sc13d
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OMB APPROVAL |
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OMB Number: 3235-0145 |
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Expires: January 31, 2006
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
TD Ameritrade Holding Corporation
(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
(CUSIP Number)
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J. Joe Ricketts |
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Marlene M. Ricketts
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Ricketts Grandchildrens Trust |
TD Ameritrade Holding Corporation
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c/o First National Bank of Omaha |
4211 South 102nd Street
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16th and Dodge Streets |
Omaha, Nebraska 68127
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Omaha, Nebraska 68102 |
with a copy to:
Brian T. May
Mayer, Brown, Rowe & Maw LLP
71 South Wacker Drive
Chicago, Illinois 60606
(312) 782-0600
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
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1 |
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NAMES OF REPORTING PERSONS:
J. Joe Ricketts |
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I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
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(a) þ |
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(b) o |
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3 |
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SEC USE ONLY: |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS): |
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5 |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION: |
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United States
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7 |
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SOLE VOTING POWER: |
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NUMBER OF |
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13,840,113 |
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SHARES |
8 |
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SHARED VOTING POWER: |
BENEFICIALLY |
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OWNED BY |
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69,907,497 |
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EACH |
9 |
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SOLE DISPOSITIVE POWER: |
REPORTING |
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PERSON |
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13,840,113 |
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WITH |
10 |
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SHARED DISPOSITIVE POWER: |
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69,907,497 |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: |
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83,747,610 |
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12 |
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS): |
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þ1
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): |
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13.8% |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS): |
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IN |
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1 |
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Based on the provisions relating to voting agreements and (except with respect to the Ricketts Grandchildrens Trust) the grant of
proxies contained in the Stockholders Agreement (as defined herein), the Reporting Persons may be deemed to share voting power over
the shares beneficially owned by the TD Entities (as defined herein). Based on information provided by the TD Entities, as of
January 24, 2006, the TD Entities beneficially owned, in the aggregate, 196,300,000 shares of Common Stock, representing
approximately 32.5% of the outstanding shares of Common Stock. The Reporting Persons disclaim beneficial ownership of all shares
held by the TD Entities. However, as described in response to Item 6, the Reporting Persons and the TD Entities acknowledge that
they constitute a group for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the Exchange Act) with respect to TD Ameritrade. |
2 of 16
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1 |
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NAMES OF REPORTING PERSONS:
Marlene M. Ricketts |
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I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
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(a) þ |
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(b) o |
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3 |
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SEC USE ONLY: |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS): |
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5 |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION: |
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United States
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7 |
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SOLE VOTING POWER: |
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NUMBER OF |
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8,519,040 |
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SHARES |
8 |
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SHARED VOTING POWER: |
BENEFICIALLY |
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OWNED BY |
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69,907,497 |
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EACH |
9 |
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SOLE DISPOSITIVE POWER: |
REPORTING |
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PERSON |
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8,519,040 |
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WITH |
10 |
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SHARED DISPOSITIVE POWER: |
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69,907,497 |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: |
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78,426,537 |
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12 |
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS): |
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þ 2
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): |
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13.0% |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS): |
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IN |
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2 |
