eTrade 2003 Annual Report Download - page 90

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Table of Contents
Index to Financial Statements
Subsequent to the acquisition of DRAFCO, the Company had not received any additional proceeds from new securitizations. However,
the Company received $0.6 million of servicing fees and $0.5 million of other cash flows after the October 2003 acquisition of DRAFCO. The
following table presents quantitative information about the loan balances, delinquencies and other assets managed with these securitized
financial assets (in thousands):
NOTE 12—RELATED PARTY TRANSACTIONS
Loans to Directors and Officers
RV
Marine
Other
Total
Principal amount of loans
$
3,485,921
$
1,046,996
$
11,629
$
4,544,546
Less:
Loans securitized
(469,737
)
(205,601
)
—
(
675,338
)
Loans sold/transferred and retained for servicing
(814,915
)
(213,420
)
—
(
1,028,335
)
Loans held for sale or securitization
(21,846
)
(2,491
)
(262
)
(24,599
)
Loans held in portfolio
$
2,179,423
$
625,484
$
11,367
$
2,816,274
Principal amount of loans 60 days or more past due
$
8,083
$
3,904
$
59
$
12,046
Net credit losses
—
year ended December 31, 2003
$
22,611
$
5,804
$
1,378
$
29,793
In 2000, the Company adopted an executive loan program for purchases of Company stock and an executive home loan/home lease
program to assist with executive relocation to the Silicon Valley. Both programs were terminated in 2002 and all loans under these programs
were repaid in 2002 in cash or in shares of the Company’s common stock. In addition, a wholly owned subsidiary of the Company purchased
four homes that were leased to executives. At December 31, 2003, three of these homes had been sold and one continues to be leased to a
former executive. Also in 2000, the Company extended a loan to a founder and director of the Company. The loan was repaid in full in August
2003.
Other
In the normal course of business, the Company’s broker-
dealer subsidiaries make margin loans to its directors and employees, these loans
are made on the same terms and conditions as with other non-affiliated customers.
The Company has entered into management retention agreements and/or employment agreements with its key executive officers. These
agreements provide for annual base salary compensation, severance payments and the acceleration of option vesting and tax reimbursements
under certain circumstances, in the event of termination of employment under defined circumstances within 18 months following a change of
control in the Company, or in some circumstances, solely in the event of termination. Base salaries are subject to adjustments by the
Company’s Board of Directors. See Note 21 for a discussion of events involving the employment agreement of the former CEO.
In the normal course of business, the Company has transactions with companies that are considered related parties. Through July 2002,
SOFTBANK held more than 10% of the Company’s outstanding common stock and had a representative on the Company’
s Board of Directors.
is an investor in venture capital funds sponsored by the Company. The Company repurchased stock from SOFTBANK during 2001 at a
discount from market price and repurchased the remainder of SOFTBANK’s interest in 2002, as is more fully disclosed in Note 18.
The Company also holds a joint interest in Thor Credit. As described in more detail in Note 7, the Company provides certain management
and loan services to Thor Credit, which are related party transactions.
77