Exhibit 10.12
AMERITRADE HOLDING CORPORATION
1996 LONG-TERM INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR EXECUTIVES
THIS AGREEMENT, made and entered into as of AUGUST 5, 2004(the "Grant
Date") by and between Ameritrade Holding Corporation (the "Company") and XXXX X.
XXXXXXXX (the "Participant");
WITNESSETH THAT:
WHEREAS, the Company maintains the Ameritrade Holding Corporation 1996
Long-Term Incentive Plan (the "Plan"); and
WHEREAS, the Participant is an employee of the Company and was selected
by the Committee (as defined in the Plan) to receive the grant of an option
under the Plan;
NOW, THEREFORE, the Company and the Participant hereby agree as
follows;
1. Grant: Option Price. This Agreement evidences the grant to the
Participant, pursuant to the terms of the Plan, of an option (the
"Option") to purchase a total of 750,000 shares of Stock. The Exercise
Price of each share subject to the Option shall be $10.90. The Option
is not intended to be, and will not be treated as an "incentive stock
option" as that term is used in section 422 of the Code.
2. Vesting. Subject to the terms and conditions of this Agreement, the
Option shall become vested and exercisable with respect to 1/4 of the
shares of Stock awarded under this Agreement on the first anniversary
of the Grant Date, and shall become vested and exercisable with respect
to an additional 1/4 of the shares of Stock under this Agreement on
each subsequent anniversary until such time as the Option is fully
exercisable; provided, however, that no portion of the Option shall
vest or become exercisable after the date on which the Participant's
employment with the Company terminates for any reason. Notwithstanding
the foregoing, if the Participant's employment is terminated pursuant
to Section 2(B)(iii) or Section 2(C) of the Employment Agreement
between the Company and the Participant (referred to in such agreement
as J. Xxx Xxxxxxxx) made and effective as of October 1, 2001, as
amended (the "Employment Agreement'), the Option shall continue to vest
and become exercisable until the earlier of the date that the Option is
fully exercisable or the expiration of the Term of the Employment
Agreement (without giving effect to an early termination of the
Employment Agreement), if earlier; provided, however, that this
sentence shall apply to provide for vesting of the Option after the
Participant's termination of employment only if the Committee
determines that such continued vesting is required by Section 2(B)(iii)
or Section 2(C) of the Employment Agreement. In the event that the
Committee determines not to permit the Option to continue vesting after
the date of such termination in accordance with its terms (without
regard to the proviso in the immediately preceding sentence), then the
Participant shall be entitled to losses and damages, if any, in
accordance with Section 2(B)(iii) or Section 2(C) of the Employment
Agreement, as applicable.
3. Exercise. Subject to the restrictions contained herein, after the
Option becomes vested or exercisable pursuant to paragraph 2 and prior
to the Expiration Date (defined below), the Option, to the extent then
vested or exercisable, may be exercised in whole or in part by filing a
written notice with the Secretary of the Company at its corporate
headquarters. The exercise notice must be filed prior to the Expiration
Date, must specify the number of shares of Stock which the Participant
elects to purchase and must be accompanied by payment of the Option
Price (including any applicable withholding taxes) for such shares of
Stock indicated by the Participant's election. Payment of the Option
Price (and any applicable withholding taxes) shall be by cash or check
payable to the Company, by delivery of shares of Stock having an
aggregate Fair Market Value (valued as of the date of exercise) that is
equal to the Option Price for the shares of Stock, or any combination
thereof. The Participant may pay the Option Price by authorizing
Ameritrade, Inc. (or such other suitable party designated by the
Company) to sell shares of stock (or a sufficient portion of the
shares) acquired upon exercise of the Option and remit to the Company a
sufficient portion of the sale proceeds to pay the entire Option Price
and any tax withholding resulting from such exercise.
