eTrade 2009 Annual Report Download - page 245

(b) “Change in Control” shall mean the occurrence of any of the following events:
(i) (X) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of
the Company representing more than fifty percent (50%) 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 or through the issuance of shares sold directly by the Company to a single acquiror; or
(Y) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the
Company representing less than fifty percent (50%) of the total combined voting power represented by the Company’s then
outstanding voting securities, but in connection with the person’s acquisition of securities the person acquires the right to
terminate the employment of all or a portion of the Company’s management team;
(ii) the Company is party to 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 more than fifty percent (50%) 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 twenty-four (24) consecutive months, as a
result of which fewer than a majority of the directors are Incumbent Directors;
(iv) effectiveness of an agreement for 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.
The Incumbent Directors shall have the right to determine whether multiple sales or exchanges of the voting stock of
the Company, which, in the aggregate, would result in a Change of Control, are related, and its determination shall be final,
binding and conclusive.
(c) “Code” means the Internal Revenue Code of 1986, as amended.
(d) “Change in Control Period” shall mean the period commencing on the earlier of: (i) 60 days prior to the date of
consummation of the Change in Control; (ii) the date of the first public announcement of a definitive agreement that would
result in a Change in Control (even though still subject to approval by the Company’s stockholders and other conditions and
contingencies); or (iii) the date of the public announcement of a tender offer that is not approved by the Incumbent Directors and
ending on the two year anniversary date of the consummation of the Change in Control.
(e) “Change in Control Period Good Reason” shall mean any of the following conditions:
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