| |
Board
of Directors
The Company’s amended and restated certificate of incorporation
divides the Company’s Board of Directors into three classes,
with three Directors per class and with each class being elected
to a staggered three-year term. J. Joe Ricketts, our Chairman and
Founder, certain members of his family and trusts established for
their benefit (collectively, the "Ricketts holders")
owned approximately 25.0% of our Common Stock as of the Record
Date. Investment funds affiliated with Bain Capital, Silver Lake
Partners and TA Associates (collectively, the "Datek holders")
collectively owned approximately 29.5% of our Common Stock as of
the Record Date. The Ricketts holders and the Datek holders have
entered into a stockholders agreement (the "Stockholders Agreement")
that obligates the parties to vote their shares in favor of a Board
of Directors consisting of nine members, of which three are designated
by the Ricketts holders, three are designated by the Datek holders
and three are independent directors selected with the agreement
of the Ricketts holders and the Datek holders. Accordingly, the
Board has nominated Michael D. Fleisher, Glenn H. Hutchins and
Thomas S. Ricketts as Class I Directors to be voted upon at the
2003 Annual Meeting, to serve terms ending at the 2006 Annual Meeting.
C. Kevin Landry, Mark L. Mitchell and J. Peter Ricketts are Class
II Directors serving terms ending at the 2004 Annual Meeting. Stephen
G. Pagliuca and J. Joe Ricketts are Class III Directors serving
terms ending at the 2005 Annual Meeting. The third Class III Director
will be nominated with the agreement of the Ricketts holders and
the Datek holders.
This Proxy Statement relates only to the solicitation of proxies
from the stockholders with respect to the election of three Class
I Directors to be elected by them and the other matters described
herein. The Board of Directors knows of no reason any of Messrs.
Fleisher, Hutchins and T. Ricketts might be unavailable to serve
as the Class I Directors, and each has expressed an intention to
serve, if elected. If any of Messrs. Fleisher, Hutchins and T.
Ricketts 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. With the exception of
the Stockholders Agreement, there are no arrangements or understandings
between any of the persons nominated to be a Class I Director and
any other person pursuant to which any of such nominees was selected.
The election of a Director requires the affirmative vote of a plurality
of the shares of Common 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 Common Stock
are represented at the meeting. Shares of Common 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. Fleisher, Hutchins and T. Ricketts
as Class I Directors, unless specified otherwise.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE ELECTION OF MICHAEL D. FLEISHER, GLENN H. HUTCHINS AND THOMAS
S. RICKETTS AS CLASS I DIRECTORS.
The tables below set forth certain information regarding the Directors
of the Company.
| |
| Nominees
to Board of Directors |
| Name
|
|
Age |
|
Principal
Occupation |
|
Director
Since |
|
Class
and Year in Which Term Expires |
 |
 |
|
|
|
|
|
|
|
|
| Michael D. Fleisher |
|
38 |
|
Chairman and Chief
Executive Officer, Gartner, Inc. |
|
2002 |
|
Class
I
2003 |
|
| Glenn H. Hutchins |
|
47 |
|
Managing Member, Silver Lake Technology
Management, L.L.C. |
|
2002 |
|
Class I
2003 |
|
| Thomas S. Ricketts |
|
37 |
|
Chairman and Chief Executive Officer,
Incapital LLC |
|
2002 |
|
Class I
2003 |
|
Michael D. Fleisher has been
Chairman of the Board of Gartner, Inc. since October 2001, and
a director and Chief Executive Officer of Gartner since October
1999. From February 1999 to October 1999, he served as Gartner's
Chief Financial Officer and Executive Vice President, Finance and
Administration. Mr. Fleisher joined Gartner in April 1993. Prior
to joining Gartner, Mr. Fleisher worked at Bain Capital, Inc. where
he was involved in the buyout of Gartner by management and Bain
Capital from Saatchi & Saatchi in October 1990. Prior to working
at Bain Capital, Mr. Fleisher was a consultant with Bain &
Company, a global business consulting firm. Mr. Fleisher is on
the board of NYC 2012, Inc. Mr. Fleisher holds a B.S. in economics
from the Wharton School of the University of Pennsylvania.
