refer to the proxy card enclosed herewith or to the e-mail
announcement that you may have received for voting instructions. If you choose
not to vote over the Internet, please complete and return the paper proxy card
in the pre-addressed, postage-paid envelope provided herewith.
If you elected to receive this Proxy Statement electronically over the
Internet and would now like to receive a paper copy of this Proxy Statement so
that you may submit a paper proxy in lieu of an electronic proxy, you should
notify the Secretary of the Company of this request.
VOTING SECURITIES AND BENEFICIAL OWNERSHIP THEREOF BY PRINCIPAL STOCKHOLDERS,
DIRECTORS AND OFFICERS
The Company has two authorized classes of Common Stock, which are
designated Class A Common Stock and Class B Common Stock. Holders of the Class B
Stock (the "Class B Stockholders") are entitled to elect a majority of the Board
of Directors. Otherwise, each share of Common Stock is entitled to one vote upon
each matter to be voted on at the Annual Meeting. Stockholders do not have the
right to cumulate votes
Page 2
in the election of Directors. The holders of Class B Stock may convert their
shares into an equal number of shares of Class A Stock, but holders of Class A
Stock may not convert their shares into Class B Stock.
Only stockholders of record at the close of business on December 21, 2001
(the "Record Date") will be entitled to vote at the Annual Meeting. As of the
Record Date, there were 199,536,095 shares of Class A Stock issued and
outstanding and 16,372,800 shares of Class B Stock issued and outstanding.
The following table sets forth, as of December 21, 2001, the beneficial
ownership of each class of the Company's Common Stock by Directors, by each of
the executive officers named in the Summary Compensation Table, by each person
believed by the Company to beneficially own more than 5 percent of the Company's
Common Stock and by all current executive officers and Directors of the Company
as a group:
<Table>
<Caption>
NUMBER OF PERCENT OF NUMBER OF PERCENT OF
SHARES OF SHARES OF SHARES OF SHARES OF
CLASS A CLASS A CLASS B CLASS B
NAME STOCK STOCK STOCK STOCK
---- --------- ---------- --------- ----------
DIRECTORS AND EXECUTIVE OFFICERS
J. Joe Ricketts(1), Chairman and Founder.............. 45,323,515 22.6% 8,186,112 50.0%
Joseph H. Moglia(2), Chief Executive Officer.......... 1,033,386 * 0 0
Vincent Passione(3), President, Institutional Client
Division............................................ 203,804 * 0 0
John R. MacDonald(4), Executive Vice President, Chief
Financial Officer and Treasurer..................... 83,714 * 0 0
J. Peter Ricketts(5), President, Private Client
Division, Vice Chairman and Corporate Secretary..... 8,921,931 4.5% 0 0
Kurt D. Halvorson(6), Executive Vice President, Chief
Administrative Officer.............................. 321,119 * 0 0
Gene L. Finn(7), Director............................. 82,904 * 0 0
David W. Garrison(8), Director........................ 60,249 * 0 0
Thomas Y. Hartley(9), Director........................ 52,347 * 0 0
Charles L. Marinaccio(10), Director................... 74,448 * 0 0
Mark L. Mitchell(11), Director........................ 142,921 * 0 0
Robert T. Slezak(12), Director........................ 130,907 * 0 0
John W. Ward(13), Director............................ 59,601 * 0 0
All Directors and Executive Officers as a group(14)
(17 in group)....................................... 56,668,905 28.1% 8,186,112 50.0%
OTHER STOCKHOLDERS
Marlene M. Ricketts(15)............................... 32,077,646 16.1% 8,186,688 50.0%
Taunus Corporation(16)................................ 26,110,305 13.1% 0 0
Ricketts Grandchildren Trust(17)...................... 19,008,000 9.5% 0 0
</Table>
- ---------------
* Less than 1 percent of the issued and outstanding shares of the class.
(1) Shares of Class A Stock beneficially owned by Mr. Ricketts consist of
38,016,946 shares held by Mr. Ricketts individually in a brokerage margin
account; 3,000,000 shares held jointly with Marlene M. Ricketts, his
spouse, in a brokerage margin account; 1,434,467 shares owned by Mr.
Ricketts but pledged as collateral; 1,500,000 shares held jointly with
Marlene M. Ricketts but pledged as collateral; 332,352 shares held in the
J. Ricketts IRA; and 1,039,750 shares issuable upon the exercise of options
exercisable within 60 days. Percentage of Class A Stock ownership is
determined based on 200,575,845 shares of Class A Stock, consisting of
199,536,095 shares outstanding and 1,039,750 shares issuable upon the
exercise of options exercisable within 60 days. Shares of Class B Stock
beneficially owned by Mr. Ricketts consist of 8,186,112 shares held by the
Marlene M. Ricketts 1994 Dynasty Trust, over which Mr. Ricketts has sole
voting and dispositive power. If all shares of Class B Stock were converted
into Class A Stock, Mr. Ricketts would beneficially own 53,509,627 shares
of Class A Stock which would represent approximately 25 percent of the
total shares of Class A Stock that would be issued and outstanding after
such conversion. Shares of Class A Stock and Class B Stock beneficially
Page 3
owned by Mr. Ricketts do not include shares held by Mrs. Ricketts
individually and disclosed in Note (15) below.
(2) Consists of 151,400 shares held by Mr. Moglia individually in a brokerage
margin account and 881,986 shares issuable upon the exercise of options
that are exercisable within 60 days.
(3) Consists of 3,140 shares held in Mr. Passione's 401(k) account, 87,500
shares issuable upon the exercise of options that are exercisable within 60
days and 113,164 shares held for the benefit of Mr. Passione in a deferred
compensation account under the Company's Executive Deferred Compensation
Program.
(4) Consists of 21,800 shares issuable upon the exercise of options that are
exercisable within 60 days and 61,914 shares held for the benefit of Mr.
MacDonald in a deferred compensation account under the Company's Executive
Deferred Compensation Program.
(5) Consists of 1,066,668 shares held by Mr. Ricketts individually in a
brokerage margin account; 74,568 shares held jointly with Susanne Shore,
his spouse, in a brokerage margin account; 65,203 shares in Mr. Ricketts'
401(k) account; 22,550 shares issuable upon the exercise of options
exercisable within 60 days; 1,435,686 shares in the Marlene Ricketts Trust
for the benefit of J. Peter Ricketts over which Mr. Ricketts has sole
voting and dispositive power; and 6,257,256 shares in the Marlene Ricketts
Annuity Trust 1999 #1, Marlene Ricketts Annuity Trust 1999 #2 and Marlene
Ricketts Annuity Trust 2000 #1 over which Mr. Ricketts has shared voting
and dispositive power.
(6) Consists of 259,219 shares held in Mr. Halvorson's 401(k) account and
61,900 shares issuable upon the exercise of options exercisable within 60
days.
(7) Consists of 75,637 shares held by Mr. Finn individually in a brokerage
margin account and 7,267 shares issuable upon the exercise of options
exercisable within 60 days.
(8) Consists of 22,667 shares of Class A Stock issuable upon the exercise of
options exercisable within 60 days, 13,628 shares held in a brokerage
margin account by the David W. and Nancy J. Garrison Trust and 23,954
shares held in a deferred compensation account for Mr. Garrison.
(9) Consists of 24,767 shares issuable upon the exercise of options exercisable
within 60 days and 27,580 shares held in a deferred compensation account
for Mr. Hartley.
(10) Consists of 8,581 shares held in the Charles L. Marinaccio Living Trust and
65,867 shares issuable upon the exercise of options exercisable within 60
days.
(11) Includes 109,812 shares held by Mr. Mitchell individually in a brokerage
margin account, 3,467 shares issuable upon the exercise of options
exercisable within 60 days, 24,413 shares in the Mark L. Mitchell IRA and
5,229 shares in the Janet T. Mitchell IRA, over which Mr. Mitchell has
shared voting and dispositive power.
(12) Represents shares held in a brokerage margin account by Robert T. Slezak
and Jane G. Slezak, as trustees of the Robert T. Slezak and Jane G. Slezak
Revocable Trust.
(13) Consists of 56,134 shares held by Mr. Ward individually in a brokerage
margin account and 3,467 shares issuable upon the exercise of options
exercisable within 60 days.
(14) Includes 2,279,463 shares issuable upon the exercise of options exercisable
within 60 days. Percentage ownership determined on the basis of 201,815,558
shares of Class A Stock, consisting of 199,536,095 shares outstanding and
2,279,463 shares issuable upon the exercise of options exercisable within
60 days.
(15) Shares of Class A Stock beneficially owned by Mrs. Ricketts consist of
27,245,294 shares held by Mrs. Ricketts individually in a brokerage margin
account; 3,000,000 shares held jointly with J. Joe Ricketts, her spouse, in
a brokerage margin account; 1,500,000 shares held jointly with J. Joe
Ricketts but pledged as collateral; and 332,352 shares held in the M.
Ricketts IRA. Shares of Class B Stock beneficially owned by Mrs. Ricketts
consist of 8,186,688 shares held by the J. Joe Ricketts 1994 Dynasty Trust,
over which Mrs. Ricketts has sole voting and dispositive power. If all
shares of Class B Stock were converted into Class A Stock, Mrs. Ricketts
would beneficially own 40,264,334 shares of Class A Stock, which would
represent approximately 19 percent of the total shares of Class A Stock
that would be issued and outstanding after such conversion. Shares of Class
A Stock and Class B Stock beneficially
Page 4
owned by Mrs. Ricketts do not include shares held by Mr. Ricketts
individually and disclosed in Note (1) above. Mrs. Ricketts' mailing
address is c/o Ameritrade Holding Corporation, 4211 South 102nd Street,
Omaha, Nebraska, 68127.
(16) Based on Amendment No. 1 to Schedule 13G filed on September 14, 2001 and
Form 4 filed on December 10, 2001, with the Securities and Exchange
Commission by Taunus Corporation, 31 West 52nd Street, New York, New York,
and certain of its wholly-owned subsidiaries. On Amendment No. 1 to
Schedule 13G, Taunus Corporation and certain of its wholly-owned
subsidiaries claimed sole voting power with respect to 26,461,205 shares,
sole dispositive power with respect to 26,448,722 shares and no shared
voting or dispositive power with respect to any of these shares. BT
Investment Partners Inc., 130 Liberty Street, New York, New York, a
wholly-owned subsidiary of Taunus Corporation, was the beneficial owner
with respect to 26,027,282 of these shares, claimed sole voting and
dispositive power with respect to 26,027,282 of these shares and no shared
voting or dispositive power with respect to any of these shares.
(17) The trustee of the Ricketts Grandchildren Trust is First National Bank of
Omaha, First National Center, 16th and Dodge Streets, Omaha, Nebraska,
68102.
PROPOSAL 1
ELECTION OF DIRECTORS
The full Board of Directors consists of nine Directors, five of whom are
elected by the Class B Stockholders and four of whom are elected by the Class A
Stockholders. Accordingly, the Board has nominated J. Joe Ricketts, Robert T.
Slezak, J. Peter Ricketts, Gene L. Finn and John W. Ward to be voted upon by the
Class B Stockholders and has nominated David W. Garrison, Thomas Y. Hartley,
Charles L. Marinaccio and Mark L. Mitchell to be voted upon by the Class A
Stockholders. All nominees have been nominated to serve for a term of one year.
This Proxy Statement relates only to the solicitation of proxies from the
Class A Stockholders with respect to the election of four Directors to be
elected by them (the "Class A Directors") and the other matters described
herein. The Board of Directors knows of no reason any of Messrs. Garrison,
Hartley, Marinaccio and Mitchell might be unavailable to serve as the Class A
Directors, and each has expressed an intention to serve, if elected. If any of
Messrs. Garrison, Hartley, Marinaccio and Mitchell is unable to serve, the
shares represented by all valid proxies will be voted for the election of such
substitute nominee as the Board of Directors may recommend. There are no
arrangements or understandings between any of the persons nominated to be a
Class A Director and any other person pursuant to which any of such nominees was
selected.
The election of a Class A Director requires the affirmative vote of a
plurality of the shares of Class A Stock present in person or represented by
proxy at the meeting and entitled to vote; provided that a quorum of at least a
majority of the outstanding shares of Class A Stock are represented at the
meeting. Shares of Class A Stock held by stockholders electing to abstain from
voting and "broker non-votes" will be counted towards the presence of a quorum
but will not be considered present and voting. Therefore, abstentions and
"broker non-votes" will have no impact on the election of Directors. Proxies
submitted pursuant to this solicitation will be voted for the election of each
of Messrs. Garrison, Hartley, Marinaccio and Mitchell as Class A Directors,
unless specified otherwise.
THE BOARD OF DIRECTORS RECOMMENDS THAT CLASS A STOCKHOLDERS VOTE "FOR" THE
ELECTION OF DAVID W. GARRISON, THOMAS Y. HARTLEY, CHARLES L. MARINACCIO AND MARK
L. MITCHELL AS CLASS A DIRECTORS.
Page 5
The tables below set forth certain information regarding the Directors of
the Company.
NOMINEES TO BE ELECTED BY CLASS A STOCKHOLDERS
<Table>
<Caption>
DIRECTOR TERM TO
NAME AGE PRINCIPAL OCCUPATION SINCE EXPIRE
---- --- -------------------- -------- -------
David W. Garrison................. 46 Chairman and Chief Executive 1997 2002
Officer, Verestar, Inc.
Thomas Y. Hartley................. 68 Chairman, Southwest Gas 1996 2002
Corporation
Charles L. Marinaccio............. 68 Director, Securities Investor 1997 2002
Protection Corporation (SIPC)
Mark L. Mitchell.................. 41 Associate Professor of Business 1996 2002
Administration (Finance), Harvard
University and Principal, CNH
Partners
</Table>
David W. Garrison has served as a Director of the Company since December
1997. Mr. Garrison is Chairman and Chief Executive Officer of Verestar, Inc., a
subsidiary of American Tower Co. (NYSE:AMT), where he also serves as a Director.
Mr. Garrison served as Chief Executive Officer, President and Chairman of the
Board of Directors of NETCOM On-Line Communications Services, Inc., an Internet
service provider, from 1995 to 1998. Prior to joining NETCOM, Mr. Garrison
served as President of SkyTel, a division of Mobil Telecommunications
Technologies, Inc., from 1990 to 1994. He holds a B.S. in accounting from
Syracuse University and an M.B.A. from Harvard University.
