EXHIBIT 10.1
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement") is made as of this sixth day
of April, 2002 by and among Arrow Stock Holding Corporation, a Delaware
corporation (the "Company"), the stockholders listed on Schedule A as the
"Xxxxxxxx Holders" and the stockholders listed on Schedule B as the "Datek
Holders." Certain capitalized terms are defined in Section 1 below.
RECITALS
WHEREAS, concurrently with the execution of this Agreement, the
Company, Ameritrade Holding Corporation ("Ameritrade"), Arrow Merger Corp., Dart
Merger Corp. and Datek Online Holdings Corp., a Delaware corporation ("Datek"),
have entered into that certain Agreement and Plan of Merger, dated as of the
date hereof (as may be amended, the "Merger Agreement"), pursuant to which,
among other things, two subsidiaries of the Company will be merged into
Ameritrade and Datek (the "Mergers") so that Ameritrade and Datek will each
become a wholly-owned subsidiary of the Company and the Xxxxxxxx Holders and the
Datek Holders will be issued shares of Common Stock of the Company; as of the
Effective Time the Company will change its name to "Ameritrade Holding
Corporation;"
WHEREAS, the Xxxxxxxx Holders and the Datek Holders desire to provide
for certain terms relating to the governance of the Company and to set forth
certain continuing rights and obligations with respect to the respective
interests (after consummation of the Mergers) of the Xxxxxxxx Holders and the
Datek Holders in the Company, in each case on the terms and conditions set forth
in this Agreement; and
WHEREAS, the Merger Agreement contemplates that this Agreement will be
executed concurrently with the execution of the Merger Agreement, with its
provisions to be effective upon consummation of the Mergers.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. GENERAL
1.1. EFFECTIVE DATE. This Agreement shall not be effective, and the
parties shall not be bound by any obligations hereunder, until the closing
occurs under the Merger Agreement on the Closing Date. In the event that the
Merger Agreement is terminated, this Agreement shall automatically terminate
without any action on the part of any party.
1.2. DEFINED TERMS. The following capitalized terms, as used in this
Agreement, shall have the meanings set forth below.
"Affiliate" means (i) with respect to any specified Person that is not
a natural Person, any other Person that, directly or indirectly through one or
more intermediaries, Controls, is Controlled by, or is under common Control
with, such specified Person, and (ii) with respect to any natural Person, any
Family Member of such natural Person.
"Board" means the Board of directors of the Company.
"Closing Date" has the meaning provided in the Merger Agreement.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means the Common Stock, $0.01 par value per share, of
the Company and any other equity securities issued or issuable with respect
thereto (whether by way of a stock dividend or stock split or in exchange for or
in replacement of or upon conversion of such shares or otherwise in connection
with a combination of shares, recapitalization, merger, consolidation or other
corporate reorganization).
"Competitor" means a competitor of the Company or any of its
subsidiaries who is so determined in the reasonable judgment of the Board. Any
person who is, or has an Affiliate who is, a bank, electronic clearing network,
stock exchange, broker dealer, clearing firm, or trading software licensor
having operations in the United States substantially similar to those conducted
by the Company or its subsidiaries (other than any fund, trust or account
managed or advised by an investment bank, bank, investment advisor or similar
investment fund) at the time of the proposed Transfer will be presumed to be a
Competitor unless the Board determines in its reasonable judgment that such
Person is not a Competitor. All determinations made by the Board under this
definition will be made in good faith after due consideration of all relevant
information.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
either through the ownership of voting securities or by contract.
"Co-Sale Offeree" means, with respect to each Co-Sale Transaction, each
Holder other than the Transferring Holder.
"Co-Sale Transaction" means any Transfer in connection with which the
Transferor is required to comply with the provisions of Section 3.2.
"Datek Holders" means, so long as such person is holding Shares (and
has not been designated as a person no longer having rights or obligations under
this Agreement in accordance with Section 2.4), the persons identified on
Schedule B as "Datek Holders", their successors and permitted assigns.
"Distribution" means a distribution as described in clause (iv) of the
definition of Excluded Transfer.
"Effective Time" has the meaning provided in the Merger Agreement.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Excluded Transfer" means a Transfer by a Holder (i) pursuant to a Rule
144 Transaction or pursuant to a Registered Public Offering; (ii) with respect
to any Holder who is a natural person, to a Family Member of such Holder;
provided that such Transferee exercises a Joinder Agreement and becomes a
Xxxxxxxx Holder, or a Datek Holder as the case may be, hereunder; (iii) with
respect to any other Holder, to any Affiliate of such Holder; provided that such
Affiliate executes a Joinder Agreement and becomes a Datek Holder, or a Xxxxxxxx
Holder as the case may be, hereunder; (iv) to a limited partner, member or
general partner of the Holder receiving Shares in a distribution of assets of
the Holder to its members or partners; or (v) to a broker-dealer or similar firm
in an equity derivative contract including a prepaid or other forward sale of
Shares.
"Family Member" means (i) a spouse, descendant, or any other Person
related by blood, adoption or marriage to such individual or such individual's
spouse, (ii) any trust, family partnership or limited liability company whose
beneficiaries shall primarily be such individual and/or such individual's spouse
and/or any Person related by blood or adoption to such individual or such
individual's spouse, and (iii) the estate or heirs of such individual.
"Fully Converted Basis" means, with respect to calculating the number
of shares of Common Stock held by a person, all such shares then outstanding
plus all shares of Common Stock issuable upon the exercise, conversion or
exchange of other securities of the Company held by such Holder.
"Holders" means, collectively, the Xxxxxxxx Holders and the Datek
Holders.
"Joinder Agreement" means a Joinder Agreement substantially in the form
set forth on Exhibit A; a Joinder Agreement need only be signed by the assignee
and the Company.