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Based on the provisions relating to voting agreements and (except with respect to the Ricketts Grandchildrens Trust) the grant of
proxies contained in the Stockholders Agreement, the Reporting Persons may be deemed to share voting power over the shares
beneficially owned by the TD Entities. Based on information provided by the TD Entities, as of January 24, 2006, the TD Entities
beneficially owned, in the aggregate, 196,300,000 shares of Common Stock, representing approximately 32.5% of the outstanding shares
of Common Stock. The Reporting Persons disclaim beneficial ownership of all shares held by the TD Entities. However, as described
in response to Item 6, the Reporting Persons and the TD Entities acknowledge that they constitute a group for purposes of Section
13(d) of the Exchange Act with respect to TD Ameritrade. |
3 of 16
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1 |
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NAMES OF REPORTING PERSONS:
Ricketts Grandchildren's Trust |
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I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
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(a) þ |
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(b) o |
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3 |
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SEC USE ONLY: |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS): |
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5 |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION: |
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United States
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7 |
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SOLE VOTING POWER: |
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NUMBER OF |
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19,008,000 |
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SHARES |
8 |
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SHARED VOTING POWER: |
BENEFICIALLY |
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OWNED BY |
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EACH |
9 |
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SOLE DISPOSITIVE POWER: |
REPORTING |
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PERSON |
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19,008,000 |
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WITH |
10 |
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SHARED DISPOSITIVE POWER: |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: |
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19,008,000 |
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12 |
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS): |
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þ 5
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): |
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3.1% |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS): |
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OO - Trust |
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5 |
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Based on the provisions relating to voting agreements and (except with respect to the Ricketts Grandchildrens Trust) the grant of
proxies contained in the Stockholders Agreement, the Reporting Persons may be deemed to share voting power over the shares
beneficially owned by the TD Entities. Based on information provided by the TD Entities, as of January 24, 2006, the TD Entities
beneficially owned, in the aggregate, 196,300,000 shares of Common Stock, representing approximately 32.5% of the outstanding shares
of Common Stock. The Reporting Persons disclaim beneficial ownership of all shares held by the TD Entities. However, as described
in response to Item 6, the Reporting Persons and the TD Entities acknowledge that they constitute a group for purposes of Section
13(d) of the Exchange Act with respect to TD Ameritrade. |
4 of 16
Item 1. Security and Issuer
This Statement on Schedule 13D (this Statement) relates to the Common Stock, $0.01 par value
(the Common Stock), of TD Ameritrade Holding Corporation, a Delaware corporation (TD Ameritrade
or the Issuer). The address of TD Ameritrades principal executive offices is:
TD Ameritrade Holding Corporation
4211 South 102nd Street
Omaha, Nebraska 68127
Item 2. Identity and Background
Schedule A hereto, and incorporated by reference herein, lists each of the persons filing this
Statement (each a Reporting Person), and his, her or its business address, principal occupation
or business, and citizenship or state of organization. Schedule B hereto, and incorporated by
reference herein, lists each of the persons enumerated in Instruction C of Schedule 13D, and his,
her or its business address, principal occupation or business, and citizenship or state of
organization.
During the last five years, no Reporting Person or, to the knowledge of any Reporting Person,
person listed on Schedule B hereto has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation with respect to
such laws.
This Statement is being filed because a group, for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder
(the Exchange Act)), has been formed consisting of the Reporting Persons and other stockholders
of the Issuer, as further described in response to Item 6 below. Each Reporting Person has
provided its own information and disclaims responsibility for information provided by any other
Reporting Person or any other member of the Section 13(d) group.
Item 3. Source and Amount of Funds or Other Consideration
This Statement does not report the acquisition of any additional shares of Common Stock by any
of the Reporting Persons except insofar as any of the Reporting Persons may be deemed for purposes
of Section 13(d) or 13(g) of the Exchange Act to have acquired beneficial ownership of the shares
of Common Stock held by any other stockholder of the Issuer who is a member of the Section 13(d)
group. As such, there is no use of funds or other consideration to report.
Item 4. Purpose of Transaction
On January 24, 2006, as part of the consummation of the transactions contemplated by the
Agreement of Sale and Purchase dated as of June 22, 2005, as amended as of October 28, 2005 and as
of December 22, 2005 (as amended, the Purchase Agreement), between The Toronto-Dominion Bank, a
Canadian chartered bank (TD), and the Issuer, TD Discount Brokerage Holdings LLC, a Delaware
limited liability company and a wholly owned subsidiary of TD (TDDBH and, together with TD, the
TD Entities), received 196,300,000 shares of Common Stock, representing approximately 32.5% of
the outstanding shares of Common Stock, and $20,000 in cash, in exchange for all of the outstanding
capital stock of TD Waterhouse Group, Inc. (TD Waterhouse), a Delaware corporation (the
Transaction).
