eTrade 2012 Annual Report Download - page 206

1.409A-3(i)(5)(v)(B)) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing at least 51% of the total combined voting power represented by the Company’s
then outstanding voting securities other than the acquisition of the Company’s common stock by a Company-sponsored
employee benefit plan;
(ii) the Company consummates a merger or consolidation which results in the holders of the voting securities of the
Company outstanding immediately prior thereto failing to retain immediately after such merger or consolidation direct or
indirect beneficial ownership of at least 51% of the total combined voting power of the securities entitled to vote generally
in the election of directors of the Company or the surviving entity outstanding immediately after such merger or
consolidation;
(iii) a change in the composition of the Board occurring within a period of 12 consecutive months, as a result of
which fewer than a majority of the directors are Incumbent Directors;
(iv) the Company consummates the sale, lease or disposition by the Company of all or substantially all of the
Company’s assets; or
(v) a liquidation or dissolution of the Company.
(c) “Code” means the Internal Revenue Code of 1986, as amended.
(d) “Change in Control Period” shall mean the period (i) ending on the second anniversary of a Change in Control and
(ii) commencing on the earlier of the date of the first public announcement of the definitive agreement (or the date of the public
announcement of a tender offer that is not approved by the Incumbent Directors) that results in such Change in Control or 60
days prior to the consummation of such Change in Control.
(e) “Good Reason” shall mean any of the following conditions without Executive’s consent:
(i) a material decrease in Executive’s Base Salary;
(ii) a material, adverse change in Executive’s title, authority, responsibilities or duties, as measured against
Executive’s title, authority, responsibilities or duties immediately prior to such change; provided that following a Change
in Control, for purposes of this subsection (ii), in addition to any other material, adverse change in title, authority,
responsibilities or duties, Executive not reporting to the Board of Directors or Executive not being Chief Executive Officer
of the surviving combined company shall constitute an event of “Good Reason”;
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