<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AmeriTrade Holding Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
AMERITRADE HOLDING CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 10, 1998
The Annual Meeting of Stockholders of AmeriTrade Holding Corporation (the
"Company") will be held at the Joslyn Art Museum, on Tuesday, February 10, 1998,
at 9:00 a.m., Central Standard Time, for the following purposes:
(1) To elect directors.
(2) To ratify the appointment of Deloitte & Touche LLP as independent
auditors for the Company for the fiscal year ending September 25, 1998.
(3) To amend the Company's Certificate of Incorporation to increase
the number of authorized shares of common stock.
(4) To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Enclosed herewith is a Proxy Statement setting forth information with
respect to the election of the four directors that will be elected by the
holders of the Company's Class A Common Stock ("Class A Stockholders"), the
ratification of the appointment of independent auditors and the proposal to
amend the Company's Certificate of Incorporation.
Only stockholders holding shares of Common Stock of record at the close of
business on December 22, 1997 will be entitled to notice of and to vote at the
meeting.
Class A Stockholders, whether or not they expect to be present at the
meeting, are requested to sign and date the enclosed proxy which is solicited on
behalf of the Board of Directors and return it promptly in the envelope enclosed
for that purpose. Any person giving a proxy has the power to revoke it at any
time, and Class A Stockholders who are present at the meeting may withdraw their
proxies and vote in person.
By Order of the Board of Directors
/s/ J. Peter Ricketts, Secretary
Omaha, Nebraska
January 9, 1998
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER SOLICITATION FOR PROXIES TO ENSURE A QUORUM AT THE ANNUAL MEETING.
<PAGE> 3
AMERITRADE HOLDING CORPORATION
4211 SOUTH 102ND STREET
OMAHA, NE 68127
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
OF
COMMON STOCK
This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Stockholders of AmeriTrade Holding
Corporation (the "Company") to be held on February 10, 1998 at the time and
place and for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders. The principal executive offices of the Company are at
4211 South 102nd Street, Omaha, Nebraska 68127. This Proxy Statement and the
proxy cards are first being mailed to stockholders on or about January 9, 1998.
The Company has two classes of Common Stock, the Class A Common Stock (the
"Class A Stock") and the Class B Common Stock (the "Class B Stock" and, together
with the Class A Stock, the "Common Stock"). The accompanying proxy is solicited
with respect to the holders of the Class A Stock (the "Class A Stockholders") on
behalf of the Board of Directors of the Company and is revocable at any time
before it is exercised by written notice of termination given to the Secretary
of the Company or by filing with him a later-dated proxy. Furthermore, the Class
A Stockholders who are present at the Annual Meeting may withdraw their proxies
and vote in person. All shares of the Company's Class A Stock represented by
properly executed and unrevoked proxies will be voted by the Board of Directors
of the Company in accordance with the directions given therein. Where no
instructions are indicated, proxies will be voted "FOR" each of the proposals
set forth in this Proxy Statement for consideration at the Annual Meeting. In
addition, the directors believe shares of the Common Stock held by executive
officers and directors of the Company will be voted "FOR" each such proposal.
Such shares represent approximately 62% of the Class A Stock and all of the
Class B Stock, which will constitute approximately 65% of the total shares
outstanding as of December 22, 1997. Shares of Class A Stock entitled to vote
and represented by properly executed, returned and unrevoked proxies will be
considered present at the meeting for purposes of determining a quorum,
including shares with respect to which votes are withheld, abstentions are cast
or there are broker nonvotes.
VOTING SECURITIES AND BENEFICIAL OWNERSHIP THEREOF BY PRINCIPAL STOCKHOLDERS,
DIRECTORS AND OFFICERS
The Company has two authorized classes of Common Stock which are designated
Class A Common Stock and Class B Common Stock. The two classes of Common Stock
are identical in all respects except that the holders of the Class B Stock are
entitled to elect a majority of the Board of Directors. Otherwise, each share of
Common Stock is entitled to one vote upon each matter to be voted on at the
Annual Meeting. Stockholders do not have the right to cumulate votes in the
election of directors. The holders of Class B Stock may convert their shares
into an equal number of shares of Class A Stock, but holders of Class A Stock
may not convert their shares into Class B Stock.
Only holders of Common Stock of record at the close of business on December
22, 1997 (the "Record Date") will be entitled to vote at the Annual Meeting. As
of the Record Date, there were 13,152,243 shares of Class A Stock and 1,364,400
shares of Class B Stock which were issued and outstanding.