Glenn H. Hutchins is a Managing
Member of Silver Lake Technology Management, L.L.C., which he co-founded
in January 1999. Silver Lake Technology Management is a manager
and advisor of private equity funds, including Silver Lake Partners,
L.P. Mr. Hutchins is a Managing Member of Silver Lake Technology
Associates, L.L.C., which is the general partner of Silver Lake
Partners, L.P. From 1994 to 1999, Mr. Hutchins was a Senior Managing
Director of The Blackstone Group, where he focused on private equity
investing. Mr. Mr. Hutchins is a director of Gartner, Inc., Instinet
Group Incorporated and Seagate Technology. He is also a director of CARE,
Inc. and a trustee of Lawrenceville School. Mr. Hutchins graduated from Harvard
College, Harvard Business School and Harvard Law School.
Thomas S. Ricketts is the
Chairman and Chief Executive Officer of Incapital LLC, a company
he co-founded in 1999. Incapital is a technologically oriented
investment bank focused exclusively on the underwriting and distribution
of fixed income products to individual investors. Incapital underwrites
for several major U.S. corporations through its InterNotesSM product
platform. From 1996 to 1999, Mr. Ricketts was a Vice President
and an investment banker for the brokerage division of ABN AMRO.
From 1995 to 1996, he was a Vice President at Mesirow Financial.
From 1988 to 1994, Mr. Ricketts was a market maker on the Chicago
Board Options Exchange. Mr. Ricketts holds an M.B.A. and a B.A.
from the University of Chicago. Thomas S. Ricketts is the son of
J. Joe Ricketts and the brother of J. Peter Ricketts.
| |
| Directors
Not Standing For Election |
| Name
|
|
Age |
|
Principal
Occupation |
|
Director
Since |
|
Class
and Year in Which Term Expires |
|
|
|
|
|
|
|
|
|
|
| J. Joe Ricketts |
|
61 |
|
Chairman and Founder
of the Company |
|
1981 |
|
Class
III
2005 |
|
| J. Peter Ricketts |
|
38 |
|
President, Private Client Division;
Vice Chairman and Corporate Secretary of the Company |
|
1999 |
|
Class
II
2004 |
|
| C. Kevin Landry |
|
58 |
|
Managing Director
and Chief Executive Officer, TA Associates, Inc. |
|
2002 |
|
Class
II
2004 |
|
| Mark L. Mitchell |
|
42 |
|
Associate Professor
of Business Administration, Harvard University and
Principal, CNH Partners, LLC |
|
1996 |
|
Class
II
2004 |
|
| Stephen G. Pagliuca |
|
47 |
|
Managing Director,
Bain Capital |
|
2002 |
|
Class
III
2005 |
|
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). Mr. Ricketts served as a member of the District
Committee for District 4 of the NASD from 1996 to 1999. Mr. Ricketts
serves on the Board of Directors of the American Enterprise Institute.
Mr. Ricketts received a B.A. in economics from Creighton University.
Mr. Ricketts is the father of J. Peter Ricketts and Thomas S. Ricketts.
J. Peter Ricketts became
President of the Company's Private Client Division in June 2001.
He has served as a Director since 1999, has been Secretary of the
Company since May 2001 and also served as Secretary from November
1996 to October 1999. Since joining the Company in 1993, he has
held various leadership positions, including Senior Vice President
of Strategy and Business Development, Senior Vice President of
Product Development and Senior Vice President of Marketing. Mr.
Ricketts received an M.B.A. in marketing and finance and a B.A.
in biology from the University of Chicago. J. Peter Ricketts is
the son of J. Joe Ricketts and the brother of Thomas S. Ricketts.