"M&A Transaction" means (i) the merger or consolidation of the Company
with any person, (ii) the sale, lease or exchange of all or substantially all of
the Company's assets or properties determined on a consolidated basis in any
transaction or series of related transactions or (iii) any transaction or series
of related transactions pursuant to which the Company issues Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock,
other than a Registered Public Offering for cash, and, in the case of (i), (ii)
and (iii), if such transaction requires approval of the stockholders of the
Company.
"Original Datek Holdings" means the Shares held by all of the Datek
Holders in the aggregate as set forth on Schedule C immediately after the
Effective Time, as adjusted to reflect stock splits, combinations,
recapitalizations and similar transactions after the Effective Time.
"Original Xxxxxxxx Holdings" means the Shares held by all of the
Xxxxxxxx Holders and Family Members of the Xxxxxxxx Holders in the aggregate as
set forth on Schedule C immediately after the Effective Time, as adjusted to
reflect stock splits, combinations, recapitalizations and similar transactions
after the Effective Time.
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"Outside Date" means the date which is one day after the Company's
annual meeting of stockholders in 2006.
"Permitted Transferee" means a Transferee under the clauses (ii), (iii)
or (iv) of the definition of "Excluded Transfer."
"Person" or "person" means an individual, a corporation, an
association, a partnership, a limited liability company, an estate, a trust, a
joint venture, an unincorporated organization and any other entity or
organization, governmental or otherwise, or division of any of the foregoing.
"Qualified M&A Transaction" means:
(i) for the period from and after the Closing Date until March
27, 2005, an M&A Transaction that is approved by a majority of the entire Board
and is recommended by the directors for approval by the stockholders of the
Company; provided that this majority includes the affirmative vote of at least
one Datek Director and at least one Xxxxxxxx Director (so long as this approval
and recommendation has not been withdrawn by the Board); or
(ii) for the period from and after March 27, 2005 until the
Second Outside Date, an M&A Transaction that is approved by a majority of the
entire Board and is recommended by the directors for approval by the
stockholders of the Company (so long as this approval and recommendation has not
been withdrawn by the Board).
"Registered Public Offering" means an offering of shares of Common
Stock that is registered under the Securities Act and is distributed to the
public.
"Xxxxxxxx Holders" means, so long as such person is holding Shares (and
has not been designated as a person no longer having rights or obligations under
this Agreement in accordance with Section 2.4), the persons identified on
Schedule A as "Xxxxxxxx Holders", their successors and permitted assigns.
"Rule 144 Transaction" means a transfer of Shares complying with Rule
144 or Rule 145 under the Securities Act as such rules are in effect on the date
of such transfer which has been effected pursuant to a "brokers transaction" as
defined in clauses (1) and (2) of paragraph (g) of Rule 144 as in effect on the
date hereof.
"Second Outside Date" means the date which is one day after the
Company's annual meeting of stockholders in 2007.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
"Shares" means, collectively, any shares of Common Stock and securities
convertible into Common Stock owned by any Holder.
"Transfer" means any direct or indirect transfer, donation, sale,
assignment, pledge, hypothecation, grant of a security interest in or other
disposal or attempted disposal of all or any
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portion of a security or of any rights associated therewith, whether voluntary
or involuntary; provided that "Transfer" shall not include the granting of a
security interest in Shares to secure indebtedness for borrowed money (so long
as the Shares will remain subject to this Agreement upon any foreclosure
thereon). "Transferred" means the accomplishment of a Transfer, and "Transferee"
means each recipient of a Transfer.
"Transferring Holder" means any Holder who proposes to Transfer all or
a portion of the Shares held by such Holder.
"Unqualified M&A Transaction" means for the period from and after the
Closing Date until March 27, 2005, an M&A Transaction in which (i) the Board
approval did not include the approval of at least one Datek Director and at
least one Xxxxxxxx Director or (ii) the Board approval did not include a
majority of the entire Board.
1.3. RULES OF CONSTRUCTION.
For all purposes of this Agreement unless otherwise expressly provided:
(a) "own", "ownership", "held" and "holding" refer to
ownership or holding beneficially, nominally or as record holder or record
owner;
(b) references to Sections, Exhibits, Schedules and Annexes
refer to Sections of this Agreement and Exhibits, Schedules and Annexes attached
to this Agreement;
(c) any uses of the masculine, feminine or neuter gender shall
also be deemed to include any other gender, as appropriate;
(d) the headings and captions in this Agreement are for
convenience of reference only and shall not define, limit or otherwise affect
any of its terms; and
(e) "including" means including without limitation.
2. GOVERNANCE
2.1. BOARD REPRESENTATION. Each Holder shall vote all of the voting
securities of the Company held by it in a manner so as to effect the following:
(a) The authorized number of directors comprising the Board
shall be nine (9) members, classified into three (3) classes of three directors
each: (x) Class I having a term expiring at the annual meeting of stockholders
of the Company in 2003 and every third year thereafter; (y) Class II having a
term expiring at the annual meeting of stockholders of the Company in 2004 and
every third year thereafter; and (z) Class III having a term expiring at the
annual meeting of stockholders of the Company in 2005 and every third year
thereafter.
(b) Through the Outside Date, the persons to be elected as
directors to the Board shall be designated as follows:
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(i) the Datek Holders shall have the right to
designate one Class I Director, one Class II Director and one Class III
Director (each, a "Datek Director");
(ii) the Xxxxxxxx Holders shall have the right to
designate one Class I Director, one Class II Director and one Class III
Director (each, a "Xxxxxxxx Director"); and
(iii) (x) the Datek Holders shall have the right to
designate one director (who shall be a Class I Director, the "Datek
Independent Director"), (y) the Xxxxxxxx Holders shall have the right
to designate one director (who shall be a Class II Director, the
"Xxxxxxxx Independent Director"), and (z) together the Datek
Independent Director and the Xxxxxxxx Independent Director shall
designate a third director (who shall be a Class III Director) (these
directors, the "Independent Directors"); provided that any person
designated as an Independent Director must (A) be reasonably acceptable
to a majority of the Datek Directors and a majority of the Xxxxxxxx
Directors; (B) not be an Affiliate or Family Member of any Xxxxxxxx
Holder or Datek Holder; and (C) not be employed by the Company or any
of its subsidiaries.