The following table sets forth, as of the Record Date, the beneficial
ownership of each class of the Company's Common Stock by directors and the
nominees for director, by each of the executive officers named in the Summary
Compensation Table, by each person believed by the Company to beneficially own
<PAGE> 4
more than 5% of the Company's Common Stock and by all present executive officers
and directors of the Company as a group:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF NUMBER OF PERCENT OF
SHARES OF SHARES OF SHARES OF SHARES OF
CLASS A CLASS A CLASS B CLASS B
NAME STOCK STOCK STOCK STOCK
---- --------- ---------- --------- ----------
<S> <C> <C> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
J. Joe Ricketts(1), Director, Chairman and Chief
Executive Officer.................................... 7,996,888 60.8% 1,364,400 100%
Joseph A. Konen(2), Director, President and Chief
Operating Officer.................................... 9,588 * 0 0
Robert T. Slezak(3), Director, Vice President, Chief
Financial Officer and Treasurer...................... 4,555 * 0 0
Thomas J. Pleiss(4), Vice President and Assistant
Secretary............................................ 710 * 0 0
Susan M. Hohman, Vice President, Human Resources....... 920 * 0 0
John W. Ward, Director................................. 2,404 * 0 0
Gene L. Finn, Director................................. 2,404 * 0 0
Charles L. Marinaccio, Director........................ 2,404 * 0 0
Thomas Y. Hartley(5), Director......................... 2,604 * 0 0
Mark L. Mitchell, Director............................. 5,204 * 0 0
David W. Garrison, Director............................ 800 * 0 0
All Directors and Executive Officers as a group (14 in
group)............................................... 8,120,467 61.7% 1,364,400 100%
OTHER STOCKHOLDERS
Marlene M. Ricketts(6)................................. 5,097,841 38.8% 682,176 49.9%
Ricketts Grandchildren Trust(7)........................ 1,584,000 12.0 0 0
AmeriTrade Holding Corporation Profit Sharing
Plan(8).............................................. 1,393,248 10.6% 0 0
</TABLE>
- -------------------------
* Less than 1% of the issued and outstanding shares of the class.
(1) In addition to shares held in his own name, the number of shares of Class A
Stock beneficially owned by Mr. Ricketts includes 27,696 shares of Class A
Stock held in the J. Ricketts IRA over which Mr. Ricketts exercised sole
voting and investment power and 3,673,897 shares of Class A Stock owned by
Marlene M. Ricketts, 27,696 shares of Class A Stock in M. Ricketts IRA and
1,393,248 shares of Class A Stock owned by the AmeriTrade Holding
Corporation Profit Sharing Plan over which Mr. Ricketts exercises shared
voting and investment power with Marlene M. Ricketts, his spouse. Shares of
Class B Stock beneficially owned by Mr. Ricketts consist of 682,224 shares
of Class B Stock owned by the Joe Ricketts Dynasty Trust over which Mr.
Ricketts exercises sole voting and investment power and 682,176 shares of
Class B Stock owned by the Marlene Ricketts Dynasty Trust over which Mr.
Ricketts exercises shared voting and investment power with Marlene M.
Ricketts, his spouse. If all shares of Class B Stock beneficially owned by
Mr. Ricketts were converted into Class A Stock, Mr. Ricketts would
beneficially own 9,361,288 shares of Class A Stock which would represent
approximately 64.5% of the total shares of Class A Stock that would be
issued and outstanding after such conversion.
(2) Represents shares of Class A Stock owned by Joseph A. Konen IRA.
(3) Represents shares of Class A Stock held by Robert T. Slezak and Jane G.
Slezak, as trustees of the Robert T. Slezak and Jane G. Slezak Revocable
Trust.
(4) Represents shares of Class A Stock owned by Thomas J. and Michaele A.
Pleiss. Mr. Pleiss is also the Chief Financial Officer of OnMoney Financial
Services Corporation, a subsidiary of the Company.
(5) Represents 1,200 shares of Class A Stock held in the Thomas Y. Hartley SEP
IRA and 1,404 shares of Class A Stock held by Thomas Y. and Deborah R.
Hartley, as trustees of the Hartley Family Trust.
(6) In addition to shares held in her own name, the number of shares of Class A
Stock beneficially owned by Mrs. Ricketts includes 27,696 shares of Class A
Stock held in the M. Ricketts IRA and 1,393,248 shares
2
<PAGE> 5
of Class A Stock owned by the AmeriTrade Holding Corporation Profit Sharing
Plan over which Mrs. Ricketts exercises shared voting and investment power
with J. Joe Ricketts, her spouse. Shares of Class B Stock beneficially owned
by Mrs. Ricketts consist of 682,176 shares of Class B Stock owned by the
Marlene Ricketts Dynasty Trust over which Mrs. Ricketts exercises shared
voting and investment power with J. Joe Ricketts, her spouse. If all shares
of Class B Stock beneficially owned by Mrs. Ricketts were converted into
Class A Stock, Mrs. Ricketts would beneficially own 5,780,017 shares of
Class A Stock which would represent approximately 41.8% of the total shares
of Class A Stock that would be issued and outstanding after such conversion.