C. Kevin Landry has served
as a Managing Director and Chief Executive Officer of TA Associates,
Inc. since its incorporation in 1994. From 1982 to 1994, Mr. Landry
served as a Managing Partner of its predecessor partnership. Mr.
Landry also is a director of Instinet Group Incorporated and Standex
International Corporation. He is a member of the Private Equity
Hall of Fame. He is an Overseer of the Museum of Fine Arts, a member
of the Executive Committee of Harvard University’s Committee on University
Resources and Co-Chairman of the Harvard Boston Major Gifts Committee. Mr.
Landry received an M.B.A. from The Wharton School of Finance and
a B.A. in Economics from Harvard University.
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 1999. He has been a Principal at CNH Partners,
LLC, a hedge fund, since 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. Mr. Mitchell
was a Senior Financial Economist for the Securities and Exchange
Commission ("SEC") from 1987 to 1990. He is a member
of the Nasdaq Quality of Markets Committee. He was a member of
the Economic Advisory Board of the National Association of Securities
Dealers ("NASD") from 1995 to 1998. Mr. Mitchell received
a Ph.D. in applied economics and an M.A. in economics from Clemson
University, and received a B.B.A. in economics from the University
of Louisiana at Monroe.
Stephen G. Pagliuca founded
the Information Partners Fund for Bain Capital in 1989. As a Managing
Director of Bain Capital, he has been involved in over thirty acquisitions
of significant information and medical companies, including Gartner,
Inc., Physio-Control and Wesley-Jessen. Previously, Mr. Pagliuca
was a Vice President at Bain & Company where he managed significant
relationships in the healthcare and information services industries.
He was also involved in developing Bain's turnaround practice in
which he worked with investment groups and corporate clients to
rapidly improve under-performing business units. Mr. Pagliuca also
worked as a senior accountant and international tax specialist
for Peat Marwick Mitchell & Company in the Netherlands. Mr.
Pagliuca is a director of Gartner, Inc., FTD, Inc. and Instinet
Group Incorporated. Mr. Pagliuca earned an M.B.A. from Harvard
Business School. He is a Certified Public Accountant and received
a B.A. from Duke University.
Executive Officers
The Company's executive officers are as follows:
| |
| Name
|
|
Age |
|
Position |
|
|
|
|
|
|
| J. Joe Ricketts |
|
61 |
|
Chairman and Founder of the Company |
|
| Joseph H. Moglia |
|
53 |
|
Chief Executive Officer |
|
| Phylis M. Esposito |
|
51 |
|
Executive Vice President, Chief
Strategy Officer |
|
| Kurt D. Halvorson |
|
40 |
|
Executive Vice President, Chief
Administrative Officer |
|
| Ellen L.S. Koplow |
|
43 |
|
Senior Vice President and General
Counsel |
|
| John R. MacDonald |
|
47 |
|
Executive Vice President, Chief
Financial Officer and Treasurer |
|
| Anne L. Nelson |
|
49 |
|
Senior Vice President and Chief
Marketing Officer |
|
| Vincent Passione |
|
41 |
|
President, Institutional Client
Division |
|
| J. Peter Ricketts |
|
38 |
|
President, Private Client Division |
|
See "Directors Not Standing For Election" 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 and 401(k) businesses.
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 its Private Client division 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 serves on the boards of directors of AXA Financial,
Inc. and of its subsidiary, The Equitable Life Assurance Society
of the U.S. Mr. Moglia received an M.A in economics from the University
of Delaware and a B.A. in economics from Fordham University.
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 financial 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, Inc., a subsidiary of
the Company, 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 from 1984 to 1987. Mr. Halvorson currently
is an industry governor on the board of the Chicago Stock Exchange.
He is a past member of the Securities Industry Association Membership
Committee and Firm and Industry Analysis Committee (FIAC), and
United Way Young Leaders Society. Mr. Halvorson earned 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 at the Wharton School at the University of Pennsylvania.