In connection with the execution of the Purchase Agreement, the Reporting Persons entered into
a Stockholders Agreement, dated as of June 22, 2005, among TD, the Issuer and each Reporting Person
(such agreement, as it may be amended, restated or otherwise modified from time to time, the
Stockholders Agreement), which contains various provisions relating to the governance of TD
Ameritrade following the completion of the Transaction, including board composition, stock
ownership, transfers by the Reporting Persons and TD, voting and
5 of 16
other matters. Pursuant to the Stockholders Agreement, the Reporting Persons are initially
entitled to designate three of the twelve directors of TD Ameritrade and TD is initially entitled
to designate five of the twelve directors of TD Ameritrade, each subject to adjustment in
accordance with the provisions of the Stockholders Agreement. The initial Reporting Persons
designees to the TD Ameritrade board of directors were serving as directors prior to the
consummation of the Transaction, and accordingly remained in such positions upon consummation of
the Transaction. The initial TD designees to the TD Ameritrade board of directors were appointed
concurrent with the consummation of the Transaction.
Pursuant to the Stockholders Agreement, TD is obligated to commence a cash tender offer, at a
price of at least $16 per share, pursuant to which TD will offer to purchase a number of shares of
Issuer Common Stock such that, if TD successfully acquires all shares subject to the tender offer,
it will beneficially own 39.9% of the outstanding shares of Issuer Common Stock. TD has informed
the Reporting Persons that it intends to commence the tender offer in the near future. The
Reporting Persons do not intend to tender any of their shares of Common Stock in the tender offer.
Each Reporting Person intends to review from time to time its investment in the Issuer
and the Issuers business affairs, financial position and capital requirements. Based upon such
review, as well as general economic, market and industry conditions and prospects existing at the
time, a Reporting Person may consider from time to time alternative courses of action as permitted
by the Stockholders Agreement. Subject to the terms of the Stockholders Agreement, such actions
may include the acquisition of additional shares of Common Stock or other securities of the Issuer
directly from the Issuer, through open market purchases, in privately negotiated transactions,
through a tender or exchange offer or a merger, reorganization or comparable transaction, through
exercise of its rights under the Stockholders Agreement or otherwise. Subject to the terms of the
Stockholders Agreement, these actions may constitute a going-private transaction and/or could
result in (i) changes to the board of directors of the Issuer, (ii) changes in the capitalization
or dividend policy of the Issuer, (iii) changes in the Issuers certificate of incorporation or
bylaws, (iv) delisting of the Common Stock from the Nasdaq National Market System (or other
national securities market or inter-dealer quotation system), (v) termination of registration of
the Common Stock pursuant to Section 12(g)(4) of the Exchange Act and/or (vi) other events
comparable to those enumerated above. Alternatively, and consistent with the terms of the
Stockholders Agreement and subject to market conditions and other considerations, the Reporting
Persons may sell all or a portion of their securities of the Issuer in the open market, in
privately negotiated transactions, through a public offering or otherwise.
Other than as described in this Statement, the Reporting Persons do not have any present
plans or proposals that relate to or would result in any of the actions described in subparagraphs
(a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) and (b) The following table sets forth the aggregate number and percentage of shares of
Common Stock beneficially owned (identifying those shares which there is a right to acquire) by
each of the Reporting Persons individually and by all of the Reporting Persons together. Based on
information provided to the Reporting Persons by the Issuer, there were 603,431,799 shares of
Common Stock outstanding as of the close of business on January 24, 2006 (including 196,300,000
shares of Common Stock that were issued to TDDBH as part of the Transaction).