Mrs. Ricketts' address is c/o AmeriTrade Holding Corporation, 4211 South
102nd Street, Omaha, Nebraska 68127.
(7) The trustee of the Ricketts Grandchildren Trust is First National Bank of
Omaha, First National Center, 16th and Dodge Streets, Omaha, Nebraska 68102.
(8) The address of the AmeriTrade Holding Corporation Profit Sharing Plan is c/o
AmeriTrade Holding Corporation, 4211 South 102nd Street, Omaha, Nebraska
68127. The trustees of the AmeriTrade Holding Corporation Profit Sharing
Plan are J. Joe Ricketts and Marlene M. Ricketts.
3
<PAGE> 6
ELECTION OF DIRECTORS
BOARD OF DIRECTORS AND COMMITTEES
The full Board of Directors consist of nine directors, five of which will
be elected by the Class B Stockholders and four of which will be elected by the
Class A Stockholders. Accordingly, the Board has nominated J. Joe Ricketts,
Joseph A. Konen, Robert T. Slezak, John W. Ward and Gene L. Finn to be elected
as Class B Stockholders and has nominated Charles L. Marinaccio, Thomas Y.
Hartley, Mark L. Mitchell and David W. Garrison to be elected by the Class A
Stockholders. All nominees have been nominated to serve for a term of one year.
This Proxy Statement relates only to the solicitation of proxies from the
Class A Stockholders with respect to the election of four directors to be
elected by them (the "Class A Directors") and the other matters described
herein. The Board of Directors knows of no reason why any of Messrs. Marinaccio,
Hartley, Mitchell and Garrison might be unavailable to serve as the Class A
Directors, if elected, and each have expressed an intention to serve, if
elected. If any of Messrs. Marinaccio, Hartley, Mitchell and Garrison are unable
to serve, the shares represented by all valid proxies will be voted for the
election of such substitute nominee as the Board of Directors may recommend.
There are no arrangements or understandings between any of the persons nominated
to be a Class A Director and any other person pursuant to which any of such
nominees was selected.
The election of a Class A Director requires the affirmative vote of a
plurality of the shares of Class A Stock present in person or represented by
proxy at the meeting and entitled to vote. Consequently, votes withheld and
broker nonvotes with respect to the election of directors 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. Marinaccio, Hartley, Mitchell and
Garrison as Class A Directors, unless specified otherwise.
THE BOARD OF DIRECTORS RECOMMENDS THAT CLASS A STOCKHOLDERS VOTE "FOR" THE
ELECTION OF CHARLES L. MARINACCIO, THOMAS Y. HARTLEY, MARK L. MITCHELL AND DAVID
W. GARRISON AS CLASS A DIRECTORS.
4
<PAGE> 7
The table below sets forth certain information regarding the directors of
the Company. All members of, and the nominees to, the Board of Directors have
held the positions with the companies (or their predecessors) set forth under
"Principal Occupation" for at least five years, unless otherwise indicated.
<TABLE>
<CAPTION>
PRINCIPAL DIRECTOR TERM TO
NAME AGE OCCUPATION SINCE EXPIRE
---- --- ---------- -------- -------
<S> <C> <C> <C> <C>
NOMINEES TO BE ELECTED BY CLASS A STOCKHOLDERS
Charles L. Marinaccio................ 64 Independent Consultant and Director of 1997 1998
Securities Investor Protection
Corporation(1)
Thomas Y. Hartley.................... 64 President and Chief Operating Officer 1996 1998
of Colbert Golf Design and Development
Mark L. Mitchell..................... 37 Associate Professor at University of 1996 1998
Chicago
David W. Garrison.................... 42 Chief Executive Officer, President and 1997 1998
Chairman of the Board of Directors of
NETCOM On-Line Communications Services,
Inc.(2)
NOMINEES TO BE ELECTED BY CLASS B STOCKHOLDERS
J. Joe Ricketts...................... 56 Chairman and Chief Executive Officer of 1981 1998
the Company
Joseph A. Konen...................... 50 President and Chief Operating Officer 1996 1998
of the Company
Robert T. Slezak..................... 40 Vice President, Chief Financial Officer 1996 1998
and Treasurer of the Company
John W. Ward......................... 54 Chairman of Transition International, 1997 1998
Inc.(3)
Gene L. Finn......................... 65 Independent Consultant(4) 1996 1998
</TABLE>
- -------------------------
(1) Prior to becoming a director of the SIPC in 1995, Mr. Marinaccio was a
partner in the law firm of Kelley, Drye & Warren from 1985 through 1994.
(2) Mr. Garrison has also served on the Board of Directors for Traveling
Software since May of 1996. Prior to joining NETCOM On-Line Communications
Services, Inc. in 1995, Mr. Garrison served as President of SkyTel, a
division of Mobile Telecommunications, Inc. from 1990 to 1994.