Thomas Y. Hartley has served as a Director of the Company since December
1996. Mr. Hartley has served as a member of the Board of Directors of Southwest
Gas Corporation since 1991, and as its Chairman since 1998. Mr. Hartley was a
partner in Deloitte & Touche, a big five public accounting firm, from 1973 to
1988, and served in other positions with Deloitte & Touche from 1959 to 1973.
Mr. Hartley was an officer in the United States Air Force from 1955 to 1958. Mr.
Hartley was a Director of Rio Hotel and Casino, Inc. from 1990 to 1998, and has
served as a director of Sierra Health Services since 1992. Mr. Hartley served as
Chairman of the University of Nevada at Las Vegas Foundation from 1994 to 1996.
Mr. Hartley is a Certified Public Accountant. Mr. Hartley has a B.S. in commerce
from Ohio University and completed the Advanced Management Program at Harvard
University.
Charles L. Marinaccio has served as a Director of the Company since January
1997 and as Chairman of the Board's Audit Committee since May 2000. Mr.
Marinaccio has served on the Board of Directors for the Securities Investor
Protection Corporation since 1995. From 1985 through 1994, he was a partner with
the law firm of Kelley, Drye & Warren. He served as Commissioner of the
Securities Exchange Commission ("SEC") from 1984 to 1985. Mr. Marinaccio was
General Counsel to the U.S. Senate Committee on Banking, Housing and Urban
Affairs from 1975 to 1984, and previously served as an advisor and senior
attorney with the regulatory and legal divisions of the Federal Reserve Board.
He holds a J.D. from George Washington University and received his B.A. from the
University of Connecticut.
Mark L. Mitchell has served as a Director of the Company since December
1996 and served as a member of the Company's Board of Advisors in 1993. Mr.
Mitchell has been an Associate Professor of Business Administration at Harvard
University since July 1999. He has been a Principal at CNH Partners, LLC, a
merger arbitrage fund, since June 2001. Mr. Mitchell was an Associate Professor
of Finance at the University of Chicago from 1994 to 1999 and was an Assistant
Professor of Finance from 1990 to 1993. He was a Visiting Associate Professor of
Business Administration at Harvard University for the 1997-1998 academic year.
Mr. Mitchell was a Senior Financial Economist for the SEC from 1987 to 1990. Mr.
Mitchell was a member of the Economic Advisory Board of the National Association
of Securities Dealers ("NASD") from 1995 to 1998. Mr. Mitchell received a B.B.A.
in economics from the University of Louisiana and received an M.A. in economics
and Ph.D. in applied economics from Clemson University.
Page 6
NOMINEES TO BE ELECTED BY CLASS B STOCKHOLDERS
<Table>
<Caption>
DIRECTOR TERM TO
NAME AGE PRINCIPAL OCCUPATION SINCE EXPIRE
- ---- --- -------------------- -------- -------
J. Joe Ricketts................... 60 Chairman and Founder of the 1981 2002
Company
Robert T. Slezak.................. 44 Management Consultant 1996 2002
J. Peter Ricketts................. 37 President, Private Client 1999 2002
Division, Vice Chairman and
Corporate Secretary of the Company
Gene L. Finn...................... 69 Management Consultant 1996 2002
John W. Ward...................... 58 Chairman, Transition 1997 2002
International, Inc.
</Table>
J. Joe Ricketts is currently Chairman of the Company's Board of Directors.
He also held the position of Chief Executive Officer from 1981 through February
2001, except for the period from March 1999 to May 2000, during which he was
Co-Chief Executive Officer, and the period from May 2000 to August 2000, during
which he did not hold the position of Chief Executive Officer. In 1975 Mr.
Ricketts became associated with the Company and served as a Director and
officer. By 1981, Mr. Ricketts acquired majority control of the Company. Prior
to 1975, Mr. Ricketts was a registered representative with a national brokerage
firm, an investment advisor with Ricketts & Co. and a branch manager with The
Dun & Bradstreet Corporation, a financial information firm. Mr. Ricketts is a
Director of Securities Industry Association (SIA) and previously served as a
Director of Knight Trading Group, Inc. and Net.B@nk, Inc. Mr. Ricketts served as
a member of the District Committee for District 4 of the NASD from 1996 to 1999.
Mr. Ricketts is a member of the Board of Trustees for Father Flanagan's Girls
and Boys Town and serves on the Board of Directors of the American Enterprise
Institute and Creighton University. Mr. Ricketts received his B.A. in economics
from Creighton University.
Robert T. Slezak served as Vice President, Chief Financial Officer and
Treasurer of the Company from January 1989 to November 1999 and has served as a
Director since October 1996. He is currently a management consultant. Mr. Slezak
joined the Company in March 1987 and served as Operations Manager at Ameritrade
Clearing, Inc., until January 1989. Prior to that time, Mr. Slezak was a Senior
Financial Analyst for Peter Kiewit Sons' Inc., an international construction and
mining company, from August 1985 to March 1987. From January 1980 to August
1985, Mr. Slezak was on the audit staff of Deloitte & Touche, a big five
accounting firm. Mr. Slezak served as a member of the District Committee for
District 4 of the NASD from 1990 to 1992, and as a member of its Nominating
Committee from 1993 to 1994. Mr. Slezak is a Certified Public Accountant. Mr.
Slezak holds a B.S. in business from the University of Nebraska at Omaha and an
M.B.A. from Creighton University.
J. Peter Ricketts became President of the Company's Private Client Division
in June 2001. In this capacity, Mr. Ricketts oversees and develops the Company's
retail client business including its Ameritrade(R), Ameritrade Plus(TM),
Ameritrade Pro(TM) and Freetrade.com(TM) products. Since joining the Company in
1993, Mr. Ricketts has held various leadership roles. Most recently, he was
interim President of Ameritrade (Inc.). He has also served as Senior Vice
President, Strategy and Business Development, where he directed the planning of
strategic initiatives such as business partnerships, strategic product
development, international expansion and public relations. Mr. Ricketts also
held the position of Senior Vice President of Product Development for Ameritrade
(Inc.), overseeing all product and feature development activities. As Senior
Vice President of Marketing, he directed client acquisition and retention and
led the successful $200 million advertising campaign, "Believe in Yourself."
Earlier, he served as President of Accutrade, Inc., a subsidiary of the Company
and the first brokerage firm to introduce automated order entry over touch-tone
telephones. He has served as a Director since October 1999. Mr. Ricketts has
been Secretary of the Company since May 2001 and also served as Secretary from
November 1996 to October 1999. Mr. Ricketts joined the Company with experience
in environmental and economic consulting and rail transportation. Mr. Ricketts
holds a B.A. in
Page 7
biology and an M.B.A. in marketing and finance from the University of Chicago.
J. Peter Ricketts is the son of J. Joe Ricketts.
Gene L. Finn has served as a Director of the Company since December 1996.
Mr. Finn was Vice President and Chief Economist of the NASD from 1983 to 1995.
Mr. Finn was Chief Economist and Senior Advisor for the SEC from 1969 through
1982. In such capacities, Mr. Finn provided policy advice on stock market and
investment company regulation and oversight. Mr. Finn is currently a management
consultant. Mr. Finn holds a Ph.D. in economics from the University of
Wisconsin.
John W. Ward has served as a Director of the Company and as Chairman of the
Board's Compensation Committee since January 1997. Mr. Ward has been an
independent consultant since 1991 and Chairman of Transition International,
Inc., management consultants in financial services and international corporate
strategy, since its formation in 1994. Mr. Ward was Chief Executive Officer of
Midland Montagu US Group, New York, a British bank, from 1987 to 1990. Mr. Ward
was a Managing Director, President and Chairman of the International Banking
Group of Merrill, Lynch & Co. Incorporated from 1981 to 1987. Prior to that
time, he was a Vice President of the Merchant Banking Group of Citibank, N.A.
Mr. Ward holds a master's degree in chemistry from Oxford University and a
business degree from the Manchester Business School in the United Kingdom.
EXECUTIVE OFFICERS OF THE REGISTRANT
The Company's executive officers are as follows:
<Table>
<Caption>
NAME AGE POSITION
- ---- --- --------
J. Joe Ricketts........................... 60 Chairman and Founder
Joseph H. Moglia.......................... 52 Chief Executive Officer
Raymond C. Dury........................... 41 Senior Vice President and Co-Chief
Information Officer
Phylis M. Esposito........................ 50 Executive Vice President, Chief Strategy
Officer
Kurt D. Halvorson......................... 39 Executive Vice President, Chief
Administrative Officer
Ellen L. Koplow........................... 42 Senior Vice President and General Counsel
John R. MacDonald......................... 46 Executive Vice President, Chief Financial
Officer and Treasurer
Anne L. Nelson............................ 48 Senior Vice President and Chief Marketing
Officer
Vincent Passione.......................... 40 President, Institutional Client Division
J. Peter Ricketts......................... 37 President, Private Client Division
</Table>
See "Nominees to be Elected by Class B Stockholders" for information
regarding the business experience of J. Joe Ricketts and J. Peter Ricketts.
Joseph H. Moglia joined the Company as Chief Executive Officer in March
2001. Mr. Moglia joined the Company from Merrill Lynch, where he served as
senior vice president and head of the Investment Performance and Product Group
for Merrill's Private Client division. He oversaw all investment products, as
well as the firm's insurance business and 401(k) efforts. Mr. Moglia joined
Merrill Lynch in 1984 and by 1988, was the company's top institutional sales
person. In 1992 he became head of Global Fixed Income Institutional Sales and in
1995 ran the firm's Municipal Division before moving to Private Client in 1997.
Prior to entering the financial services industry, Mr. Moglia was the defensive
coordinator for Dartmouth College's football team. He coached various teams for
16 years, authored a book on football and wrote 11 articles that were published
in national coaching journals. Mr. Moglia holds a master's degree from the
University of Delaware and a bachelor's in economics from Fordham University.
Page 8
Raymond C. Dury has served as Co-Chief Information Officer of the Company
since June 2001. He heads the Ameritrade Technology Group, overseeing all
information technology functions of the Company. Mr. Dury joined the Company's
OnMoney Financial Services Corporation ("OnMoney") subsidiary in 1999, serving
as Senior Vice President of Operations and Chief Information Officer until June
2001. Prior to joining the Company, Mr. Dury was a vice president with Citibank,
managing security and regulatory risk for Citibank's Internet-only bank, Citi
f/i. Prior to joining Citibank, he was vice president of operations for NetDox,
a joint venture of Deloitte & Touche Consulting Group and Thurston Group that
provides secure electronic business-to-business communication. Mr. Dury received
a B.S. in accounting from Franklin University in Columbus, Ohio and passed the
Certified Public Accountant exam.
Phylis M. Esposito joined the Company as Chief Strategy Officer in July
2001. Ms. Esposito oversees mergers and acquisitions, strategic alliances,
marketing, business development and corporate communications. Ms. Esposito has
over 25 years of financial markets experience. From 1998 until joining the
Company, she served as senior partner and project manager for Mathias & Company,
Management Consultants. In that role, she provided strategic advice and business
plan implementation to global financial institutions, professional service firms
and multi-national corporations. Prior to that she was a senior managing
director for Bear Stearns & Company. She was also a founding partner and chief
financial officer for Artemis Capital Group, and a vice president for Goldman
Sachs. Ms. Esposito received an M.B.A. from Columbia University and holds a B.A.
from Fordham University.
Kurt D. Halvorson has served as Chief Administrative Officer since June
2001. He is responsible for communication and coordination of the Company's
Executive Management Team. In addition, he oversees human resources, facilities
and clearing functions and administers corporate audit. Mr. Halvorson served as
President of Advanced Clearing from 1997 to June 2001. He has been with the
Company since 1987, also serving as Vice President and General Manager, and Vice
President and Controller of Advanced Clearing. Before joining the Company, Mr.
Halvorson was a Certified Public Accountant for Deloitte & Touche in Omaha,
Nebraska from 1984 to 1987. Mr. Halvorson currently is an industry governor on
the board of the Chicago Stock Exchange, serves on the Securities Industry
Association Membership Committee and the United Way Young Leaders Society. He is
a past member of the Securities Industry Association Firm and Industry Analysis
Committee (FIAC). Mr. Halvorson obtained his B.S.B.A. from the University of
Nebraska in 1983 and is a Certified Public Accountant. In March 2000, he
graduated from the Securities Industry Institute from the Wharton School at the
University of Pennsylvania.
Ellen L. Koplow joined the Company in May 1999 as Deputy General Counsel.
She was named Acting General Counsel in November 2000, and accepted the position
of General Counsel in June 2001. Prior to joining the Company, Ms. Koplow was
managing principal of the Columbia, Maryland office of Miles & Stockbridge P.C.
where she was responsible for the operations of attorneys and staff and
concentrated her practice in the areas of corporate law, e-commerce, technology
law, media, and commercial contracts. Ms. Koplow graduated cum laude from the
University of Baltimore Law School in 1983 where she was a member of the
Heuisler Honor Society, a Scribes Award winner, and a Comments Editor for the
Law Review. She has been a member of the Maryland High Technology Council and
has lectured extensively on technology-related issues. In 1998, she was selected
by The Daily Record as one of Maryland's Top 100 women.
John R. (Randy) MacDonald has served as Chief Financial Officer of
Ameritrade Holding Corporation since March 2000. Mr. MacDonald is responsible
for all financial operations of the Company and Company-wide fiscal management.
Prior to joining the Company in March 2000, Mr. MacDonald served in a similar
capacity with Investment Technology Group, Inc. ("ITG"), based in New York City.
As chief financial officer of ITG, he was responsible for a wide range of
activities for the company, including the planning and management of several
complex financial transactions such as a corporate spin-off and an initial
public offering. He was the executive in charge of administration, accounting
operations, corporate capital management, tax compliance, risk management,
investor relations, and the design and implementation of improved compensation
and benefit plans. Previously, Mr. MacDonald worked with Salomon Brothers in New
York where he served as Vice President and Group Manager responsible for the
development and creation of a consulting group for integrated financial
instrument engineering and for providing their clients with practical
Page 9
accounting solutions. While at Salomon Brothers, he also re-engineered their
internal reporting and budgeting systems. Earlier, he was employed with Deloitte
& Touche as Audit Senior Manager specializing in commercial banking, joint
ventures in real estate, and financial services. Mr. MacDonald began his career
at Ernst & Young, performing financial audits with a concentration in
international operations. He holds a B.S. in accounting from Boston College, and
is a member of the American Institute of Certified Public Accountants as well as
other professional organizations.