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Shared |
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Sole Power |
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Power |
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Number of |
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to Vote or |
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to Vote or |
Name |
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Shares |
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Percent |
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Dispose |
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Dispose |
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J. Joe Ricketts(1)
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83,747,610 |
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13.8 |
% |
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13,840,113 |
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69,907,497 |
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Marlene M. Ricketts(2)
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78,426,537 |
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13.0 |
% |
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8,519,040 |
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69,907,497 |
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6 of 16
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Shared |
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Sole Power |
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Power |
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Number of |
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to Vote or |
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to Vote or |
Name |
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Shares |
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Percent |
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Dispose |
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Dispose |
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Ricketts Grandchildrens Trust(3)
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19,008,000 |
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3.1 |
% |
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19,008,000 |
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0 |
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Total:
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111,274,650(4)
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18.4 |
% |
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41,367,153
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69,907,497(5)
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(1) |
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Shares of Common Stock beneficially owned by Mr. Ricketts consist of 69,907,497 shares
held jointly with Marlene M. Ricketts, his spouse, in brokerage margin accounts; 8,186,112 shares
held by the Marlene M. Ricketts 1994 Dynasty Trust, over which Mr. Ricketts has sole voting and
dispositive power; 332,352 shares held in the J. Ricketts IRA; 5,153 shares held in Mr. Ricketts
401(k) account; and 2,841,496 shares issuable upon the exercise of options exercisable within 60
days. |
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(2) |
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Shares of Common Stock beneficially owned by Mrs. Ricketts consist of 69,907,497 shares held
jointly with J. Joe Ricketts, her spouse, in brokerage margin accounts; 8,186,688 shares held by
the J. Joe Ricketts 1996 Dynasty Trust, over which Mrs. Ricketts has sole voting and dispositive
power; and 332,352 shares held in the M. Ricketts IRA. |
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(3) |
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The trustee of the Ricketts Grandchildrens Trust is First
National Bank of Omaha, 16th and Dodge Streets, Omaha, Nebraska 68102. |
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(4) |
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The amount reflected does not include 69,907,497 shares of Common Stock reported above
by Marlene M. Ricketts as such share ownership is shared with her spouse and already reflected
under Mr. Ricketts reported shares of Common Stock. |
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(5) |
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The amount reflected does not include 69,907,497 shares of Common Stock reported above by
Marlene M. Ricketts as such share ownership is shared with her spouse and already reflected under
Mr. Ricketts reported shares of Common Stock. |
Based on the provisions relating to voting agreements and (except with respect to the Ricketts
Grandchildrens Trust) the grant of proxies contained in the Stockholders Agreement, the Reporting
Persons may be deemed to share voting power over the shares beneficially owned by the TD Entities.
Based on information provided by the TD Entities, as of January 24, 2006, the TD Entities
beneficially owned, in the aggregate, 196,300,000 shares of Common Stock, representing
approximately 32.5% of the outstanding shares of Common Stock. The Reporting Persons disclaim
beneficial ownership of all shares held by the TD Entities. However, as described in response to
Item 6, the Reporting Persons and the TD Entities acknowledge that they constitute a group for
purposes of Section 13(d) of the Exchange Act with respect to TD Ameritrade.
All information contained in this Statement relating to the TD Entities is based on
information provided to the Reporting Persons by the TD Entities. While the Reporting Persons have
no reason to believe that such information is inaccurate or incomplete, the Reporting Persons do
not assume any responsibility for the accuracy or completeness of such information.
7 of 16
(c) None of the Reporting Persons, or, to the knowledge of the Reporting Persons, any of the
individuals named in Schedule B hereto, has engaged in any transaction during the past 60 days in
any shares of Common Stock.
(d) |
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Not applicable. |
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(e) |
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Not applicable. |
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the
Issuer
Except as set forth in this Statement, to the knowledge of the Reporting Persons, there are no
other contracts, arrangements, understandings or relationships (legal or otherwise) between the
Reporting Persons or any of the individuals named in Schedule B hereto and any other person with
respect to the securities of the Issuer, including but not limited to transfer or voting of any of
the securities of the Issuer, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or withholding of proxies, or a
pledge or contingency the occurrence of which would give another person voting power over the
securities of the Issuer.
a. |
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Stockholders Agreement |
In connection with the Transaction, the Issuer, the Reporting Persons and TD entered into the
Stockholders Agreement, which, among other things, contains certain governance arrangements and
various provisions relating to board composition, stock ownership, stock transfers by the Reporting
Persons and TD, voting and other matters. The following is a summary of selected provisions of the
Stockholders Agreement. While the Reporting Persons believe this description covers the material
terms of the Stockholders Agreement, it is qualified in its entirety by reference to the
Stockholders Agreement, a copy of which is included as Exhibit 99.1 of this Statement and
incorporated herein by reference.
Due to certain agreements contained in the Stockholders Agreement, the Reporting Persons
and the TD Entities have acknowledged that they constitute a group for purposes of Section 13(d)
of the Exchange Act with respect to TD Ameritrade.