(3) Mr. Ward has been an independent consultant since 1991, in addition to
acting as Chairman of Transition International, Inc. since 1994.
(4) From 1983 to 1995, Mr. Finn was Vice President and Chief Economist for the
National Association of Securities Dealers, Inc.
Information regarding other executive officers of the Company is found in
the Company's report on Form 10-K for the year ended September 26, 1997, which
is available upon request.
The Board of Directors conducts its business through meetings of the Board
and actions taken by written consent in lieu of meetings and by the actions of
its committees. During the fiscal year ended September 26, 1997, the Board of
Directors held three meetings and took action by written consent 10 times. All
directors attended at least 75% of the meetings of the Board of Directors and of
the committees of the Board of Directors on which they served during fiscal year
1997.
The Board of Directors has established two committees: Audit and
Compensation.
AUDIT COMMITTEE. The functions performed by the Audit Committee include
reviewing periodically with independent auditors the performance of the services
for which they are engaged, including reviewing the scope of the annual audit
and its results, reviewing the scope and results of the Company's internal
auditing function, reviewing the adequacy of the Company's internal accounting
controls with management and auditors and reviewing fees charged by the
Company's independent auditors. The Audit Committee is composed of Directors
Hartley and Finn. The Audit Committee met two times during fiscal year 1997.
5
<PAGE> 8
COMPENSATION COMMITTEE. The Compensation Committee reviews and approves
compensation policy, changes in salary levels and bonus payment and awards
pursuant to the Company's management incentive plans. The Compensation Committee
consists of Directors Ward, Mitchell and Marinaccio. The Compensation Committee
met four times during fiscal year 1997.
COMPENSATION OF DIRECTORS
Employee directors do not receive compensation for services provided as a
director. Nonemployee directors receive an annual retainer of $12,000, plus a
fee of $1,500 for attendance at quarterly Board of Directors meetings and a fee
of $1,000 for attendance at committee meetings. Half of the annual retainer is
paid in shares of Class A Stock and the remainder is paid in cash or stock at
the option of the director. The other fees are payable in cash or stock at the
option of the individual director. The number of shares of Class A Stock
delivered in payment of fees is determined by its market value on the date of
payment. The Company also reimburses each of its directors for reasonable
expenses incurred in attending meetings of the Board of Directors and its
various committees.
Nonemployee directors are also eligible to receive awards of restricted
stock and stock options under the Company's Directors Incentive Plan (the
"Directors Plan"). Under the Directors Plan, nonemployee directors are granted
800 shares of restricted Class A Stock and options to acquire 1,600 shares of
Class A Stock upon their initial election to the Board of Directors. Thereafter,
nonemployee directors may be granted restricted stock and stock options, subject
to approval of those directors who are not receiving a grant. Such awards may be
based on recommendations of outside consultants, taking into account such
factors as total shareholder return. The exercise price of options granted under
the Directors Plan may not be less than the fair market value of a share of the
Class A Stock on the date the option is granted. The options granted under the
Directors Plan generally vest over three years in substantially equal annual
installments beginning with the first anniversary of the date of grant. Options
may not be exercised prior to becoming vested. Shares of restricted stock may be
voted by a director immediately upon the award of such shares, but may not be
transferred and generally will not be entitled to receive dividends until such
shares have vested. Vesting of restricted stock occurs over a three year period
in substantially equal annual installments beginning with the first anniversary
of the date of grant. Unvested options and restricted stock are forfeited by a
director at the time he or she leaves the Board of Directors.
6
<PAGE> 9
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information regarding the annual and
long-term compensation awarded to, earned by or paid by the Company and its
subsidiaries to the Chief Executive Officer and the other four highest paid
executive officers of the Company for services rendered during the fiscal years
ended September 26, 1997 and September 27, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------- ----------------------- --------
RESTRICTED SECURITIES
STOCK UNDERLYING LTIP ALL OTHER
OTHER ANNUAL AWARD(S) OPTIONS/ PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) ($) SARS(#) ($) ($)
- --------------------------- ---- ------ ----- --------------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. Joe Ricketts............ 1997 $337,503 $148,650 $11,803 -- -- -- --
Chairman and Chief 1996 $285,252 $178,000 $11,778 -- -- -- --
Executive Officer
Joseph A. Konen............ 1997 $275,001 -- $11,866 -- -- -- --
President and Chief 1996 $200,004 $ 75,000 $11,940 -- -- -- --
Operating Officer
Robert T. Slezak........... 1997 $231,258 -- $11,866 -- -- -- --
Vice President, Chief 1996 $175,008 $ 50,000 $11,940 -- -- -- --
Financial Officer and
Treasurer
Thomas J. Pleiss........... 1997 $105,000 $ 33,608 $10,935 -- -- $928,868(2) --
Vice President and 1996 $105,000 $ 38,835 $10,602 -- -- -- --
Assistant Secretary(3)
Susan M. Hohman............ 1997 $113,750 $ 26,636 $ 8,182 -- -- -- --
Vice President, 1996 $108,750 -- $10,151 -- -- -- --
Human Resources
</TABLE>
- -------------------------
(1) The amounts in this column represent employer contributions to the Company's
Profit Sharing Plan.