Anne Nelson joined the Company in November 1999. As Chief Marketing
Officer, Mrs. Nelson oversees marketing strategy as well as advertising, brand
management, database management and client marketing. Previously, she served for
six years as the executive vice president of marketing for HSBC Bank USA, where
she headed retail, corporate and investment marketing for the United States.
During her tenure, she directed the brand identity change from Marine Midland to
HSBC, which was part of HSBC's global transition to a single brand name. Prior
to HSBC, Mrs. Nelson spent 10 years with CoreStates Financial Corp., located in
Philadelphia, in a number of senior level positions in their retail marketing,
credit card and acquisition divisions. Mrs. Nelson received her M.B.A. from
Temple University and holds a B.A. from LaSalle College. She completed
additional post-graduate studies at the Wharton School of the University of
Pennsylvania. In 2000, she was named one of the Top 100 Advertising Executives
by Advertising Age, and one of the Top 10 Marketers by Financial Services
Marketing.
Vincent Passione was named President of the Company's Institutional Client
Division in June 2001. In this capacity, Mr. Passione oversees Ameritrade
Financial Services(TM), Ameritrade Corporate Services(TM), Ameritrade Advisor
Services(TM), Ameritrade Clearing Services(TM) and TradeCast by Ameritrade(TM).
Previously, Mr. Passione was President and Chief Executive Officer of OnMoney.
He joined the Company in August 1999, oversaw the launch of the OnMoney.com Web
site and was responsible for all aspects of OnMoney's operations, including the
growth of the company's business strategy and corporate development. Mr.
Passione spent six years at Citigroup managing its U.S. Technology organization.
His last assignment was as the chief operation officer for Citi f/i (Financial
Interactive) where he developed and implemented the strategy, delivery
capability and infrastructure for this nationwide Internet bank. Prior to
joining Citi f/i, Mr. Passione served as chief technology officer for
Citigroup's U.S. Consumer Bank. He led a staff of over 500, which was
responsible for the design, development and maintenance of the entire Citigroup
U.S. technology base. During his tenure, Mr. Passione spearheaded several major
efforts, including the conversion of the U.S. Consumer Bank to a single
technology platform, the implementation of one of the banking industry's largest
customer relationship management systems, and the establishment of the bank's
first Y2K remediation factory, which became the model for the rest of Citicorp's
technology organizations. Mr. Passione has a B.S. in computer science from New
York Polytechnic Institute.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon the Company's review of forms filed by Directors,
officers and certain beneficial owners of the Company's Common Stock (the
"Section 16(a) Reporting Persons") pursuant to Section 16 of the 1934 Act, the
Company has identified the following late filings by the Section 16(a) Reporting
Persons: grants of stock on a deferred basis under the Executive Deferred
Compensation Program were reported late on Forms 5 by John R. MacDonald (1 award
in fiscal 2001) and by James M. Ditmore (1 award in fiscal 2001); grants of
stock on a deferred basis under the 1996 Directors Incentive Plan were reported
late on Forms 5 by David W. Garrison (2 awards in fiscal 1998, 4 in fiscal 1999,
1 in fiscal 2000 and 3 in fiscal 2001) and by Thomas Y. Hartley (2 awards in
fiscal 1998, 1 in fiscal 1999, 4 in fiscal 2000 and 4 in fiscal 2001); the
Initial Statement of Beneficial Ownership of Securities on Form 3 by Joseph H.
Moglia was filed late (reflecting the award of stock options in fiscal 2001);
and the acquisition of shares by Anne Nelson was reported late on a Form 4 (1
transaction in fiscal 2001).
BOARD MEETINGS AND COMMITTEES
The Board of Directors conducts its business through meetings of the Board
and actions taken by written consent in lieu of meetings and by the actions of
its Committees. During the fiscal year ended September 28, 2001, the Board of
Directors held 4 meetings and took action by written consent one time. During
fiscal year
Page 10
2001, each Director attended at least 75 percent of the aggregate number of
meetings of the Board of Directors and meetings of the Committees of the Board
of Directors on which he served.
The Board of Directors has established two Committees: Audit and
Compensation.
AUDIT COMMITTEE. The functions performed by the Audit Committee are
described in the Audit Committee Charter and include (i) overseeing the
Company's internal accounting and operational controls as well as its financial
and regulatory reporting, (ii) selecting the Company's independent auditors and
managing director of corporate audit, and assessing their performance on an
ongoing basis, (iii) reviewing the Company's financial statements and audit
findings, and taking any action considered appropriate by the Audit Committee
and the Board of Directors, (iv) performing other oversight functions as
requested by the full Board of Directors, and (v) reporting activities performed
to the full Board of Directors. The Audit Committee Charter was adopted at the
February 22, 2000 Audit Committee meeting and the February 23, 2000 Board of
Directors meeting. The Charter was subsequently reviewed and reaffirmed at the
November 12, 2001 Audit Committee meeting. The Audit Committee is composed of
Directors Finn, Hartley, Marinaccio and Slezak. The Audit Committee met nine
times during fiscal year 2001.
All Audit Committee members are "independent" as defined in the applicable
listing standards of the NASD, except Mr. Slezak, who serves as a
non-independent Director of the Audit Committee. Mr. Slezak formerly served as
the Chief Financial Officer of the Company and officially retired as Chief
Financial Officer effective November 15, 1999. Mr. Slezak was subsequently
appointed to serve on the Audit Committee at the February 23, 2000 Board of
Directors meeting. The Board of Directors determined that the addition of Mr.
Slezak to the Audit Committee was an appropriate and acceptable appointment
because of his extensive industry and financial expertise and background and was
in the best interests of the Company and its stockholders. The Board of
Directors determined that Mr. Slezak's appointment to the Audit Committee
complies with the conditions stipulated in the NASD independence rules that
allow "one non-independent director" to serve on the Audit Committee of the
Board of Directors under exceptional and limited circumstances.
COMPENSATION COMMITTEE. The Compensation Committee reviews and approves
broad compensation philosophy and policy and changes in executive salary levels,
bonus payments and stock option awards pursuant to the Company's management
incentive plans as outlined below. The Compensation Committee consists of
Directors Garrison, Mitchell and Ward. The Compensation Committee met five times
during fiscal year 2001.
The Company does not have a standing Nominating Committee. Nominations of
both Class A Directors and Class B Directors are made by the entire Board of
Directors.
COMPENSATION OF DIRECTORS
The Company maintains the Ameritrade Holding Corporation Directors
Incentive Plan (the "Directors Plan") pursuant to which non-employee Directors
are granted various equity awards and may make elections with respect to the
payment of their retainers and fees. Specifically, the Directors Plan provides
that, upon a non-employee Director's election to the Board for his first term,
the Director will receive (a) a stock option to purchase such number of shares
of the Company's Class A Stock as determined by the Chairman of the Board and
approved by the Board and (b) an award of Restricted Stock, the fair market
value of which is equal to $20,000 or such other amount determined by the Board
from time to time. Non-employee Directors may also be awarded stock options
other than upon their initial election to the Board as determined from time to
time by the Board. Awards made pursuant to the Directors Plan will generally
vest in substantially equal annual installments over a period of three years,
beginning with the first anniversary of the grant date. The exercise price of
options granted under the Directors Plan may not be less than the fair market
value of a share of the Company's Class A Stock on the date of the grant of the
option.
Employee Directors do not receive compensation for services provided as a
Director. Non-employee Directors receive an annual retainer payable in advance.
For fiscal year 2001, the annual retainer was $25,000, payable in the form of
cash or Class A Stock at the election of the Director. Non-employee Directors
receive
Page 11
payment of $1,500 for quarterly meetings and $1,000 for Committee meetings, all
payable quarterly in advance in the form of cash or Class A Stock at the
election of the Director. The foregoing elections and payments are made pursuant
to the Directors Plan.
Pursuant to the Directors Plan, non-employee Directors may elect to defer
receipt of all or a portion of the retainer and meeting and Committee fees
otherwise payable to the non-employee Director, including those amounts that
would otherwise be payable to the non-employee Director in the form of Class A
Stock. Amounts deferred pursuant to a non-employee Director's election are
credited to a bookkeeping account which consists of a "Cash Subaccount"
reflecting amounts that would otherwise have been payable to the non-employee
Director in cash and a "Stock Subaccount" reflecting amounts that would
otherwise have been payable to the non-employee Director in Class A Stock. As of
the first day of each calendar quarter, the Cash Subaccount is adjusted to
reflect contributions and distributions during the preceding calendar quarter
and is credited with interest computed at the prime rate as reported by the Wall
Street Journal for that date (or, if that day is not a business day, the next
preceding business day). The Stock Subaccount is credited with "stock units" as
of each day that a deferred amount would otherwise have been payable to the
non-employee Director in Class A Stock, is charged with stock units as of each
day on which amounts are distributed from the Stock Subaccount and is credited
with stock units as of each record date to reflect dividends paid on the Class A
Stock. For purposes of the adjustments to the Stock Subaccount, one stock unit
corresponds to one share of the Class A Stock.
Deferred amounts are payable to non-employee Directors as of a distribution
date elected by the non-employee Director at the time of the deferral.
Distributions of deferred amounts can be made in ten annual installments
commencing on the distribution date elected. A non-employee Director may also
elect to have payments in a lump sum or in any number of annual payments not
exceeding ten. If a non-employee Director dies prior to the full payment of his
deferral account, the balance will be paid to a beneficiary designated by the
non-employee Director.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth a three year history of the annual and
long-term compensation awarded to, earned by or paid by the Company and its
subsidiaries to each person serving as Chief Executive Officer at any time
during the fiscal year ended September 28, 2001, and to each of the other four
highest paid executive officers of the Company (collectively, the "Named
Executive Officers") for the fiscal year ended September 28, 2001.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------------- ------------
SECURITIES
UNDERLYING ALL OTHER
OTHER ANNUAL OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION(1)($) SARS(#) ($)
- --------------------------- ---- ---------- --------- ------------------ ---------- ------------
J. Joe Ricketts(2)........ 2001 631,251 353,749 30,000 -- --
Chairman, Chief Executive 2000 540,003 606,801 30,000 298,700 --
Officer and Founder 1999 435,000 54,375 12,580 -- --
Joseph H. Moglia(3)....... 2001 350,769 1,533,320 4,515,890 1,816,132 141,360
Chief Executive Officer
Vincent Passione(4)....... 2001 329,135 125,000 617,500 350,000 --
President, Institutional 2000 300,000 425,000 -- -- --
Client Division 1999 50,000 125,000 -- -- --
</Table>
Page 12
<Table>
<Caption>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------------- ------------
SECURITIES
UNDERLYING ALL OTHER
OTHER ANNUAL OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION(1)($) SARS(#) ($)
- --------------------------- ---- ---------- --------- ------------------ ---------- ------------
John R. MacDonald(5)...... 2001 311,250 87,500 262,500 100,000 --
Executive Vice President, 2000 155,770 58,414 175,241 87,200 23,895
Chief Financial Officer
and Treasurer
J. Peter Ricketts......... 2001 228,264 200,000 30,000 100,000 --
President, Private 2000 147,456 100,000 30,000 29,900 --
Client Division 1999 104,099 68,791 17,730 11,400 --
Vice Chairman and
Corporate Secretary
Kurt D. Halvorson......... 2001 263,751 150,000 30,000 100,000 --
Executive Vice 2000 226,128 201,000 30,000 59,800 --
President, Chief 1999 165,375 104,482 12,580 48,000 --
Administrative Officer
</Table>
- ---------------
(1) The amounts in this column for Mr. J. Joe Ricketts, Mr. J. Peter Ricketts
and Mr. Halvorson represent employer contributions to the Company's Profit
Sharing Plan in the form of Company Class A Stock. In the cases of Mr.
Passione and Mr. MacDonald, the amounts shown include bonus payments that
were deferred by the employee into a trust that holds shares of Class A
Stock pursuant to the Ameritrade Holding Corporation Executive Deferred
Compensation Program and, in the case of Mr. Passione, profit sharing
contributions in the form of Company Class A Stock. Amounts shown in this
column for Mr. Moglia represent deferred compensation earned pursuant to his
employment agreement.
(2) Mr. J. Joe Ricketts served as Chief Executive Officer through February 2001.
(3) Mr. Moglia became an employee of the Company in March 2001. Amounts under
Bonus include Mr. Moglia's signing bonus pursuant to his employment
agreement. Amounts under All Other Compensation for Mr. Moglia represent
reimbursement of moving expenses.
(4) Mr. Passione became an employee of the Company in August 1999.
(5) Mr. MacDonald became an employee of the Company in March 2000. Amounts under
All Other Compensation for Mr. MacDonald represent reimbursement of moving
expenses.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding stock options granted
to Named Executive Officers during fiscal 2001 pursuant to the Long-Term
Incentive Plan. No grants of Stock Appreciation Rights were made in fiscal 2001.
<Table>
<Caption>
INDIVIDUAL GRANTS
---------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS ANNUAL RATES OF
UNDERLYING GRANTED TO STOCK APPRECIATION FOR
OPTIONS EMPLOYEES IN EXERCISE OR THE OPTION TERM(2) ($)
GRANTED FISCAL BASE PRICE EXPIRATION ----------------------
NAME (#) YEAR(1) ($/SHARE) DATE 5% 10%
---- ---------- ------------ ----------- ---------- -- ---
J. Joe Ricketts................... -- 0.0% -- -- -- --
Joseph H. Moglia.................. 1,816,132 36.5% 8.25 3/1/11 9,422,784 23,879,185
Vincent Passione.................. 350,000 7.0% 6.72 6/27/11 1,479,160 3,748,482
John R. MacDonald................. 100,000 2.0% 10.00 5/17/11 472,521 1,344,743
J. Peter Ricketts................. 100,000 2.0% 10.00 5/17/11 472,521 1,344,743
Kurt D. Halvorson................. 100,000 2.0% 10.00 5/17/11 472,521 1,344,743
</Table>
Page 13
- ---------------
(1) Based on an aggregate of 4,974,777 options granted to employees during
fiscal 2001.
(2) Calculated on the assumption that the market value of the underlying stock
increases at the stated values compounded annually for the ten-year term of
the option and that the option is exercised and sold on the last day of its
term for the appreciated stock price.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during fiscal 2001 and
unexercised options held as of the end of fiscal 2001.