(c) Until three years after the Outside Date, in the event of
any vacancy on the Board due to death, disability, retirement, resignation or
removal of a Datek Director (or Xxxxxxxx Director) designated in accordance with
Section 2.1, unless his or her resignation or removal is pursuant to Section
2.4, the replacement director shall be designated by a majority of the remaining
Datek Directors (or the remaining Xxxxxxxx Directors, as the case may be). In
the event of any such vacancy on the Board of an Independent Director designated
in accordance with Section 2.1, the replacement Independent Director shall be
designated in the same manner as the Independent Director as to whom the vacancy
developed. Until three years after the Outside Date, each Datek Holder (and each
Xxxxxxxx Holder) shall not vote Shares held by it in favor of a removal (other
than for cause) of a Director designated by the Xxxxxxxx Holders (or the Datek
Holders, as the case may be) pursuant to Section 2.1(a), except as provided in
Section 2.4.
(d) Until three years after the Outside Date, if, for any
reason, any director designated in accordance with Section 2.1 is not elected to
the Board, the Holders will call a special meeting or act by written consent to
vote for the removal of the director not so designated under Section 2.1 and to
vote for the election of the person so designated to the Board.
(e) After the annual meeting of stockholders of the Company in
2006, the Holders will no longer be required to vote their Shares for any
director as provided in Section 2.1 nor take any action required by Section 2.2,
except as may be required under Section 2.1(c) and (d).
(f) No party shall designate a director who (i) has been
removed for cause from the Board; or (ii) has ever been convicted of a felony;
or (iii) is or, within 10 years prior to the date of designation, has been
subject to any injunction for violation of any federal or state securities law.
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(g) Any designation made by the Datek Holders or the Xxxxxxxx
Holders under this Section 2.1, Section 2.3 or Section 2.4 will be made by
giving notice to the Company, the Datek Holders and the Xxxxxxxx Holders,
accompanied by a certificate that the designation has been validly made in
accordance with an agreement or understanding among the Datek Holders (or the
Xxxxxxxx Holders, as the case may be).
2.2. AGREEMENT TO VOTE. Each Holder shall vote all of the Shares held
by it for the persons designated pursuant to Section 2.1 and shall take all
other necessary or desirable actions within its control (including calling a
meeting of stockholders of the Company, attending all meetings in person or by
proxy for purposes of obtaining a quorum, voting to remove directors not
designated in accordance with the provisions of this Agreement and executing all
written consents in lieu of meetings, as applicable) to effectuate the
provisions of this Section 2. The Company, subject to the Board's fiduciary
duties, shall take all necessary and desirable actions within its control
(including calling special meetings of the Board and stockholders) to effectuate
the provisions of this Section 2.
2.3. COMMITTEES. Until the Second Outside Date, (i) the Company shall,
subject to the Board's fiduciary duties, cause at least one Datek Director
designated by the Datek Holders and one Xxxxxxxx Director designated by the
Xxxxxxxx Holders to be appointed to each of the committees of the Board, and
(ii) if the Datek Director (or the Xxxxxxxx Director, as the case may be)
serving on any such committee shall cease to serve as a director of the Company
for any reason or otherwise is unable to fulfill his or her duties on any such
committee unless his or her ceasing to serve on such committee is pursuant to
Section 2.4, the Company, subject to the fiduciary duties of the Board, shall
cause the director to be succeeded by another Datek Director (or a Xxxxxxxx
Director, as the case may be) designated by the remaining Datek Directors (or
the Xxxxxxxx Directors, as the case may be).
2.4. REDUCTIONS IN DIRECTORS.
(a) If, at any time, the aggregate number of Shares held by the Datek
Holders falls below a Target Percentage Level of the Original Datek Holdings,
then immediately prior to the following annual meeting of the stockholders of
the Company, the total number of Datek Directors shall be reduced (if necessary)
to the total number shown below opposite such Target Percentage Level. This
reduction will be accomplished by the resignation or removal of one or more
Datek Directors (as selected by the Datek Holders) immediately prior to the
annual meeting. Upon the resignation or removal of a director pursuant to this
Section 2.4(a), one Datek Holder (as selected by the Datek Holders), together
with its Affiliates who are otherwise subject to this Agreement, will no longer
constitute a Datek Holder and will have no further rights and obligations under
this Agreement.
TOTAL NUMBER OF
---------------
TARGET PERCENTAGE LEVEL DATEK DIRECTORS
----------------------- ---------------
33% or more 3
22% - 32.9% 2
11% - 21.9% 1
0% - 10.9% 0
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(b) If, at any time the aggregate number of Shares held by the Xxxxxxxx
Holders and Family Members of the Xxxxxxxx Holders falls below a Target
Percentage Level of the Original Xxxxxxxx Holdings, then immediately prior to
the following annual meeting of the stockholders of the Company, the total
number of Xxxxxxxx Directors shall be reduced (if necessary) to the total number
shown below opposite such Target Percentage Level. This reduction will be
accomplished by the resignation or removal of one or more Xxxxxxxx Directors (as
selected by the Xxxxxxxx Holders) immediately prior to the annual meeting. Upon
the resignation or removal of a director pursuant to this Section 2.4(b), one
Xxxxxxxx Holder (as selected by the Xxxxxxxx Holders), together with its
Affiliates who are otherwise subject to this Agreement, will no longer
constitute a Xxxxxxxx Holder and will have no further rights and obligations
under this Agreement.