Ellen L.S. Koplow has served
as General Counsel since June 2001. She oversees the Company’s
Legal Department. She joined the Company in May 1999 as Deputy
General Counsel and was named Acting General Counsel in November
2000. 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 since March 2000. He oversees
all financial operations of the Company, including developing and
planning financial transactions and Company-wide fiscal management.
Recently, he led the integration of Ameritrade and Datek into one
company. Prior to joining the Company in March 2000, Mr. MacDonald
served in a similar capacity with New York City-based Investment
Technology Group, Inc. Mr. MacDonald has also held executive positions
at Salomon Brothers and Deloitte & Touche. Mr. MacDonald currently
serves on the Nasdaq Technology Advisory Council. He graduated
cum laude from Boston College with a B.S. in accounting.
Anne L. Nelson joined the
Company as Vice President of Marketing in November 1999 and was
promoted to Chief Marketing Officer in August 2001. As Chief Marketing
Officer, Ms. 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. Prior to joining HSBC, Ms. Nelson
spent 10 years with CoreStates Financial Corp. in a number of senior
level positions in their retail marketing, credit card and acquisition
divisions. Ms. Nelson received an 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 Advisor
ServicesTM, Ameritrade Corporate ServicesTM, Ameritrade ClearingTM
and Ameritrade Financial ServicesTM. Previously, Mr. Passione was
President and Chief Executive Officer of the Company’s OnMoney
subsidiary. 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. Prior to joining the Company, Mr. Passione
managed the Citigroup U.S. Technology organization. Mr. Passione
earned a B.S. in computer science from New York Polytechnic Institute.
Board Meetings
and Committees
The Board of Directors conducts its business through meetings of
the Board, actions taken by written consent in lieu of meetings
and by the actions of its Committees. During the fiscal year ended
September 27, 2002, the Board of Directors held 11 meetings and
took action by written consent three times. During fiscal year
2002, 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 included as Appendix A to this proxy
statement 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 by unanimous written consent
of the Board of Directors on September 5, 2002 and subsequently
adopted by the Audit Committee at the October 3, 2002 Audit Committee
meeting. The Charter was reaffirmed by the Audit Committee at the
November 18, 2002 Audit Committee meeting. The Audit Committee
is currently composed of Messrs. Fleisher, Landry and Mitchell.
Mr. Fleisher serves as the Audit Committee’s chairman. All
current Audit Committee members are "independent" as
defined in the current applicable listing standards of the NASD.
The Company’s Audit Committee met eight times during fiscal
year 2002. The Report of the Audit Committee for the fiscal year
ended September 27, 2002 appears under PROPOSAL 2 – "RATIFICATION
OF APPOINTMENT OF AUDITOR".
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 is
currently composed of Messrs. Hutchins, Mitchell and Pagliuca.
Mr. Hutchins serves as the Compensation Committee’s chairman.
The Company’s Compensation Committee met eight times during
fiscal year 2002. The Report of the Compensation Committee on Executive
Compensation appears under "EXECUTIVE COMPENSATION".
The Company does not have a standing Nominating Committee. Nominations
of Directors are made by the entire Board of Directors.
Compensation
of Directors
The Company maintains the Ameritrade Holding Corporation 1996 Directors
Incentive Plan (the "Directors Plan"), administered by
the Compensation Committee, 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 Common
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 approximately $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 Common Stock on the date of the grant of the option.
The expiration date with respect to an award under the Directors
Plan is the earlier of the ten-year anniversary of the date on
which the award is granted or the one-year anniversary of the date
on which the non-employee Director's service as a director of the
Company terminates for cause. Options are not exercisable after
the expiration date. Restricted stock that is not vested on the
expiration date is forfeited.
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 2002, the annual retainer was
$25,000. Fifty percent of the retainer is payable in cash and fifty
percent is payable in the form of Common Stock, provided that,
if a Director has met the Company’s equity ownership guidelines,
the Director may elect to receive all or any portion of the stock
retainer in cash. Non-employee Directors receive payments of $1,500
for quarterly meetings and $1,000 for Committee meetings, all payable
quarterly in advance in the form of cash or Common Stock at the
election of the Director. The foregoing elections and payments
are made pursuant to the Directors Plan. Awards for periods of
less than 12 months are calculated and determined by the Board.
