EXHIBIT 99.9
FULL ACCELERATION
E*TRADE GROUP, INC.
STOCK OPTION ASSUMPTION AGREEMENT
TELEBANC FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
AND
1998 STOCK INCENTIVE PLAN
Optionee: ((First_Name)) ((Last_Name)),
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 12th day of
January, 2000 by E*TRADE Group, Inc., a Delaware corporation ("E*TRADE").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of TeleBanc Financial
Corporation, a Delaware corporation ("TeleBanc"), which were granted to Optionee
under the TeleBanc 1998 Stock Incentive Plan and/or the TeleBanc 1997 Stock
Option Plan (the "Plans") and are each evidenced by a Stock Option Agreement
(the "Option Agreement").
WHEREAS, TeleBanc has been acquired by E*TRADE through the merger of
Turbo Acquisition Corp. ("Merger Sub") with and into TeleBanc, whereby TeleBanc
has become a wholly-owned subsidiary of E*TRADE (the "Merger") pursuant to the
Agreement and Plan of Merger and Reorganization, by and between E*TRADE,
TeleBanc and Merger Sub (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require E*TRADE to
assume all obligations of TeleBanc under all outstanding options under the Plans
at the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is 1.05 shares of
E*TRADE common stock, par value $0.01 par value per share ("E*TRADE Stock"), for
each outstanding share of TeleBanc common stock ("TeleBanc Stock").
WHEREAS, this Agreement became effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options which have become necessary by
reason of the assumption of those options by E*TRADE in connection with the
Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of TeleBanc Stock subject to the options
held by Optionee immediately prior to the Effective Time (the "TeleBanc
Options") and the exercise price payable per share are set forth below. E*TRADE
hereby assumes, as of the Effective Time, all the duties and obligations of
TeleBanc under each of the TeleBanc Options. In connection with such assumption,
the number of shares of E*TRADE Stock purchasable under each TeleBanc Option
hereby assumed and the exercise price payable thereunder have been adjusted to
reflect the Exchange Ratio. Accordingly, the number of shares of E*TRADE Stock
subject to each TeleBanc Option hereby assumed shall be as specified for that
option below, and the adjusted exercise price payable per share of E*TRADE Stock
under the assumed TeleBanc Option shall also be as indicated for that option
below.
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TELEBANC STOCK OPTIONS E*TRADE ASSUMED OPTIONS
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# of Shares of Exercise Price # of Shares of Adjusted Exercise
TeleBanc Common per Share E*TRADE Common Price per Share
Stock Stock
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TeleBanc Shares $TeleBanc Price E*TRADE Shares $E*TRADE Price
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2. The intent of the foregoing adjustments to each assumed TeleBanc
Option is to assure that the spread between the aggregate fair market value of
the shares of E*TRADE Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this Agreement will, immediately after
the consummation of the Merger, be not less than the spread which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the TeleBanc Stock subject to the TeleBanc Option and the aggregate exercise
price in effect at such time under the Option Agreement. Such adjustments are
also intended to preserve, immediately after the Merger, on a per share basis,
the same ratio of exercise price per option share to fair market value per share
which existed under the TeleBanc Option immediately prior to the Merger.
3. The following provisions shall govern each TeleBanc Option hereby
assumed by E*TRADE:
(a) Unless the context otherwise requires, all references
in each Option Agreement and, if applicable, in the Plans (as incorporated
into such Option Agreement) (i) to "TeleBanc" or the "Company" shall mean
E*TRADE, (ii) to "Share" shall mean share of E*TRADE Stock, (iii) to
"Stock" or "Common Stock" shall mean E*TRADE Stock, (iv) to the "Board"
shall mean the Board of Directors of E*TRADE and (v) to the "Committee"
shall mean the Compensation Committee of the E*TRADE Board of Directors.
(b) The grant date and the expiration date of each assumed
TeleBanc Option and all other provisions which govern either the exercise
or the termination of the assumed TeleBanc Option shall remain the same as
set forth in the Option Agreements applicable to that option, and the
provisions of the Option
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Agreements shall accordingly govern and control Optionee's rights under
this Agreement to purchase E*TRADE Stock.
(c) Your TeleBanc Option shall be assumed by E*TRADE as of
the Effective Time. Pursuant to the terms of the Option Agreement, your
option assumed by E*TRADE in connection with the transaction will become
fully vested and exercisable upon the consummation of the Merger.
(d) Your option as assumed by E*TRADE which was originally
designated on your Notice of Grant as an Incentive Option shall remain an
Incentive Stock Option to the maximum extent allowed by law. The
acceleration of vesting of your option may have caused a portion of your
Incentive Option to become a non-statutory option. In such an instance, the
portion of the Incentive Option that has been converted into a non-
statutory option is identified on the attached exhibit.
(e) For purposes of applying any and all provisions of the
Option Agreement and/or the Plans relating to Optionee's status as an
employee or a consultant of TeleBanc, Optionee shall be deemed to continue
in such status as an employee or a consultant for so long as Optionee
renders services as an employee or a consultant to E*TRADE or any present
or future E*TRADE subsidiary. Accordingly, the provisions of the Option
Agreement governing the termination of the assumed TeleBanc Options upon
Optionee's cessation of service as an employee or a consultant of TeleBanc
shall hereafter be applied on the basis of Optionee's cessation of employee
or consultant status with E*TRADE and its subsidiaries, and each assumed
TeleBanc Option shall accordingly terminate, within the designated time
period in effect under the Option Agreement for that option, generally a
three (3)-month period, following such cessation of service as an employee
or a consultant of E*TRADE and its subsidiaries.
(f) The adjusted exercise price payable for the E*TRADE
Stock subject to each assumed TeleBanc Option shall be payable in any of
the forms authorized under the Option Agreement applicable to that option.
For purposes of determining the holding period of any shares of E*TRADE
Stock delivered in payment of such adjusted exercise price, the period for
which such shares were held as TeleBanc Stock prior to the Merger shall be
taken into account.
(g) In order to exercise each assumed TeleBanc Option,
Optionee must deliver to E*TRADE a written notice of exercise in which the
number of shares of E*TRADE Stock to be purchased thereunder must be
indicated. The exercise notice must be accompanied by payment of the
adjusted exercise price payable for the purchased shares of E*TRADE Stock
and should be delivered to E*TRADE at the following address:
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E*TRADE Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Stock Administration
4. Except to the extent specifically modified by this Option
Assumption Agreement, all of the terms and conditions of each Option Agreement
as in effect immediately prior to the Merger shall continue in full force and
effect and shall not in any way be amended, revised or otherwise affected by
this Stock Option Assumption Agreement.
IN WITNESS WHEREOF, E*TRADE Group, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the ______ day of ___________, 2000.
E*TRADE GROUP, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her TeleBanc Options hereby assumed by E*TRADE are as
set forth in the Option Agreement, the Plans, as applicable, and such Stock
Option Assumption Agreement.
______________________________________
((First_Name)) ((Last_Name)), OPTIONEE
DATED: __________________, 2000
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