Governance of TD Ameritrade
Under the terms of the Stockholders Agreement, the board of directors of TD Ameritrade is
classified into three classes, with each class serving staggered, three-year terms. The board of
directors consists of twelve members, and the persons to be nominated for election as directors of
TD Ameritrade were initially designated as follows:
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the Reporting Persons initially had the right to designate three of the
directors, initially J. Joe Ricketts, J. Peter Ricketts and Thomas S. Ricketts (each
of whom was assigned to a different class of directors, as designated by the
Reporting Persons); |
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TD initially had the right to designate five of the directors, initially W.
Edmund Clark, Fredric J. Tomczyk, Daniel A. Marinangeli, Marshall A. Cohen and
Wilbur J. Prezzano (one of whom is a class I director, two of whom are class II
directors and two of whom are class III directors, as designated by TD); |
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the individual serving as chief executive officer of TD Ameritrade, initially
Joseph H. Moglia (who is a class I director); and |
8 of 16
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three of the directors are to be outside independent directors, who initially are
Michael D. Fleisher, Glenn H. Hutchins and Dan W. Cook III (each of whom was
assigned to a different class of directors). |
The number of directors designated by the Reporting Persons (the Ricketts directors) may
increase or decrease from time to time depending on the ownership position of the Reporting
Persons. Generally, the number of Ricketts directors relates to the Reporting Persons ownership as
set forth in the table below, subject to specified cure periods in the event of a decrease in
ownership from one threshold to another and minimum holding periods in the event of an increase in
ownership from one threshold to another. Any vacancy resulting from the reduction of the number of
Ricketts directors will be filled with an outside independent director, effective immediately prior
to the following annual meeting of TD Ameritrade stockholders. In the event that the number of
Ricketts directors increases as a result of an increase in the Reporting Persons ownership
position, the corresponding outside independent directors will be removed and replaced with new
Ricketts directors.
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Reporting Persons Ownership Level |
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Total Number of Ricketts Directors |
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Greater than 20.83% |
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3 |
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Greater than 12.50% to 20.83% |
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2 |
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Greater than 4.17% to 12.50% |
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1 |
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4.17% or less |
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0 |
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If, on the first anniversary of the closing date of the Transaction, the Reporting Persons do
not beneficially own at least 20.83% of the outstanding voting securities of TD Ameritrade, and the
number of Ricketts directors has not already been reduced, then one of the Ricketts directors must
resign from the board of directors of TD Ameritrade, and the resulting vacancy will be filled by an
outside independent director, effective immediately prior to the following annual meeting of TD
Ameritrade stockholders. Following any such resignation,
however, the number of Ricketts directors may continue to increase or decrease
based on the ownership position of the Reporting Persons, as described above.
The number of directors designated by TD (the TD directors) may increase or decrease from
time to time depending on the ownership position of TD. Generally, the number of TD
directors relates to TDs ownership as set forth in the table below, subject to specified cure
periods in the event of a decrease in ownership from one threshold to another and minimum holding
periods in the event of an increase in ownership from one threshold to another. Any vacancy
resulting from the reduction of the number of TD directors will be filled with an outside
independent director, effective immediately prior to the following annual meeting of TD Ameritrade
stockholders. In the event that the number of TD directors increases as a result of an increase in
TDs ownership position, the corresponding outside independent directors will be removed and
replaced with new TD directors.
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TD Ownership Level Directors |
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Total Number of TD Directors |
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Greater than 37.5% |
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5 |
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Greater than 29.17% to 37.50% |
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4 |
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Greater than 20.83% to 29.17% |
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3 |
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Greater than 12.50% to 20.83% |
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2 |
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Greater than 4.17% to 12.50% |
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1 |
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4.17% or less |
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0 |
|
If, on the first anniversary of the closing date of the Transaction, TDs percentage ownership
of the outstanding voting securities of TD Ameritrade is not at least 37.5%, and the number of TD
directors has not already been reduced, then one of the TD directors must resign from the board of
directors of TD Ameritrade, and the resulting vacancy will be filled by an outside independent
director, effective immediately prior to the following annual meeting of TD Ameritrade
stockholders. Following any such resignation, however, the number of
TD directors may continue to increase or decrease based on the ownership
position of TD, as described above.
The Stockholders Agreement also sets forth procedures by which outside independent directors
are selected. A committee of the board of directors of TD Ameritrade comprised solely of all of
the outside independent directors, referred to as the outside independent director committee, has
the sole authority on behalf of the board of
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directors to nominate candidates for election to serve
as outside independent directors, except that TD and the Reporting Persons have the right to reject
a director candidate, but not without a reasonable basis for doing so.