TOTAL NUMBER OF
---------------
TARGET PERCENTAGE LEVEL XXXXXXXX DIRECTORS
----------------------- ------------------
33% or more 3
22% - 32.9% 2
11% - 21.9% 1
0% - 10.9% 0
2.5. NO EXPANSION OF DUTIES. The parties acknowledge that the Datek
Holders and their Affiliates may have investments in other businesses similar to
and which may compete with the Company's businesses ("Competing Businesses") and
reserve the right to make additional investments in other Competing Businesses
independent of their investments in the Company. By virtue of a Datek Holder
holding Shares or by having persons designated by or affiliated with such Datek
Holder serving on or observing at meetings of the Board or any of the Company's
subsidiaries' (each, a "Subsidiary") respective boards of directors (or the
functional equivalent thereof in the case of non-corporate Subsidiaries) or
otherwise, no Datek Holder nor any of the Datek Holders' respective Affiliates
nor any Datek Director shall have any obligation to the Company, any Subsidiary
or any holder of Shares to refrain from competing with the Company or any
Subsidiary, making investments in Competing Businesses or otherwise engaging in
any commercial activity, and none of the Company, any Subsidiary or any holder
of Shares (other than such Datek Holder) shall have any right with respect to
any such investments or activities
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undertaken by such Datek Holder or other persons. Without limitation of the
foregoing, each Datek Holder or any Affiliates thereof or any Datek Director may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Company or any Subsidiary, and none of the Company, any Subsidiary or any
holder of Shares (other than the Datek Holder) shall have any rights or
expectancy by virtue of such Datek Holder's (or other person's) relationships
with the Company, any Subsidiary, this Agreement or otherwise in and to such
independent ventures or the income of profits derived therefrom; and the pursuit
of any such venture, even if such investment is in a Competing Business, shall
not be deemed wrongful or improper. No Datek Holder nor any of its Affiliates
nor any Datek Director shall be obligated to present any particular investment
opportunity (so long as the opportunity did not arise by virtue of a Datek
Director being a member of the Board) to the Company or any Subsidiary even if
such opportunity is of a character that, if presented to the Company or a
Subsidiary, could be taken by the Company or such Subsidiary, and the Datek
Holder and their respective Affiliates and the Datek Directors shall continue to
have the right to take for their own respective account or to recommend to
others any such particular investment opportunity. The provisions of this
Section 2.5 shall in no way limit or eliminate the Datek Holders' and their
respective Affiliates' and the Datek Directors' duties, responsibilities and
obligations with respect to any proprietary information of the Company and any
Subsidiary, including the duty to not disclose or use such proprietary
information improperly or to obtain therefrom an improper personal benefit.
Except as otherwise set forth in this Section, this Section 2.5 shall not limit
or eliminate the fiduciary duties of any Datek Director or otherwise be deemed
to exculpate any such Datek Director from any breach of his or her fiduciary
duties to the Company. The Company agrees that at the Effective Time its
certificate of incorporation will contain a provision to this effect.
2.6. ACTIONS TAKEN. Any action taken by a director designated by Datek
Holders or Xxxxxxxx Holders in his or her capacity as a director (such as
approving or authorizing transactions, adopting resolutions, etc.) shall be
considered to be an action taken by such director solely in his or her capacity
as a director and not in any other capacity and shall not be construed as,
considered to be or deemed to be an action taken by any Holder and such action
shall not in any way bind, obligate, estop, waive the rights of or otherwise
affect in any way such Holders (in their capacity as stockholders or otherwise)
or the directors in any capacity other than as directors of the Company.
2.7. OBSERVER RIGHTS. Until the Outside Date, the Datek Holders will
have the right to send one representative to each meeting of the Board (and the
board of directors of any Subsidiary), and such representative is to act as an
observer without a vote or other rights as a director (except the right to
receive sufficient notice to enable such attendance and the right to receive all
other communications, information and materials furnished, from time to time, to
directors of the Company (and such other Subsidiaries) and the right to receive
reimbursement for travel expenses to the same extent as directors of the
Company). The observer shall be selected by a majority of the Datek Directors.
In addition, until the Outside Date, if requested, the Xxxxxxxx Holders will
have the right to send an additional observer, as selected by a majority of the
Xxxxxxxx Directors; this observer will be subject to the same restrictions and
have the same rights as the observer selected by the Datek Directors. The Board
may exclude the observer from
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any portion of a meeting and may withhold confidential information or materials
if necessary to preserve the attorney-client privilege or if the Board
determines, in its reasonable judgment, that the exclusion or withholding is
reasonably necessary in the interests of the Company.
2.8. TECHNOLOGY INTEGRATION TASK FORCE. Immediately after the Closing
Date, there shall be established a Technology Integration Task Force, comprised
of an equal number of Datek employees on the one hand and Ameritrade employees
on the other hand (in each case selected by the Board), plus one representative
to be selected by Xxxx Capital (who shall be the Chairman of the Technology
Integration Task Force). The Technology Integration Task Force will oversee, in
consultation with a consultant appointed by the Board, the integration of Datek
technology with the Company's technology, subject to the oversight and approval
of the Board.
2.9. CUSTOMER ORDER HANDLING. The parties understand that the objective
of the Company is that execution of transactions for customers of the Company
will comply with all applicable regulatory standards and that the Company will
continue to adopt and enforce procedures and policies to that end. The Company
recognizes that a large part of the success of Datek and its high client
satisfaction is attributable to the ECN execution destination of The Island ECN,
Inc. and the value placed on this facility by Datek's clients. Because the
number one priority for the combined Company will be the best interests of its
clients, the Company will endeavor to maintain the success of this facility. The
Company will preserve the functionality of Datek technology with respect to
order handling and the Company will continue to use a functionally equivalent
system.
3. TAG-ALONG RIGHTS
3.1. CERTAIN TRANSFERS.
(a) Private Transfers to Competitors and 15% Holders. If,
prior to the third anniversary of the Closing Date, a Holder proposes to
Transfer any Shares to a Competitor or to a person (together with its
Affiliates) or "group" (as defined in Section 13(d) of the Exchange Act), who
would, upon consummation of such Transfer beneficially own 15% or more of the
Common Stock (as determined under Section 13(d) of the Exchange Act), the
Transferring Holder will be required to comply with Section 3.2; provided that
Excluded Transfers shall not be subject to Section 3.2.