(2) Represents deferred payments from the Company's Executive Bonus Plan of
amounts awarded in fiscal years 1992, 1993 and 1994.
(3) Mr. Pleiss is also the Chief Financial Officer of OnMoney Financial Services
Corporation, a subsidiary of the Company.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
No options were granted during fiscal year 1997 to the executive officers
listed in the Summary Compensation Table.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
No options were exercised during fiscal year 1997 by the executive officers
listed in the Summary Compensation Table.
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
No awards were made under the Company's 1996 Long-term Incentive Plan to an
executive officer listed in the Summary Compensation Table during fiscal year
1997.
EMPLOYMENT AGREEMENTS
On December 3, 1996, the Company entered into employment agreements (the
"Employment Agreements") with J. Joe Ricketts, its Chairman and Chief Executive
Officer; Joseph A. Konen, its President and Chief Operating Officer; and Robert
T. Slezak, its Vice President and Chief Financial Officer. The initial term
7
<PAGE> 10
of each Employment Agreement ended on December 3, 1997, but each term has been
renewed for the first of three one-year extension periods. The Employment
Agreements will be automatically renewed for two additional one-year extensions,
unless either party gives written notice of nonrenewal to the other party at
least 180 days prior to the then current expiration date. The Employment
Agreement with a particular officer will terminate prior to its scheduled
expiration date in the event of the officer's death or disability. In addition,
either party may terminate any of the Employment Agreements with or without
cause (as defined therein). If an officer is discharged from employment by the
Company without cause, he will receive continued payments of his base salary for
a period commencing on the date of termination and ending on a date as
determined in his Employment Agreement.
Each Employment Agreement provides for the payment of a base salary, which
is subject to annual adjustment, and to incentive compensation and other
employee benefits under the various benefit plans and programs maintained by the
Company. Each of the Employment Agreements contain confidentiality covenants on
the part of the named officers.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The report is not deemed to be "soliciting material" or to be "filed" with
the Securities and Exchange Commission (the "SEC") or subject to the SEC's proxy
rules or to the liabilities of Section 18 of the Securities Exchange Act of 1934
(the "1934 Act"), and the report shall not be deemed to be incorporated by
reference into any prior or subsequent filing by the Company under the
Securities Act of 1933 or the 1934 Act.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors (the "Committee"). The current
members of the Compensation Committee are Messrs. Ward, Mitchell and Marinaccio.
Prior to October 1996, there was no Compensation Committee and the then-existing
Board participated in decisions regarding executive officer compensation. Where
appropriate, the Committee reviews and considers the recommendations of
management before determining compensation policy. In addition, the Committee
has employed outside compensation consultants with respect to certain
compensation-related issues. The Company's compensation programs are designed to
be tied closely to Company performance and shareholder return and to enable the
Company to attract and retain the best possible executive talent.
Generally, the Company's compensation programs consist of salary, an
executive bonus program for certain executives, performance-based bonus programs
and a long-term incentive plan consisting primarily of a stock option program
for executives and key management employees. Although the incentive plan also
permits the award of stock appreciation rights, stock awards (including
restricted stock) and performance units, no such awards have been made under the
program.
During 1997, the salary of Messrs. Ricketts, Konen and Slezak was set
pursuant to employment agreements. The Committee determines the compensation for
other named executive officers based on the recommendation of management and, in
certain cases, outside compensation consultants. In 1997, the Committee also
engaged the services of a compensation consultant to review the compensation
packages provided to all of the named executive officers to determine whether
such packages provided salary and benefits which were comparable to similarly
situated individuals in comparable companies.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), limits the Company's deduction for compensation paid to the executive
officers named in the Summary Compensation Table to $1 million unless certain
requirements are met. The policy of the Compensation Committee with respect to
Section 162(m) is to establish and maintain a compensation program which will
optimize the deductibility of compensation. The Committee, however, reserves the
right to use its judgment, where merited by the Committee's need to respond to
changing business conditions or by an executive officer's individual
performance, to authorize compensation which may not, in a specific case, be
fully deductible by the Company.