Special rules applied to the payment of the annual retainer for
the 2003 fiscal year to accommodate newly elected Directors. Awards
for periods of less than 12 months are calculated and determined
by the Board. Special rules applied to the payment of the annual
retainer for the 2003 fiscal year to accommodate newly elected
Directors.
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 Common 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 Common Stock. As of the first day of each
fiscal quarter, the Cash Subaccount is adjusted to reflect contributions
and distributions during the preceding fiscal 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 Common 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 Common Stock. For purposes of the adjustments to the
Stock Subaccount, one stock unit corresponds to one share of Common
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. If no distribution date is specified, payments
begin as of the first business day of January of the year following
the date on which the non-employee Director ceases to be a Director
of the Company for any reason. 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 in a lump sum
to a beneficiary designated by the non-employee Director. The Compensation
Committee may also distribute the full balance of a non-employee
Director’s deferral account in a lump sum at any time.
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: five transactions
between Marlene M. Ricketts and trust accounts over which J. Peter
Ricketts has shared voting and dispositive power were reported
late on two Forms 4 filed by Marlene M. Ricketts and J. Peter Ricketts.
Stock Ownership
of Certain Beneficial Owners and Management
As of the Record Date, there were 430,147,895 shares of Common
Stock issued and outstanding. The following table sets forth, as
of the Record Date, the beneficial ownership of the Company's Common
Stock by each of the executive officers named in the Summary Compensation
Table, by Directors, 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:
| Name |
|
Number
of
Shares of
Common
Stock |
|
Percent of
Shares of
Common
Stock |
|
|
|
|
|
| Directors and
Executive Officers |
|
|
|
|
|
| J. Joe Ricketts(1),
Chairman and Founder |
|
53,899,635 |
|
12.5% |
|
| Joseph H. Moglia(2),
Chief Executive Officer |
|
2,577,732 |
|
* |
|
| Vincent Passione(3),
President, Institutional Client Division |
|
472,817 |
|
* |
|
John R. MacDonald(4),
Executive Vice President,
Chief Financial Officer and Treasurer |
|
475,246 |
|
* |
|
Phylis M. Esposito(5),
Executive Vice President, Chief
Strategy Officer |
|
300,528 |
|
* |
|
J. Peter Ricketts(6),
President, Private Client
Division, Vice Chairman and Corporate Secretary |
|
10,312,196 |
|
2.4% |
|
| Michael D. Fleisher(7),
Director |
|
14,053 |
|
* |
|
| Glenn H. Hutchins(8),
Director |
|
34,328,192 |
|
8.0% |
|
| C. Kevin Landry(9),
Director |
|
42,166,884 |
|
9.8% |
|
| Mark L. Mitchell(10),
Director |
|
187,394 |
|
* |
|
| Stephen G. Pagliuca(11),
Director |
|
50,579,952 |
|
11.8% |
|
| Thomas S. Ricketts(12),
Director |
|
9,167,367 |
|
2.1% |
|
All Directors and
Executive Officers as a group(13)
(15 in group) |
|
196,978,887 |
|
45.4% |
|
| Other Stockholders |
|
|
|
|
Entities affiliated
with Bain Capital Funds(14)
111 Huntington Ave.
Boston, MA 02199 |
|
50,565,915 |
|
11.8% |
|
Entities affiliated
with TA Associates, Inc.(15)
125 High Street, Suite 2500
Boston, MA 02110 |
|
42,160,884 |
|
9.8% |
|
| Marlene M. Ricketts(16) |
|
40,361,589 |
|
9.4% |
|
Entities affiliated
with Silver Lake Partners, LP(17)
2725 Sand Hill Road, Building C
Suite 150
Menlo Park, CA 94025 |
|
34,314,155 |
|
8.0% |
|
Taunus Corporation(18)
31 West 52nd Street
New York, NY 10019 |
|
22,838,082 |
|
5.3% |
|
| Ricketts Grandchildren
Trust(19) |
|
19,008,000 |
|
4.4% |
____________
* Less than 1 percent of the issued and outstanding shares.