Subject to applicable laws and certain conditions, TD Ameritrade is required to cause each
committee of its board of directors (other than the outside independent director committee and a
committee of the board of directors comprised solely of all directors who are not TD directors) to
consist of two TD directors, one Ricketts director, and two outside independent directors. These
levels of committee representation are subject to adjustment from time to time based on TDs and
the Reporting Persons maintenance of specified ownership levels.
The parties to the Stockholders Agreement have agreed to vote their shares of Common Stock in
favor of the election of each director nominated for election in the manner provided for in the
Stockholders Agreement and in favor of the removal of each director designated for removal in the
manner provided for in the Stockholders Agreement, and have agreed not to vote in favor of any
candidate for director who is not nominated in accordance with the Stockholders Agreement. The
Reporting Persons (other than the Ricketts Grandchildrens Trust) and TD irrevocably appointed an
officer of Ameritrade as their respective proxy and attorney-in-fact to vote in accordance with the terms of the Stockholders Agreement in the event they fail to comply
with its terms. TD Ameritrade has agreed to take all actions within its control to effectuate the
corporate governance provisions of the Stockholders Agreement.
Tender Offer and Share Ownership
TD is required pursuant to the Stockholders Agreement to commence a cash tender offer pursuant
to which TD will offer to purchase a number of shares of Common Stock such that, upon successful
completion of the offer, TD will own up to 39.9% of the outstanding shares of Common Stock. J.
Joe Ricketts has the option of participating as a co-bidder in the tender offer, in which case he
may offer to purchase up to the number of shares of Common Stock such that, upon successful
completion of the tender offer, he and the other Reporting Persons collectively own up to 29% of
the voting securities of TD Ameritrade. Mr. Ricketts does not intend to participate as a co-bidder
in the tender offer.
Following the tender offer:
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TD may acquire additional shares of Common Stock only up to an aggregate
beneficial ownership interest of 39.9% of the outstanding voting securities of TD
Ameritrade for a period of three years following completion of the Transaction, and
up to an aggregate beneficial ownership of 45% for the remaining term of the
Stockholders Agreement; and |
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the Reporting Persons may acquire additional shares of Common Stock only up to an
aggregate beneficial ownership interest of 29% of the outstanding voting securities
of TD Ameritrade. |
Notwithstanding the limitations on TDs ownership described above, TD may make a non-public
proposal to the board of directors of TD Ameritrade to acquire additional shares pursuant to a
tender offer, merger or other business combination for 100% of the outstanding shares of Common
Stock not owned by TD, and TD may complete such a transaction, subject to the approval of a
majority of the outside independent directors and the holders of a majority of the outstanding
shares of Common Stock not affiliated with TD. TD may not, subject to certain exceptions, solicit
proxies with respect to Common Stock.
If TD Ameritrade receives a bona fide inquiry or proposal from a third party that could result
in a proposal with respect to a merger, acquisition or other business combination involving TD
Ameritrade or its subsidiaries in which more than 25% of the voting securities or consolidated
assets of TD Ameritrade would be acquired or received by the third party, TD Ameritrade must
promptly notify TD of receipt of the inquiry or proposal and offer TD the opportunity to
participate in parallel discussions with TD Ameritrade, and must consider proposals from TD
regarding a comparable transaction.
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Right to Purchase Securities
The Reporting Persons and TD have the right to purchase up to their respective proportionate
share of future issuances of Common Stock, options, warrants or other debt or equity securities
that are convertible into or exchangeable or exercisable for Common Stock, other than issuances of
Common Stock as consideration in connection with an acquisition by TD Ameritrade and certain other
issuances specified in the Stockholders Agreement. If TD Ameritrade proposes to issue shares as
consideration in an acquisition, TD Ameritrade must discuss in good faith with the Reporting
Persons and TD alternative structures in which a portion of such shares would be sold to the
Reporting Persons or TD, with the proceeds of such sale used to fund the acquisition.