8
<PAGE> 11
CHIEF EXECUTIVE OFFICER COMPENSATION
The compensation arrangement for Mr. Ricketts with respect to fiscal year
1997 was set pursuant to his employment agreement which was entered into before
the Company conducted its public stock offering. Mr. Rickett's base salary is
established by the terms of the employment agreement. The bonus awarded for
fiscal year 1997 was primarily based on the return on shareholders' equity
achieved by the Company over the preceding five years and in recognition of the
substantial efforts of Mr. Ricketts in connection with the successful public
offering of the Company's common stock.
Mark L. Mitchell
John W. Ward
Charles L. Marinaccio
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 1997, there were no compensation committee interlocks
and no insider participation in compensation committee decisions that were
required to be reported under the rules and regulations of the Securities
Exchange Act of 1934.
9
<PAGE> 12
COMPANY PERFORMANCE
The following graph and table set forth certain information comparing the
cumulative total return from a $100 investment in the Company and the stocks
making up an industry peer group and a broad-based stock index on March 4, 1997
(the date the Company's stock commenced public trading) through the end of the
Company's most recent fiscal year.
<TABLE>
<CAPTION>
AmeriTrade
Measurement Period Holding Industry Peer Standard & Poor's
(Fiscal Year Covered) Corporation Group 500 Index
<S> <C> <C> <C>
Mar 4, 1997 100 100 100
Mar 31, 1997 104 87 96
Jun 30, 1997 105 112 112
Sept 26, 1997 172 147 121*
- ------------------------
*as of 30 September 1997
</TABLE>
The Company included the following companies in its peer group, which
companies are publicly traded firms engaged in the securities brokerage
business:
E Trade Group Inc.
Charles Schwab Corp.
Southwest Securities Group Inc.
Everen Capital Corp.
PaineWebber Group Inc.
A.G. Edwards
Raymond James Financial Inc.
RELATED PARTY TRANSACTIONS
The Company paid $823,360 during fiscal year 1997 to J. Joe Ricketts and
Marlene M. Ricketts for lease of the Company's headquarters. J. Joe Ricketts is
Chairman and Chief Executive Officer of the Company.
On September 5, 1995, J. Joe Ricketts borrowed $173,000 from the Company,
payable on demand, at a 7.25% interest rate. The remaining outstanding principal
balance of the loan was fully paid on November 19, 1996.
10
<PAGE> 13
RATIFICATION OF APPOINTMENT OF AUDITOR
Deloitte & Touche LLP, who has been auditor for the Company since 1975, has
been appointed by the Board of Directors as auditor for the Company and its
subsidiaries for the fiscal year ending September 25, 1998. This appointment is
being presented to the stockholders for ratification. The ratification of the
appointment of auditor requires the affirmative vote of the holders of a
majority of the total shares of Common Stock present in person or represented by
proxy at the Annual Meeting and entitled to vote there at. Abstentions will have
the same effect as a vote against ratification. Broker nonvotes will not be
considered shares entitled to vote with respect to ratification of the
appointment and will not be counted as votes for or against the ratification.
This proxy is being solicited with respect to the ratification of the
appointment of auditor only from the Class A Stockholders. Proxies submitted
pursuant to this solicitation will be voted for the ratification of Deloitte &
Touche LLP as the Company's auditors for the fiscal year ending September 25,
1998, unless specified otherwise.
THE BOARD OF DIRECTORS RECOMMENDS THAT CLASS A STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
AUDITORS FOR THE FISCAL YEAR ENDING SEPTEMBER 25, 1998.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting and will be provided an opportunity to make a statement and to
respond to appropriate inquiries from stockholders.
AMENDMENT TO CERTIFICATE OF INCORPORATION
The Board of Directors of the Company has adopted, and is recommending to
the stockholders that they approve, an amendment to the Article Fourth of the
Company's Certificate of Incorporation (the "Proposed Amendment") that will
increase the total number of authorized shares of Class A Stock from 25,000,000
to 60,000,000 and the total number of authorized shares of Class B Stock from
2,000,000 to 6,000,000. The proposed amendment will not increase or otherwise
affect the number of authorized shares of the Company's Preferred Stock. The
text of the Article Fourth as it is proposed to be amended is set forth in
Exhibit A to this Proxy Statement.
There are presently 13,152,243 shares of the Company's Class A Stock and
1,364,400 shares of the Company's Class B Stock which are issued and
outstanding. Accordingly, there are only 11,847,757 shares of Class A Stock and
635,600 shares of Class B Stock which remain authorized for issuance by the
Company. The Board of Directors believes it would be in the best interest of the
Company and its stockholders to increase the authorized number of shares of
Common Stock so that there will be an ample number of authorized shares of
Common Stock available for future issuance by the Company without further
stockholder approval. The Company may desire to issue additional shares of
Common Stock for a variety of corporate purposes. For example, the Board of
Directors may determine that it is in the best interest of the stockholders to
maintain the trading price of the Class A Stock within a particular range and,
therefore, may wish to declare a stock split or stock dividend from time to
time. The current number of remaining authorized but unissued shares of Class A
Stock is not sufficient to allow a 2-for-1 split of the Company's Class A Stock.