|
|
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| (1) |
|
Shares of Common Stock beneficially
owned by Mr. Ricketts consist of 38,602,590 shares
held by Mr. Ricketts individually in a brokerage
margin account; 8,186,112 shares held by the Marlene
M. Ricketts 1994 Dynasty Trust, over which Mr. Ricketts
has sole voting and dispositive power; 3,000,000
shares held jointly with Marlene M. Ricketts, his
spouse, in a brokerage margin account; 975,000 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; 796 shares held in Mr. Ricketts’
401(k) account; and 1,302,785 shares issuable upon
the exercise of options exercisable within 60 days.
Percentage ownership is determined based on 431,450,680
shares of Common Stock, consisting of 430,147,895
shares outstanding and 1,302,785 shares issuable
upon the exercise of options exercisable within
60 days. Shares of Common Stock beneficially owned
by Mr. Ricketts do not include shares held by Mrs.
Ricketts individually and disclosed in Note (16)
below. |
|
| (2) |
|
Consists of 791,400 shares held
by Mr. Moglia individually in a brokerage margin
account and 1,786,332 shares issuable upon the exercise
of options exercisable within 60 days. |
|
| (3) |
|
Consists of 6,000 shares held by
Mr. Passione individually, 3,921 shares held in
Mr. Passione's 401(k) account, 262,500 shares issuable
upon the exercise of options exercisable within
60 days and 200,396 shares held for the benefit
of Mr. Passione in a deferred compensation account
under the Company's Executive Deferred Compensation
Program. |
|
| (4) |
|
Consists of 53,005 shares held
by Mr. MacDonald individually in IRA accounts, 3,638
shares held by Mr. MacDonald’s spouse individually
in an IRA account, 4,105 shares held in Mr. MacDonald’s
401(k) account, 307,066 shares issuable upon the
exercise of options exercisable within 60 days and
107,432 shares held for the benefit of Mr. MacDonald
in a deferred compensation account under the Company's
Executive Deferred Compensation Program. |
|
| (5) |
|
Consists of 200,000 shares held
by Ms. Esposito individually, 4,116 shares held
in Ms. Esposito’s 401(k) account, 81,966 shares
issuable upon the exercise of options exercisable
within 60 days and 14,446 shares held for the benefit
of Ms. Esposito in a deferred compensation account
under the Company’s Executive Deferred Compensation
Program. |
|
| (6) |
|
Consists of 1,066,668 shares held
by Mr. Ricketts individually in a brokerage margin
account; 87,868 shares held jointly with Mr. Ricketts’
spouse in a brokerage margin account; 19,950 shares
held in trusts for the benefit of Mr. Ricketts’
children; 65,709 shares in Mr. Ricketts' 401(k)
account; 88,791 shares issuable upon the exercise
of options exercisable within 60 days; 958,640 shares
in the Marlene Ricketts Trust for the benefit of
J. Peter Ricketts over which Mr. Ricketts has sole
voting and dispositive power; and 8,024,570 shares
in the Marlene Ricketts Annuity Trust 2001 #1 and
Marlene Ricketts Annuity Trust 2002 #1 over which
Mr. Ricketts has shared voting and dispositive power. |
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| (7) |
|
Consists of 6,000 shares of restricted
stock and 8,053 shares held in a deferred compensation
account for Mr. Fleisher. |
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| (8) |
|
Consists of 8,037 shares held by
Mr. Hutchins individually, 6,000 shares of restricted
stock held by Mr. Hutchins individually and 34,314,155
shares owned by Silver Lake Partners, LP and its
affiliated entities (see footnote 17 below). Mr.
Hutchins is a Managing Member and officer of the
General Partner of Silver Lake Partners, LP. Mr.