(b) Private Transfers to 5% Holders. If, prior to the first
anniversary of the Closing Date, a Holder proposes to Transfer any Shares to a
person (together with its Affiliates) or "group" (as defined in Section 13(d) of
the Exchange Act and the rules and regulations thereunder), who would, upon
consummation of such Transfer beneficially own 5% or more of the Common Stock
(as determined under Section 13(d) of the Exchange Act), the Transferring Holder
will be required to comply with Section 3.2; provided that Excluded Transfers
shall not be subject to Section 3.2.
(c) Procedures for Transfers to Competitors. If, prior to the
third anniversary of the Closing Date, a Holder proposes to Transfer any Shares
to a person who it reasonably
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believes might be deemed to be a Competitor, the Holder will provide a Transfer
Notice to the Company and to the Board. The Company shall notify the Holder
within ten (10) business days after receipt of the Transfer Notice as to whether
the Board has determined that the proposed Transferee is a Competitor (a
"Response Notice"); if the Board has determined that the Transferee is a
Competitor, Section 3.1(a) applies. Any determination by the Board shall be made
pursuant to procedures to be developed by the Board. If a Response Notice is not
delivered to the Transferring Holder within the ten (10) business day period,
the proposed Transferee shall be deemed not to be a "Competitor". A "Transfer
Notice" will set forth the following: it is a Transfer Notice under this Section
3.1(c); it requires a Response Notice within a ten (10) business day period; the
Holder proposes to Transfer an amount of Shares to a person who may be a
Competitor; the amount of Shares proposed to be Transferred and the
identification of the proposed Transferee, including a brief description of its
business. Excluded Transfers are not subject to this Section 3.1(c).
(d) No Other Restrictions. Except as set forth in Sections
3.1, 3.2, 3.3 and 4(b), there are no restrictions in this Agreement with respect
to any Transfer of Shares by a Holder.
3.2. TAG-ALONG RIGHTS.
(a) The Transferring Holder will promptly give each Co-Sale
Offeree written notice (a "Co-Sale Notice") of the terms and conditions of the
Co-Sale Transaction, including the maximum number of Shares owned by the
Transferring Holder and all Co-Sale Offerees that the proposed Transferee is
willing to purchase (the "Co-Sale Shares"), the identity of the proposed
Transferee, the cash or other consideration, and all other material terms of the
Co-Sale Transaction. Each Co-Sale Offeree shall have the right to participate in
the Co-Sale Transaction on the terms and conditions as set forth in the Co-Sale
Notice (the "Co-Sale Option"), which right shall be exercisable upon written
notice (the "Acceptance Notice") to the Transferring Holder within twenty (20)
days after the receipt by the Co-Sale Offerees of the Co-Sale Notice. The
Acceptance Notice shall indicate the number of shares each Co-Sale Offeree
wishes to sell on the terms and conditions stated in the Co-Sale Notice. To the
extent one or more of the Co-Sale Offerees exercise such right of participation
in accordance with the terms and conditions set forth in the Co-Sale Notice, the
number of shares of stock that such Transferring Holder may sell in the
transaction shall be correspondingly reduced as provided in Section 3.2(b).
(b) Each of the Transferring Holder and each Co-Sale Offeree
shall in its discretion have the right to sell up to a portion of its Shares
pursuant to the Co-Sale Transaction that is equal to the product obtained by
multiplying (i) the total number of Co-Sale Shares by (ii) a fraction, the
numerator of which is the total number of Shares held by such Transferring
Holder or Co-Sale Offeree on a Fully Converted Basis and the denominator of
which is the total number of Shares held by the Transferring Holder and all
Co-Sale Offerees on a Fully Converted Basis. To the extent one or more Co-Sale
Offerees elect not to exercise their Co-Sale Option in full, then the rights of
the Transferring Holder and the other Co-Sale Offerees who exercised their
Co-Sale Option to sell Shares shall be increased proportionately based on their
relative holdings of Shares by the full amount of Shares that the non-electing
Co-Sale Offerees were entitled to but did not sell pursuant to the preceding
sentence. If not all of the Co-Sale Offerees
-11-
elect to sell their pro rata share of the Co-Sale Shares within said twenty (20)
day period, then the Transferring Holder shall promptly notify in writing the
Co-Sale Offerees who do so elect and shall offer such Co-Sale Offerees the
additional right to participate to the extent of their pro rata share of the
full amount of the Co-Sale Shares which the non-electing Co-Sale Offerees were
entitled to but did not sell. Each Co-Sale Offeree shall have five (5) days
after receipt of such notice to notify the Transferring Holder of its election
to sell additional shares.
(c) Within ten (10) days after the date by which the Co-Sale
Offerees are required to notify the Transferring Holder of their intent to
exercise the Co-Sale Option, the Transferring Holder shall notify each Co-Sale
Offeree of the number of shares held by such Co-Sale Offeree that will be
included in the sale and the date on which the Co-Sale Transaction will be
consummated, which shall be no later than the later of (i) sixty (60) days after
the date by which the Co-Sale Offerees were required to notify the Transferring
Holder of their intent to exercise the Co-Sale Option and (ii) the satisfaction
of any governmental approval or filing requirements, if any. No Co-Sale Offeree
participating, as a result of a Co-Sale Notice, in a Co-Sale Transaction as to
which this Section 3.2 applies shall be required to give a Co-Sale Notice
pursuant to this Section 3.2 with respect to any Shares to be included by such
Co-Sale Offeree in such Co-Sale Transaction.