The Company may also desire to issue additional shares of Common Stock in order
to raise additional equity capital or in connection with future acquisitions of
other companies. Further, from time to time, additional authorized but unissued
Common Stock may be issued to employees or employee benefit plans.
If the Company does not have a sufficient number of authorized but unissued
shares available for these purposes, it will need to amend its Certificate of
Incorporation in order to increase the number of authorized shares at the time.
It is the opinion of the Board of Directors that such an amendment should not be
postponed until a specific situation arises that requires additional authorized
Common Stock, because the time and expense incident to obtaining stockholder
approval at that time might disadvantage the Company by depriving it of the
flexibility which could be important in facilitating effective use of the Common
Stock.
The additional Common Stock authorized by the Proposed Amendment could be
issued at any time in the Board's discretion for any proper corporate purposes,
without further stockholder action, unless required by law or any rules or
regulations to which the Company is subject, including those of the NASDAQ Stock
11
<PAGE> 14
Market. The Company's Board of Directors and management have no plans or
agreements for the issuance of additional shares of Common Stock at this time,
other than pursuant to existing employee benefit plans or upon conversion, if
any, of Class B Stock to Class A Stock. It is the intention of the Board of
Directors and management to hold authorized and unissued Common Stock in reserve
for such corporate needs as may develop.
The authorization of additional shares of Common Stock may have a potential
anti-takeover effect if, for example, additional shares were issued in order to
dilute the stock ownership of persons seeking to obtain control of the Company.
However, the Board knows of no effort by any party to accumulate Common Stock or
to otherwise seek to obtain control over the Company and the Board of Directors
has no present plans to use additional shares that would be authorized by the
Proposed Amendment to inhibit a hostile takeover attempt. In addition, due to
the beneficial ownership of over 60% of the outstanding Class A Stock and all of
the outstanding Class B Stock by J. Joe Ricketts, it is unlikely that control of
the Company could be obtained without the approval of the Board of Directors.
Therefore, the Company does not consider the Proposed Amendment to be part of an
anti-takeover strategy.
Pursuant to Delaware law, the holders of the shares of a class of voting
stock are entitled to vote as a class on a proposed amendment to increase the
number of authorized shares of such class. Therefore, the Proposed Amendment may
only be adopted by the affirmative vote of the holders of a majority of the
issued and outstanding shares of both the Class A Stock and the Class B Stock
entitled to vote. As a result, abstentions and broker nonvotes will have the
same effect as a vote against the proposal. This proxy is being solicited with
respect to the Proposed Amendment only from the Class A Stockholders. Proxies
submitted pursuant to this solicitation will be voted in favor of the Proposed
Amendment, unless specified otherwise.
THE BOARD OF DIRECTORS RECOMMENDS THAT CLASS A STOCKHOLDERS VOTE "FOR" THE
PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE
AUTHORIZED NUMBER OF SHARES OF COMMON STOCK OF THE COMPANY.
SUBMISSION OF STOCKHOLDER PROPOSALS
Pursuant to the Company's Bylaws, stockholder proposals submitted for
presentation at the Annual Meeting should have been received by the Secretary of
the Company at its home office no later than October 13, 1997. Pursuant to the
Company's Bylaws, nominations for directors should have been submitted by
stockholders in writing to the Secretary of the Company by October 13, 1997.
Only stockholders of record are entitled to bring business before the Annual
Meeting or make nominations for directors.
In order to be included in the Company's proxy statement relating to its
next annual meeting, stockholder proposals must be submitted by September 10,
1998 to the Secretary of the Company at its home office. Such proposals must set
forth (i) a brief description of the business desired to be brought before the
annual meeting and the reason for conducting such business at the annual
meeting, (ii) the name and address of the stockholder proposing such business,
(iii) the class and number of shares of the Company's Common Stock beneficially
owned by such stockholder and (iv) any material interest of such stockholder in
such business. The inclusion of any such proposal in such proxy material shall
be subject to the requirements of the proxy rules adopted under the Securities
Exchange Act of 1934, as amended.
OTHER MATTERS
Management does not now intend to bring before the Annual Meeting any
matters other than those disclosed in the Notice of Annual Meeting of
Stockholders, and it does not know of any business which persons, other than
management, intend to present at the meeting. Should any other matters requiring
a vote of the stockholders arise, the proxies in the enclosed form confer upon
the person or persons entitled to vote the shares represented by such proxies
discretionary authority to vote the same in respect of any such other matter in
accordance with their best judgment.
