eTrade 2000 Annual Report Download - page 90

par. ETFC deemed these repurchased securities to be retired and, therefore, wrote off a proportionate share of the discount on TCT II
securities against additional paid-in capital.
All of the capital securities of TCT I and TCT II (together the “Trusts”) are owned by ETFC. The guarantees for the Trusts, together
with obligations under the trust agreements as assumed in the Company’ s acquisition of ETFC, and the indenture and junior
subordinated debentures, constitute a full, irrevocable and unconditional guarantee by the Company of the capital securities issued by
TCT I and TCT II. 16. SHAREOWNERS’ EQUITY
Shares Exchangeable into Common Stock
In August 2000, EGI Canada Corporation issued approximately 9,354,000 Exchangeable Shares in connection with the Company’ s
acquisition of VERSUS (See Note 3). Holders of Exchangeable Shares have dividend, voting, and other rights equivalent to those of
E*TRADE’ s common shareowners. Exchangeable Shares may be exchanged at any time, at the option of the holder, on a one-for-one
basis for E*TRADE common stock. The Company may redeem all outstanding Exchangeable Shares for E*TRADE common stock
after August 23, 2005 or earlier under certain circumstances.
During fiscal 2000, approximately 3,734,000 Exchangeable Shares were converted to E*TRADE common stock. At September 30,
2000, approximately 5,620,000 Exchangeable Shares were outstanding.
Stock Issuances
In July and August 1999, ETFC sold 10,867,500 shares of common stock to the public at an offering price of $6.90. Simultaneously,
pursuant to a conversion agreement dated May 15, 1998, ETFC’ s 29,900 outstanding shares of preferred stock converted to 5,038,906
shares of common stock, upon consummation of ETFC’ s equity offering on July 28, 1998. In addition, upon the conversion, ETFC
issued a special dividend in the amount of 251,948 shares of common stock to the holders of the preferred stock.
In July 1998, the Company sold 62,600,000 shares of common stock to SOFTBANK Holdings, Inc. for an aggregate purchase price
of $400 million.
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In March 1999, VERSUS raised aggregate net proceeds of $30.7 million in a public offering in Canada.
Stock Option Plans
The Company’ s stock option plans provide for the granting of nonqualified or incentive stock options to officers, directors, key
associates and consultants for the purchase of shares of the Company’ s common stock at a price determined by the board of directors
at the date the option is granted. The options are generally exercisable ratably over a four-year period from the date the option is
granted and expire within ten years from the date of grant.
In July 1996, the shareowners of the Company approved the 1996 Stock Incentive Plan (the “1996 Plan”) and reserved 16,000,000
shares of common stock for future grants. In addition, all shares then currently reserved to the predecessors to the 1996 Plan were
incorporated into the 1996 Plan. The 1996 Plan has been subsequently amended by the shareowners to increase the maximum number
of shares of common stock authorized for issuance under the plan to 46,500,000 shares. Following adoption, no additional grants may
be made under any prior plans. The 1996 Plan is divided into five components: the Discretionary Option Grant Program, the Salary
Investment Option Grant Program, the Stock Issuance Program, the Automatic Option Grant Program and the Director Fee Option
Grant Program. Under the Discretionary Option Grant Program, options may be granted to purchase shares of common stock at an
exercise price not less than the fair market value of those shares on the grant date to eligible associates. The Salary Investment Option
Grant Program allows executive officers and other highly compensated associates the opportunity to apply a portion of their base
salary to the acquisition of special below-market stock option grants. The Stock Issuance Program allows for individuals to be issued
shares of common stock directly through the purchase of such shares at a price not less than the fair market value of those shares at the
time of issuance or as a bonus tied to the performance of services. The Director Fee Option Grant Program provides each
non-associate Board member the opportunity to apply all or a portion of any annual retainer fee otherwise payable in cash to the
acquisition of a below-market stock option grant. Under the Automatic Option Grant Program, options are automatically granted at
periodic intervals to eligible non-associate members of the board of directors to purchase shares of common stock at an exercise price
equal to the fair market value of those shares on the grant date. The Salary Investment Option Grant Program and the Director Fee
Option Grant Program have each been activated for the first time to allow for the granting of such options in calendar year 2001. The
Company has also assumed option plans as a result of several acquisitions during the year. No additional grants will be made under
these plans.
2002. EDGAR Online, Inc.