Hutchins disclaims beneficial ownership of all shares
owned by Silver Lake Partners, LP and its affiliated
entities, except to the extent of his pecuniary
interest therein. |
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| (9) |
|
Consists of 6,000 shares of restricted
stock held by Mr. Landry individually and 42,160,884
shares owned by TA Associates, Inc. and its affiliated
entities (see footnote 15 below). Mr. Landry disclaims
beneficial ownership of all shares owned by TA Associates,
Inc.,and its affiliated entities, except to the
extent of 69,840 shares which he owns through TA
Investors LLC. |
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| (10) |
|
Includes 117,870 shares held by
Mr. Mitchell individually in a brokerage margin
account, 6,000 shares of restricted stock held by
Mr. Mitchell individually, 25,692 shares issuable
upon the exercise of options exercisable within
60 days, 25,653 shares in the Mark L. Mitchell IRA
and 12,179 shares in the Janet T. Mitchell IRA,
over which Mr. Mitchell has shared voting and dispositive
power. |
|
| (11) |
|
Consists of 8,037 shares held by
Mr. Pagliuca individually, 6,000 shares of restricted
stock held by Mr. Pagliuca individually and 50,565,915
shares owned by Bain Capital and its affiliated
entities (see footnote 14 below). Mr. Pagliuca is
a member of Bain Capital Investors, LLC and he,
or entities affiliated with him, are partners of
one or more of BCIP Associates II, BCIP Associates
II-B, BCIP Trust Associates II and BCIP Trust Associates
II-B. Mr. Pagliuca disclaims beneficial ownership
of all such shares owned by these entities, except
to the extent of his pecuniary interest therein. |
|
| (12) |
|
Consists of 151,557 shares held
by Mr. Ricketts jointly with his spouse in a brokerage
margin account; 6,000 shares of restricted stock
held individually by Mr. Ricketts; 26,600 shares
held in trusts for the benefit of Mr. Ricketts’
children; 958,640 shares held in the Marlene Ricketts
Trust for the benefit of Thomas S. Ricketts over
which Mr. Ricketts has sole voting and dispositive
power; and 8,024,570 shares in the Marlene Ricketts
Annuity Trust 2001 #1 and Marlene Ricketts Annuity
Trust 2002 #1 over which Mr. Ricketts has shared
voting and dispositive power. |
|
| (13) |
|
Includes 4,072,333 shares issuable
upon the exercise of options exercisable within
60 days. Percentage ownership is determined on the
basis of 434,220,228 shares of Common Stock, consisting
of 430,147,895 shares outstanding and 4,072,333
shares issuable upon the exercise of options exercisable
within 60 days. |
|
| (14) |
|
Represents shares owned by a group
of investment funds affiliated with Bain Capital,
including (i) 30,073,629 shares owned by Bain Capital
Fund VII, LLC, whose managing member is Bain Capital
Fund VII, L.P., whose sole general partner is Bain
Capital Partners VII, L.P. ("BCP"), whose
sole general partner is Bain Capital Investors,
LLC ("BCI"); (ii) 11,126,356 shares owned
by Bain Capital VII Coinvestment Fund, LLC, whose
managing member is Bain Capital VII Coinvestment
Fund, L.P., whose sole general partner is BCP, whose
sole general partner is BCI; (iii) 7,378,603 shares
owned by BCI Datek Investors, LLC, whose administrative
member is BCP; and (iv) 1,987,327 shares owned by
BCIP Associates II, BCIP Associates II-B, BCIP Trust
Associates II and BCIP Trust Associates II-B, in
each case whose managing partner is BCI. |
|
| (15) |
|
Represents shares owned by a group
of investment funds affiliated with TA Associates,
including (i) 24,766,979 shares owned by TA IX,
LP, (ii) 6,023,607 shares owned by TA Atlantic &
Pacific IV, LP, (iii) 8,887,320 shares owned by
TA/Advent VIII, LP, (iv) 1,530,927 shares owned
by Advent Atlantic & Pacific III, L.P., (v)
278,967 shares owned by TA Executives Fund, LLC,
and (vi) 673,084 shares owned by TA Investors, LLC. |
|
| (16) |
|
Consists of 27,342,549 shares held
by Mrs. Ricketts individually in a brokerage margin
account; 8,186,688 shares held by the J. Joe Ricketts