(d) Each Co-Sale Offeree participating in a Co-Sale
Transaction hereunder agrees to execute and deliver such agreements as may be
reasonably specified by the Transferring Holder to which the Transferring Holder
will also be party, including without limitation agreements to (i) (A) make
individual representations, warranties, covenants and other agreements as to the
unencumbered title to the Shares being conveyed and (B) be liable without
limitation as to such representations, warranties, covenants and other
agreements and (ii) be liable (whether by purchase price adjustment, indemnity
payments or otherwise) in respect of representations, warranties, covenants and
agreements in respect of the Company and its subsidiaries; provided, however,
that the aggregate amount of liability described in this clause (d) in
connection with any Co-Sale Transaction shall not exceed the lesser of (x) such
participating Co-Sale Offeree's pro rata portion of any such liability, to be
determined in accordance with such participating Co-Sale Offeree's portion of
the total number of Shares included in such Co-Sale Transaction and (y) the
proceeds to such participating Co-Sale Offeree in connection with such Co-Sale
Transaction. At the time of consummation of the Co-Sale Transaction, the
proposed Transferee shall remit directly to each such Co-Sale Offeree that
portion of the sale proceeds to which such Co-Sale Offeree is entitled by reason
of its participation therein.
(e) Promptly after such sale, the Transferring Holder shall
notify each participating Co-Sale Offeree of the consummation thereof and shall
furnish such evidence of the completion and time of completion of such sale and
of the terms thereof as may reasonably be requested by any such Co-Sale Offeree.
In the event that the Co-Sale Transaction is not consummated within the period
required by Section 3.2(a) or the proposed Transferee fails timely to remit to
each such Co-Sale Offeree its portion of the sale proceeds, the Proposed
Transaction shall be deemed to lapse, and any Transfers of shares pursuant to
such Proposed Transaction shall be deemed to be in violation of the provisions
of this Agreement unless the Transferring Holder once again complies with the
provisions of Section 3 with respect to such Proposed Transaction.
-12-
(f) Any Co-Sale Offeree may designate another Person to
exercise its Co-Sale Option, provided the designated Person is an Affiliate of
the designating Co-Sale Offeree.
3.3. PROHIBITED TRANSFERS. If any Transfer is made or attempted
contrary to the provisions of Section 3.1, then: (a) this purported Transfer
shall be void ab initio; (b) the Company and the Holders shall have, in addition
to any other legal or equitable remedies that they may have, the right to
enforce the provisions of this Agreement by actions for specific performance (to
the extent permitted by law); and (c) the Company shall have the right to refuse
to recognize any Transferee of a void Transfer as one of its stockholders for
any purpose.
4. M&A TRANSACTIONS.
(a) Each Holder, as a stockholder, agrees:
(i) until the Second Outside Date, to vote all of the
Shares held by it in favor of (or to execute written consents in favor
of) any Qualified M&A Transaction; and
(ii) until March 27, 2005, to vote all of the Shares
held by it against (or to execute written consents against) any
Unqualified M&A Transaction.
(b) Each Holder agrees that until March 27, 2005, it will not
tender any Shares held by it in connection with any tender offer for
Common Stock subject to Section 14(d)(1) of the Exchange Act unless the
tender offer has been approved by a majority of the entire Board;
provided, that the majority includes the affirmative vote of at least
one Datek Director and at least one Xxxxxxxx Director.
5. GENERAL
5.1. TERMINATION. This Agreement shall terminate on the Second Outside
Date, except for any provisions which expressly continue after that date.
5.2. CERTIFICATE OF INCORPORATION. The Company agrees that the
certificate of incorporation of the Company as of the Effective Time will
contain provisions to the following effect: (i) there shall be a classified
board as contemplated by Section 2.1(a); (ii) directors may be removed by the
stockholders without cause; (iii) the right of holders of 25% of the outstanding
shares of Common Stock to call a special meeting of the stockholders of the
Company; (iv) the right of holders of 5% of the outstanding shares of Common
Stock to nominate directors; (v) the right of stockholders to act by written
consent; (vi) mandatory director indemnification; and (vii) director
exculpation.
5.3. AMENDMENTS, WAIVERS AND CONSENTS.
(a) No course of dealing between or among any of the parties
to this Agreement and no delay on the part of any party in exercising any rights
under this Agreement or any other agreement contemplated by this Agreement shall
operate as a waiver of any such rights.
-13-
(b) This Agreement may be amended, modified, extended or
terminated, and the provisions hereof may be waived, only by an agreement in
writing signed by (x) Datek Holders holding 80% of the Shares then owned by
Datek Holders, voting together as a single class and (y) Xxxxxxxx Holders
holding 80% of the Shares then owned by the Xxxxxxxx Holders, voting together as
a single class; provided that no amendment or modification may alter (in any
material respect) or impose material obligations on the Company unless the
Company consents to the amendment or modification. Each such amendment,
modification, extension, termination and waiver shall be binding upon each party
and each holder of Shares subject to this Agreement. In addition, each party and
each holder of Shares subject to this Agreement may waive any right hereunder by
an instrument in writing signed by such party or holder and delivered to the
Company.
5.4. CERTAIN ACTIONS. Unless otherwise expressly provided herein,
whenever any action or consent is required under this Agreement by (i) the Datek
Holders (as a group, as opposed to the exercise by a Datek Holder of its
individual rights or obligations hereunder), it shall be by the affirmative vote
of the holders of Shares representing a majority of the Shares then held by the
Datek Holders, voting together as a separate class, and (ii) the Xxxxxxxx
Holders (as a group, as opposed to the exercise by a Xxxxxxxx Holder of its
individual rights or obligations hereunder), it shall be by the affirmative vote
of the holders of Shares representing a majority of the Shares then held by the
Xxxxxxxx Holders, voting together as a separate class.
5.5. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by any
Datek Holder without the consent of the Xxxxxxxx Holders, or by any Xxxxxxxx
Holder without the consent of the Datek Holders, except a Holder may assign its
rights and obligations to a Permitted Transferee to whom it Transfers Shares.