<Table>
<Caption>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT SEPT. 28, 2001 AT SEPT. 28, 2001(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
J. Joe Ricketts............ -- -- 965,075 224,025 $1,678,404 $--
Joseph H. Moglia........... -- -- 524,222 1,291,910 $ -- $--
Vincent Passione........... -- -- 43,750 306,250 $ -- $--
John R. MacDonald.......... -- -- 21,800 165,400 $ -- $--
J. Peter Ricketts.......... -- -- 15,075 126,225 $ -- $--
Kurt D. Halvorson.......... -- -- 46,950 160,850 $ -- $--
</Table>
- ---------------
(1) Based on the market price of $4.01 per share, which was the closing price
per share of the Company's Common Stock on the Nasdaq National Market on the
last day of fiscal 2001, less the exercise price payable for such shares.
EMPLOYMENT AND SEVERANCE AGREEMENTS
The Company currently has employment agreements with its Chief Executive
Officer, Joseph H. Moglia, and John R. MacDonald, Executive Vice President,
Chief Financial Officer and Treasurer.
Mr. Moglia's employment agreement was entered into as of March 1, 2001, and
has a two-year initial term. The agreement renews automatically for an
additional two-year term unless either party provides written notice of
non-renewal to the other at least 90 days before the last day of the initial
term. In addition, either party may terminate the employment agreement with or
without cause (as defined therein). Mr. Moglia's employment agreement provides
for the payment of a base salary, an annual bonus, a one-time signing bonus,
grants of stock options pursuant to the Company's Long-Term Incentive Plan,
benefits pursuant to a deferred compensation plan (as described below), and
participation in other employee benefits under the various benefit plans and
programs maintained by the Company. If Mr. Moglia is discharged from employment
by the Company without cause or terminates his employment under circumstances
which constitute constructive dismissal (as defined in the agreement), he will
be entitled to 100 percent vesting of his stock options and his account under
the deferred compensation plan. If a change in control of the Company occurs (as
defined in the agreement), Mr. Moglia's employment will automatically terminate
and he will be entitled to the payments and benefits to which he would otherwise
be entitled under the agreement had he continued in employment with the Company
through both the initial and additional two-year terms. In addition, if, during
the initial two-year term, a change in control occurs, Mr. Moglia's employment
is terminated by the Company without cause, or if Mr. Moglia's employment is
terminated under circumstances which constitute a constructive dismissal (as
defined in the agreement), he will be awarded stock options which would have
been awarded to him at the beginning of the additional two-year term, except
that the options shall be granted as of the date of the change of control or
termination date, as applicable, with an exercise price equal to 80 percent of
the fair market value of a share of Company Class A Common Stock on the date of
grant. Mr. Moglia's employment agreement contains covenants by him not to
compete with the Company during the term of employment and for a specified
period thereafter. He is generally entitled to receive noncompetition payments
(as defined in the agreement) during the period subsequent to his termination in
which the covenant not to compete is in effect.
Page 14
Under the deferred compensation plan established in connection with Mr.
Moglia's employment agreement, Mr. Moglia is entitled to a deferred payment of
cash compensation, as adjusted for earnings and losses related to investment
decisions made by him. The balance in the deferred compensation account vests
pro rata on a daily basis over the initial two-year term but becomes fully
vested as described above. Payments of the deferred compensation account balance
begin as soon as practicable after Mr. Moglia's termination date and may be made
in a lump sum or installments over a period of not more than 10 years, as
elected by Mr. Moglia in accordance with the plan. If Mr. Moglia dies before the
vested balance in his deferred compensation account is paid to him, the vested
balance is paid to a beneficiary named by him in a lump sum.
Mr. MacDonald's employment agreement was entered into as of March 27, 2000
and provides for Mr. MacDonald to be an employee-at-will. Mr. MacDonald's
employment agreement may be terminated by either Mr. MacDonald or the Company at
any time; however, if Mr. MacDonald is terminated by the Company for any reason
other than cause (as defined in the agreement) or is terminated within six
months after a change of control (as defined in the agreement) of the Company,
Mr. MacDonald is entitled to receive continued payments of his base salary for a
period of one year after termination. Additionally, in the event of a change in
control (as defined in the agreement), all unvested stock options then held
shall become fully vested. Mr. MacDonald's employment agreement provides for the
payment of a base salary (which is subject to adjustment) and an incentive
bonus, the grant of stock options pursuant to the Company's Long-Term Incentive
Plan and participation in other employee benefits under the various benefit
plans and programs maintained by the Company. Mr. MacDonald's employment
agreement contains covenants by the employee not to compete with the Company
during the term of employment and for a specified period thereafter.
Each of the Employment Agreements described above contain confidentiality
covenants on the part of the named officers that survive termination of the
agreements.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
This report is not deemed to be "soliciting material" or to be "filed" with
the Securities and Exchange Commission (the "SEC") or subject to the SEC's proxy
rules or to the liabilities of Section 18 of the Securities Exchange Act of 1934
(the "1934 Act") and the report shall not be deemed to be incorporated by
reference into any prior or subsequent filing by the Company under the
Securities Act of 1933 (the "1933 Act") or the 1934 Act.
The Compensation Committee (the "Committee") of the Board of Directors
establishes and administers the Company's executive compensation programs. The
Committee is currently composed of three non-employee Directors of the Board,
Messrs. Garrison, Mitchell, and Ward. No member of the Committee during fiscal
year 2001 was an employee of the Company or any of its subsidiaries. Each member
qualifies as a "non-employee director" under rule 16b-3 of the Securities
Exchange Act of 1934 and as an "outside director" under Section 162(m) of the
Internal Revenue Code.
COMPENSATION PHILOSOPHY AND POLICY OVERVIEW
THE COMMITTEE'S PURPOSE IS TO DEVELOP AND MAINTAIN COMPENSATION PROGRAMS
AND POLICIES REFLECTIVE OF THE COMPANY'S STRATEGY FOR ACHIEVING GOALS TO
MAXIMIZE STOCKHOLDER VALUE. TO ACCOMPLISH THIS, THE COMMITTEE CONSTRUCTS
COMPENSATION DETERMINATIONS BASED UPON THE FOLLOWING GOALS:
1. Align executive compensation with stockholder interests; and
2. Attract, retain, and motivate an effective executive team.
The Company's executive officers are assigned to pay grades, each with an
established pay range. Assignment to a pay grade is determined by comparing
individual responsibilities with industry survey data and internal equity. In
addition, a percentage of salary determines a target annual incentive bonus
award and long-term incentive awards are based on a factor of salary. Both the
incentive bonus and long-term incentives are at-risk pay, which serves to
motivate the executive to perform, and comprises a large portion of total
executive compensation. The Committee utilized the services of an external
executive compensation
Page 15
consultant to provide the utmost objective and competitive data to ensure
stockholder-beneficial decision making consistent with the Company's
compensation goals.
The Committee and the Company strongly believe in executive ownership of
Company stock. This benefits stockholders by meaningfully aligning executive
goals and decision-making to stockholder needs. Executives are required to
adhere to certain Equity Ownership Guidelines that require a specific percentage
of Company stock ownership.
BASE SALARIES
In order to remain competitive with the market, the Committee reviews
executive salaries and pay grades at least annually. Comparably sized general
industry and financial services competitors are selected for analysis and
comparison. Executive officer salary adjustments are determined by objective and
subjective evaluation of individual performance and by comparison with market
data of external comparable positions, internal comparison, and applicable terms
of existing employment agreements.
ANNUAL INCENTIVE BONUSES
Annual incentive bonuses are designed to promote strong Company performance
and achievement of the Company's initiatives. Target incentive percentages are
set at the beginning of the fiscal year and payout is earned according to
achievement of Company goals. For Fiscal Year 2001, 50 percent of annual
incentive was based upon corporate performance and the remaining 50 percent was
based upon individual performance.
Executives were able to defer all or part of annual incentive bonuses under
a deferred compensation program in the form of Company stock.
2002 MANAGEMENT INCENTIVE PLAN
Included in this Proxy Statement is a proposal for approval of a management
incentive plan. This plan is based on the achievement of key corporate
performance metrics and is Section 162(m) qualified in order to maximize tax
deductibility for the Company, while providing strong incentive for goal
achievement at the highest levels of the organization.
LONG-TERM INCENTIVES
The Company strongly supports stock ownership at all levels and maintains a
broadbased and executive stock option program. Long-term incentives are awarded
to foster forward-looking motivation and long-term growth for stockholders. In
some cases, options were awarded at a premium strike price, in order to
emphasize this future orientation. Other annual stock option awards were granted
with a strike price of fair market value on the date of grant.
Annual stock option awards were determined based on the Company's total
stockholder return ("TSR"). This measurement compares Company stock performance
with the stock performance of a peer group. The Company's relative performance
against the peer group is applied to the target award level per individual
executive.
The Committee also considers the award of stock options in specific cases
based on individual performance or for purposes of retaining and attracting key
executives.
Although the long-term incentive plan also permits the award of stock
appreciation rights, stock awards (including Restricted Stock), and performance
units, no such awards have been made under the program.
DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended ("the
Code"), limits the Company's deduction for compensation paid to the executive
officers named in the Summary Compensation Table to $1 million unless certain
requirements are met. The policy of the Compensation Committee with respect to
Section 162(m) is to establish and maintain a compensation program that will
optimize the deductibility of
Page 16
compensation. However, the Committee must exercise its right to use judgement
where merited by the need to respond to changing business conditions or by an
executive officer's individual performance, to authorize compensation, which may
not, in a specific case, be fully deductible by the Company. For fiscal year
2001, the only executive officer to exceed $1 million in compensation was Mr.
Moglia, based largely on the need to recruit him from his previous employer. The
Committee has reviewed this arrangement and the related Section 162(m) issues
and given its approval.
CHIEF EXECUTIVE OFFICER COMPENSATION
In Fiscal Year 2001, both Mr. J. Joe Ricketts and Mr. Moglia served in the
capacity of Chief Executive Officer. Mr. Ricketts served from the beginning of
the fiscal year until February 28, 2001. Mr. Moglia's tenure began on March 1,
2001 and continued through the end of the fiscal year. The determination of the
Chief Executive Officer's salary, annual incentive, and grants of stock options
followed the philosophy and policies set forth above for all other executive
compensation, subject to any individual terms negotiated and demonstrated in the
executive's employment agreement.
David W. Garrison
Mark L. Mitchell
John W. Ward
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2001, there were no Compensation Committee interlocks and no
insider participation in Compensation Committee decisions that were required to
be reported under the rules and regulations of the 1934 Act.
Page 17
COMPANY PERFORMANCE
The company performance information is not deemed to be "soliciting
material" or to be "filed" with the SEC or subject to the SEC's proxy rules or
to the liabilities of Section 18 of the 1934 Act and the company performance
information shall not be deemed to be incorporated by reference into any prior
or subsequent filing by the Company under the 1933 Act or the 1934 Act.
The following graph and table set forth certain information comparing the
cumulative total return from a $100 investment in the Company and the stocks
making up an industry peer group and a broad-based stock index on March 4, 1997
(the date the Company's stock commenced public trading) through the end of the
Company's most recent fiscal year.
[PERFORMANCE GRAPH]
<Table>
<Caption>
PERIOD ENDING
---------------------------------------------------------------
INDEX 3/4/97 9/26/97 9/25/98 9/24/99 9/29/00 9/28/01
- ----- ------ ------- ------- -------- -------- -------
Ameritrade Holding Corporation........... 100.00 171.67 240.00 1,445.00 1,420.00 320.80
S&P 500.................................. 100.00 121.03 131.99 168.64 191.05 140.09
Peer Group............................... 100.00 155.41 152.93 418.56 584.01 195.50
</Table>
The Peer Group is comprised of the following companies whose primary business is
online brokerage:
The Charles Schwab Corporation
E*TRADE Group, Inc.
CSFBdirect Inc.
TD Waterhouse Group, Inc.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
J. Joe Ricketts, the Company's Chairman and Founder and Gene L. Finn, a
Director of the Company, served on the Board of Directors of Knight Trading
Group, Inc. ("Knight") during fiscal 2001 until their resignations from the
Knight Board in February 2001. The Company executes a portion of its securities
transactions through subsidiaries of Knight. Revenues earned by the Company
related to such transactions totaled $9.9 million in fiscal 2001.
On September 6, 2001, the Company acquired from National Discount Brokers
Group, Inc. ("NDB Group") all the outstanding stock of National Discount Brokers
Corporation ("NDB.com"). Pursuant to the terms of the purchase agreement dated
July 30, 2001, between the Company and NDB Group (the "Purchase Agreement"), the
Company paid aggregate consideration of $154 million, consisting of 26,027,282
shares of
Page 18
its Class A Stock issued to BT Investment Partners Inc., an affiliate of NDB
Group and a subsidiary of Taunus Corporation ("Taunus"), and $20,000 in cash
paid to NDB Group. Taunus, through its ownership of BT Investment Partners Inc.,
owned approximately 13% of the Company's Class A Stock upon completion of the
transaction.
The Company entered into certain agreements with affiliates of Taunus prior
to Taunus becoming became a beneficial owner of greater than 5% of the Company's
Class A Stock. In April 2001, the Company entered into an agreement with
Deutsche Banc Alex. Brown Inc. ("DB Alex. Brown"), an affiliate of Taunus, to
provide financial advisory and investment banking services. The Company paid a
one-time retainer fee of $150,000 to DB Alex. Brown. Under the agreement, the
Company will pay additional fees if a merger with or acquisition of another
company is completed, based on the amount of consideration paid, or if DB Alex.
Brown renders a fairness opinion. No such fees have been paid by the Company
since Taunus became a beneficial owner of greater than 5% of the Company's Class
A Stock. In July 2001, the Company entered into an equity index swap arrangement
with Deutsche Bank AG, an affiliate of Taunus, for the purpose of hedging the
Company's obligation under its deferred compensation plan for its Chief
Executive Officer. The Company paid interest and fees to Deutsche Bank AG of
$0.7 million related to this arrangement. The swap arrangement was assigned from
Deutsche Bank AG to an unaffiliated counterparty in November 2001.
In October 2001, the Company entered into an agreement with NDB Group,
which in part amended the Purchase Agreement, relating to the occupancy and
surrender of certain premises by NDB.com. The agreement provides, among other
things, that NDB Group will purchase from the Company certain furniture,
fixtures and building equipment for a price of $0.5 million.
The Company executes a portion of its securities transactions through
subsidiaries of Taunus. Revenues earned by the Company related to such
transactions totaled $2.1 million in fiscal 2001.
The Company believes that its transactions with affiliates of Taunus have
been negotiated on an arms-length basis and have been entered into on terms no
more or less favorable than those available in similar transactions with other
unaffiliated third parties.