1996 Dynasty Trust, over which Mrs. Ricketts has
sole voting and dispositive power; 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 Common Stock beneficially 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. |
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| (17) |
|
Represents shares owned by a group
of investment funds affiliated with Silver Lake
Partners, L.P., the General Partner of which is
Silver Lake Technology Associates, LLC, including
(i) 32,650,160 shares owned by Silver Lake Partners,
L.P., (ii) 941,626 shares owned by Silver Lake Investors,
L.P. and (iii) 722,369 shares owned by Silver Lake
Technology Investors, L.L.C. |
|
| (18) |
|
Based on Schedule 13G filed on
November 27, 2002 with the SEC by Taunus Corporation,
a holding company that is a wholly owned subsidiary
of Deutsche Bank A.G., and certain of its wholly
owned subsidiaries. Taunus Corporation and certain
of its wholly-owned subsidiaries claimed sole voting
and dispositive power with respect to 22,620,582
shares and shared voting and dispositive power with
respect to 217,500 shares. BT Investment Partners
Inc., a wholly owned subsidiary of Taunus Corporation,
was the beneficial owner with respect to 22,361,482
of these shares, claimed sole voting and dispositive
power with respect to 22,361,482 of these shares
and claimed no shared voting or dispositive power
with respect to any of these shares. |
|
| (19) |
|
The trustee of the Ricketts Grandchildren
Trust is First National Bank of Omaha, First National
Center, 16th and Dodge Streets, Omaha, Nebraska,
68102. |
|
Merger and
Stockholders Agreement
On September 9, 2002, the merger of Ameritrade Online Holdings
Corp. ("AOH") (formerly Ameritrade Holding Corporation)
and Datek Online Holdings Corp. ("Datek") was completed.
As a result, AOH and Datek became wholly owned subsidiaries of
the Company (formerly Arrow Stock Holding Corporation). In the
merger, each share of Common Stock of AOH was automatically converted
into one share of Common Stock of the Company and the stockholders
of Datek in the aggregate received 216,341,375 shares of Common
Stock of the Company.
Prior to the merger, the Ricketts holders collectively owned approximately
51.0% of the AOH Common Stock. Upon completion of the merger, the
Ricketts holders owned approximately 25.5% of the Company’s
Common Stock and the Datek holders collectively owned approximately
29.4% of the Company’s Common Stock. Therefore, the Ricketts
holders and the Datek holders collectively owned a majority of
the Company’s Common Stock.
Under the Stockholders Agreement by and among the Ricketts holders,
the Datek holders and the Company, among other things:
- the Ricketts holders and the Datek holders have agreed
to vote their shares of Common Stock in favor of a Board
of Directors of the Company consisting of nine members,
of which three are designated by the Ricketts holders,
three are designated by the Datek holders, and three
are independent directors designated by the Ricketts
holders and the Datek holders, subject to limitations,
until after the Company’s annual stockholders meeting
in 2006;
- if a Ricketts holder or a Datek holder sells shares in
some negotiated transactions, the other Ricketts holders
and Datek holders are entitled to participate in the
same transaction by selling a pro rata amount of their
shares;
- the Ricketts holders and the Datek holders have agreed,
until March 27, 2005, to vote their shares in favor of
specified merger and sale of the Company transactions
that are approved by specified Directors and against
specified merger and sale of the Company transactions
that are not approved by specified Directors; and
- the Ricketts holders and the Datek holders have agreed,
from March 27, 2005 until March 27, 2007, to vote their
shares in favor of specified merger and sale of the Company
transactions that are approved by a majority of the entire
Board of Directors.
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