4. Expiration of Option. The "Expiration Date" for this Option shall be
the first to occur of the following, as described below, subject to the
descriptions, definitions, and/or provisions of the Employment
Agreement:
a. Notwithstanding the following, in no event shall the Expiration
Date extend beyond the ten-year anniversary of the Grant Date.
b. Upon Death or disability (within the meaning of Section 2(B)(i)
of the Employment Agreement), the Option shall immediately become
100% vested and the Expiration Date shall be the one-year
anniversary of the Participant's termination date determined
under Section 2(B)(i) of the Employment Agreement (after giving
effect to the notice period);
c. Upon termination of the Participant's employment by the Company
for reasons provided in Section 2(B)(ii) of the Employment
Agreement (relating to termination for cause or the achievement
of the stock price target), the Option shall be exercisable to
the extent vested at the time the Participant's employment is
terminated in accordance with in Section 2(B)(ii) of the
Employment Agreement and the Expiration Date shall be the
three-month anniversary of the Participant's termination date.
d. Upon termination of the Participant's employment by the Company
for reasons provided in Section 2(B)(iii) of the Employment
Agreement, or if the Participant's employment is terminated
pursuant to Section 2(C) of the Employment Agreement, the Option
shall be exercisable to the extent vested in accordance with
Section 2 of this Agreement at the time of exercise and the
Expiration Date shall be the later of the end of the stated Term
of the Employment Agreement (without giving effect to an early
termination of the Employment Agreement) or the two-year
anniversary of the Participant's termination date; provided,
however, that the Option shall be exercisable after the two year
anniversary of the Participant's actual termination date only if
the Committee determines that such exercise is required by
Section 2(B)(iii) or Section 2(C) of the Employment Agreement. In
the event that the Committee determines not to permit the Option
to continue to remain exercisable after the two-year anniversary
of such termination date in accordance with its terms (without
regard to the proviso in the immediately preceding sentence),
then the Participant shall be entitled to losses and damages, if
any, in accordance with Section 2(B)(iii) or Section 2(C) of the
Employment Agreement, as applicable.
e. Upon a Change of Control, as defined in Section 2(A) of the
Employment Agreement, the Option shall immediately become 100%
vested; provided, however, that while the Participant remains
employed by the Company, the Option will only be exercisable to
the extent it would have vested according to paragraph 2 of this
Agreement absent a Change of Control. If the Participant's
employment with the Company is terminated within twelve months
from the occurrence of a Change of Control, the Expiration Date
of the Option shall be the two-year anniversary of the
Participant's termination date if such two-year anniversary would
be later than the Expiration Date otherwise determined under the
foregoing provisions of this Section 4.
5. Restriction on Sale of Shares. The Participant's right to sell any
shares acquired by exercise of this Option shall be subject to the
terms, conditions and restrictions of the Ameritrade equity ownership
and disposition guidelines.
6. Nontransferability. The Option shall not be transferable except by
will or the laws of descent and distribution and shall be exercisable
during the Participant's lifetime only by the Participant.
7. Administration. The authority to manage and control the operation
and administration of this Agreement shall be vested in the Committee
and the Committee shall have all of the powers with respect to this
Agreement that it has with respect to the Plan. Any interpretation of
the Agreement by the Committee and any decision made by it with respect
to the Agreement is final and binding on all persons.
8. Plan Governs. Notwithstanding anything in this Agreement to the
contrary, the terms of this Agreement shall be subject to the terms of
the Plan, a copy of which may be obtained by the Participant from the
office of the Secretary of the Company.
9. Successors. This Agreement shall be binding upon and shall inure to
the benefit of any assignee or successor in the interest of the
Company, and shall be binding upon and inure to the benefits of any
estate, legal representative, beneficiary or heir of the Participant.
10. Employee and Shareholder Status. This Agreement does not constitute
a contract of employment or continued service and does not give the
Participant the right to be retained as an employee of the Company.
This Agreement does not confer upon the Participant or any holder
thereof any right as a shareholder of the Company prior to the issuance
of Stock pursuant to the exercise of the Option.
11. Amendment and Severability. This Agreement may be amended by
written agreement of the Participant and the Company, subject to the
consent of the Committee, without the consent of any other person. If
any provision, sub-provision or paragraph of this Agreement is found to
be unenforceable by a court of competent jurisdiction, it shall not
impair the enforceability of the other provisions, sub-provisions, and
paragraphs.
12. Defined Terms. Unless the context clearly implies or indicates the
contrary, a word, term or phrase used or defined in the Plan is
similarly used or defined for purposes of this Agreement.
* * * * * * *
IN WITNESS WHEREOF, the Participant has hereunto set his or her hand
and the Company has caused these presents to be executed in its name and on its
behalf, all as of the date first above written and the Participant hereby
acknowledges that the terms and conditions of this Agreement have been read and
understood.
PARTICIPANT
/s/ Xxxx Xxx Xxxxxxxx
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AMERITRADE HOLDING CORPORATION
By: /s/ Xxxxx Xxxxxx
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Its: /s/ EVP and General Counsel
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