Certain Directors and executive officers, and members of their immediate
families, maintain margin trading accounts with the Company. Margin loans to
these individuals were made in the ordinary course of business on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons and did not involve more
than the normal risk of collectibility or present other unfavorable features.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF AUDITOR
Deloitte & Touche LLP, which has been the independent auditor for the
Company since 1975, has been appointed by the Board of Directors as auditor for
the Company and its subsidiaries for the fiscal year ending September 27, 2002.
This appointment is being presented to the stockholders for ratification. The
ratification of the appointment of auditor requires the affirmative vote of the
holders of a majority of the total shares of Common Stock present in person or
represented by proxy and entitled to vote at the Annual Meeting; provided that a
quorum of at least a majority of the outstanding shares of Class A Stock are
represented at the meeting. Abstentions will have the same effect as a vote
against ratification. Broker non-votes will not be considered shares entitled to
vote with respect to ratification of the appointment and will not be counted as
votes for or against the ratification. This proxy is being solicited with
respect to the ratification of the appointment of auditor only from the Class A
Stockholders. Proxies submitted pursuant to this solicitation will be voted for
the ratification of Deloitte & Touche LLP as the Company's auditors for the
fiscal year ending September 27, 2002, unless specified otherwise.
THE BOARD OF DIRECTORS RECOMMENDS THAT CLASS A STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
AUDITORS FOR THE FISCAL YEAR ENDING SEPTEMBER 27, 2002.
Page 19
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting and will be provided an opportunity to make a statement and to
respond to appropriate inquiries from stockholders.
AUDIT AND ALL OTHER FEES
Fees for the last fiscal year were: Audit $179,950 and All Other $382,423.
There were no fees for financial information systems design and implementation
during the last fiscal year. Audit fees relate to services rendered in
connection with the audit of the Company's consolidated financial statements and
the quarterly reviews of financial statements included in the Company's Forms
10-Q. All other fees relate to non-financial statement audit related services
and include fees for items such as statutory audits, business acquisitions, tax
consultations and accounting consultations. The Audit Committee considers
whether the provision of All Other services is compatible with maintaining the
auditor's independence, and has determined such services for fiscal 2001 were
compatible.
We have been advised by Deloitte & Touche LLP that neither the firm, nor
any member of the firm, has any financial interest, direct or indirect, in any
capacity in Ameritrade or its subsidiaries.
Page 20
REPORT OF THE AUDIT COMMITTEE
The following report is not deemed to be "soliciting material" or to be
"filed" with the SEC or subject to the SEC's proxy rules or to the liabilities
of Section 18 of the 1934 Act and the report shall not be deemed to be
incorporated by reference into any prior or subsequent filing by the Company
under the Securities Act of 1933 or the 1934 Act.
The Audit Committee evidenced its completion of and compliance with the
duties and responsibilities set forth in the adopted Audit Committee Charter
through a formal written report dated and executed as of December 6, 2001. The
report will be submitted to the Board of Directors of the Company at the
February 12, 2002 Board meeting. A copy of that report is set forth below.
December 6, 2001
The Board of Directors
Ameritrade Holding Corporation
Fellow Directors:
The Audit Committee conducted its oversight activities for Ameritrade Holding
Corporation and subsidiaries ("Ameritrade") in accordance with the duties and
responsibilities outlined in the audit committee charter. The Audit Committee,
with the assistance and support of the Corporate Audit Department and management
of Ameritrade Holding Corporation, has fulfilled its objectives, duties and
responsibilities as stipulated in the audit committee charter and has provided
adequate and appropriate independent oversight and monitoring of Ameritrade's
systems of internal control for the fiscal year ended September 28, 2001.
These activities included, but were not limited to, the following significant
accomplishments during the fiscal year ended September 28, 2001:
- - Reviewed and discussed the audited financial statements with management.
- - Discussed with the external auditors the matters requiring discussion by
Statement on Auditing Standards No. 61.
- - Received written disclosures and letter from the external auditors required by
Independence Standards Board Standard No. 1, and discussed with the auditors
their independence.
In reliance on the Committee's review and discussions of the matters referred to
above, the Audit Committee recommends the audited financial statements be
included in Ameritrade's Annual Report on Form 10-K for the year ended September
28, 2001, for filing with the Securities and Exchange Commission.
Respectfully submitted,
Ameritrade Holding Corporation Audit Committee
Charles L. Marinaccio, Chairman
Gene L. Finn
Thomas Y. Hartley
Robert T. Slezak
PROPOSAL 3
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors has declared advisable, and directed that there be
submitted to the stockholders of the Company for approval, an amendment to the
Company's Restated Certificate of Incorporation. In the event that stockholder
approval is received, Article FOURTH would be amended to increase the number of
shares of Class A Stock and Class B Stock that the Company is authorized to
issue to 370,000,000 and
Page 21
25,000,000, respectively. The text of Amendment No. 1 to the Restated
Certificate of Incorporation is set forth in Appendix A to this Proxy Statement.
Currently the Company has a total of 291,000,000 shares of capital stock
authorized, consisting of 270,000,000 shares of Class A Stock, 18,000,000 shares
of Class B Stock and 3,000,000 shares of Preferred Stock. As of the Record Date,
there were 199,831,088 shares of Class A Stock issued, 199,536,095 shares of
Class A Stock outstanding and 16,372,800 shares of Class B Stock issued and
outstanding. In addition, as of the Record Date, there were approximately 11.0
million shares of Class A Stock reserved for issuance pursuant to the Company's
employee benefit plans and outstanding convertible notes. No shares of Preferred
Stock were issued and outstanding. The Board of Directors has proposed this
amendment to ensure that a sufficient number of shares of Common Stock will be
available, if needed, in connection with future transactions that the Board of
Directors may consider advantageous to the Company, including stock splits
effected as stock dividends, public offerings and acquisitions or other business
combinations and transactions. An increase in the number of shares of Common
Stock authorized for issuance would be beneficial to the Company by providing
additional flexibility to respond to future business opportunities as they may
arise and by enabling the Board of Directors to issue additional shares of
Common Stock expeditiously if and when it deems such an issuance to be
advisable.
The additional shares of Common Stock will be available for issuance
without further action by the stockholders, except as required by Delaware law
or the rules of The Nasdaq National Market. Under current Nasdaq rules,
stockholder approval is generally required to issue shares of Common Stock, or
securities convertible into or exercisable for shares of Common Stock, in one or
a series of related transactions, if such shares represent 20% or more of the
voting power of outstanding shares of the Company. However, shares of Common
Stock issued for cash in a public offering are excluded from this stockholder
approval requirement, as are shares of Common Stock issued for cash in a private
offering at a price greater than or equal to both book value and market value of
the Common Stock. Nasdaq rules also require stockholder approval for an issuance
of shares that would result in a change of control of the Company as well as for
stock issuances in connection with certain benefit plans or related party
transactions. The additional shares of Common Stock would not be subject to any
preemptive rights and could be issued by the Company at any time and to any
person.
Increasing the authorized Common Stock of the Company may have certain
anti-takeover effects such as deterring certain mergers, tender offers and proxy
contests or other takeover attempts that some or a majority of stockholders may
deem to be in their best interests. Management is not aware of any specific
attempt to accumulate the Company's securities or to obtain control of the
Company by means of a merger, tender offer, proxy contest or other takeover
device. In addition, the proposed amendment is not part of a plan to adopt
further amendments to the Company's Certificate of Incorporation that would
affect the ability of third parties to take over or change control of the
Company.
Under Delaware corporate law, a proposed amendment to the Certificate of
Incorporation requires a vote by the holders of the outstanding shares of
capital stock that are entitled to vote thereon. In addition, the holders of the
outstanding shares of a class of capital stock are entitled to vote as a class
on a proposed amendment to the Certificate of Incorporation if the amendment
would increase or decrease the aggregate number of authorized shares of such
class. Therefore, the proposed amendment to the Restated Certificate of
Incorporation must be approved by the affirmative vote of a majority of the
outstanding shares of the Class A Stock and Class B Stock voting together as a
single class and by a majority of the outstanding shares of the Class A Stock
and the Class B Stock each voting as a separate class. As a result, abstentions
and broker non-votes will have the same effect as a vote against the proposed
amendment. This proxy is being solicited with respect to the proposed amendment
to the Restated Certificate of Incorporation only from the holders of
outstanding Class A Stock. Proxies submitted pursuant to this solicitation will
be voted in favor of the proposed amendment to the Restated Certificate of
Incorporation, unless specified otherwise.
If the proposed amendment to the Restated Certificate of Incorporation is
approved, the appropriate officers of the Company will execute and file with the
Secretary of State of the State of Delaware the
Page 22
Certificate of Amendment to the Restated Certificate of Incorporation in the
form set forth in Appendix A to this Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE CLASS A STOCKHOLDERS VOTE "FOR"
THE APPROVAL OF THE CERTIFICATE OF AMENDMENT TO THE RESTATED CERTIFICATE OF
INCORPORATION.
PROPOSAL 4
AMENDMENT TO THE COMPANY'S 1996 LONG-TERM INCENTIVE PLAN
INTRODUCTION
The stockholders are being requested to consider and approve an amendment,
restatement and continuation of the Company's 1996 Long-Term Incentive Plan, as
previously amended and restated (the "Long-Term Incentive Plan"), (1) to
increase the maximum aggregate number of shares of the Class A Stock reserved
for issuance under the Long-Term Incentive Plan from 9,600,000 to 20,000,000 (2)
to increase the maximum aggregate number of shares of the Class A Stock that may
be granted or awarded to any participant under the Long-Term Incentive Plan in a
calendar year from 1,920,000 to 6,000,000, and (3) to permit grants of stock
options at less than fair market value, but no less than 75 percent of fair
market value.
The Long-Term Incentive Plan was initially adopted by the Company effective
as of October 1, 1996. The purposes of the Long-Term Incentive Plan are to
increase stockholder value and to advance the interests of the Company by
awarding equity and performance-based incentives designed to attract, retain and
motivate employees.
As of September 28, 2001, there were 2,286,254 shares available for future
grants under the Long-Term Incentive Plan. The Board of Directors has proposed
the amendments to the Long-Term Incentive Plan to ensure that a sufficient
number of shares are available for future grants and awards under the Long-Term
Incentive Plan to attract, retain and motivate employees, and to ensure that a
sufficient number of shares are available for grants pursuant to the Company's
employment agreement, dated as of March 1, 2001, with Joseph H. Moglia, the
Company's Chief Executive Officer (the "CEO Employment Agreement"), and to
ensure that grants to Mr. Moglia can be made in accordance with the terms of the
CEO Employment Agreement. The CEO Employment Agreement requires a grant to Mr.
Moglia of options to purchase two percent (2%) of the then-outstanding shares of
the Common Stock, if Mr. Moglia is employed by the Company on the second
anniversary of the date of the CEO Employment Agreement. This grant would be
made prior to the second anniversary of the date of the CEO Employment Agreement
if, prior to such second anniversary, a change in control of the Company (as
defined under the CEO Employment Agreement) occurs or if Mr. Moglia's employment
with the Company is terminated by the Company without cause or under
circumstances that constitute a constructive dismissal (as defined under the CEO
Employment Agreement). In this case, however, the options will be granted at 80
percent of the fair market value of a share of stock on the date of the grant.
At September 28, 2001, the closing sale price per share of Class A Stock
was $4.01.
The material features of the Long-Term Incentive Plan are outlined below.
This summary of the Long-Term Incentive Plan is qualified in its entirety by
reference to the Long-Term Incentive Plan, a copy of which is attached as
Appendix B.
LONG-TERM INCENTIVE PLAN PROVISIONS
The Long-Term Incentive Plan authorizes grants of incentive stock options,
nonqualified stock options, restricted stock awards, stock appreciation rights
and performance units to employees of the Company and its subsidiaries. All
employees of the Company and its subsidiaries are eligible to participate in the
Long-Term Incentive Plan. At September 28, 2001, the Company and its
subsidiaries had 1,970 full-time equivalent employees. The Long-Term Incentive
Plan is administered by the Company's Board of Directors (the
Page 23
"Board") or the Compensation Committee of the Board. The Board or the
Compensation Committee determines the employees who receive benefits under the
Long-Term Incentive Plan and the terms of such benefits. The Board or the
Compensation Committee may also designate to a Board member the authority to
make certain grants under the Long-Term Incentive Plan. In the event of such
delegation, that individual will have the same authorities as the Board of the
Compensation Committee with respect to the awards made by such individual under
the Long-Term Incentive Plan.
Stock Options. Options granted under the Long-Term Incentive Plan may be
either incentive stock options or nonqualified stock options, as determined in
the discretion of the Board or Compensation Committee. An incentive stock option
is a stock option that satisfies the requirements specified in section 422(b) of
the Internal Revenue Code (the "Code"). To the extent that the aggregate fair
market value of the stock with respect to which incentive stock options are
exercisable for the first time by any individual during any calendar year (under
all plans of the Company and its subsidiaries) exceeds $100,000 or to the extent
the options otherwise do not satisfy the requirements of section 422 of the
Code, such options shall be treated as nonqualified stock options, to the extent
required by section 422 of the Code. The price at which shares of stock may be
purchased upon the exercise of an option cannot be less than the fair market
value of the stock on the date on which the option is granted; provided,
however, that any option which is granted after the Long-Term Incentive Plan, as
amended, is approved by the stockholders, may be granted with an option price
that is less than fair market value (but in no event less than 75% of fair
market value). Should the Board or Compensation Committee grant an option with
an option price that is less than fair market value, any such option will not
qualify as an incentive stock option. The Company has granted nonqualified stock
options, but has not granted incentive stock options pursuant to the Long-Term
Incentive Plan.
Stock Awards. A stock award under the Long-Term Incentive Plan is a grant
of shares of stock to a participant, the earning, vesting or distribution of
which is subject to one or more conditions established by the Board or
Compensation Committee. Stock awards may provide for delivery of the shares of
stock at the time of grant, or may provide for a deferred delivery date. The
Company has not granted any stock awards pursuant to the Long-Term Incentive
Plan.
Stock Appreciation Rights. Stock appreciation rights entitle participants
to receive, in cash or stock, value equal to all or a portion of the excess of
the fair market value of a specified number of shares of stock at the time of
exercise over a specified price not less than the fair market value of the stock
at the time the stock appreciation right is granted. The Company has not granted
any stock appreciation rights pursuant to the Long-Term Incentive Plan.