Transfer and Other Restrictions
In general, absent approval of a majority of the independent directors, the Reporting Persons
and TD may not transfer shares of Common Stock to any holders of 5% or more of the outstanding
shares of Common Stock, subject to certain exceptions.
Obligation to Repurchase Shares
If TD Ameritrade issues shares of its common stock pursuant to any compensation or similar
program or arrangement, then TD Ameritrade will, subject to certain exceptions, use its reasonable
efforts to repurchase a corresponding number of shares of its common stock in the open market
within 120 days after any such issuance.
Non-Competition Covenants
Subject to certain exceptions described below, none of J. Joe Ricketts (so long as he is
serving as a director of TD Ameritrade), TD or any of their respective affiliates may participate
in or own any portion of a business engaged in the business of providing securities brokerage
services in the U.S. (or, solely in the case of Mr. Ricketts and his affiliates, in Canada) to
retail traders, individual investors and registered investment advisors. If TD acquires indirectly
such a competing business as a result of its acquisition of a non-competing business, TD must offer
to sell the competing business to TD Ameritrade at its appraised fair value as determined in
accordance with the terms of the Stockholders Agreement. If TD Ameritrade decides not to purchase
the competing business, TD must use commercially reasonable efforts to divest the competing
business within two years. Notwithstanding the foregoing, J. Joe Ricketts, TD and their respective
affiliates are permitted under the terms of the Stockholders Agreement to own a passive
investment representing less than 2% of a class of equity securities of a competing business so
long as the class of equity securities is traded on a national securities exchange in the U.S. or
the Toronto Stock Exchange or quoted on the NASDAQ National Market.
Termination of the Stockholders Agreement
The Stockholders Agreement will terminate (1) with respect to the Reporting Persons, when
their aggregate ownership of Common Stock falls below approximately 4% of the outstanding voting
securities of TD Ameritrade, and (2) upon the earliest to occur of:
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the consummation of a merger, tender offer or other business combination pursuant
to which TD offers to acquire 100% of the Common Stock not owned by TD; |
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the 10th anniversary of the consummation of the Transaction; |
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the date on which TDs ownership of Common Stock falls below approximately 4% of
the outstanding voting securities of TD Ameritrade; |
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the commencement by a third party of a tender offer or exchange offer for not
less than 25% of the Common Stock unless the TD Ameritrade board recommends against
such tender offer or exchange offer and continues to take all reasonable steps to
oppose such tender offer or exchange offer (as reasonably determined by TD); |
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the approval by the TD Ameritrade board of a business combination that would
result in another party owning 25% of TD Ameritrades voting securities or its
consolidated assets or which would otherwise result in a change of control of TD
Ameritrade; or |
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the acquisition of 20% of the voting securities of TD Ameritrade by a third
party. |
For a period of up to one year following a termination due to events described in the fourth,
fifth or sixth bullet points above, the Reporting Persons and TD will be prohibited from acquiring
shares of Common Stock that would cause TDs aggregate ownership to exceed 45% of the outstanding
voting securities of TD Ameritrade (39.9% in the first three years) or the aggregate ownership of
the Reporting Persons to exceed 29% of the outstanding voting securities of TD Ameritrade, except
that either TD or the Reporting Persons may exceed these thresholds in connection with a merger,
tender offer or other business combination for 100% of the outstanding shares of Common Stock
approved by the holders of a majority of the outstanding shares of Common Stock (other than the
Reporting Persons and TD). Furthermore, during that period of up to one year following such
termination, the provisions of the Stockholders Agreement relating to the designation and election
of directors, transfer restrictions and certain other provisions will remain in effect. In the
event that TDs or the Reporting Persons beneficial ownership of Common Stock falls below
approximately 4% of the outstanding voting securities of TD Ameritrade, TD or the Reporting
Persons, as the case may be, must cause each of the TD or Reporting Persons directors to
immediately resign as directors of TD Ameritrade.
b. |
|
Amended and Restated Registration Rights Agreement |
Concurrently with entering into the Purchase Agreement and the Stockholders Agreement, TD, the
Issuer, the Reporting Persons and certain persons who are no longer parties entered into the
Amended and Restated Registration Rights Agreement (the Registration Rights Agreement)
to, among other things, include TD as a party to the existing registration rights agreement among
the Issuer, the Reporting Persons and such other persons. The Registration Rights Agreement is
substantially the same as the preexisting registration rights agreement except for the provision of
registration rights to TD, the elimination of the term of the
registration rights and the provision of additional registration rights to the Reporting Persons.