Except as otherwise provided herein, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. The only Transferees bound by the terms of this Agreement are
those set forth in subclauses (ii) and (iii) of the definition of Excluded
Transfers and a person foreclosing upon a security interest in Shares; provided,
that in the event that a Distribution is effected for the primary purpose of
intentionally avoiding the obligations under Section 2.2 and Section 4, each
distributee will then be bound by those provisions with respect to the Shares
held by it.
5.6. LEGEND ON SECURITIES. The Company and each of the Holders
acknowledge and agree that substantially the following legend shall be typed on
each certificate evidencing any of the Shares held at any time by a Holder:
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE PROVISIONS OF A
STOCKHOLDERS AGREEMENT DATED AS OF APRIL ___, 2002, AS AMENDED FROM TIME TO
TIME, WHICH INCLUDES CERTAIN RESTRICTIONS ON TRANSFER. A COMPLETE AND CORRECT
COPY OF THIS AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF
THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST AND WITHOUT CHARGE.
-14-
5.7. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York without regard to its conflict of laws principles which might
result in the applications of the law of any other jurisdiction, except to the
extent that the General Corporation Law of the State of Delaware applies as a
result of the Company being a Delaware corporation.
5.8. SPECIFIC PERFORMANCE. The parties agree that irreparable damage
will result in the event that this Agreement is not specifically enforced, and
the parties agree that any damages available at law for a breach of this
Agreement would not be an adequate remedy. Therefore, the provisions hereof and
the obligations of the parties hereunder shall be enforceable in a court of
equity, or other tribunal with jurisdiction by a decree of specific performance,
and appropriate injunctive relief may be applied for and granted in connection
therewith. Such remedies shall, however, be cumulative and not exclusive and
shall be in addition to any other remedies which a party may have under this
Agreement or otherwise.
5.9. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
5.10. NOTICES AND DEMANDS. Any notice given under this Agreement shall
be deemed to have been sufficiently given and received for all purposes when
delivered by hand, or five (5) business days after being sent by certified or
registered mail, postage and charges prepaid, return receipt requested, or two
(2) business days after being sent by overnight delivery providing receipt of
delivery, or, provided the recipient shall have indicated the appropriate
telephone number and/or e-mail address, by telecopy, or other method of
facsimile, or by electronic mail with the recipient's receipt of the message
being acknowledged or confirmed (electronically or otherwise), to the following
addresses: if to the Company, at its address set forth on Schedule A, or at any
other address designated by the Company to the Holders and the other parties in
writing; if to a Xxxxxxxx Holder or a Datek Holder, at its address as designated
for notice in Schedule A or Schedule B, or at any other address designated by it
to the Company in writing.
5.11. JURISDICTION. The parties hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the courts of the State of
New York and of the United States of America located in the Southern District of
the State of New York (the "New York Courts") for any litigation arising out of
or relating to this Agreement and the transactions contemplated hereby (and
agree not to commence any litigation relating thereto except in such courts),
waive any objection to the laying of venue of any such litigation in the New
York Courts and agree not to plead or claim that such litigation brought in any
New York Court has been brought in an inconvenient forum.
-15-
5.12. WAIVER OF JURY TRIAL. Each of the parties irrevocably waives all
right to trial by jury in any action, proceeding or counterclaim (whether based
on contract, tort or otherwise) arising out of or relating to this Agreement.
5.13. SEVERABILITY. Each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law.
Should any provision of this Agreement be deemed prohibited or invalid under
applicable law, that provision shall be ineffective to the extent of the
prohibition or invalidity, which shall not invalidate the remainder of that
provision or the other provisions of this Agreement.
5.14. THIRD PARTY BENEFICIARIES. This Agreement is for the sole benefit
of the parties and their successors and permitted assigns and nothing herein
expressed or implied shall give or be construed to give to any person or entity,
other than the parties and such assigns, any legal or equitable rights
hereunder.
5.15. INTEGRATION. This Agreement, including the exhibits, documents
and instruments referred to herein or therein, constitutes the entire agreement,
and supersedes all other prior agreements and understandings, both written and
oral, among the parties with respect to this subject matter.
5.16. SCHEDULE C. Immediately after the Closing Date, the Company shall
attach Schedule C showing the aggregate number of Shares held by the Family
Members of the Xxxxxxxx Holders (who are not themselves Xxxxxxxx Holders).
Schedule C shall also set forth the aggregate number of Original Datek Holdings
and Original Xxxxxxxx Holdings as of the Effective Time. Copies of Schedule C
shall be delivered to each of the Datek Holders and the Xxxxxxxx Holders.
[SIGNATURE PAGE FOLLOWS]
-16-
IN WITNESS WHEREOF, the parties have executed this Stockholders
Agreement as of the date first above written.
COMPANY:
ARROW STOCK HOLDING CORPORATION
By: /s/ Xxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxx
Title: CEO
DATEK HOLDERS:
XXXX CAPITAL FUND VII, X.X.
XXXX CAPITAL VII COINVESTMENT FUND, L.P.
By: Xxxx Capital Partners VII, L.P.,
its General Partner
By: Xxxx Capital Investors, LLC,
its General Partner
By: /s/ Xxxx Xxxxxxxxxxx
--------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Managing Director
BCI DATEK INVESTORS, LLC
By: /s/ Xxxx Xxxxxxxxxxx
--------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Managing Director
BCIP ASSOCIATES II
BCIP ASSOCIATES II-B
BCIP TRUST ASSOCIATES II
BCIP TRUST ASSOCIATES II-B
By: /s/ Xxxx Xxxxxxxxxxx
--------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Managing Director
Signature page to Stockholders Agreement
SILVER LAKE PARTNERS, L.P.
By: Silver Lake Technology Associates, L.L.C.,
its General Partner
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: VP
SILVER LAKE INVESTORS, L.P.
By: Silver Lake Technology Associates, L.L.C.,
its General Partner
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: VP
SILVER LAKE TECHNOLOGY INVESTORS, L.L.C.
By: Silver Lake Technology Management, L.L.C.,
its Managing Member
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: VP
Signature page to Stockholders Agreement
TA/ADVENT VIII, L.P.