Performance Units. The award of performance units under the Long-Term
Incentive Plan entitles the participant to receive value for the units at the
end of a performance period to the extent provided under the award. The number
of units earned, and the value received for the awards, will be contingent on
the degree to which the performance measures established at the time of grant of
the award are met. The Board or Compensation Committee determines the terms and
conditions of performance unit awards. The Company's Executive Deferred
Compensation Program forms a part of the Long-Term Incentive Plan and awards
under that program are performance units under the Long-Term Incentive Plan.
FEDERAL INCOME TAX CONSEQUENCES
The following summary generally describes the federal income tax
consequences to participants and the Company of options granted under the
Long-Term Incentive Plan and is based on current laws and regulations. The
summary is general in nature and is not intended to cover all tax consequences
that could apply to a particular participant or the Company.
No federal taxable income is recognized by a Long-Term Incentive Plan
participant upon the grant of a nonqualified stock option or stock appreciation
right. A holder of a nonqualified option will, however, recognize ordinary
income in the year in which the option is exercised in the amount by which the
fair market value of the purchased shares on the date of exercise exceeds the
option exercise price. Additionally, any appreciation in the value of the
purchased shares after the date of exercise will be taxed as capital gains when
Page 24
such stock is ultimately sold. A holder of a stock appreciation right will
recognize ordinary income in the year in which the stock appreciation right is
exercised equal to the amount paid to the participant upon such exercise. The
Company is generally entitled to a compensation expense deduction at the time
when such option or stock appreciation right is exercised equal in amount to the
ordinary income recognized by the participant.
If the option exercise price under any nonqualified stock option is paid
for by surrendering shares of Common Stock previously acquired, then the
participant will recognize ordinary income on the exercise as described above
(any shares acquired under the option in excess of the number of shares
surrendered being treated as having been acquired without consideration), but
will not recognize any taxable gain or loss on the difference between the
participant's basis in the surrendered shares and their current fair market
value. For federal income tax purposes, newly acquired shares equal to the
number of shares surrendered will have the same basis and holding period as the
surrendered shares. Any additional newly acquired shares will have a basis equal
to their fair market value at exercise and their holding period will begin at
the date of exercise as described above.
With respect to an incentive stock option that is issued under the
Long-Term Incentive Plan, the participant will generally not recognize any
taxable income at the time of grant or at the time the option is exercised
provided the option is exercised while the participant is an employee or within
three months thereafter, but the participant must treat the excess of the fair
market value on the date of exercise over the exercise price as an item of tax
adjustment for alternative minimum tax purposes. If the shares acquired as a
result of the exercise are held for a period of one year after the incentive
stock option is exercised and a period of two years after the incentive stock
option is granted, the disposition of such shares will ordinarily result in
capital gains or losses to the holder for federal income tax purposes equal to
the difference between the amount realized on disposition of the shares and the
exercise price. If the participant sells the shares acquired as a result of the
incentive stock option exercise prior to the expiration of the one and two year
holding periods described above, a portion of any gain resulting from such sale
will be taxed as ordinary income. The portion so taxed is equal to the excess of
the fair market value of the shares when the incentive stock option is exercised
over the option exercise price, or if less, the entire gain. Any additional gain
upon the sale of the stock will be taxed as capital gains. The Company will be
entitled to deduct as compensation expense only the amount of appreciation
treated as ordinary income by the participant.
Any compensation expense attributable to stock options which do not satisfy
the requirements for performance-based compensation under section 162(m) of the
Code and which exceeds $1 million when aggregated with other non-excludable
compensation will not be deductible by the Company if paid to the Chief
Executive Officer or one of the other Named Executive Officers.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Each of the executive officers of the Company has a direct interest in the
approval of the Long-Term Incentive Plan, which will make additional shares of
Common Stock available to employees and executive officers.
PLAN BENEFITS
The following table sets forth grants of options made under the Plan during
the fiscal year ended September 28, 2001 to each person serving as Chief
Executive Officer at any time during the fiscal year ended September 28, 2001
and to each of the Named Executive Officers for the fiscal year ended September
28, 2001.
Page 25
HISTORICAL PLAN BENEFITS
<Table>
<Caption>
NUMBER OF SHARES
UNDERLYING OPTIONS
NAME AND POSITION DOLLAR VALUE ($)(1) GRANTED (#)
- ----------------- -------------------- ------------------
J. Joe Ricketts............................................. -- --
Chairman and Founder
Joseph H. Moglia............................................ -- 1,816,132
Chief Executive Officer
Vincent Passione............................................ -- 350,000
President, Institutional Client Division
John R. MacDonald........................................... -- 100,000
Executive Vice President, Chief Financial Officer and
Treasurer
J. Peter Ricketts........................................... -- 100,000
President, Private Client Division, Vice Chairman and
Corporate Secretary
Kurt D. Halvorson........................................... -- 100,000
Executive Vice President, Chief Administrative Officer
All current executive officers, as a group.................. -- 2,621,832
All current directors who are not executive officers, as a
group..................................................... -- --
All employees who are not current executive officers, as a
group..................................................... -- 2,352,945
</Table>
- ---------------
(1) Based on the market price of $4.01 per share, which was the closing price
per share of the Company's Class A Stock on the Nasdaq National Market on
the last day of fiscal 2001, less the exercise price payable for such
shares.
REGISTRATION
The Long-Term Incentive Plan was registered under the 1933 Act on Form S-8.
Immediately following the Annual Meeting, the Company intends to amend the
registration statement to include the additional shares issuable under the
Long-Term Incentive Plan.
BOARD RECOMMENDATION AND REQUIRED VOTE
Approval of the amendment to the Plan requires the affirmative vote of the
holders of a majority of the total shares of Common Stock present in person or
represented by proxy and entitled to vote at the Annual Meeting, provided that a
quorum is present. Abstentions will have the same effect as a vote against
approval. Broker non-votes will not be considered shares entitled to vote with
respect to approval of the amendment and will not be counted as votes for or
against approval. This proxy is being solicited with respect to the approval of
the Long-Term Incentive Plan amendment only from the Class A Stockholders.
Proxies submitted pursuant to this solicitation will be voted for the approval
of the Long-Term Incentive Plan amendment unless otherwise specified.
THE BOARD OF DIRECTORS RECOMMENDS THAT CLASS A STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE AMENDED AND RESTATED 1996 LONG-TERM INCENTIVE PLAN.
PROPOSAL 5
Page 26
PROPOSED APPROVAL OF A NEW PERFORMANCE-BASED
MANAGEMENT INCENTIVE PLAN
The Stockholders are being requested to consider and approve the adoption
of a new performance-based bonus plan, Ameritrade Holding Corporation 2002
Management Incentive Plan, (the "MIP") that would determine the bonus payments
for the Company's Executive Officers and select senior management. Approximately
10 Executive Officers and 25 other members of senior management may be eligible
to participate in the MIP, as determined by the Compensation Committee. The
Compensation Committee will consider employees' level of responsibility and the
potential impact on the Company of their performance in determining
participation in the MIP. This summary of the MIP is qualified in its entirety
by reference to the MIP, a copy of which is attached as Appendix C. The MIP
would be administered by the Compensation Committee of the Board of Directors.
The purpose of this program is two-fold.
1. To enhance stockholder value by linking Company performance
directly to incentive compensation; and
2. To maximize Company compensation tax deductibility.
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to publicly-held companies for compensation paid to certain executive
officers if that compensation exceeds $1 million. With stockholder approval and
if certain other administrative guidelines are met, this compensation that is
normally non-deductible, will be deductible. For further details, see the
Compensation Committee Report. The Company reserves the right to amend the MIP
at any time, without stockholder approval, as it applies to associates not
subject to Section 162(m). The maximum amount payable to any individual in the
MIP is $5 million.
PERFORMANCE GOALS
In all areas of compensation, the Company seeks to maintain a close
relationship between stockholder interests and management incentives. In order
to accomplish the above goal, the Company will use objective, financially based
criteria. These criteria will include one or more of the following: earnings per
share; earnings yield; net income; operating margin; return on assets; return on
equity; revenue; and total stockholder return and growth rates for each of the
above measures. At the beginning of each fiscal year, a threshold performance
level will be established. If this performance is not met, no compensation is
payable under the plan. As participants meet and exceed established goals,
potential compensation increases. However, as the performance increases the
dollars allocated to the incentive pool, stockholders retain an increased
percentage of the growth.
PAYMENT
At the end of the fiscal year, the Compensation Committee shall certify the
extent to which applicable performance goals have been met and based on
performance, individual incentive compensation will be determined and approved
shortly after the end of each fiscal year. The Compensation Committee may, at
its discretion, reduce any amount determined by the calculation.
THE BOARD OF DIRECTORS RECOMMENDS THAT CLASS A STOCKHOLDERS VOTE "FOR"
ADOPTION OF THE PROPOSED 2002 MANAGEMENT INCENTIVE PLAN.
SUBMISSION OF STOCKHOLDER PROPOSALS
Pursuant to the Company's Bylaws, in order to be included in the Company's
Proxy Statement relating to its next annual meeting, stockholder proposals must
be submitted by September , 2002 and not prior to August , 2002 to the
Secretary of the Company at the Company's principal executive offices. Such
proposals must set forth (1) a brief description of the business desired to be
brought before the annual meeting and the reason for conducting such business at
the annual meeting, (2) the name and address of the stockholder proposing such
business, (3) the class and number of shares of the Common Stock beneficially
Page 27
owned by such stockholder and (4) any material interest of such stockholder in
such business. The inclusion of any such proposal in such proxy material shall
be subject to the requirements of the proxy rules adopted under the 1934 Act.
The proxy solicited by the Board of Directors relating to the Company's next
annual meeting will confer discretionary authority to vote on a stockholder
proposal if the Secretary of the Company receives notice of that proposal after
September 16, 2002.
OTHER MATTERS
Management does not now intend to bring before the Annual Meeting any
matters other than those disclosed in the Notice of Annual Meeting of
Stockholders and it does not know of any business which persons, other than the
management, intend to present at the meeting. Should any other matters requiring
a vote of the stockholders arise, the proxies in the enclosed form confer
discretionary authority on the Board of Directors to vote on any other matter
proposed by stockholders in accordance with their best judgment. Votes against
proposals or abstentions from voting on proposals will not be used to adjourn or
postpone the Annual Meeting.
The Company will bear the cost of soliciting proxies. To the extent
necessary, proxies may be solicited by Directors, officers and employees of the
Company in person, by telephone or through other forms of communication, but
such persons will not receive any additional compensation for such solicitation.
The Company will reimburse brokerage firms, banks and other custodians, nominees
and fiduciaries for reasonable expenses incurred by them in sending proxy
materials to the beneficial owners of the Company's shares. In addition to
solicitation by mail, the Company has made these materials available via the
Internet at www.amtd.com. The Company will supply banks, brokers, dealers and
other custodian nominees and fiduciaries with proxy materials to enable them to
send a copy of such materials by mail to each beneficial owner of shares of the
Class A Stock which they hold of record and will, upon request, reimburse them
for their reasonable expenses in so doing.
By Order of the Board of Directors
/s/ J. Peter Ricketts
J. Peter Ricketts, Secretary
Omaha, Nebraska
January , 2002
Page 28
APPENDIX A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
AMERITRADE HOLDING CORPORATION (the "Corporation"), a corporation organized
and existing under and by virtue of the General Corporation Law of the State of
Delaware, as amended (the "DGCL") DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation adopted resolutions
pursuant to Section 424(b)(1) of the DGCL proposing and declaring advisable the
following amendment to the Restated Certificate of Incorporation of the
Corporation:
RESOLVED, that the Board of Directors deems it to be in the best
interest of the Corporation to amend Article Fourth of the Corporation's
Restated Certificate of Incorporation (the "Charter") to read in its
entirety as follows:
FOURTH: The total number of shares of capital stock which the
Corporation has authority to issue is 398,000,000, consisting of:
(1) 3,000,000 shares of Preferred Stock, par value $1.00 per share
(the "Preferred Stock");
(2) 370,000,000 shares of Class A Common Stock, par value $0.01 per
share (the "Class A Stock"); and
(3) 25,000,000 shares of Class B Common Stock, par value $0.01 per
share (the "Class B Stock").
The Class A Common Stock and the Class B Stock are hereafter
collectively referred to as the "Common Stock."
SECOND: That stockholders of the Corporation approved said amendment in
accordance with the provisions of Section 242(b)(2) of the DGCL at a meeting
held on February 12, 2002.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be executed by its duly authorized officer this -- day of
February, 2002.
AMERITRADE HOLDING CORPORATION
By:
------------------------------------
J. Peter Ricketts
Secretary
Page 29
APPENDIX B
AMERITRADE HOLDING CORPORATION
1996 LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF NOVEMBER 13, 2001)
Page 30
AMERITRADE HOLDING CORPORATION
1996 LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF NOVEMBER 13, 2001)
1. History and Purpose. The Ameritrade Holding Corporation 1996 Long-Term
Incentive Plan (the "Plan") was previously adopted effective as of October 1,
1996 to increase stockholder value and to advance the interests of Ameritrade
Holding Corporation ("Ameritrade") and its subsidiaries (collectively, the
"Company") by awarding equity and performance based incentives designed to
attract, retain and motivate employees. The was amended, restated and continued
effective as of April 1, 2000. The following provisions constitute a further
amendment, restatement and continuation of the Plan effective as of November 13,
2001. As used in the Plan, the term "subsidiary" means any business, whether or
not incorporated, in which Ameritrade has an ownership interest. The amendment,
restatement and continuation of the Plan in the form hereof is conditioned upon
shareholder approval. The date of such approval shall be referred to herein as
the "Effective Date".
2. Administration.
2.1. Administration by Board or Committee. The Plan shall be administered
by the entire Board of Directors of Ameritrade (the "Board") or a Committee of
the Board (the "Committee") consisting of two or more non-employee directors
within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and "outside directors" within the
meaning of Treas. Reg. sec. 1.162-27(e)(3). Notwithstanding the foregoing, the
Board or the Committee, as applicable and subject to the terms and conditions of
the Plan, may delegate to any individual (or individuals) who are then serving
as a member(s) of the Board (the "Committee Designate") the authority to act as
a subcommittee of the Board or Committee, as applicable, for purposes of making
grants or awards under the Plan to such employees of the Company and its
subsidiaries who are not subject to section 16(a) of the Exchange Act as the
Committee Designate shall determine in his or her sole discretion and the
Committee Designate shall have the authority and duties of the Committee with
respect to such grants or awards.