The following is a summary of selected provisions of the Registration Rights Agreement. While the
Reporting Persons believe this description covers the material terms of the Registration Rights
Agreement, it is qualified in its entirety by reference to the Registration Rights Agreement, a
copy of which is included as Exhibit 99.2 to this Statement and incorporated herein by reference.
Demand Registrations
TD Ameritrade has granted the Reporting Persons and TD, collectively, the right to demand
registration of the shares of Common Stock held by them on nine separate occasions. Six of the
nine demand rights, including two shelf registrations, are allocated to TD, and three of the nine
demand rights, including one shelf registration, are allocated to the Reporting Persons.
Piggy Back Registrations
TD Ameritrade has also agreed to provide the Reporting Persons and TD with piggy back
registration rights, such that if at any time TD Ameritrade proposes to file a registration
statement with respect to any offering of its securities for its own account or for the account of
any stockholder who holds its securities (subject to certain exceptions) then, as expeditiously as
reasonably possible (but in no event less than 20 days prior to the proposed date of filing such
registration statement), TD Ameritrade shall give written notice of such proposed filing to all
holders of securities subject to registration rights pursuant to the Registration Rights Agreement,
and such notice shall offer the holders of such registrable securities the opportunity to register
such number of registrable securities as each such holder may request in writing.
The registration rights granted in the Registration Rights Agreement are subject to customary
restrictions such as minimums, blackout periods and limitations on the number of shares to be
included in any underwritten offering imposed by the managing underwriter. In addition, the
Registration Rights Agreement contains other limitations on the timing and ability of stockholders
to exercise demands.
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Item 7. Material to Be Filed as Exhibits
Exhibit 99.1. Stockholders Agreement, dated as of June 22, 2005 (incorporated by reference to
Exhibit 10.1 on Form 8-K filed by the Issuer on June 22, 2005 (SEC File No. 0-49992)).
Exhibit 99.2. Amended and Restated Registration Rights Agreement, dated as of June 22, 2005
(incorporated by reference to Exhibit 99.1 on Form 8-K filed by the Issuer on September 12, 2005
(SEC File No. 0-49992)).
Exhibit 99.3.
Joint Filing Agreement by and among J. Joe Ricketts,
Marlene M. Ricketts and the Ricketts
Grandchildrens Trust, dated as of January 24, 2006.
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, the undersigned
certifies that the information set forth in this Statement is true, complete and correct.
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Date: January 24, 2006 |
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/s/ J. Joe Ricketts |
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J. Joe Ricketts, individually |
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/s/ Marlene M. Ricketts |
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Marlene M. Ricketts, individually |
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RICKETTS GRANDCHILDRENS TRUST |
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By: |
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/s/ John E. Lenihan |
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First National Bank of Omaha, trustee |
|
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Name: John E. Lenihan |
|
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Title: Senior Trust Officer |
14 of 16
Schedule A
Persons Filing Schedule 13D
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Citizenship or Place of |
Name and Business Address |
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Occupation or Principal Business |
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Organization |
J. Joe Ricketts
c/o TD Ameritrade Holding Corporation
|
|
Chairman of the Board of Directors of TD Ameritrade Holding Corporation |
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U.S.A. |
4211 South 102nd Street
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Omaha, Nebraska 68127
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Marlene M. Ricketts
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U.S.A. |
c/o J. Joe Ricketts
TD Ameritrade Holding Corporation
4211 South 102nd Street
Omaha, Nebraska 68127 |
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Ricketts Grandchildrens Trust
c/o First National Bank of Omaha
16th and Dodge Streets
Omaha, Nebraska 68102 |
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15 of 16
Schedule B
Persons Enumerated in Instruction C of Schedule 13D
Ricketts Grandchildrens Trust
Set forth below is information concerning the trustee of Ricketts Grandchildrens Trust
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Citizenship or Place of |
Name and Business Address |
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Occupation or Principal Business |
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Organization |
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First National Bank of Omaha
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Trustee
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U.S.A. |
16 of 16