By: TA Associates VIII, LLC,
its General Partner
By: TA Associates, Inc.,
its Manager
By: /s/ Xxx Xxxxxxxxx
-------------------------------
Name: Xxx Xxxxxxxxx
Title: Managing Director
TA EXECUTIVES FUND, LLC
By: TA Associates, Inc.,
its Manager
By: /s/ Xxx Xxxxxxxxx
-------------------------------
Name: Xxx Xxxxxxxxx
Title: Managing Director
TA INVESTORS, LLC
By: TA Associates, Inc.,
its Manager
By: /s/ Xxx Xxxxxxxxx
-------------------------------
Name: Xxx Xxxxxxxxx
Title: Managing Director
TA ATLANTIC & PACIFIC IV, L.P.
By: TA Associates AP IV Partners, L.P.,
its General Partner
By: TA Associates, Inc.,
its Manager
Signature page to Stockholders Agreement
By: /s/ Xxx Xxxxxxxxx
-------------------------------
Name: Xxx Xxxxxxxxx
Title: Managing Director
TA IX, L.P.
By: TA Associates IX, LLC,
its General Partner
By: TA Associates, Inc.,
its Manager
By: /s/ Xxx Xxxxxxxxx
-------------------------------
Name: Xxx Xxxxxxxxx
Title: Managing Director
ADVENT ATLANTIC & PACIFIC III, L.P.
By: TA Associates AAP III Partners, L.P.,
its General Partner
By: TA Associates, Inc.,
its General Partner
By: /s/ Xxx Xxxxxxxxx
-------------------------------
Name: Xxx Xxxxxxxxx
Title: Managing Director
Signature page to Stockholders Agreement
XXXXXXXX HOLDERS:
/s/ J. Xxx Xxxxxxxx
---------------------------------------------
J. Xxx Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX 1994 DYNASTY TRUST
By: /s/ J. Xxx Xxxxxxxx
---------------------------------------
J. Xxx Xxxxxxxx, trustee
J. XXX XXXXXXXX 1994 DYNASTY TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxxx, trustee
XXXXXXXX GRANDCHILDREN TRUST
By: /s/ Xxxxx X. Xxxxx, P.T. Admin. Officer
---------------------------------------
First National Bank of Omaha, trustee
Signature page to Stockholders Agreement
EXHIBIT A
FORM OF JOINDER AGREEMENT
The undersigned hereby agrees, effective as of the date hereof, to
become a party to that certain Stockholders Agreement (the "Agreement") dated as
of [ ], 2002 by and among [A], a Delaware corporation (the "Company"), and the
other parties named therein and for all purposes of the Agreement, the
undersigned shall be included within the term "Holder" [and "Datek Holder" (or
"Xxxxxxxx Holder", as the case may be)]. The address and facsimile number to
which notices may be sent to the undersigned is as follows:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Facsimile No. ________________________.
---------------------------------------------------
[NAME]
A-1
SCHEDULE A
XXXXXXXX HOLDERS
NAME ADDRESS FOR NOTICES
---- -------------------
J. Xxx Xxxxxxxx c/o Ameritrade Holding Corporation
0000 Xxxxx 000xx Xxxxxx
Xxxxx, XX 00000
Attn.: J. Xxx Xxxxxxxx
Facsimile: 000-000-0000
Xxxxxxx X. Xxxxxxxx c/o Ameritrade Holding Corporation
0000 Xxxxx 000xx Xxxxxx
Xxxxx, XX 00000
Attn.: J. Xxx Xxxxxxxx
Facsimile: 000-000-0000
Xxxxxxx X. Xxxxxxxx 1994 Dynasty Trust c/o Ameritrade Holding Corporation
0000 Xxxxx 000xx Xxxxxx
Xxxxx, XX 00000
Attn.: J. Xxx Xxxxxxxx
Facsimile: 000-000-0000
J. Xxx Xxxxxxxx 1994 Dynasty Trust c/o Ameritrade Holding Corporation
0000 Xxxxx 000xx Xxxxxx
Xxxxx, XX 00000
Attn.: J. Xxx Xxxxxxxx
Facsimile: 000-000-0000
Xxxxxxxx Grandchildren Trust c/o First National Bank of Omaha
First National Center
00xx xxx Xxxxx Xxxxxxx
Xxxxx, XX 00000
Attn.: J. Xxx Xxxxxxxx
Facsimile: 000-000-0000
SCHEDULE B
DATEK HOLDERS
NAME ADDRESS FOR NOTICES
---- -------------------
Xxxx Capital Fund VII, L.P. c/o Bain Capital
Xxxx Capital VII Co Investment Fund, L.P. 000 Xxxxxxxxxx Xxx.
BCI Datek Investors, LLC Xxxxxx, XX 00000
BCIP Associates II Attn: Xxxx Xxxxxxxxxxx
BCIP Associates II-B Fascimile: 000-000-0000
BCIP Trust Associates II
BCIP Trust Associates II-B
with a copy to:
x/x Xxxxx & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xx Xxxx
Fascimile: 000-000-0000
Silver Lake Partners, L.P. c/o Silver Lake Partners
Silver Lake Investors, L.P. 0000 Xxxx Xxxx Xxxx
Xxxxxx Xxxx Technology Investors, L.L.C. Xxxxx Xxxx, XX 00000
SLP CI-2, L.P.
Attn.: Xxxx Xxxxxxxxx
Facsimile: 000-000-0000
Additional fascimile copy:
Attn.: Xxxx Xxxxxx
Facsimile: 000-000-0000
TA/Atlantic & Pacific IV, L.P. c/o TA Associates
TA/Advent VIII, L.P. 000 Xxxx Xxxxxx, Xxxxx 0000
XX Xxxxxxxxx, LLC Xxxxxx, XX 00000
TA Executives Fund, LLC
TA IX, L.P. Attn.: Xxxxxx Xxxxx
Facsimile: 000-000-0000