2.2. Authority. Subject to the provisions of the Plan, the Board or the
Committee shall have the authority to (a) manage and control the operation of
the Plan, (b) interpret and construe the provisions of the Plan, and prescribe,
amend and rescind rules and regulations relating to the Plan, (c) make Awards
under the Plan, in such forms and amounts and subject to such restrictions,
limitations and conditions as it deems appropriate, including, without
limitation, Awards which are made in combination with or in tandem with other
Awards (whether or not contemporaneously granted) or compensation or in lieu of
current or deferred compensation, (d) modify the terms of, cancel and reissue,
or repurchase outstanding Awards, (e) prescribe the form of agreement,
certificate or other instrument evidencing any Award under the Plan, (f) correct
any defect or omission and reconcile any inconsistency in the Plan or in any
Award hereunder, and (g) make all other determinations and take all other
actions as it deems necessary or desirable for the implementation and
administration of the Plan; provided, however, that in no event shall the Board
or the Committee cancel or modify any outstanding Option for the purpose of
reissuing an additional option to the option holder at a lower exercise price.
The determination of the Board or the Committee on matters within its authority
shall be conclusive and binding on the Company and all other persons.
3. Participation. Subject to the terms and conditions of the Plan, the
Board or the Committee shall determine and designate, from time to time, from
among the employees of the Company and its subsidiaries those persons who will
be granted one or more Awards under the Plan, and thereby become "Participants"
in the Plan. In the discretion of the Board or the Committee, and subject to the
terms of the Plan, a Participant may be granted any Award permitted under the
provisions of the Plan, and more than one Award may be granted to a Participant.
Except as otherwise agreed by the Board or the Committee and the Participant, or
except as otherwise provided in the Plan, an Award under the Plan shall not
affect any previous Award under the Plan or an award under any other plan
maintained by the Company. For purposes of the Plan, the term "Award" shall mean
any award or benefit granted to any Participant under the Plan.
Page 32
4. Definition of Fair Market Value. For purposes of the Plan, the "Fair
Market Value" of a share of common stock of Ameritrade ("Stock") as of any date
shall be the closing market composite price for such Stock as reported on NASDAQ
on that date or, if Stock is not traded on that date, on the next preceding date
on which Stock was traded.
5. Shares Subject to the Plan.
5.1. Number of Shares Reserved. The shares of Stock with respect to which
Awards may be made under the Plan shall be shares currently authorized but
unissued or currently held or subsequently acquired by Ameritrade as treasury
shares, including shares purchased in the open market or in private
transactions. Subject to the provisions of subsection 5.4, the number of shares
of Stock which may be issued with respect to Awards under the Plan shall not
exceed 20,000,000 shares in the aggregate.
5.2. Individual Limits on Awards. Notwithstanding any other provision of
the Plan to the contrary, the maximum aggregate number of shares of Stock that
may be granted or awarded to any Participant under the Plan for any calendar
year shall be 6,000,000 and the maximum aggregate cash payout with respect to
grants or awards under the Plan in any calendar year to any Covered Employee
shall be $2,500,000. The determination made under the foregoing provisions of
this subsection 5.2 shall be based on the shares subject to the Awards at the
time of grant, regardless of when the Awards become exercisable.
5.3. Reusage of Shares.
(a) In the event of the exercise or termination (by reason of forfeiture,
expiration, cancellation, surrender or otherwise) of any Award under the Plan,
that number of shares of Stock that was subject to the Award but not delivered
shall again be available for Awards under the Plan.
(b) In the event that shares of Stock are delivered under the Plan as a
Stock Award (as defined in Section 8) and are thereafter forfeited or reacquired
by the Company pursuant to rights reserved upon the award thereof, such
forfeited or reacquired shares shall again be available for awards under the
Plan.
(c) Notwithstanding the provisions of paragraphs (a) or (b), the following
shares shall not be available for reissuance under the Plan: (i) shares with
respect to which the Participant has received the benefits of ownership (other
than voting rights), either in the form of dividends or otherwise; (ii) shares
which are withheld from any award or payment under the Plan to satisfy tax
withholding obligations (as described in subsection 11.4) (iii) shares which are
surrendered to fulfill tax obligations (as described in subsection 11.4); and
(iv) shares which are surrendered in payment of the Option Price (as defined in
subsection 6.3) upon the exercise of an Option.
5.4. Adjustments to Shares Reserved. In the event of any merger,
consolidation, reorganization, recapitalization, spinoff, stock dividend, stock
split, reverse stock split, exchange or other distribution with respect to
shares of Stock or other change in the corporate structure or capitalization
affecting the Stock, the type and number of shares of stock which are or may be
subject to awards under the Plan and the terms of any outstanding awards
(including the price at which shares of stock may be issued pursuant to an
outstanding award) shall be equitably adjusted by the Board or the Committee, in
its sole discretion, to preserve the value of benefits awarded or to be awarded
to Participants under the Plan.
6. Options.
6.1. Definitions. The grant of an "Option" under this Section 6 entitles
the Participant to purchase shares of Stock at the Option Price (determined
under subsection 6.3), subject to the terms of this Section 6. Options granted
under this Section 6 may be either Incentive Stock Options or Non-Qualified
Stock Options, as determined in the discretion of the Board or the Committee. An
"Incentive Stock Option" is an Option that is intended to satisfy the
requirements applicable to an "incentive stock option" described in section
422(b) of the Code. A "Non-Qualified Option" is an Option that is not intended
to be an "incentive stock option" as that term is described in section 422(b) of
the Code.
6.2. Restrictions Relating to Incentive Stock Options. To the extent that
the aggregate fair market value of Stock with respect to which Incentive Stock
Options are exercisable for the first time by any
Page 33
individual during any calendar year (under all plans of the Company) exceeds
$100,000, such options shall be treated as Non-Qualified Stock Options, to the
extent required by section 422 of the Code.
6.3. Option Price. The price at which shares of Stock may be purchased
upon the exercise of an Option (the "Option Price") shall be established by the
Board or the Committee or shall be determined by a method established by the
Board or the Committee at the time the Option is granted; provided, however,
that in no event shall such price be less than the greater of: (i) 100% of the
Fair Market Value (as defined in Section 4) of a share of Stock as of the date
on which the Option is granted; or (ii) the par value of a share of Stock on
such date. Notwithstanding the foregoing, any Option granted on or after the
Effective Date may have an Option Price which is less than Fair Market Value
(but in no event less than 75% of Fair Market Value) provided such Option is
granted by the Committee (and not any person acting in the capacity of the
Committee hereunder).
6.4. Exercise. Except as otherwise expressly provided in the Plan, an
Option may be exercised, in whole or in part, in accordance with terms and
conditions established by the Board or the Committee at the time of grant;
provided, however, that no Option shall be exercisable after the Expiration Date
(as defined in Section 11) applicable to that Option and no Option or any
portion thereof will first become exercisable after the Participant's
termination of employment with the Company. The full Option Price of each share
of Stock purchased upon the exercise of any Option shall be paid at the time of
such exercise (except that, in the case of a cashless exercise arrangement
approved by the Committee, payment may be made as soon as practicable after the
exercise) and, as soon as practicable thereafter, a certificate representing the
shares so purchased shall be delivered to the person entitled thereto. The
Option Price shall be payable in cash or in shares of Stock (valued at Fair
Market Value as of the day of exercise), or in any combination thereof, as
determined by the Board or the Committee and, to the extent provided by the
Committee, a Participant may elect to pay the Option Price upon the exercise of
an Option through a cashless exercise arrangement. The exercise of an Option
will result in the surrender of the corresponding rights under a tandem Stock
Appreciation Right, if any.
6.5. Post-Exercise Limitations. The Board or the Committee, in its
discretion, may impose such restrictions on shares of Stock acquired pursuant to
the exercise of an Option (including stock acquired pursuant to the exercise of
a tandem Stock Appreciation Right) as it determines to be desirable, including,
without limitation, restrictions relating to disposition of the shares and
forfeiture restrictions based on service, performance, Stock ownership by the
Participant, and such other factors as the Board or the Committee determines to
be appropriate.
6.6. Reload Provision. In the event the Participant exercises an Option
and pays all or a portion of the Option Price in Stock, in the manner permitted
by subsection 6.4, such Participant (either pursuant to the terms of the Option
Award, or pursuant to the exercise of Committee discretion at the time the
Option is exercised) may be issued a new Option to purchase additional shares of
Stock equal to the number of shares of Stock surrendered to the Company in such
payment. Such new Option shall have an exercise price equal to the Fair Market
Value per share on the date such new Option is granted, shall first be
exercisable six months from the date of grant of the new Option and shall have
an Expiration Date on the same date as the Expiration Date of the original
Option so exercised by payment of the Option Price in shares of Stock.
7. Stock Appreciation Rights.
7.1. Definition. Subject to the terms of this Section 7, a "Stock
Appreciation Right" granted under the Plan entitles the Participant to receive,
in cash or Stock, value equal to all or a portion of the excess of: (a) the Fair
Market Value of a specified number of shares of Stock at the time of exercise;
over (b) a specified price which shall not be less than 100% of the Fair Market
Value of the Stock at the time the Stock Appreciation Right is granted, or, if
granted in tandem with an Option, the exercise price with respect to shares
under the tandem Option.
7.2. Exercise. If a Stock Appreciation Right is not in tandem with an
Option, then the Stock Appreciation Right shall be exercisable in accordance
with the terms established by the Board or the Committee at the time of grant;
provided, however, that no Stock Appreciation Right shall be exercisable
Page 34
after the Expiration Date applicable to that Stock Appreciation Right and no
Stock Appreciation Right or any portion thereof will first become exercisable
after the Participant's termination of employment with the Company. If a Stock
Appreciation Right is in tandem with an Option, then the Stock Appreciation
Right shall be exercisable at the time the tandem Option is exercisable. The
exercise of a Stock Appreciation Right will result in the surrender of the
corresponding rights under the tandem Option.
7.3. Settlement of Award. Upon the exercise of a Stock Appreciation
Right, the value to be distributed to the Participant, in accordance with
subsection 7.1, shall be distributed in shares of Stock (valued at their Fair
Market Value at the time of exercise), in cash, or in a combination thereof, in
the discretion of the Board or the Committee.
7.4. Post-Exercise Limitations. The Board or the Committee, in its
discretion, may impose such restrictions on shares of Stock acquired pursuant to
the exercise of a Stock Appreciation Right as it determines to be desirable,
including, without limitation, restrictions relating to disposition of the
shares and forfeiture restrictions based on service, performance, ownership of
Stock by the Participant, and such other factors as the Board or the Committee
determines to be appropriate.
8. Stock Awards.
8.1. Definition. Subject to the terms of this Section 4, a "Stock Award"
under the Plan is a grant of shares of Stock to a Participant, the earning,
vesting or distribution of which is subject to one or more conditions
established by the Board or the Committee. Such conditions may relate to events
(such as performance or continued employment) occurring before or after the date
the Stock Award is granted, or the date the Stock is earned by, vested in or
delivered to the Participant. If the vesting of Stock Awards is subject to
conditions occurring after the date of grant, the period beginning on the date
of grant of a Stock Award and ending on the vesting or forfeiture of such Stock
(as applicable) is referred to as the "Restricted Period". Stock Awards may
provide for delivery of the shares of Stock at the time of grant, or may provide
for a deferred delivery date.
8.2. Terms and Conditions of Awards. Beginning on the date of grant (or,
if later, the date of distribution) of shares of Stock comprising a Stock Award,
and including any applicable Restricted Period, the Participant, as owner of
such shares, shall have the right to vote such shares; provided, however, that
payment of dividends with respect to Stock Awards shall be subject to the
following:
(a) On and after date that a Participant has a fully earned and vested
right to the shares comprising a Stock Award, and the shares have been
distributed to the Participant, the Participant shall have all dividend
rights (and other rights) of a stockholder with respect to such shares.
(b) Prior to the date that a Participant has a fully earned and vested
right to the shares comprising a Stock Award, the Board or the Committee,
in its sole discretion, may award Dividend Rights (as defined below) with
respect to such shares.
(c) On and after the date that a Participant has a fully earned and
vested right to the shares comprising a Stock Award, but before the shares
have been distributed to the Participant, the Participant shall be entitled
to Dividend Rights with respect to such shares, at the time and in the form
determined by the Board or the Committee.
A "Dividend Right" with respect to shares comprising a Stock Award shall entitle
the Participant, as of each dividend payment date, to an amount equal to the
dividends payable with respect to a share of Stock multiplied by the number of
such shares. Dividend Rights shall be settled in cash or in shares of Stock, as
determined by the Board or the Committee, shall be payable at the time and in
the form determined by the Board or the Committee, and shall be subject to such
other terms and conditions as the Board or the Committee may determine.
9. Performance Units.
9.1. Definition. Subject to the terms of this Section 9, the Award of
"Performance Units" under the Plan entitles the Participant to receive value for
the units at the end of a Performance Period to the extent
Page 35
provided under the Award. The number of units earned, and the value received for
them, will be contingent on the degree to which the performance measures
established at the time of grant of the Award are met. For purposes of the Plan,
the "Performance Period" with respect to the award of any Performance Units
shall be the period over which the applicable performance is to be measured.
9.2. Terms and Conditions of Awards. For each Participant, the Board or
the Committee will determine the value of units, which may be stated either in
cash or in units representing shares of Stock; the performance measures used for
determining whether the Performance Units are earned; the Performance Period
during which the performance measures will apply; the relationship between the
level of achievement of the performance measures and the degree to which
Performance Units are earned; whether, during or after the Performance Period,
any revision to the performance measures or Performance Period should be made to
reflect significant events or changes that occur during the Performance Period;
and the number of earned Performance Units that will be paid in cash and the
number of earned Performance Units to be paid in shares of Stock.
9.3. Settlement. Settlement of Performance Units shall be subject to the
following:
(a) The Board or the Committee will compare the actual performance to
the performance measures established for the Performance Period and
determine the number of units as to which settlement is to be made, and the
value of such units.
(b) Settlement of units earned shall be wholly in cash, wholly in
Stock or in a combination of the two, to be distributed in a lump sum or
installments, as determined by the Board or the Committee.
(i) For Performance Units stated in units representing shares of
Stock when granted, one share of Stock will be distributed for each unit
earned, or cash will be distributed for each unit earned equal to either
(A) the Fair Market Value of a share of Stock at the end of the
Performance Period or (B) the average Stock value over a period
determined by the Board or the Committee.