12
<PAGE> 15
The Company will bear the cost of soliciting proxies. To the extent
necessary, proxies may be solicited by directors, officers and employees of the
Company in person, by telephone or through other forms of communication, but
such persons will not receive any additional compensation for such solicitation.
The Company will reimburse brokerage firms, banks and other custodians, nominees
and fiduciaries for reasonable expenses incurred by them in sending proxy
materials to the beneficial owners of the Company's shares. In addition to
solicitation by mail, the Company will supply banks, brokers, dealers and other
custodian nominees and fiduciaries with proxy materials to enable them to send a
copy of such materials by mail to each beneficial owner of shares of the
Company's Class A Stock which they hold of record and will, upon request,
reimburse them for their reasonable expenses in so doing.
The Company's Annual Report, including financial statements, is being
mailed, together with this Proxy Statement, to all stockholders entitled to vote
at the Annual Meeting. However, such Annual Report is not to be considered part
of this proxy solicitation material. IN ADDITION, ANY STOCKHOLDER WHO WISHES TO
RECEIVE A COPY OF THE FORM 10-K FILED BY THE COMPANY WITH THE SECURITIES AND
EXCHANGE COMMISSION MAY OBTAIN A COPY WITHOUT CHARGE BY WRITING TO THE COMPANY.
REQUESTS SHOULD BE DIRECTED TO J. PETER RICKETTS AT THE COMPANY'S PRINCIPAL
EXECUTIVE OFFICE.
By Order of the Board of Directors
/s/ J. Peter Ricketts
--------------------------------------
J. Peter Ricketts, Secretary
Omaha, Nebraska
January 9, 1998
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<PAGE> 16
EXHIBIT A
As amended, ARTICLE FOURTH, of the Company's Certificate of Incorporation
will read, in its entirety, as follows:
FOURTH: The total number of shares of capital stock which the Corporation
has authority to issue is 69,000,000 shares, consisting of:
(1) 3,000,000 shares of Preferred Stock, par value $1.00 per share
(the "Preferred Stock");
(2) 60,000,000 shares of Class A Common Stock, par value $.01 per
share (the "Class A Stock"); and
(3) 6,000,000 shares of Class B Common Stock, par value $.01 per share
(the "Class B Stock").
The Class A Stock and the Class B Stock are hereafter collectively referred
to as the "Common Stock."
A-1
<PAGE> 17
REVOCABLE PROXY OF HOLDERS
OF CLASS A STOCK
AMERITRADE HOLDING CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
AMERITRADE HOLDING CORPORATION FOR USE ONLY AT THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON FEBRUARY 10, 1998 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby authorizes the Board of Directors of AmeriTrade
Holding Corporation (the "Company"), or any successors in their respective
positions, as proxy, with full powers of substitution, to represent the
undersigned at the Annual Meeting of Stockholders of the Company to be held at
the Joslyn Art Museum, on Tuesday, February 10, 1998, at 9:00 a.m., Central
Standard Time, and at any adjournment of said meeting, and thereat to act with
respect to all votes that the undersigned would be entitled to cast, if then
personally present, in accordance with the instructions below and on the reverse
hereof.
1. ELECTION OF CLASS A DIRECTORS
[ ] FOR all nominees listed below for terms to expire in 1999
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
Charles L. Marinaccio
Thomas Y. Hartley
Mark L. Mitchell
David W. Garrison
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
-----------------------
2. AUDITORS. Ratification of the appointment of Deloitte & Touche
LLP as independent auditors for the fiscal year ending September 25, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. AMEND CERTIFICATE OF INCORPORATION. Amend Certificate of
Incorporation to increase the number of authorized shares of Common Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To vote, in its discretion, upon any other business that may properly
come before the Annual Meeting or any adjournment thereof. Management is not
aware of any other matters which should come before the Annual Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ELECTION OF THE BOARD OF DIRECTORS' NOMINEES FOR CLASS
A DIRECTORS, FOR THE RATIFICATION OF THE APPOINTMENT OF AUDITORS AND FOR THE
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK. (continued and to be signed on the reverse
hereof)
<PAGE> 18
This proxy is revocable and the undersigned may revoke it at any time prior
to the Annual Meeting by giving written notice of such revocation to the
Secretary of the Company. Should the undersigned be present and want to vote in
person at the Annual Meeting, or at any adjournment thereof, the undersigned may
revoke this proxy by giving written notice of such revocation to the Secretary
of the Company on a form provided at the meeting. The undersigned hereby
acknowledges receipt of a Notice of Annual Meeting of Stockholders of the
Company called for February 10, 1998 and the Proxy Statement for the Annual
Meeting prior to the signing of this proxy.
Dated: ,1998.
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----------------------------------
(Signature)
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(Signature if held jointly)
Please sign exactly as name
appears on this proxy. When shares
are held by joint tenants, both
should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
your full title. If a corporation,
please sign in full corporate name
by authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