(ii) For Performance Units stated in cash when granted, the value
of each unit earned will be distributed in its initial cash value, or
shares of Stock will be distributed based on the cash value of the units
earned divided by (A) the Fair Market Value of a share of Stock at the
end of the Performance Period or (B) the average Stock value over a
period determined by the Board or the Committee.
(c) Shares of Stock distributed in settlement of the units shall be
subject to such vesting requirements and other conditions, if any, as the
Board or the Committee shall determine.
9.4. Termination During Performance Period. If a Participant's
termination of employment with the Company occurs during a Performance Period
with respect to any Performance Units granted to him, the Board or the Committee
may determine that the Participant will be entitled to settlement of all or any
portion of the Performance Units as to which he would otherwise be eligible, and
may accelerate the determination of the value and settlement of such Performance
Units or make such other adjustments as the Board or the Committee, in its sole
discretion, deems desirable.
10. Expiration of Awards. The "Expiration Date" with respect to an Award
under the Plan means the date established as the Expiration Date by the Board or
the Committee; provided, however, that, except as otherwise specifically
provided by the Committee, the Expiration Date with respect to any Award under
the Plan shall not be later than the earliest to occur of:
(a) the ten-year anniversary of the date on which the Award is
granted;
(b) if the Participant's termination of employment with the Company
occurs on account of disability (as defined below), the one-year
anniversary of such termination of employment;
(c) if the Participant's termination of employment with the Company
occurs by reason of retirement (as defined below), the one-year anniversary
of such termination of employment;
(d) the one-year anniversary of the Participant's death;
Page 36
(e) if the Participant's termination of employment with the Company
occurs for reasons other than retirement, death or disability, the
three-month anniversary of such termination of employment; or
(f) in the case of any Option which is intended to constitute an
Incentive Stock Option, the last day on which such Option may be exercised
in accordance with the provisions of section 422 of the Code.
If a Stock Appreciation Right is in tandem with an Option, then the "Expiration
Date" for the Stock Appreciation Right shall be the Expiration Date for the
related Option. In no event shall the Expiration Date for any Award be later
than the ten-year anniversary of the date on which the Award is granted. For
purposes of the Plan, a Participant's employment with the Company shall be
considered to have terminated on account of disability if, at the time of
termination, the Participant is eligible for benefits under the applicable
Company's long-term disability plan and a Participant's employment with the
Company shall be considered to have terminated on account of retirement if his
employment terminates after the Participant has attained age 55 and completed at
least 10 years of continuous service with the Company.
11. Miscellaneous.
11.1. Duration. The Plan shall be unlimited in duration and, in the event
of Plan termination, shall remain in effect as long as any Awards under it are
outstanding; provided, however, that no Incentive Stock Options may be granted
under the Plan on a date that is more than ten years from the date the Plan is
adopted or, if earlier, the date the Plan is initially approved by shareholders.
11.2. Limit on Distribution. Distribution of shares of Stock or other
amounts under the Plan shall be subject to the following:
(a) Notwithstanding any other provision of the Plan, Ameritrade shall
have no liability to deliver any shares of Stock under the Plan or make any
other distribution of benefits under the Plan unless such delivery or
distribution would comply with all applicable laws and the applicable
requirements of any securities exchange or similar entity.
(b) In the case of a Participant who is subject to Section 16(a) and
16(b) of the Exchange Act, the Board or the Committee may, at any time, add
such conditions and limitations to any Award to such Participant, or any
feature of any such Award, as the Board or the Committee, in its sole
discretion, deems necessary or desirable to comply with Section 16(a) or
16(b) and the rules and regulations thereunder or to obtain any exemption
therefrom.
(c) To the extent that the Plan provides for issuance of certificates
to reflect the transfer of shares of Stock, the transfer of such shares may
be effected on a non- certificated basis, to the extent not prohibited by
applicable law or the rules of any stock exchange.
11.3. Performance-Based Compensation. To the extent that the Board or the
Committee determines that it is necessary or desirable to conform any Awards
under the Plan with the requirements applicable to "Performance-Based
Compensation", as that term is used in section 162(m)(4)(C) of the Code, it may,
at or prior to the time an Award is granted, take such steps and impose such
restrictions with respect to such Award as it determines to be necessary or
desirable.
11.4. Withholding. All Awards and other payments under the Plan are
subject to withholding of all applicable taxes, which withholding obligations
may be satisfied, with the consent of the Board or the Committee, through the
surrender of shares of Stock which the Participant already owns, or to which a
Participant is otherwise entitled under the Plan; provided, however, that in no
event shall the Fair Market Value of the number of shares withheld from any
Award to satisfy tax withholding obligations exceed the amount necessary to meet
the required Federal, state and local withholding tax rates then in effect that
are applicable to the participant and to the particular transaction.
11.5. Transferability. Awards under the Plan are not transferable except
as designated by a Participant by will or by the laws of descent and
distribution. To the extent that the Participant who receives an Award under the
Plan has the right to exercise such Award, the Award may be exercised during the
lifetime of the Participant only by the Participant.
Page 37
11.6. Notices. Any notice or document required to be filed with the Board
or the Committee under the Plan will be properly filed if delivered or mailed by
registered mail, postage prepaid, to the Board or the Committee, in care of
Ameritrade, at its principal executive offices. The Board or the Committee may,
by advance written notice to affected persons, revise such notice procedure from
time to time. Any notice required under the Plan (other than a notice of
election) may be waived by the person entitled to notice.
11.7. Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification or
revocation thereof, shall be in writing filed with the Board or the Committee at
such times, in such form, and subject to such restrictions and limitations, not
inconsistent with the terms of the Plan, as the Board or the Committee shall
require.
11.8. Agreement With Ameritrade. At the time of an Award to a Participant
under the Plan, the Board or the Committee may require a Participant to enter
into an agreement with Ameritrade (the "Agreement") in a form specified by the
Board or the Committee, agreeing to the terms and conditions of the Plan and to
such additional terms and conditions, not inconsistent with the Plan, as the
Board or the Committee may, in its sole discretion, prescribe.
11.9. Limitation of Implied Rights.
(a) Neither a Participant nor any other person shall, by reason of the
Plan, acquire any right in or title to any assets, funds or property of the
Company whatsoever, including, without limitation, any specific funds, assets,
or other property which the Company, in its sole discretion, may set aside in
anticipation of a liability under the Plan. A Participant shall have only a
contractual right to the amounts, if any, payable under the Plan, unsecured by
any assets of the Company. Nothing contained in the Plan shall constitute a
guarantee by the Company that the assets of such companies shall be sufficient
to pay any benefits to any person.
(b) The Plan does not constitute a contract of employment, and selection as
a Participant will not give any employee the right to be retained in the employ
of the Company, nor any right or claim to any benefit under the Plan, unless
such right or claim has specifically accrued under the terms of the Plan. Except
as otherwise provided in the Plan, no Award under the Plan shall confer upon the
holder thereof any right as a shareholder of Ameritrade prior to the date on
which he fulfills all service requirements and other conditions for receipt of
such rights.
11.10. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
11.11. Gender and Number. Where the context admits, words in one gender
shall include the other gender, words in the singular shall include the plural
and the plural shall include the singular.
12. Amendment and Termination.
The Board may, at any time, amend or terminate the Plan, provided that,
subject to subsection 5.4 (relating to certain adjustments to shares), no
amendment or termination may materially adversely affect the rights of any
Participant or beneficiary under any Award made under the Plan prior to the date
such amendment is adopted by the Board.
Page 38
APPENDIX C
AMERITRADE HOLDING CORPORATION
2002 MANAGEMENT INCENTIVE PLAN (EFFECTIVE SEPTEMBER 29, 2001)
ELIGIBILITY FOR AWARDS. Awards under the 2002 Management Incentive Plan ("the
Plan") may be granted by the Compensation Committee of the Board of Directors
("the Committee") of Ameritrade Holding Corporation ("the Company") or its
designee to any associate who is in good standing at the time the award is made
(the "Participant"). To be eligible for an award Participant shall be employed
full-time by the Company as of the date final award amounts are calculated and
approved by the Committee under this Plan.
DETERMINATION OF AWARDS. Incentive awards for Participants shall be determined
annually according to the achievement of Performance Goals that shall be
established in the first 90 days of each year by the Committee. The Performance
Goals (the "Performance Goals") shall be the stated business criteria as
required pursuant to Section 162(m) of the Internal Revenue Code, as amended.
For purposes of the Plan, one or more of the following shall be the Performance
Goals: Earnings Per Share; Earnings Yield; Net Income; Operating Margin; Return
on Assets; Return on Equity; Revenue; and Total Shareholder Return.
Awards shall be defined by reference to a target percentage of base salary
determined, from time to time, by the Committee or its designee. Incentive
awards described in this subsection shall be calculated and paid on an annual
basis, based on performance over the course of that fiscal year (the
"Performance Period"). With respect to all associates other than Section 162(m)
"covered persons", the Committee or its designee reserves the right to modify
any criteria, goals or payment amounts as appropriate. Notwithstanding anything
to the contrary contained in this Plan, the Committee shall have the power, in
its sole discretion, to reduce the amount payable to any Participant (or to
determine that no amount shall be payable to such Participant) with respect to
any award prior to the time the amount otherwise would have become payable
hereunder. In the event of such a reduction, the amount of such reduction shall
not increase the amounts payable to other Participants under the Plan. The
maximum award that may be payable under this Plan for Fiscal Year 2002 shall be
five million dollars.
ADMINISTRATION. Except as otherwise specifically provided, the Plan shall be
administered by the Committee. The decision of the Committee with respect to any
questions arising as to interpretation of the Plan, including the severability
of any and all of the provisions thereof, shall be, in its sole and absolute
discretion, final, conclusive and binding. Except to the extent prohibited by
law, the Committee may delegate some or all of its authority under the Plan to
any person or persons.
While it is the present intention of the Company to grant awards annually, the
Committee reserves the right to modify or amend this Plan or any formula, target
or goal established hereunder from time to time or to repeal the Plan entirely,
or to direct the discontinuance of granting awards either temporarily or
permanently, at any time, except as otherwise prohibited by law, including the
restrictions described in Section 162(m) of the Internal Revenue Code, as such
statute may be amended in the future.
CERTIFICATION. Following the completion of each Performance Period, the
Committee shall certify in writing whether the Performance Goals have been
achieved and determine the actual size of the award paid to each Participant.
FORM OF AWARDS. The Committee may determine, from time to time, that all or a
portion of any award may be paid in the form of cash (less any applicable
withholding taxes or deductions) or an equity based incentive, including without
limitation stock options, restricted shares, or outright grants of Company stock
under and subject to the terms of the Ameritrade Holding Corporation 1996 Long
Term Incentive Plan, as amended. A Participant in this Plan who is also eligible
to participate in any deferred compensation plan offered by the Company may
elect to defer payments pursuant to the terms of that plan.
NO RIGHT TO CONTINUED EMPLOYMENT OR GRANTS. Participation in the Plan shall not
give any Participant any right to remain in the employ of the Company. Further,
adoption and maintenance of this Plan shall not be deemed to give any associate
the right to be selected as a Participant or to be granted any award.
Page 39
REVOCABLE PROXY OF HOLDERS
OF CLASS A STOCK
AMERITRADE HOLDING CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
AMERITRADE HOLDING CORPORATION FOR USE ONLY AT THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON FEBRUARY 12, 2002 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby authorizes the Board of Directors of Ameritrade Holding
Corporation (the "Company"), or any successors in their respective positions, as
proxy, with full powers of substitution, to represent the undersigned at the
Annual Meeting of Stockholders of the Company to be held at the Joslyn Art
Museum, on Tuesday, February 12, 2002, at 9 a.m., Central Standard Time and at
any adjournment of said meeting and thereat to act with respect to all votes
that the undersigned would be entitled to cast, if then personally present, in
accordance with the instructions below and on the reverse hereof.
1. ELECTION OF CLASS A DIRECTORS
[ ] FOR all nominees listed below for terms to expire in 2001
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
Charles L. Marinaccio
Thomas Y. Hartley
Mark L. Mitchell
David W. Garrison
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, mark "FOR" but write that nominee's name in the space
provided below.)
------------------------------------------
2. AUDITORS. Ratification of the appointment of Deloitte & Touche
LLP as independent auditors for the fiscal year ending September
27, 2002.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION. Proposal to
amend the Company's Restated Certificate of Incorporation to
increase the authorized number of shares of Class A Common Stock
from 270,000,000 to 370,000,000 and Class B Common Stock from
18,000,000 to 25,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. AMENDMENT OF LONG-TERM INCENTIVE PLAN. Proposal to amend the
Company's 1996 Long-Term Incentive Plan to increase the number of
shares the Company may issue under the plan and to make other
changes to the plan as described in the Proxy Statement for the
Annual Meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. ADOPTION OF THE 2002 MANAGEMENT INCENTIVE PLAN. Proposal to adopt
an incentive bonus plan for executive management.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. To vote, in its discretion, upon any other business that may
properly come before the Annual Meeting or any postponement or
adjournment thereof. Management is not aware of any other matters
which should come before the Annual Meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ELECTION OF THE BOARD OF DIRECTORS' NOMINEES FOR CLASS A
DIRECTORS, FOR THE RATIFICATION OF THE APPOINTMENT OF AUDITORS, FOR THE APPROVAL
OF THE RESTATED CERTIFICATE OF INCORPORATION, FOR THE PROPOSAL TO AMEND THE 1996
LONG-TERM INCENTIVE PLAN AND FOR THE ADOPTION OF THE 2002 MANAGEMENT INCENTIVE
PLAN.
This proxy is revocable and the undersigned may revoke it at any time
prior to the Annual Meeting by giving written notice of such revocation to the
Secretary of the Company prior to the meeting or by filing with the Secretary of
the Company prior to the meeting a later-dated proxy. Should the undersigned be
present and want to vote in person at the Annual Meeting, or at any adjournment
thereof, the undersigned may revoke this proxy by giving written notice of such
revocation to the Secretary of the Company on a form provided at the meeting.
The undersigned hereby acknowledges receipt of a Notice of Annual Meeting of
Stockholders of the Company called for February 12, 2001 and the Proxy Statement
for the Annual Meeting prior to the signing of this proxy.
Dated:
-------------------------
- -------------------------------
(Signature)
- -------------------------------
(Signature if held jointly)
Please sign exactly as name appears on this proxy. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give your full title. If a corporation, please sign
in full corporate name by authorized officer. If a partnership or LLC, please
sign in firm name by authorized partner or member.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.